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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3590 Amendment Ordered to be Printed Senate (AS)]

<bullet>AMDT. NO. 2786
                                                                     VI
                                                       Calendar No. 175
AMENDMENT NO. 2786
Purpose: In the nature of a substitute.

       IN THE SENATE OF THE UNITED STATES--111th Cong., 1st Sess.

                               H. R. 3590

  To amend the Internal Revenue Code of 1986 to modify the first-time 
   homebuyers credit in the case of members of the Armed Forces and 
        certain other Federal employees, and for other purposes.

                           November 19, 2009

             Ordered to lie on the table and to be printed

Amendment in the nature of a substitute intended to be proposed by Mr. 
        Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin)

Viz:
    Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Patient Protection 
and Affordable Care Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
       TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

  Subtitle A--Immediate Improvements in Health Care Coverage for All 
                               Americans

Sec. 1001. Amendments to the Public Health Service Act.
             ``PART A--Individual and Group Market Reforms

                    ``subpart ii--improving coverage

        ``Sec. 2711. No lifetime or annual limits.
        ``Sec. 2712. Prohibition on rescissions.
        ``Sec. 2713. Coverage of preventive health services.
        ``Sec. 2714. Extension of dependent coverage.
        ``Sec. 2715. Development and utilization of uniform explanation 
                            of coverage documents and standardized 
                            definitions.
        ``Sec. 2716. Prohibition of discrimination based on salary.
        ``Sec. 2717. Ensuring the quality of care.
        ``Sec. 2718. Bringing down the cost of health care coverage.
        ``Sec. 2719. Appeals process.
Sec. 1002. Health insurance consumer information.
Sec. 1003. Ensuring that consumers get value for their dollars.
Sec. 1004. Effective dates.
     Subtitle B--Immediate Actions to Preserve and Expand Coverage

Sec. 1101. Immediate access to insurance for uninsured individuals with 
                            a preexisting condition.
Sec. 1102. Reinsurance for early retirees.
Sec. 1103. Immediate information that allows consumers to identify 
                            affordable coverage options.
Sec. 1104. Administrative simplification.
Sec. 1105. Effective date.
    Subtitle C--Quality Health Insurance Coverage for All Americans

                PART I--Health Insurance Market Reforms

Sec. 1201. Amendment to the Public Health Service Act.
                      ``subpart i--general reform

        ``Sec. 2701. Fair health insurance premiums.
        ``Sec. 2702. Guaranteed availability of coverage.
        ``Sec. 2703. Guaranteed renewability of coverage.
        ``Sec. 2704. Prohibition of preexisting condition exclusions or 
                            other discrimination based on health 
                            status.
        ``Sec. 2705. Prohibiting discrimination against individual 
                            participants and beneficiaries based on 
                            health status.
        ``Sec. 2706. Non-discrimination in health care.
        ``Sec. 2707. Comprehensive health insurance coverage.
        ``Sec. 2708. Prohibition on excessive waiting periods.
                       PART II--Other Provisions

Sec. 1251. Preservation of right to maintain existing coverage.
Sec. 1252. Rating reforms must apply uniformly to all health insurance 
                            issuers and group health plans.
Sec. 1253. Effective dates.
        Subtitle D--Available Coverage Choices for All Americans

            PART I--Establishment of Qualified Health Plans

Sec. 1301. Qualified health plan defined.
Sec. 1302. Essential health benefits requirements.
Sec. 1303. Special rules.
Sec. 1304. Related definitions.
  PART II--Consumer Choices and Insurance Competition Through Health 
                           Benefit Exchanges

Sec. 1311. Affordable choices of health benefit plans.
Sec. 1312. Consumer choice.
Sec. 1313. Financial integrity.
           PART III--State Flexibility Relating to Exchanges

Sec. 1321. State flexibility in operation and enforcement of Exchanges 
                            and related requirements.
Sec. 1322. Federal program to assist establishment and operation of 
                            nonprofit, member-run health insurance 
                            issuers.
Sec. 1323. Community health insurance option.
Sec. 1324. Level playing field.
      PART IV--State Flexibility to Establish Alternative Programs

Sec. 1331. State flexibility to establish basic health programs for 
                            low-income individuals not eligible for 
                            Medicaid.
Sec. 1332. Waiver for State innovation.
Sec. 1333. Provisions relating to offering of plans in more than one 
                            State.
                PART V--Reinsurance and Risk Adjustment

Sec. 1341. Transitional reinsurance program for individual and small 
                            group markets in each State.
Sec. 1342. Establishment of risk corridors for plans in individual and 
                            small group markets.
Sec. 1343. Risk adjustment.
       Subtitle E--Affordable Coverage Choices for All Americans

        PART I--Premium Tax Credits and Cost-sharing Reductions

       subpart a--premium tax credits and cost-sharing reductions

Sec. 1401. Refundable tax credit providing premium assistance for 
                            coverage under a qualified health plan.
Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified 
                            health plans.
                 subpart b--eligibility determinations

Sec. 1411. Procedures for determining eligibility for Exchange 
                            participation, premium tax credits and 
                            reduced cost-sharing , and individual 
                            responsibility exemptions.
Sec. 1412. Advance determination and payment of premium tax credits and 
                            cost-sharing reductions.
Sec. 1413. Streamlining of procedures for enrollment through an 
                            exchange and State Medicaid, CHIP, and 
                            health subsidy programs.
Sec. 1414. Disclosures to carry out eligibility requirements for 
                            certain programs.
Sec. 1415. Premium tax credit and cost-sharing reduction payments 
                            disregarded for Federal and Federally-
                            assisted programs.
                   PART II--Small Business Tax Credit

Sec. 1421. Credit for employee health insurance expenses of small 
                            businesses.
           Subtitle F--Shared Responsibility for Health Care

                   PART I--Individual Responsibility

Sec. 1501. Requirement to maintain minimum essential coverage.
Sec. 1502. Reporting of health insurance coverage.
                   PART II--Employer Responsibilities

Sec. 1511. Automatic enrollment for employees of large employers.
Sec. 1512. Employer requirement to inform employees of coverage 
                            options.
Sec. 1513. Shared responsibility for employers.
Sec. 1514. Reporting of employer health insurance coverage.
Sec. 1515. Offering of Exchange-participating qualified health plans 
                            through cafeteria plans.
                  Subtitle G--Miscellaneous Provisions

Sec. 1551. Definitions.
Sec. 1552. Transparency in government.
Sec. 1553. Prohibition against discrimination on assisted suicide.
Sec. 1554. Access to therapies.
Sec. 1555. Freedom not to participate in Federal health insurance 
                            programs.
Sec. 1556. Equity for certain eligible survivors.
Sec. 1557. Nondiscrimination.
Sec. 1558. Protections for employees.
Sec. 1559. Oversight.
Sec. 1560. Rules of construction.
Sec. 1561. Health information technology enrollment standards and 
                            protocols.
Sec. 1562. Conforming amendments.
                   TITLE II--ROLE OF PUBLIC PROGRAMS

                Subtitle A--Improved Access to Medicaid

Sec. 2001. Medicaid coverage for the lowest income populations.
Sec. 2002. Income eligibility for nonelderly determined using modified 
                            gross income.
Sec. 2003. Requirement to offer premium assistance for employer-
                            sponsored insurance.
Sec. 2004. Medicaid coverage for former foster care children.
Sec. 2005. Payments to territories.
Sec. 2006. Special adjustment to FMAP determination for certain States 
                            recovering from a major disaster.
Sec. 2007. Medicaid Improvement Fund rescission.
   Subtitle B--Enhanced Support for the Children's Health Insurance 
                                Program

Sec. 2101. Additional federal financial participation for CHIP.
Sec. 2102. Technical corrections.
        Subtitle C--Medicaid and CHIP Enrollment Simplification

Sec. 2201. Enrollment Simplification and coordination with State Health 
                            Insurance Exchanges.
Sec. 2202. Permitting hospitals to make presumptive eligibility 
                            determinations for all Medicaid eligible 
                            populations.
             Subtitle D--Improvements to Medicaid Services

Sec. 2301. Coverage for freestanding birth center services.
Sec. 2302. Concurrent care for children.
Sec. 2303. State eligibility option for family planning services.
Sec. 2304. Clarification of definition of medical assistance.
 Subtitle E--New Options for States to Provide Long-Term Services and 
                                Supports

Sec. 2401. Community First Choice Option.
Sec. 2402. Removal of barriers to providing home and community-based 
                            services.
Sec. 2403. Money Follows the Person Rebalancing Demonstration.
Sec. 2404. Protection for recipients of home and community-based 
                            services against spousal impoverishment.
Sec. 2405. Funding to expand State Aging and Disability Resource 
                            Centers.
Sec. 2406. Sense of the Senate regarding long-term care.
            Subtitle F--Medicaid Prescription Drug Coverage

Sec. 2501. Prescription drug rebates.
Sec. 2502. Elimination of exclusion of coverage of certain drugs.
Sec. 2503. Providing adequate pharmacy reimbursement.
  Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments

Sec. 2551. Disproportionate share hospital payments.
   Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

Sec. 2601. 5-year period for demonstration projects.
Sec. 2602. Providing Federal coverage and payment coordination for dual 
                            eligible beneficiaries.
    Subtitle I--Improving the Quality of Medicaid for Patients and 
                               Providers

Sec. 2701. Adult health quality measures.
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions.
Sec. 2703. State option to provide health homes for enrollees with 
                            chronic conditions.
Sec. 2704. Demonstration project to evaluate integrated care around a 
                            hospitalization.
Sec. 2705. Medicaid Global Payment System Demonstration Project.
Sec. 2706. Pediatric Accountable Care Organization Demonstration 
                            Project.
Sec. 2707. Medicaid emergency psychiatric demonstration project.
 Subtitle J--Improvements to the Medicaid and CHIP Payment and Access 
                          Commission (MACPAC)

Sec. 2801. MACPAC assessment of policies affecting all Medicaid 
                            beneficiaries.
    Subtitle K--Protections for American Indians and Alaska Natives

Sec. 2901. Special rules relating to Indians.
Sec. 2902. Elimination of sunset for reimbursement for all medicare 
                            part B services furnished by certain indian 
                            hospitals and clinics.
             Subtitle L--Maternal and Child Health Services

Sec. 2951. Maternal, infant, and early childhood home visiting 
                            programs.
Sec. 2952. Support, education, and research for postpartum depression.
Sec. 2953. Personal responsibility education.
Sec. 2954. Restoration of funding for abstinence education.
Sec. 2955. Inclusion of information about the importance of having a 
                            health care power of attorney in transition 
                            planning for children aging out of foster 
                            care and independent living programs.
     TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE

        Subtitle A--Transforming the Health Care Delivery System

 PART I--Linking Payment to Quality Outcomes Under the Medicare Program

Sec. 3001. Hospital Value-Based purchasing program.
Sec. 3002. Improvements to the physician quality reporting system.
Sec. 3003. Improvements to the physician feedback program.
Sec. 3004. Quality reporting for long-term care hospitals, inpatient 
                            rehabilitation hospitals, and hospice 
                            programs.
Sec. 3005. Quality reporting for PPS-exempt cancer hospitals.
Sec. 3006. Plans for a Value-Based purchasing program for skilled 
                            nursing facilities and home health 
                            agencies.
Sec. 3007. Value-based payment modifier under the physician fee 
                            schedule.
Sec. 3008. Payment adjustment for conditions acquired in hospitals.
       PART II--National Strategy to Improve Health Care Quality

Sec. 3011. National strategy.
Sec. 3012. Interagency Working Group on Health Care Quality.
Sec. 3013. Quality measure development.
Sec. 3014. Quality measurement.
Sec. 3015. Data collection; public reporting.
      PART III--Encouraging Development of New Patient Care Models

Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation 
                            within CMS.
Sec. 3022. Medicare shared savings program.
Sec. 3023. National pilot program on payment bundling.
Sec. 3024. Independence at home demonstration program.
Sec. 3025. Hospital readmissions reduction program.
Sec. 3026. Community-Based Care Transitions Program.
Sec. 3027. Extension of gainsharing demonstration.
       Subtitle B--Improving Medicare for Patients and Providers

    PART I--Ensuring Beneficiary Access to Physician Care and Other 
                                Services

Sec. 3101. Increase in the physician payment update.
Sec. 3102. Extension of the work geographic index floor and revisions 
                            to the practice expense geographic 
                            adjustment under the Medicare physician fee 
                            schedule.
Sec. 3103. Extension of exceptions process for Medicare therapy caps.
Sec. 3104. Extension of payment for technical component of certain 
                            physician pathology services.
Sec. 3105. Extension of ambulance add-ons.
Sec. 3106. Extension of certain payment rules for long-term care 
                            hospital services and of moratorium on the 
                            establishment of certain hospitals and 
                            facilities.
Sec. 3107. Extension of physician fee schedule mental health add-on.
Sec. 3108. Permitting physician assistants to order post-Hospital 
                            extended care services.
Sec. 3109. Exemption of certain pharmacies from accreditation 
                            requirements.
Sec. 3110. Part B special enrollment period for disabled TRICARE 
                            beneficiaries.
Sec. 3111. Payment for bone density tests.
Sec. 3112. Revision to the Medicare Improvement Fund.
Sec. 3113. Treatment of certain complex diagnostic laboratory tests.
Sec. 3114. Improved access for certified nurse-midwife services.
                       PART II--Rural Protections

Sec. 3121. Extension of outpatient hold harmless provision.
Sec. 3122. Extension of Medicare reasonable costs payments for certain 
                            clinical diagnostic laboratory tests 
                            furnished to hospital patients in certain 
                            rural areas.
Sec. 3123. Extension of the Rural Community Hospital Demonstration 
                            Program.
Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program.
Sec. 3125. Temporary improvements to the Medicare inpatient hospital 
                            payment adjustment for low-volume 
                            hospitals.
Sec. 3126. Improvements to the demonstration project on community 
                            health integration models in certain rural 
                            counties.
Sec. 3127. MedPAC study on adequacy of Medicare payments for health 
                            care providers serving in rural areas.
Sec. 3128. Technical correction related to critical access hospital 
                            services.
Sec. 3129. Extension of and revisions to Medicare rural hospital 
                            flexibility program.
                  PART III--Improving Payment Accuracy

Sec. 3131. Payment adjustments for home health care.
Sec. 3132. Hospice reform.
Sec. 3133. Improvement to medicare disproportionate share hospital 
                            (DSH) payments.
Sec. 3134. Misvalued codes under the physician fee schedule.
Sec. 3135. Modification of equipment utilization factor for advanced 
                            imaging services.
Sec. 3136. Revision of payment for power-driven wheelchairs.
Sec. 3137. Hospital wage index improvement.
Sec. 3138. Treatment of certain cancer hospitals.
Sec. 3139. Payment for biosimilar biological products.
Sec. 3140. Medicare hospice concurrent care demonstration program.
Sec. 3141. Application of budget neutrality on a national basis in the 
                            calculation of the Medicare hospital wage 
                            index floor.
Sec. 3142. HHS study on urban Medicare-dependent hospitals.
               Subtitle C--Provisions Relating to Part C

Sec. 3201. Medicare Advantage payment.
Sec. 3202. Benefit protection and simplification.
Sec. 3203. Application of coding intensity adjustment during MA payment 
                            transition.
Sec. 3204. Simplification of annual beneficiary election periods.
Sec. 3205. Extension for specialized MA plans for special needs 
                            individuals.
Sec. 3206. Extension of reasonable cost contracts.
Sec. 3207. Technical correction to MA private fee-for-service plans.
Sec. 3208. Making senior housing facility demonstration permanent.
Sec. 3209. Authority to deny plan bids.
Sec. 3210. Development of new standards for certain Medigap plans.
 Subtitle D--Medicare Part D Improvements for Prescription Drug Plans 
                            and MA-PD Plans

Sec. 3301. Medicare coverage gap discount program.
Sec. 3302. Improvement in determination of Medicare part D low-income 
                            benchmark premium.
Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals 
                            under prescription drug plans and MA-PD 
                            plans.
Sec. 3304. Special rule for widows and widowers regarding eligibility 
                            for low-income assistance.
Sec. 3305. Improved information for subsidy eligible individuals 
                            reassigned to prescription drug plans and 
                            MA-PD plans.
Sec. 3306. Funding outreach and assistance for low-income programs.
Sec. 3307. Improving formulary requirements for prescription drug plans 
                            and MA-PD plans with respect to certain 
                            categories or classes of drugs.
Sec. 3308. Reducing part D premium subsidy for high-income 
                            beneficiaries.
Sec. 3309. Elimination of cost sharing for certain dual eligible 
                            individuals.
Sec. 3310. Reducing wasteful dispensing of outpatient prescription 
                            drugs in long-term care facilities under 
                            prescription drug plans and MA-PD plans.
Sec. 3311. Improved Medicare prescription drug plan and MA-PD plan 
                            complaint system.
Sec. 3312. Uniform exceptions and appeals process for prescription drug 
                            plans and MA-PD plans.
Sec. 3313. Office of the Inspector General studies and reports.
Sec. 3314. Including costs incurred by AIDS drug assistance programs 
                            and Indian Health Service in providing 
                            prescription drugs toward the annual out-
                            of-pocket threshold under part D.
Sec. 3315. Immediate reduction in coverage gap in 2010.
              Subtitle E--Ensuring Medicare Sustainability

Sec. 3401. Revision of certain market basket updates and incorporation 
                            of productivity improvements into market 
                            basket updates that do not already 
                            incorporate such improvements.
Sec. 3402. Temporary adjustment to the calculation of part B premiums.
Sec. 3403. Independent Medicare Advisory Board.
              Subtitle F--Health Care Quality Improvements

Sec. 3501. Health care delivery system research; Quality improvement 
                            technical assistance.
Sec. 3502. Establishing community health teams to support the patient-
                            centered medical home.
Sec. 3503. Medication management services in treatment of chronic 
                            disease.
Sec. 3504. Design and implementation of regionalized systems for 
                            emergency care.
Sec. 3505. Trauma care centers and service availability.
Sec. 3506. Program to facilitate shared decisionmaking.
Sec. 3507. Presentation of prescription drug benefit and risk 
                            information.
Sec. 3508. Demonstration program to integrate quality improvement and 
                            patient safety training into clinical 
                            education of health professionals.
Sec. 3509. Improving women's health.
Sec. 3510. Patient navigator program.
Sec. 3511. Authorization of appropriations.
  TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH

  Subtitle A--Modernizing Disease Prevention and Public Health Systems

Sec. 4001. National Prevention, Health Promotion and Public Health 
                            Council.
Sec. 4002. Prevention and Public Health Fund.
Sec. 4003. Clinical and community preventive services.
Sec. 4004. Education and outreach campaign regarding preventive 
                            benefits.
     Subtitle B--Increasing Access to Clinical Preventive Services

Sec. 4101. School-based health centers.
Sec. 4102. Oral healthcare prevention activities.
Sec. 4103. Medicare coverage of annual wellness visit providing a 
                            personalized prevention plan.
Sec. 4104. Removal of barriers to preventive services in Medicare.
Sec. 4105. Evidence-based coverage of preventive services in Medicare.
Sec. 4106. Improving access to preventive services for eligible adults 
                            in Medicaid.
Sec. 4107. Coverage of comprehensive tobacco cessation services for 
                            pregnant women in Medicaid.
Sec. 4108. Incentives for prevention of chronic diseases in medicaid.
               Subtitle C--Creating Healthier Communities

Sec. 4201. Community transformation grants.
Sec. 4202. Healthy aging, living well; evaluation of community-based 
                            prevention and wellness programs for 
                            Medicare beneficiaries.
Sec. 4203. Removing barriers and improving access to wellness for 
                            individuals with disabilities.
Sec. 4204. Immunizations.
Sec. 4205. Nutrition labeling of standard menu items at chain 
                            restaurants.
Sec. 4206. Demonstration project concerning individualized wellness 
                            plan.
Sec. 4207. Reasonable break time for nursing mothers.
    Subtitle D--Support for Prevention and Public Health Innovation

Sec. 4301. Research on optimizing the delivery of public health 
                            services.
Sec. 4302. Understanding health disparities: data collection and 
                            analysis.
Sec. 4303. CDC and employer-based wellness programs.
Sec. 4304. Epidemiology-Laboratory Capacity Grants.
Sec. 4305. Advancing research and treatment for pain care management.
Sec. 4306. Funding for Childhood Obesity Demonstration Project.
                  Subtitle E--Miscellaneous Provisions

Sec. 4401. Sense of the Senate concerning CBO scoring.
Sec. 4402. Effectiveness of Federal health and wellness initiatives.
                     TITLE V--HEALTH CARE WORKFORCE

                  Subtitle A--Purpose and Definitions

Sec. 5001. Purpose.
Sec. 5002. Definitions.
          Subtitle B--Innovations in the Health Care Workforce

Sec. 5101. National health care workforce commission.
Sec. 5102. State health care workforce development grants.
Sec. 5103. Health care workforce assessment.
     Subtitle C--Increasing the Supply of the Health Care Workforce

Sec. 5201. Federally supported student loan funds.
Sec. 5202. Nursing student loan program.
Sec. 5203. Health care workforce loan repayment programs.
Sec. 5204. Public health workforce recruitment and retention programs.
Sec. 5205. Allied health workforce recruitment and retention programs.
Sec. 5206. Grants for State and local programs.
Sec. 5207. Funding for National Health Service Corps.
Sec. 5208. Nurse-managed health clinics.
Sec. 5209. Elimination of cap on commissioned corps.
Sec. 5210. Establishing a Ready Reserve Corps.
   Subtitle D--Enhancing Health Care Workforce Education and Training

Sec. 5301. Training in family medicine, general internal medicine, 
                            general pediatrics, and physician 
                            assistantship.
Sec. 5302. Training opportunities for direct care workers.
Sec. 5303. Training in general, pediatric, and public health dentistry.
Sec. 5304. Alternative dental health care providers demonstration 
                            project.
Sec. 5305. Geriatric education and training; career awards; 
                            comprehensive geriatric education.
Sec. 5306. Mental and behavioral health education and training grants.
Sec. 5307. Cultural competency, prevention, and public health and 
                            individuals with disabilities training.
Sec. 5308. Advanced nursing education grants.
Sec. 5309. Nurse education, practice, and retention grants.
Sec. 5310. Loan repayment and scholarship program.
Sec. 5311. Nurse faculty loan program.
Sec. 5312. Authorization of appropriations for parts B through D of 
                            title VIII.
Sec. 5313. Grants to promote the community health workforce.
Sec. 5314. Fellowship training in public health.
Sec. 5315. United States Public Health Sciences Track.
       Subtitle E--Supporting the Existing Health Care Workforce

Sec. 5401. Centers of excellence.
Sec. 5402. Health care professionals training for diversity.
Sec. 5403. Interdisciplinary, community-based linkages.
Sec. 5404. Workforce diversity grants.
Sec. 5405. Primary care extension program.
Subtitle F--Strengthening Primary Care and Other Workforce Improvements

Sec. 5501. Expanding access to primary care services and general 
                            surgery services.
Sec. 5502. Medicare Federally qualified health center improvements.
Sec. 5503. Distribution of additional residency positions.
Sec. 5504. Counting resident time in outpatient settings and allowing 
                            flexibility for jointly operated residency 
                            training programs.
Sec. 5505. Rules for counting resident time for didactic and scholarly 
                            activities and other activities.
Sec. 5506. Preservation of resident cap positions from closed 
                            hospitals.
Sec. 5507. Demonstration projects To address health professions 
                            workforce needs; extension of family-to-
                            family health information centers.
Sec. 5508. Increasing teaching capacity.
Sec. 5509. Graduate nurse education demonstration.
          Subtitle G--Improving Access to Health Care Services

Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs).
Sec. 5602. Negotiated rulemaking for development of methodology and 
                            criteria for designating medically 
                            underserved populations and health 
                            professions shortage areas.
Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services 
                            for Children Program.
Sec. 5604. Co-locating primary and specialty care in community-based 
                            mental health settings.
Sec. 5605. Key National indicators.
                     Subtitle H--General Provisions

Sec. 5701. Reports.
              TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

         Subtitle A--Physician Ownership and Other Transparency

Sec. 6001. Limitation on Medicare exception to the prohibition on 
                            certain physician referrals for hospitals.
Sec. 6002. Transparency reports and reporting of physician ownership or 
                            investment interests.
Sec. 6003. Disclosure requirements for in-office ancillary services 
                            exception to the prohibition on physician 
                            self-referral for certain imaging services.
Sec. 6004. Prescription drug sample transparency.
Sec. 6005. Pharmacy benefit managers transparency requirements.
         Subtitle B--Nursing Home Transparency and Improvement

             PART I--Improving Transparency of Information

Sec. 6101. Required disclosure of ownership and additional disclosable 
                            parties information.
Sec. 6102. Accountability requirements for skilled nursing facilities 
                            and nursing facilities.
Sec. 6103. Nursing home compare Medicare website.
Sec. 6104. Reporting of expenditures.
Sec. 6105. Standardized complaint form.
Sec. 6106. Ensuring staffing accountability.
Sec. 6107. GAO study and report on Five-Star Quality Rating System.
                     PART II--Targeting Enforcement

Sec. 6111. Civil money penalties.
Sec. 6112. National independent monitor demonstration project.
Sec. 6113. Notification of facility closure.
Sec. 6114. National demonstration projects on culture change and use of 
                            information technology in nursing homes.
                   PART III--Improving Staff Training

Sec. 6121. Dementia and abuse prevention training.
Subtitle C--Nationwide Program for National and State Background Checks 
  on Direct Patient Access Employees of Long-term Care Facilities and 
                               Providers

Sec. 6201. Nationwide program for National and State background checks 
                            on direct patient access employees of long-
                            term care facilities and providers.
             Subtitle D--Patient-Centered Outcomes Research

Sec. 6301. Patient-Centered Outcomes Research.
Sec. 6302. Federal coordinating council for comparative effectiveness 
                            research.
 Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions

Sec. 6401. Provider screening and other enrollment requirements under 
                            Medicare, Medicaid, and CHIP.
Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions.
Sec. 6403. Elimination of duplication between the Healthcare Integrity 
                            and Protection Data Bank and the National 
                            Practitioner Data Bank.
Sec. 6404. Maximum period for submission of Medicare claims reduced to 
                            not more than 12 months.
Sec. 6405. Physicians who order items or services required to be 
                            Medicare enrolled physicians or eligible 
                            professionals.
Sec. 6406. Requirement for physicians to provide documentation on 
                            referrals to programs at high risk of waste 
                            and abuse.
Sec. 6407. Face to face encounter with patient required before 
                            physicians may certify eligibility for home 
                            health services or durable medical 
                            equipment under Medicare.
Sec. 6408. Enhanced penalties.
Sec. 6409. Medicare self-referral disclosure protocol.
Sec. 6410. Adjustments to the Medicare durable medical equipment, 
                            prosthetics, orthotics, and supplies 
                            competitive acquisition program.
Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program.
      Subtitle F--Additional Medicaid Program Integrity Provisions

Sec. 6501. Termination of provider participation under Medicaid if 
                            terminated under Medicare or other State 
                            plan.
Sec. 6502. Medicaid exclusion from participation relating to certain 
                            ownership, control, and management 
                            affiliations.
Sec. 6503. Billing agents, clearinghouses, or other alternate payees 
                            required to register under Medicaid.
Sec. 6504. Requirement to report expanded set of data elements under 
                            MMIS to detect fraud and abuse.
Sec. 6505. Prohibition on payments to institutions or entities located 
                            outside of the United States.
Sec. 6506. Overpayments.
Sec. 6507. Mandatory State use of national correct coding initiative.
Sec. 6508. General effective date.
          Subtitle G--Additional Program Integrity Provisions

Sec. 6601. Prohibition on false statements and representations.
Sec. 6602. Clarifying definition.
Sec. 6603. Development of model uniform report form.
Sec. 6604. Applicability of State law to combat fraud and abuse.
Sec. 6605. Enabling the Department of Labor to issue administrative 
                            summary cease and desist orders and summary 
                            seizures orders against plans that are in 
                            financially hazardous condition.
Sec. 6607. Permitting evidentiary privilege and confidential cSec. 
                            6606. MEWA plan registration with 
                            Department of Labor.
ommunications.
                     Subtitle H--Elder Justice Act

Sec. 6701. Short title of subtitle.
Sec. 6702. Definitions.
Sec. 6703. Elder Justice.
     Subtitle I--Sense of the Senate Regarding Medical Malpractice

Sec. 6801. Sense of the Senate regarding medical malpractice.
      TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

         Subtitle A--Biologics Price Competition and Innovation

Sec. 7001. Short title.
Sec. 7002. Approval pathway for biosimilar biological products.
Sec. 7003. Savings.
  Subtitle B--More Affordable Medicines for Children and Underserved 
                              Communities

Sec. 7101. Expanded participation in 340B program.
Sec. 7102. Improvements to 340B program integrity.
Sec. 7103. GAO study to make recommendations on improving the 340B 
                            program.
                         TITLE VIII--CLASS ACT

Sec. 8001. Short title of title.
Sec. 8002. Establishment of national voluntary insurance program for 
                            purchasing community living assistance 
                            services and support.
                      TITLE IX--REVENUE PROVISIONS

                 Subtitle A--Revenue Offset Provisions

Sec. 9001. Excise tax on high cost employer-sponsored health coverage.
Sec. 9002. Inclusion of cost of employer-sponsored health coverage on 
                            W-2.
Sec. 9003. Distributions for medicine qualified only if for prescribed 
                            drug or insulin.
Sec. 9004. Increase in additional tax on distributions from HSAs and 
                            Archer MSAs not used for qualified medical 
                            expenses.
Sec. 9005. Limitation on health flexible spending arrangements under 
                            cafeteria plans.
Sec. 9006. Expansion of information reporting requirements.
Sec. 9007. Additional requirements for charitable hospitals.
Sec. 9008. Imposition of annual fee on branded prescription 
                            pharmaceutical manufacturers and importers.
Sec. 9009. Imposition of annual fee on medical device manufacturers and 
                            importers.
Sec. 9010. Imposition of annual fee on health insurance providers.
Sec. 9011. Study and report of effect on veterans health care.
Sec. 9012. Elimination of deduction for expenses allocable to Medicare 
                            Part D subsidy.
Sec. 9013. Modification of itemized deduction for medical expenses.
Sec. 9014. Limitation on excessive remuneration paid by certain health 
                            insurance providers.
Sec. 9015. Additional hospital insurance tax on high-income taxpayers.
Sec. 9016. Modification of section 833 treatment of certain health 
                            organizations.
Sec. 9017. Excise tax on elective cosmetic medical procedures.
                      Subtitle B--Other Provisions

Sec. 9021. Exclusion of health benefits provided by Indian tribal 
                            governments.
Sec. 9022. Establishment of simple cafeteria plans for small 
                            businesses.
Sec. 9023. Qualifying therapeutic discovery project credit.

       TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

  Subtitle A--Immediate Improvements in Health Care Coverage for All 
                               Americans

SEC. 1001. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    Part A of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg et seq.) is amended--
            (1) by striking the part heading and inserting the 
        following:

            ``PART A--INDIVIDUAL AND GROUP MARKET REFORMS'';

            (2) by redesignating sections 2704 through 2707 as sections 
        2725 through 2728, respectively;
            (3) by redesignating sections 2711 through 2713 as sections 
        2731 through 2733, respectively;
            (4) by redesignating sections 2721 through 2723 as sections 
        2735 through 2737, respectively; and
            (5) by inserting after section 2702, the following:

                    ``Subpart II--Improving Coverage

``SEC. 2711. NO LIFETIME OR ANNUAL LIMITS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
establish--
            ``(1) lifetime limits on the dollar value of benefits for 
        any participant or beneficiary; or
            ``(2) unreasonable annual limits (within the meaning of 
        section 223 of the Internal Revenue Code of 1986) on the dollar 
        value of benefits for any participant or beneficiary.
    ``(b) Per Beneficiary Limits.--Subsection (a) shall not be 
construed to prevent a group health plan or health insurance coverage 
that is not required to provide essential health benefits under section 
1302(b) of the Patient Protection and Affordable Care Act from placing 
annual or lifetime per beneficiary limits on specific covered benefits 
to the extent that such limits are otherwise permitted under Federal or 
State law.

``SEC. 2712. PROHIBITION ON RESCISSIONS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall not rescind such plan or 
coverage with respect to an enrollee once the enrollee is covered under 
such plan or coverage involved, except that this section shall not 
apply to a covered individual who has performed an act or practice that 
constitutes fraud or makes an intentional misrepresentation of material 
fact as prohibited by the terms of the plan or coverage. Such plan or 
coverage may not be cancelled except with prior notice to the enrollee, 
and only as permitted under section 2702(c) or 2742(b).

``SEC. 2713. COVERAGE OF PREVENTIVE HEALTH SERVICES.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage shall 
provide coverage for and shall not impose any cost sharing requirements 
for--
            ``(1) evidence-based items or services that have in effect 
        a rating of `A' or `B' in the current recommendations of the 
        United States Preventive Services Task Force;
            ``(2) immunizations that have in effect a recommendation 
        from the Advisory Committee on Immunization Practices of the 
        Centers for Disease Control and Prevention with respect to the 
        individual involved; and
            ``(3) with respect to infants, children, and adolescents, 
        evidence-informed preventive care and screenings provided for 
        in the comprehensive guidelines supported by the Health 
        Resources and Services Administration.
    ``(b) Interval.--
            ``(1) In general.--The Secretary shall establish a minimum 
        interval between the date on which a recommendation described 
        in subsection (a)(1) or (a)(2) or a guideline under subsection 
        (a)(3) is issued and the plan year with respect to which the 
        requirement described in subsection (a) is effective with 
        respect to the service described in such recommendation or 
        guideline.
            ``(2) Minimum.--The interval described in paragraph (1) 
        shall not be less than 1 year.
    ``(c) Value-based Insurance Design.--The Secretary may develop 
guidelines to permit a group health plan and a health insurance issuer 
offering group or individual health insurance coverage to utilize 
value-based insurance designs.

``SEC. 2714. EXTENSION OF DEPENDENT COVERAGE.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage that 
provides dependent coverage of children shall continue to make such 
coverage available for an adult child (who is not married) until the 
child turns 26 years of age. Nothing in this section shall require a 
health plan or a health insurance issuer described in the preceding 
sentence to make coverage available for a child of a child receiving 
dependent coverage.
    ``(b) Regulations.--The Secretary shall promulgate regulations to 
define the dependents to which coverage shall be made available under 
subsection (a).
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to modify the definition of `dependent' as used in the 
Internal Revenue Code of 1986 with respect to the tax treatment of the 
cost of coverage.

``SEC. 2715. DEVELOPMENT AND UTILIZATION OF UNIFORM EXPLANATION OF 
              COVERAGE DOCUMENTS AND STANDARDIZED DEFINITIONS.

    ``(a) In General.--Not later than 12 months after the date of 
enactment of the Patient Protection and Affordable Care Act, the 
Secretary shall develop standards for use by a group health plan and a 
health insurance issuer offering group or individual health insurance 
coverage, in compiling and providing to enrollees a summary of benefits 
and coverage explanation that accurately describes the benefits and 
coverage under the applicable plan or coverage. In developing such 
standards, the Secretary shall consult with the National Association of 
Insurance Commissioners (referred to in this section as the `NAIC'), a 
working group composed of representatives of health insurance-related 
consumer advocacy organizations, health insurance issuers, health care 
professionals, patient advocates including those representing 
individuals with limited English proficiency, and other qualified 
individuals.
    ``(b) Requirements.--The standards for the summary of benefits and 
coverage developed under subsection (a) shall provide for the 
following:
            ``(1) Appearance.--The standards shall ensure that the 
        summary of benefits and coverage is presented in a uniform 
        format that does not exceed 4 pages in length and does not 
        include print smaller than 12-point font.
            ``(2) Language.--The standards shall ensure that the 
        summary is presented in a culturally and linguistically 
        appropriate manner and utilizes terminology understandable by 
        the average plan enrollee.
            ``(3) Contents.--The standards shall ensure that the 
        summary of benefits and coverage includes--
                    ``(A) uniform definitions of standard insurance 
                terms and medical terms (consistent with subsection 
                (g)) so that consumers may compare health insurance 
                coverage and understand the terms of coverage (or 
                exception to such coverage);
                    ``(B) a description of the coverage, including cost 
                sharing for--
                            ``(i) each of the categories of the 
                        essential health benefits described in 
                        subparagraphs (A) through (J) of section 
                        1302(b)(1) of the Patient Protection and 
                        Affordable Care Act; and
                            ``(ii) other benefits, as identified by the 
                        Secretary;
                    ``(C) the exceptions, reductions, and limitations 
                on coverage;
                    ``(D) the cost-sharing provisions, including 
                deductible, coinsurance, and co-payment obligations;
                    ``(E) the renewability and continuation of coverage 
                provisions;
                    ``(F) a coverage facts label that includes examples 
                to illustrate common benefits scenarios, including 
                pregnancy and serious or chronic medical conditions and 
                related cost sharing, such scenarios to be based on 
                recognized clinical practice guidelines;
                    ``(G) a statement of whether the plan or coverage--
                            ``(i) provides minimum essential coverage 
                        (as defined under section 5000A(f) of the 
                        Internal Revenue Code 1986); and
                            ``(ii) ensures that the plan or coverage 
                        share of the total allowed costs of benefits 
                        provided under the plan or coverage is not less 
                        than 60 percent of such costs;
                    ``(H) a statement that the outline is a summary of 
                the policy or certificate and that the coverage 
                document itself should be consulted to determine the 
                governing contractual provisions; and
                    ``(I) a contact number for the consumer to call 
                with additional questions and an Internet web address 
                where a copy of the actual individual coverage policy 
                or group certificate of coverage can be reviewed and 
                obtained.
    ``(c) Periodic Review and Updating.--The Secretary shall 
periodically review and update, as appropriate, the standards developed 
under this section.
    ``(d) Requirement to Provide.--
            ``(1) In general.--Not later than 24 months after the date 
        of enactment of the Patient Protection and Affordable Care Act, 
        each entity described in paragraph (3) shall provide, prior to 
        any enrollment restriction, a summary of benefits and coverage 
        explanation pursuant    to the standards developed by the 
        Secretary under subsection (a) to--
                    ``(A) an applicant at the time of application;
                    ``(B) an enrollee prior to the time of enrollment 
                or reenrollment, as applicable; and
                    ``(C) a policyholder or certificate holder at the 
                time of issuance of the policy or delivery of the 
                certificate.
            ``(2) Compliance.--An entity described in paragraph (3) is 
        deemed to be in compliance with this section if the summary of 
        benefits and coverage described in subsection (a) is provided 
        in paper or electronic form.
            ``(3) Entities in general.--An entity described in this 
        paragraph is--
                    ``(A) a health insurance issuer (including a group 
                health plan that is not a self-insured plan) offering 
                health insurance coverage within the United States; or
                    ``(B) in the case of a self-insured group health 
                plan, the plan sponsor or designated administrator of 
                the plan (as such terms are defined in section 3(16) of 
                the Employee Retirement Income Security Act of 1974).
            ``(4) Notice of modifications.--If a group health plan or 
        health insurance issuer makes any material modification in any 
        of the terms of the plan or coverage involved (as defined for 
        purposes of section 102 of the Employee Retirement Income 
        Security Act of 1974) that is not reflected in the most 
        recently provided summary of benefits and coverage, the plan or 
        issuer shall provide notice of such modification to enrollees 
        not later than 60 days prior to the date on which such 
        modification will become effective.
    ``(e) Preemption.--The standards developed under subsection (a) 
shall preempt any related State standards that require a summary of 
benefits and coverage that provides less information to consumers than 
that required to be provided under this section, as determined by the 
Secretary.
    ``(f) Failure to Provide.--An entity described in subsection (d)(3) 
that willfully fails to provide the information required under this 
section shall be subject to a fine of not more than $1,000 for each 
such failure. Such failure with respect to each enrollee shall 
constitute a separate offense for purposes of this subsection.
    ``(g) Development of Standard Definitions.--
            ``(1) In general.--The Secretary shall, by regulation, 
        provide for the development of standards for the definitions of 
        terms used in health insurance coverage, including the 
        insurance-related terms described in paragraph (2) and the 
        medical terms described in paragraph (3).
            ``(2) Insurance-related terms.--The insurance-related terms 
        described in this paragraph are premium, deductible, co-
        insurance, co-payment, out-of-pocket limit, preferred provider, 
        non-preferred provider, out-of-network co-payments, UCR (usual, 
        customary and reasonable) fees, excluded services, grievance 
        and appeals, and such other terms as the Secretary determines 
        are important to define so that consumers may compare health 
        insurance coverage and understand the terms of their coverage.
            ``(3) Medical terms.--The medical terms described in this 
        paragraph are hospitalization, hospital outpatient care, 
        emergency room care, physician services, prescription drug 
        coverage, durable medical equipment, home health care, skilled 
        nursing care, rehabilitation services, hospice services, 
        emergency medical transportation, and such other terms as the 
        Secretary determines are important to define so that consumers 
        may compare the medical benefits offered by health insurance 
        and understand the extent of those medical benefits (or 
        exceptions to those benefits).

``SEC. 2716. PROHIBITION OF DISCRIMINATION BASED ON SALARY.

    ``(a) In General.--The plan sponsor of a group health plan (other 
than a self-insured plan) may not establish rules relating to the 
health insurance coverage eligibility (including continued eligibility) 
of any full-time employee under the terms of the plan that are based on 
the total hourly or annual salary of the employee or otherwise 
establish eligibility rules that have the effect of discriminating in 
favor of higher wage employees.
    ``(b) Limitation.--Subsection (a) shall not be construed to 
prohibit a plan sponsor from establishing contribution requirements for 
enrollment in the plan or coverage that provide for the payment by 
employees with lower hourly or annual compensation of a lower dollar or 
percentage contribution than the payment required of similarly situated 
employees with a higher hourly or annual compensation.

``SEC. 2717. ENSURING THE QUALITY OF CARE.

    ``(a) Quality Reporting.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Patient Protection and Affordable Care Act, 
        the Secretary, in consultation with experts in health care 
        quality and stakeholders, shall develop reporting requirements 
        for use by a group health plan, and a health insurance issuer 
        offering group or individual health insurance coverage, with 
        respect to plan or coverage benefits and health care provider 
        reimbursement structures that--
                    ``(A) improve health outcomes through the 
                implementation of activities such as quality reporting, 
                effective case management, care coordination, chronic 
                disease management, and medication and care compliance 
                initiatives, including through the use of the medical 
                homes model as defined for purposes of section 3602 of 
                the Patient Protection and Affordable Care Act, for 
                treatment or services under the plan or coverage;
                    ``(B) implement activities to prevent hospital 
                readmissions through a comprehensive program for 
                hospital discharge that includes patient-centered 
                education and counseling, comprehensive discharge 
                planning, and post discharge reinforcement by an 
                appropriate health care professional;
                    ``(C) implement activities to improve patient 
                safety and reduce medical errors through the 
                appropriate use of best clinical practices, evidence 
                based medicine, and health information technology under 
                the plan or coverage; and
                    ``(D) implement wellness and health promotion 
                activities.
            ``(2) Reporting requirements.--
                    ``(A) In general.--A group health plan and a health 
                insurance issuer offering group or individual health 
                insurance coverage shall annually submit to the 
                Secretary, and to enrollees under the plan or coverage, 
                a report on whether the benefits under the plan or 
                coverage satisfy the elements described in 
                subparagraphs (A) through (D) of paragraph (1).
                    ``(B) Timing of reports.--A report under 
                subparagraph (A) shall be made available to an enrollee 
                under the plan or coverage during each open enrollment 
                period.
                    ``(C) Availability of reports.--The Secretary shall 
                make reports submitted under subparagraph (A) available 
                to the public through an Internet website
                    ``(D) Penalties.--In developing the reporting 
                requirements under paragraph (1), the Secretary may 
                develop and impose appropriate penalties for non-
                compliance with such requirements.
                    ``(E) Exceptions.--In developing the reporting 
                requirements under paragraph (1), the Secretary may 
                provide for exceptions to such requirements for group 
                health plans and health insurance issuers that 
                substantially meet the goals of this section.
    ``(b) Wellness and Prevention Programs.--For purposes of subsection 
(a)(1)(D), wellness and health promotion activities may include 
personalized wellness and prevention services, which are coordinated, 
maintained or delivered by a health care provider, a wellness and 
prevention plan manager, or a health, wellness or prevention services 
organization that conducts health risk assessments or offers ongoing 
face-to-face, telephonic or web-based intervention efforts for each of 
the program's participants, and which may include the following 
wellness and prevention efforts:
            ``(1) Smoking cessation.
            ``(2) Weight management.
            ``(3) Stress management.
            ``(4) Physical fitness.
            ``(5) Nutrition.
            ``(6) Heart disease prevention.
            ``(7) Healthy lifestyle support.
            ``(8) Diabetes prevention.
    ``(c) Regulations.--Not later than 2 years after the date of 
enactment of the Patient Protection and Affordable Care Act, the 
Secretary shall promulgate regulations that provide criteria for 
determining whether a reimbursement structure is described in 
subsection (a).
    ``(d) Study and Report.--Not later than 180 days after the date on 
which regulations are promulgated under subsection (c), the Government 
Accountability Office shall review such regulations and conduct a study 
and submit to the Committee on Health, Education, Labor, and Pensions 
of the Senate and the Committee on Energy and Commerce of the House of 
Representatives a report regarding the impact the activities under this 
section have had on the quality and cost of health care.

``SEC. 2718. BRINGING DOWN THE COST OF HEALTH CARE COVERAGE.

    ``(a) Clear Accounting for Costs.--A health insurance issuer 
offering group or individual health insurance coverage shall, with 
respect to each plan year, submit to the Secretary a report concerning 
the percentage of total premium revenue that such coverage expends--
            ``(1) on reimbursement for clinical services provided to 
        enrollees under such coverage;
            ``(2) for activities that improve health care quality; and
            ``(3) on all other non-claims costs, including an 
        explanation of the nature of such costs, and excluding State 
        taxes and licensing or regulatory fees.
The Secretary shall make reports received under this section available 
to the public on the Internet website of the Department of Health and 
Human Services.
    ``(b) Ensuring That Consumers Receive Value for Their Premium 
Payments.--
            ``(1) Requirement to provide value for premium payments.--A 
        health insurance issuer offering group or individual health 
        insurance coverage shall, with respect to each plan year, 
        provide an annual rebate to each enrollee under such coverage, 
        on a pro rata basis, in an amount that is equal to the amount 
        by which premium revenue expended by the issuer on activities 
        described in subsection (a)(3) exceeds--
                    ``(A) with respect to a health insurance issuer 
                offering coverage in the group market, 20 percent, or 
                such lower percentage as a State may by regulation 
                determine; or
                    ``(B) with respect to a health insurance issuer 
                offering coverage in the individual market, 25 percent, 
                or such lower percentage as a State may by regulation 
                determine, except that such percentage shall be 
                adjusted to the extent the Secretary determines that 
                the application of such percentage with a State may 
                destabilize the existing individual market in such 
                State.
            ``(2) Consideration in setting percentages.--In determining 
        the percentages under paragraph (1), a State shall seek to 
        ensure adequate participation by health insurance issuers, 
        competition in the health insurance market in the State, and 
        value for consumers so that premiums are used for clinical 
        services and quality improvements.
            ``(3) Termination.--The provisions of this subsection shall 
        have no force or effect after December 31, 2013.
    ``(c) Standard Hospital Charges.--Each hospital operating within 
the United States shall for each year establish (and update) and make 
public (in accordance with guidelines developed by the Secretary) a 
list of the hospital's standard charges for items and services provided 
by the hospital, including for diagnosis-related groups established 
under section 1886(d)(4) of the Social Security Act.
    ``(d) Definitions.--The Secretary, in consultation with the 
National Association of Insurance Commissions, shall establish uniform 
definitions for the activities reported under subsection (a).

``SEC. 2719. APPEALS PROCESS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall implement an effective 
appeals process for appeals of coverage determinations and claims, 
under which the plan or issuer shall, at a minimum--
            ``(1) have in effect an internal claims appeal process;
            ``(2) provide notice to enrollees, in a culturally and 
        linguistically appropriate manner, of available internal and 
        external appeals processes, and the availability of any 
        applicable office of health insurance consumer assistance or 
        ombudsman established under section 2793 to assist such 
        enrollees with the appeals processes;
            ``(3) allow an enrollee to review their file, to present 
        evidence and testimony as part of the appeals process, and to 
        receive continued coverage pending the outcome of the appeals 
        process; and
            ``(4) provide an external review process for such plans and 
        issuers that, at a minimum, includes the consumer protections 
        set forth in the Uniform External Review Model Act promulgated 
        by the National Association of Insurance Commissioners and is 
        binding on such plans.''.

SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.) is amended by adding at the end the following:

``SEC. 2793. HEALTH INSURANCE CONSUMER INFORMATION.

    ``(a) In General.--The Secretary shall award grants to States to 
enable such States (or the Exchanges operating in such States) to 
establish, expand, or provide support for--
            ``(1) offices of health insurance consumer assistance; or
            ``(2) health insurance ombudsman programs.
    ``(b) Eligibility.--
            ``(1) In general.--To be eligible to receive a grant, a 
        State shall designate an independent office of health insurance 
        consumer assistance, or an ombudsman, that, directly or in 
        coordination with State health insurance regulators and 
        consumer assistance organizations, receives and responds to 
        inquiries and complaints concerning health insurance coverage 
        with respect to Federal health insurance requirements and under 
        State law.
            ``(2) Criteria.--A State that receives a grant under this 
        section shall comply with criteria established by the Secretary 
        for carrying out activities under such grant.
    ``(c) Duties.--The office of health insurance consumer assistance 
or health insurance ombudsman shall--
            ``(1) assist with the filing of complaints and appeals, 
        including filing appeals with the internal appeal or grievance 
        process of the group health plan or health insurance issuer 
        involved and providing information about the external appeal 
        process;
            ``(2) collect, track, and quantify problems and inquiries 
        encountered by consumers;
            ``(3) educate consumers on their rights and 
        responsibilities with respect to group health plans and health 
        insurance coverage;
            ``(4) assist consumers with enrollment in a group health 
        plan or health insurance coverage by providing information, 
        referral, and assistance; and
            ``(5) resolve problems with obtaining premium tax credits 
        under section 36B of the Internal Revenue Code of 1986.
    ``(d) Data Collection.--As a condition of receiving a grant under 
subsection (a), an office of health insurance consumer assistance or 
ombudsman program shall be required to collect and report data to the 
Secretary on the types of problems and inquiries encountered by 
consumers. The Secretary shall utilize such data to identify areas 
where more enforcement action is necessary and shall share such 
information with State insurance regulators, the Secretary of Labor, 
and the Secretary of the Treasury for use in the enforcement activities 
of such agencies.
    ``(e) Funding.--
            ``(1) Initial funding.--There is hereby appropriated to the 
        Secretary, out of any funds in the Treasury not otherwise 
        appropriated, $30,000,000 for the first fiscal year for which 
        this section applies to carry out this section. Such amount 
        shall remain available without fiscal year limitation.
            ``(2) Authorization for subsequent years.--There is 
        authorized to be appropriated to the Secretary for each fiscal 
        year following the fiscal year described in paragraph (1), such 
        sums as may be necessary to carry out this section.''.

SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.), as amended by section 1002, is further amended by 
adding at the end the following:

``SEC. 2794. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.

    ``(a) Initial Premium Review Process.--
            ``(1) In general.--The Secretary, in conjunction with 
        States, shall establish a process for the annual review, 
        beginning with the 2010 plan year and subject to subsection 
        (b)(2)(A), of unreasonable increases in premiums for health 
        insurance coverage.
            ``(2) Justification and disclosure.--The process 
        established under paragraph (1) shall require health insurance 
        issuers to submit to the Secretary and the relevant State a 
        justification for an unreasonable premium increase prior to the 
        implementation of the increase. Such issuers shall prominently 
        post such information on their Internet websites. The Secretary 
        shall ensure the public disclosure of information on such 
        increases and justifications for all health insurance issuers.
    ``(b) Continuing Premium Review Process.--
            ``(1) Informing secretary of premium increase patterns.--As 
        a condition of receiving a grant under subsection (c)(1), a 
        State, through its Commissioner of Insurance, shall--
                    ``(A) provide the Secretary with information about 
                trends in premium increases in health insurance 
                coverage in premium rating areas in the State; and
                    ``(B) make recommendations, as appropriate, to the 
                State Exchange about whether particular health 
                insurance issuers should be excluded from participation 
                in the Exchange based on a pattern or practice of 
                excessive or unjustified premium increases.
            ``(2) Monitoring by secretary of premium increases.--
                    ``(A) In general.--Beginning with plan years 
                beginning in 2014, the Secretary, in conjunction with 
                the States and consistent with the provisions of 
                subsection (a)(2), shall monitor premium increases of 
                health insurance coverage offered through an Exchange 
                and outside of an Exchange.
                    ``(B) Consideration in opening exchange.--In 
                determining under section 1312(f)(2)(B) of the Patient 
                Protection and Affordable Care Act whether to offer 
                qualified health plans in the large group market 
                through an Exchange, the State shall take into account 
                any excess of premium growth outside of the Exchange as 
                compared to the rate of such growth inside the 
                Exchange.
    ``(c) Grants in Support of Process.--
            ``(1) Premium review grants during 2010 through 2014.--The 
        Secretary shall carry out a program to award grants to States 
        during the 5-year period beginning with fiscal year 2010 to 
        assist such States in carrying out subsection (a), including--
                    ``(A) in reviewing and, if appropriate under State 
                law, approving premium increases for health insurance 
                coverage; and
                    ``(B) in providing information and recommendations 
                to the Secretary under subsection (b)(1).
            ``(2) Funding.--
                    ``(A) In general.--Out of all funds in the Treasury 
                not otherwise appropriated, there are appropriated to 
                the Secretary $250,000,000, to be available for 
                expenditure for grants under paragraph (1) and 
                subparagraph (B).
                    ``(B) Further availability for insurance reform and 
                consumer protection.--If the amounts appropriated under 
                subparagraph (A) are not fully obligated under grants 
                under paragraph (1) by the end of fiscal year 2014, any 
                remaining funds shall remain available to the Secretary 
                for grants to States for planning and implementing the 
                insurance reforms and consumer protections under part 
                A.
                    ``(C) Allocation.--The Secretary shall establish a 
                formula for determining the amount of any grant to a 
                State under this subsection. Under such formula--
                            ``(i) the Secretary shall consider the 
                        number of plans of health insurance coverage 
                        offered in each State and the population of the 
                        State; and
                            ``(ii) no State qualifying for a grant 
                        under paragraph (1) shall receive less than 
                        $1,000,000, or more than $5,000,000 for a grant 
                        year.''.

SEC. 1004. EFFECTIVE DATES.

    (a) In General.--Except as provided for in subsection (b), this 
subtitle (and the amendments made by this subtitle) shall become 
effective for plan years beginning on or after the date that is 6 
months after the date of enactment of this Act, except that the 
amendments made by sections 1002 and 1003 shall become effective for 
fiscal years beginning with fiscal year 2010.
    (b) Special Rule.--The amendments made by sections 1002 and 1003 
shall take effect on the date of enactment of this Act.

     Subtitle B--Immediate Actions to Preserve and Expand Coverage

SEC. 1101. IMMEDIATE ACCESS TO INSURANCE FOR UNINSURED INDIVIDUALS WITH 
              A PREEXISTING CONDITION.

    (a) In General.--Not later than 90 days after the date of enactment 
of this Act, the Secretary shall establish a temporary high risk health 
insurance pool program to provide health insurance coverage for 
eligible individuals during the period beginning on the date on which 
such program is established and ending on January 1, 2014.
    (b) Administration.--
            (1) In general.--The Secretary may carry out the program 
        under this section directly or through contracts to eligible 
        entities.
            (2) Eligible entities.--To be eligible for a contract under 
        paragraph (1), an entity shall--
                    (A) be a State or nonprofit private entity;
                    (B) submit to the Secretary an application at such 
                time, in such manner, and containing such information 
                as the Secretary may require; and
                    (C) agree to utilize contract funding to establish 
                and administer a qualified high risk pool for eligible 
                individuals.
            (3) Maintenance of effort.--To be eligible to enter into a 
        contract with the Secretary under this subsection, a State 
        shall agree not to reduce the annual amount the State expended 
        for the operation of one or more State high risk pools during 
        the year preceding the year in which such contract is entered 
        into.
    (c) Qualified High Risk Pool.--
            (1) In general.--Amounts made available under this section 
        shall be used to establish a qualified high risk pool that 
        meets the requirements of paragraph (2).
            (2) Requirements.--A qualified high risk pool meets the 
        requirements of this paragraph if such pool--
                    (A) provides to all eligible individuals health 
                insurance coverage that does not impose any preexisting 
                condition exclusion with respect to such coverage;
                    (B) provides health insurance coverage--
                            (i) in which the issuer's share of the 
                        total allowed costs of benefits provided under 
                        such coverage is not less than 65 percent of 
                        such costs; and
                            (ii) that has an out of pocket limit not 
                        greater than the applicable amount described in 
                        section 223(c)(2) of the Internal Revenue Code 
                        of 1986 for the year involved, except that the 
                        Secretary may modify such limit if necessary to 
                        ensure the pool meets the actuarial value limit 
                        under clause (i);
                    (C) ensures that with respect to the premium rate 
                charged for health insurance coverage offered to 
                eligible individuals through the high risk pool, such 
                rate shall--
                            (i) except as provided in clause (ii), vary 
                        only as provided for under section 2701 of the 
                        Public Health Service Act (as amended by this 
                        Act and notwithstanding the date on which such 
                        amendments take effect);
                            (ii) vary on the basis of age by a factor 
                        of not greater than 4 to 1; and
                            (iii) be established at a standard rate for 
                        a standard population; and
                    (D) meets any other requirements determined 
                appropriate by the Secretary.
    (d) Eligible Individual.--An individual shall be deemed to be an 
eligible individual for purposes of this section if such individual--
            (1) is a citizen or national of the United States or is 
        lawfully present in the United States (as determined in 
        accordance with section 1411);
            (2) has not been covered under creditable coverage (as 
        defined in section 2701(c)(1) of the Public Health Service Act 
        as in effect on the date of enactment of this Act) during the 
        6-month period prior to the date on which such individual is 
        applying for coverage through the high risk pool; and
            (3) has a pre-existing condition, as determined in a manner 
        consistent with guidance issued by the Secretary.
    (e) Protection Against Dumping Risk by Insurers.--
            (1) In general.--The Secretary shall establish criteria for 
        determining whether health insurance issuers and employment-
        based health plans have discouraged an individual from 
        remaining enrolled in prior coverage based on that individual's 
        health status.
            (2) Sanctions.--An issuer or employment-based health plan 
        shall be responsible for reimbursing the program under this 
        section for the medical expenses incurred by the program for an 
        individual who, based on criteria established by the Secretary, 
        the Secretary finds was encouraged by the issuer to disenroll 
        from health benefits coverage prior to enrolling in coverage 
        through the program. The criteria shall include at least the 
        following circumstances:
                    (A) In the case of prior coverage obtained through 
                an employer, the provision by the employer, group 
                health plan, or the issuer of money or other financial 
                consideration for disenrolling from the coverage.
                    (B) In the case of prior coverage obtained directly 
                from an issuer or under an employment-based health 
                plan--
                            (i) the provision by the issuer or plan of 
                        money or other financial consideration for 
                        disenrolling from the coverage; or
                            (ii) in the case of an individual whose 
                        premium for the prior coverage exceeded the 
                        premium required by the program (adjusted based 
                        on the age factors applied to the prior 
                        coverage)--
                                    (I) the prior coverage is a policy 
                                that is no longer being actively 
                                marketed (as defined by the Secretary) 
                                by the issuer; or
                                    (II) the prior coverage is a policy 
                                for which duration of coverage form 
                                issue or health status are factors that 
                                can be considered in determining 
                                premiums at renewal.
            (3) Construction.--Nothing in this subsection shall be 
        construed as constituting exclusive remedies for violations of 
        criteria established under paragraph (1) or as preventing 
        States from applying or enforcing such paragraph or other 
        provisions under law with respect to health insurance issuers.
    (f) Oversight.--The Secretary shall establish--
            (1) an appeals process to enable individuals to appeal a 
        determination under this section; and
            (2) procedures to protect against waste, fraud, and abuse.
    (g) Funding; Termination of Authority.--
            (1) In general.--There is appropriated to the Secretary, 
        out of any moneys in the Treasury not otherwise appropriated, 
        $5,000,000,000 to pay claims against (and the administrative 
        costs of) the high risk pool under this section that are in 
        excess of the amount of premiums collected from eligible 
        individuals enrolled in the high risk pool. Such funds shall be 
        available without fiscal year limitation.
            (2) Insufficient funds.--If the Secretary estimates for any 
        fiscal year that the aggregate amounts available for the 
        payment of the expenses of the high risk pool will be less than 
        the actual amount of such expenses, the Secretary shall make 
        such adjustments as are necessary to eliminate such deficit.
            (3) Termination of authority.--
                    (A) In general.--Except as provided in subparagraph 
                (B), coverage of eligible individuals under a high risk 
                pool in a State shall terminate on January 1, 2014.
                    (B) Transition to exchange.--The Secretary shall 
                develop procedures to provide for the transition of 
                eligible individuals enrolled in health insurance 
                coverage offered through a high risk pool established 
                under this section into qualified health plans offered 
                through an Exchange. Such procedures shall ensure that 
                there is no lapse in coverage with respect to the 
                individual and may extend coverage after the 
                termination of the risk pool involved, if the Secretary 
                determines necessary to avoid such a lapse.
            (4) Limitations.--The Secretary has the authority to stop 
        taking applications for participation in the program under this 
        section to comply with the funding limitation provided for in 
        paragraph (1).
            (5) Relation to state laws.--The standards established 
        under this section shall supersede any State law or regulation 
        (other than State licensing laws or State laws relating to plan 
        solvency) with respect to qualified high risk pools which are 
        established in accordance with this section.

SEC. 1102. REINSURANCE FOR EARLY RETIREES.

    (a) Administration.--
            (1) In general.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall establish a 
        temporary reinsurance program to provide reimbursement to 
        participating employment-based plans for a portion of the cost 
        of providing health insurance coverage to early retirees (and 
        to the eligible spouses, surviving spouses, and dependents of 
        such retirees) during the period beginning on the date on which 
        such program is established and ending on January 1, 2014.
            (2) Reference.--In this section:
                    (A) Health benefits.--The term ``health benefits'' 
                means medical, surgical, hospital, prescription drug, 
                and such other benefits as shall be determined by the 
                Secretary, whether self-funded, or delivered through 
                the purchase of insurance or otherwise.
                    (B) Employment-based plan.--The term ``employment-
                based plan'' means a group health benefits plan that--
                            (i) is--
                                    (I) maintained by one or more 
                                current or former employers (including 
                                without limitation any State or local 
                                government or political subdivision 
                                thereof), employee organization, a 
                                voluntary employees' beneficiary 
                                association, or a committee or board of 
                                individuals appointed to administer 
                                such plan; or
                                    (II) a multiemployer plan (as 
                                defined in section 3(37) of the 
                                Employee Retirement Income Security Act 
                                of 1974); and
                            (ii) provides health benefits to early 
                        retirees.
                    (C) Early retirees.--The term ``early retirees'' 
                means individuals who are age 55 and older but are not 
                eligible for coverage under title XVIII of the Social 
                Security Act, and who are not active employees of an 
                employer maintaining, or currently contributing to, the 
                employment-based plan or of any employer that has made 
                substantial contributions to fund such plan.
    (b) Participation.--
            (1) Employment-based plan eligibility.--A participating 
        employment-based plan is an employment-based plan that--
                    (A) meets the requirements of paragraph (2) with 
                respect to health benefits provided under the plan; and
                    (B) submits to the Secretary an application for 
                participation in the program, at such time, in such 
                manner, and containing such information as the 
                Secretary shall require.
            (2) Employment-based health benefits.--An employment-based 
        plan meets the requirements of this paragraph if the plan--
                    (A) implements programs and procedures to generate 
                cost-savings with respect to participants with chronic 
                and high-cost conditions;
                    (B) provides documentation of the actual cost of 
                medical claims involved; and
                    (C) is certified by the Secretary.
    (c) Payments.--
            (1) Submission of claims.--
                    (A) In general.--A participating employment-based 
                plan shall submit claims for reimbursement to the 
                Secretary which shall contain documentation of the 
                actual costs of the items and services for which each 
                claim is being submitted.
                    (B) Basis for claims.--Claims submitted under 
                subparagraph (A) shall be based on the actual amount 
                expended by the participating employment-based plan 
                involved within the plan year for the health benefits 
                provided to an early retiree or the spouse, surviving 
                spouse, or dependent of such retiree. In determining 
                the amount of a claim for purposes of this subsection, 
                the participating employment-based plan shall take into 
                account any negotiated price concessions (such as 
                discounts, direct or indirect subsidies, rebates, and 
                direct or indirect remunerations) obtained by such plan 
                with respect to such health benefit. For purposes of 
                determining the amount of any such claim, the costs 
                paid by the early retiree or the retiree's spouse, 
                surviving spouse, or dependent in the form of 
                deductibles, co-payments, or co-insurance shall be 
                included in the amounts paid by the participating 
                employment-based plan.
            (2) Program payments.--If the Secretary determines that a 
        participating employment-based plan has submitted a valid claim 
        under paragraph (1), the Secretary shall reimburse such plan 
        for 80 percent of that portion of the costs attributable to 
        such claim that exceed $15,000, subject to the limits contained 
        in paragraph (3).
            (3) Limit.--To be eligible for reimbursement under the 
        program, a claim submitted by a participating employment-based 
        plan shall not be less than $15,000 nor greater than $90,000. 
        Such amounts shall be adjusted each fiscal year based on the 
        percentage increase in the Medical Care Component of the 
        Consumer Price Index for all urban consumers (rounded to the 
        nearest multiple of $1,000) for the year involved.
            (4) Use of payments.--Amounts paid to a participating 
        employment-based plan under this subsection shall be used to 
        lower costs for the plan. Such payments may be used to reduce 
        premium costs for an entity described in subsection 
        (a)(2)(B)(i) or to reduce premium contributions, co-payments, 
        deductibles, co-insurance, or other out-of-pocket costs for 
        plan participants. Such payments shall not be used as general 
        revenues for an entity described in subsection (a)(2)(B)(i). 
        The Secretary shall develop a mechanism to monitor the 
        appropriate use of such payments by such entities.
            (5) Payments not treated as income.--Payments received 
        under this subsection shall not be included in determining the 
        gross income of an entity described in subsection (a)(2)(B)(i) 
        that is maintaining or currently contributing to a 
        participating employment-based plan.
            (6) Appeals.--The Secretary shall establish--
                    (A) an appeals process to permit participating 
                employment-based plans to appeal a determination of the 
                Secretary with respect to claims submitted under this 
                section; and
                    (B) procedures to protect against fraud, waste, and 
                abuse under the program.
    (d) Audits.--The Secretary shall conduct annual audits of claims 
data submitted by participating employment-based plans under this 
section to ensure that such plans are in compliance with the 
requirements of this section.
    (e) Funding.--There is appropriated to the Secretary, out of any 
moneys in the Treasury not otherwise appropriated, $5,000,000,000 to 
carry out the program under this section. Such funds shall be available 
without fiscal year limitation.
    (f) Limitation.--The Secretary has the authority to stop taking 
applications for participation in the program based on the availability 
of funding under subsection (e).

SEC. 1103. IMMEDIATE INFORMATION THAT ALLOWS CONSUMERS TO IDENTIFY 
              AFFORDABLE COVERAGE OPTIONS.

    (a) Internet Portal to Affordable Coverage Options.--
            (1) Immediate establishment.--Not later than July 1, 2010, 
        the Secretary, in consultation with the States, shall establish 
        a mechanism, including an Internet website, through which a 
        resident of any State may identify affordable health insurance 
        coverage options in that State.
            (2) Connecting to affordable coverage.--An Internet website 
        established under paragraph (1) shall, to the extent 
        practicable, provide ways for residents of any State to receive 
        information on at least the following coverage options:
                    (A) Health insurance coverage offered by health 
                insurance issuers, other than coverage that provides 
                reimbursement only for the treatment or mitigation of--
                            (i) a single disease or condition; or
                            (ii) an unreasonably limited set of 
                        diseases or conditions (as determined by the 
                        Secretary);
                    (B) Medicaid coverage under title XIX of the Social 
                Security Act.
                    (C) Coverage under title XXI of the Social Security 
                Act.
                    (D) A State health benefits high risk pool, to the 
                extent that such high risk pool is offered in such 
                State; and
                    (E) Coverage under a high risk pool under section 
                1101.
    (b) Enhancing Comparative Purchasing Options.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Secretary shall develop a 
        standardized format to be used for the presentation of 
        information relating to the coverage options described in 
        subsection (a)(2). Such format shall, at a minimum, require the 
        inclusion of information on the percentage of total premium 
        revenue expended on nonclinical costs (as reported under 
        section 2718(a) of the Public Health Service Act), eligibility, 
        availability, premium rates, and cost sharing with respect to 
        such coverage options and be consistent with the standards 
        adopted for the uniform explanation of coverage as provided for 
        in section 2715 of the Public Health Service Act.
            (2) Use of format.--The Secretary shall utilize the format 
        developed under paragraph (1) in compiling information 
        concerning coverage options on the Internet website established 
        under subsection (a).
    (c) Authority to Contract.--The Secretary may carry out this 
section through contracts entered into with qualified entities.

SEC. 1104. ADMINISTRATIVE SIMPLIFICATION.

    (a) Purpose of Administrative Simplification.--Section 261 of the 
Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 
1320d note) is amended--
            (1) by inserting ``uniform'' before ``standards''; and
            (2) by inserting ``and to reduce the clerical burden on 
        patients, health care providers, and health plans'' before the 
        period at the end.
    (b) Operating Rules for Health Information Transactions.--
            (1) Definition of operating rules.--Section 1171 of the 
        Social Security Act (42 U.S.C. 1320d) is amended by adding at 
        the end the following:
            ``(9) Operating rules.--The term `operating rules' means 
        the necessary business rules and guidelines for the electronic 
        exchange of information that are not defined by a standard or 
        its implementation specifications as adopted for purposes of 
        this part.''.
            (2) Transaction standards; operating rules and 
        compliance.--Section 1173 of the Social Security Act (42 U.S.C. 
        1320d-2) is amended--
                    (A) in subsection (a)(2), by adding at the end the 
                following new subparagraph:
                    ``(J) Electronic funds transfers.'';
                    (B) in subsection (a), by adding at the end the 
                following new paragraph:
            ``(4) Requirements for financial and administrative 
        transactions.--
                    ``(A) In general.--The standards and associated 
                operating rules adopted by the Secretary shall--
                            ``(i) to the extent feasible and 
                        appropriate, enable determination of an 
                        individual's eligibility and financial 
                        responsibility for specific services prior to 
                        or at the point of care;
                            ``(ii) be comprehensive, requiring minimal 
                        augmentation by paper or other communications;
                            ``(iii) provide for timely acknowledgment, 
                        response, and status reporting that supports a 
                        transparent claims and denial management 
                        process (including adjudication and appeals); 
                        and
                            ``(iv) describe all data elements 
                        (including reason and remark codes) in 
                        unambiguous terms, require that such data 
                        elements be required or conditioned upon set 
                        values in other fields, and prohibit additional 
                        conditions (except where necessary to implement 
                        State or Federal law, or to protect against 
                        fraud and abuse).
                    ``(B) Reduction of clerical burden.--In adopting 
                standards and operating rules for the transactions 
                referred to under paragraph (1), the Secretary shall 
                seek to reduce the number and complexity of forms 
                (including paper and electronic forms) and data entry 
                required by patients and providers.''; and
                    (C) by adding at the end the following new 
                subsections:
    ``(g) Operating Rules.--
            ``(1) In general.--The Secretary shall adopt a single set 
        of operating rules for each transaction referred to under 
        subsection (a)(1) with the goal of creating as much uniformity 
        in the implementation of the electronic standards as possible. 
        Such operating rules shall be consensus-based and reflect the 
        necessary business rules affecting health plans and health care 
        providers and the manner in which they operate pursuant to 
        standards issued under Health Insurance Portability and 
        Accountability Act of 1996.
            ``(2) Operating rules development.--In adopting operating 
        rules under this subsection, the Secretary shall consider 
        recommendations for operating rules developed by a qualified 
        nonprofit entity that meets the following requirements:
                    ``(A) The entity focuses its mission on 
                administrative simplification.
                    ``(B) The entity demonstrates a multi-stakeholder 
                and consensus-based process for development of 
                operating rules, including representation by or 
                participation from health plans, health care providers, 
                vendors, relevant Federal agencies, and other standard 
                development organizations.
                    ``(C) The entity has a public set of guiding 
                principles that ensure the operating rules and process 
                are open and transparent, and supports 
                nondiscrimination and conflict of interest policies 
                that demonstrate a commitment to open, fair, and 
                nondiscriminatory practices.
                    ``(D) The entity builds on the transaction 
                standards issued under Health Insurance Portability and 
                Accountability Act of 1996.
                    ``(E) The entity allows for public review and 
                updates of the operating rules.
            ``(3) Review and recommendations.--The National Committee 
        on Vital and Health Statistics shall--
                    ``(A) advise the Secretary as to whether a 
                nonprofit entity meets the requirements under paragraph 
                (2);
                    ``(B) review the operating rules developed and 
                recommended by such nonprofit entity;
                    ``(C) determine whether such operating rules 
                represent a consensus view of the health care 
                stakeholders and are consistent with and do not 
                conflict with other existing standards;
                    ``(D) evaluate whether such operating rules are 
                consistent with electronic standards adopted for health 
                information technology; and
                    ``(E) submit to the Secretary a recommendation as 
                to whether the Secretary should adopt such operating 
                rules.
            ``(4) Implementation.--
                    ``(A) In general.--The Secretary shall adopt 
                operating rules under this subsection, by regulation in 
                accordance with subparagraph (C), following 
                consideration of the operating rules developed by the 
                non-profit entity described in paragraph (2) and the 
                recommendation submitted by the National Committee on 
                Vital and Health Statistics under paragraph (3)(E) and 
                having ensured consultation with providers.
                    ``(B) Adoption requirements; effective dates.--
                            ``(i) Eligibility for a health plan and 
                        health claim status.--The set of operating 
                        rules for eligibility for a health plan and 
                        health claim status transactions shall be 
                        adopted not later than July 1, 2011, in a 
                        manner ensuring that such operating rules are 
                        effective not later than January 1, 2013, and 
                        may allow for the use of a machine readable 
                        identification card.
                            ``(ii) Electronic funds transfers and 
                        health care payment and remittance advice.--The 
                        set of operating rules for electronic funds 
                        transfers and health care payment and 
                        remittance advice transactions shall--
                                    ``(I) allow for automated 
                                reconciliation of the electronic 
                                payment with the remittance advice; and
                                    ``(II) be adopted not later than 
                                July 1, 2012, in a manner ensuring that 
                                such operating rules are effective not 
                                later than January 1, 2014.
                            ``(iii) Health claims or equivalent 
                        encounter information, enrollment and 
                        disenrollment in a health plan, health plan 
                        premium payments, referral certification and 
                        authorization.--The set of operating rules for 
                        health claims or equivalent encounter 
                        information, enrollment and disenrollment in a 
                        health plan, health plan premium payments, and 
                        referral certification and authorization 
                        transactions shall be adopted not later than 
                        July 1, 2014, in a manner ensuring that such 
                        operating rules are effective not later than 
                        January 1, 2016.
                    ``(C) Expedited rulemaking.--The Secretary shall 
                promulgate an interim final rule applying any standard 
                or operating rule recommended by the National Committee 
                on Vital and Health Statistics pursuant to paragraph 
                (3). The Secretary shall accept and consider public 
                comments on any interim final rule published under this 
                subparagraph for 60 days after the date of such 
                publication.
    ``(h) Compliance.--
            ``(1) Health plan certification.--
                    ``(A) Eligibility for a health plan, health claim 
                status, electronic funds transfers, health care payment 
                and remittance advice.--Not later than December 31, 
                2013, a health plan shall file a statement with the 
                Secretary, in such form as the Secretary may require, 
                certifying that the data and information systems for 
                such plan are in compliance with any applicable 
                standards (as described under paragraph (7) of section 
                1171) and associated operating rules (as described 
                under paragraph (9) of such section) for electronic 
                funds transfers, eligibility for a health plan, health 
                claim status, and health care payment and remittance 
                advice, respectively.
                    ``(B) Health claims or equivalent encounter 
                information, enrollment and disenrollment in a health 
                plan, health plan premium payments, health claims 
                attachments, referral certification and 
                authorization.--Not later than December 31, 2015, a 
                health plan shall file a statement with the Secretary, 
                in such form as the Secretary may require, certifying 
                that the data and information systems for such plan are 
                in compliance with any applicable standards and 
                associated operating rules for health claims or 
                equivalent encounter information, enrollment and 
                disenrollment in a health plan, health plan premium 
                payments, health claims attachments, and referral 
                certification and authorization, respectively. A health 
                plan shall provide the same level of documentation to 
                certify compliance with such transactions as is 
                required to certify compliance with the transactions 
                specified in subparagraph (A).
            ``(2) Documentation of compliance.--A health plan shall 
        provide the Secretary, in such form as the Secretary may 
        require, with adequate documentation of compliance with the 
        standards and operating rules described under paragraph (1). A 
        health plan shall not be considered to have provided adequate 
        documentation and shall not be certified as being in compliance 
        with such standards, unless the health plan--
                    ``(A) demonstrates to the Secretary that the plan 
                conducts the electronic transactions specified in 
                paragraph (1) in a manner that fully complies with the 
                regulations of the Secretary; and
                    ``(B) provides documentation showing that the plan 
                has completed end-to-end testing for such transactions 
                with their partners, such as hospitals and physicians.
            ``(3) Service contracts.--A health plan shall be required 
        to ensure that any entities that provide services pursuant to a 
        contract with such health plan shall comply with any applicable 
        certification and compliance requirements (and provide the 
        Secretary with adequate documentation of such compliance) under 
        this subsection.
            ``(4) Certification by outside entity.--The Secretary may 
        designate independent, outside entities to certify that a 
        health plan has complied with the requirements under this 
        subsection, provided that the certification standards employed 
        by such entities are in accordance with any standards or 
        operating rules issued by the Secretary.
            ``(5) Compliance with revised standards and operating 
        rules.--
                    ``(A) In general.--A health plan (including 
                entities described under paragraph (3)) shall file a 
                statement with the Secretary, in such form as the 
                Secretary may require, certifying that the data and 
                information systems for such plan are in compliance 
                with any applicable revised standards and associated 
                operating rules under this subsection for any interim 
                final rule promulgated by the Secretary under 
                subsection (i) that--
                            ``(i) amends any standard or operating rule 
                        described under paragraph (1) of this 
                        subsection; or
                            ``(ii) establishes a standard (as described 
                        under subsection (a)(1)(B)) or associated 
                        operating rules (as described under subsection 
                        (i)(5)) for any other financial and 
                        administrative transactions.
                    ``(B) Date of compliance.--A health plan shall 
                comply with such requirements not later than the 
                effective date of the applicable standard or operating 
                rule.
            ``(6) Audits of health plans.--The Secretary shall conduct 
        periodic audits to ensure that health plans (including entities 
        described under paragraph (3)) are in compliance with any 
        standards and operating rules that are described under 
        paragraph (1) or subsection (i)(5).
    ``(i) Review and Amendment of Standards and Operating Rules.--
            ``(1) Establishment.--Not later than January 1, 2014, the 
        Secretary shall establish a review committee (as described 
        under paragraph (4)).
            ``(2) Evaluations and reports.--
                    ``(A) Hearings.--Not later than April 1, 2014, and 
                not less than biennially thereafter, the Secretary, 
                acting through the review committee, shall conduct 
                hearings to evaluate and review the adopted standards 
                and operating rules established under this section.
                    ``(B) Report.--Not later than July 1, 2014, and not 
                less than biennially thereafter, the review committee 
                shall provide recommendations for updating and 
                improving such standards and operating rules. The 
                review committee shall recommend a single set of 
                operating rules per transaction standard and maintain 
                the goal of creating as much uniformity as possible in 
                the implementation of the electronic standards.
            ``(3) Interim final rulemaking.--
                    ``(A) In general.--Any recommendations to amend 
                adopted standards and operating rules that have been 
                approved by the review committee and reported to the 
                Secretary under paragraph (2)(B) shall be adopted by 
                the Secretary through promulgation of an interim final 
                rule not later than 90 days after receipt of the 
                committee's report.
                    ``(B) Public comment.--
                            ``(i) Public comment period.--The Secretary 
                        shall accept and consider public comments on 
                        any interim final rule published under this 
                        paragraph for 60 days after the date of such 
                        publication.
                            ``(ii) Effective date.--The effective date 
                        of any amendment to existing standards or 
                        operating rules that is adopted through an 
                        interim final rule published under this 
                        paragraph shall be 25 months following the 
                        close of such public comment period.
            ``(4) Review committee.--
                    ``(A) Definition.--For the purposes of this 
                subsection, the term `review committee' means a 
                committee chartered by or within the Department of 
                Health and Human services that has been designated by 
                the Secretary to carry out this subsection, including--
                            ``(i) the National Committee on Vital and 
                        Health Statistics; or
                            ``(ii) any appropriate committee as 
                        determined by the Secretary.
                    ``(B) Coordination of hit standards.--In developing 
                recommendations under this subsection, the review 
                committee shall ensure coordination, as appropriate, 
                with the standards that support the certified 
                electronic health record technology approved by the 
                Office of the National Coordinator for Health 
                Information Technology.
            ``(5) Operating rules for other standards adopted by the 
        secretary.--The Secretary shall adopt a single set of operating 
        rules (pursuant to the process described under subsection (g)) 
        for any transaction for which a standard had been adopted 
        pursuant to subsection (a)(1)(B).
    ``(j) Penalties.--
            ``(1) Penalty fee.--
                    ``(A) In general.--Not later than April 1, 2014, 
                and annually thereafter, the Secretary shall assess a 
                penalty fee (as determined under subparagraph (B)) 
                against a health plan that has failed to meet the 
                requirements under subsection (h) with respect to 
                certification and documentation of compliance with--
                            ``(i) the standards and associated 
                        operating rules described under paragraph (1) 
                        of such subsection; and
                            ``(ii) a standard (as described under 
                        subsection (a)(1)(B)) and associated operating 
                        rules (as described under subsection (i)(5)) 
                        for any other financial and administrative 
                        transactions.
                    ``(B) Fee amount.--Subject to subparagraphs (C), 
                (D), and (E), the Secretary shall assess a penalty fee 
                against a health plan in the amount of $1 per covered 
                life until certification is complete. The penalty shall 
                be assessed per person covered by the plan for which 
                its data systems for major medical policies are not in 
                compliance and shall be imposed against the health plan 
                for each day that the plan is not in compliance with 
                the requirements under subsection (h).
                    ``(C) Additional penalty for misrepresentation.--A 
                health plan that knowingly provides inaccurate or 
                incomplete information in a statement of certification 
                or documentation of compliance under subsection (h) 
                shall be subject to a penalty fee that is double the 
                amount that would otherwise be imposed under this 
                subsection.
                    ``(D) Annual fee increase.--The amount of the 
                penalty fee imposed under this subsection shall be 
                increased on an annual basis by the annual percentage 
                increase in total national health care expenditures, as 
                determined by the Secretary.
                    ``(E) Penalty limit.--A penalty fee assessed 
                against a health plan under this subsection shall not 
                exceed, on an annual basis--
                            ``(i) an amount equal to $20 per covered 
                        life under such plan; or
                            ``(ii) an amount equal to $40 per covered 
                        life under the plan if such plan has knowingly 
                        provided inaccurate or incomplete information 
                        (as described under subparagraph (C)).
                    ``(F) Determination of covered individuals.--The 
                Secretary shall determine the number of covered lives 
                under a health plan based upon the most recent 
                statements and filings that have been submitted by such 
                plan to the Securities and Exchange Commission.
            ``(2) Notice and dispute procedure.--The Secretary shall 
        establish a procedure for assessment of penalty fees under this 
        subsection that provides a health plan with reasonable notice 
        and a dispute resolution procedure prior to provision of a 
        notice of assessment by the Secretary of the Treasury (as 
        described under paragraph (4)(B)).
            ``(3) Penalty fee report.--Not later than May 1, 2014, and 
        annually thereafter, the Secretary shall provide the Secretary 
        of the Treasury with a report identifying those health plans 
        that have been assessed a penalty fee under this subsection.
            ``(4) Collection of penalty fee.--
                    ``(A) In general.--The Secretary of the Treasury, 
                acting through the Financial Management Service, shall 
                administer the collection of penalty fees from health 
                plans that have been identified by the Secretary in the 
                penalty fee report provided under paragraph (3).
                    ``(B) Notice.--Not later than August 1, 2014, and 
                annually thereafter, the Secretary of the Treasury 
                shall provide notice to each health plan that has been 
                assessed a penalty fee by the Secretary under this 
                subsection. Such notice shall include the amount of the 
                penalty fee assessed by the Secretary and the due date 
                for payment of such fee to the Secretary of the 
                Treasury (as described in subparagraph (C)).
                    ``(C) Payment due date.--Payment by a health plan 
                for a penalty fee assessed under this subsection shall 
                be made to the Secretary of the Treasury not later than 
                November 1, 2014, and annually thereafter.
                    ``(D) Unpaid penalty fees.--Any amount of a penalty 
                fee assessed against a health plan under this 
                subsection for which payment has not been made by the 
                due date provided under subparagraph (C) shall be--
                            ``(i) increased by the interest accrued on 
                        such amount, as determined pursuant to the 
                        underpayment rate established under section 
                        6621 of the Internal Revenue Code of 1986; and
                            ``(ii) treated as a past-due, legally 
                        enforceable debt owed to a Federal agency for 
                        purposes of section 6402(d) of the Internal 
                        Revenue Code of 1986.
                    ``(E) Administrative fees.--Any fee charged or 
                allocated for collection activities conducted by the 
                Financial Management Service will be passed on to a 
                health plan on a pro-rata basis and added to any 
                penalty fee collected from the plan.''.
    (c) Promulgation of Rules.--
            (1) Unique health plan identifier.--The Secretary shall 
        promulgate a final rule to establish a unique health plan 
        identifier (as described in section 1173(b) of the Social 
        Security Act (42 U.S.C. 1320d-2(b))) based on the input of the 
        National Committee on Vital and Health Statistics. The 
        Secretary may do so on an interim final basis and such rule 
        shall be effective not later than October 1, 2012.
            (2) Electronic funds transfer.--The Secretary shall 
        promulgate a final rule to establish a standard for electronic 
        funds transfers (as described in section 1173(a)(2)(J) of the 
        Social Security Act, as added by subsection (b)(2)(A)). The 
        Secretary may do so on an interim final basis and shall adopt 
        such standard not later than January 1, 2012, in a manner 
        ensuring that such standard is effective not later than January 
        1, 2014.
            (3) Health claims attachments.--The Secretary shall 
        promulgate a final rule to establish a transaction standard and 
        a single set of associated operating rules for health claims 
        attachments (as described in section 1173(a)(2)(B) of the 
        Social Security Act (42 U.S.C. 1320d-2(a)(2)(B))) that is 
        consistent with the X12 Version 5010 transaction standards. The 
        Secretary may do so on an interim final basis and shall adopt a 
        transaction standard and a single set of associated operating 
        rules not later than January 1, 2014, in a manner ensuring that 
        such standard is effective not later than January 1, 2016.
    (d) Expansion of Electronic Transactions in Medicare.--Section 
1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--
            (1) in paragraph (23), by striking the ``or'' at the end;
            (2) in paragraph (24), by striking the period and inserting 
        ``; or''; and
            (3) by inserting after paragraph (24) the following new 
        paragraph:
            ``(25) not later than January 1, 2014, for which the 
        payment is other than by electronic funds transfer (EFT) or an 
        electronic remittance in a form as specified in ASC X12 835 
        Health Care Payment and Remittance Advice or subsequent 
        standard.''.

SEC. 1105. EFFECTIVE DATE.

    This subtitle shall take effect on the date of enactment of this 
Act.

    Subtitle C--Quality Health Insurance Coverage for All Americans

                PART I--HEALTH INSURANCE MARKET REFORMS

SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

    Part A of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg et seq.), as amended by section 1001, is further amended--
            (1) by striking the heading for subpart 1 and inserting the 
        following:

                     ``Subpart I--General Reform'';

            (2)(A) in section 2701 (42 U.S.C. 300gg), by striking the 
        section heading and subsection (a) and inserting the following:

``SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER 
              DISCRIMINATION BASED ON HEALTH STATUS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
impose any preexisting condition exclusion with respect to such plan or 
coverage.''; and
            (B) by transferring such section (as amended by 
        subparagraph (A)) so as to appear after the section 2703 added 
        by paragraph (4);
            (3)(A) in section 2702 (42 U.S.C. 300gg-1)--
                    (i) by striking the section heading and all that 
                follows through subsection (a);
                    (ii) in subsection (b)--
                            (I) by striking ``health insurance issuer 
                        offering health insurance coverage in 
                        connection with a group health plan'' each 
                        place that such appears and inserting ``health 
                        insurance issuer offering group or individual 
                        health insurance coverage''; and
                            (II) in paragraph (2)(A)--
                                    (aa) by inserting ``or individual'' 
                                after ``employer''; and
                                    (bb) by inserting ``or individual 
                                health coverage, as the case may be'' 
                                before the semicolon; and
                    (iii) in subsection (e)--
                            (I) by striking ``(a)(1)(F)'' and inserting 
                        ``(a)(6)'';
                            (II) by striking ``2701'' and inserting 
                        ``2704''; and
                            (III) by striking ``2721(a)'' and inserting 
                        ``2735(a)''; and
                    (B) by transferring such section (as amended by 
                subparagraph (A)) to appear after section 2705(a) as 
                added by paragraph (4); and
            (4) by inserting after the subpart heading (as added by 
        paragraph (1)) the following:

``SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS.

    ``(a) Prohibiting Discriminatory Premium Rates.--
            ``(1) In general.--With respect to the premium rate charged 
        by a health insurance issuer for health insurance coverage 
        offered in the individual or small group market--
                    ``(A) such rate shall vary with respect to the 
                particular plan or coverage involved only by--
                            ``(i) whether such plan or coverage covers 
                        an individual or family;
                            ``(ii) rating area, as established in 
                        accordance with paragraph (2);
                            ``(iii) age, except that such rate shall 
                        not vary by more than 3 to 1 for adults 
                        (consistent with section 2707(c)); and
                            ``(iv) tobacco use, except that such rate 
                        shall not vary by more than 1.5 to 1; and
                    ``(B) such rate shall not vary with respect to the 
                particular plan or coverage involved by any other 
                factor not described in subparagraph (A).
            ``(2) Rating area.--
                    ``(A) In general.--Each State shall establish 1 or 
                more rating areas within that State for purposes of 
                applying the requirements of this title.
                    ``(B) Secretarial review.--The Secretary shall 
                review the rating areas established by each State under 
                subparagraph (A) to ensure the adequacy of such areas 
                for purposes of carrying out the requirements of this 
                title. If the Secretary determines a State's rating 
                areas are not adequate, or that a State does not 
                establish such areas, the Secretary may establish 
                rating areas for that State.
            ``(3) Permissible age bands.--The Secretary, in 
        consultation with the National Association of Insurance 
        Commissioners, shall define the permissible age bands for 
        rating purposes under paragraph (1)(A)(iii).
            ``(4) Application of variations based on age or tobacco 
        use.--With respect to family coverage under a group health plan 
        or health insurance coverage, the rating variations permitted 
        under clauses (iii) and (iv) of paragraph (1)(A) shall be 
        applied based on the portion of the premium that is 
        attributable to each family member covered under the plan or 
        coverage.
            ``(5) Special rule for large group market.--If a State 
        permits health insurance issuers that offer coverage in the 
        large group market in the State to offer such coverage through 
        the State Exchange (as provided for under section 1312(f)(2)(B) 
        of the Patient Protection and Affordable Care Act), the 
        provisions of this subsection shall apply to all coverage 
        offered in such market in the State.

``SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE.

    ``(a) Guaranteed Issuance of Coverage in the Individual and Group 
Market.--Subject to subsections (b) through (e), each health insurance 
issuer that offers health insurance coverage in the individual or group 
market in a State must accept every employer and individual in the 
State that applies for such coverage.
    ``(b) Enrollment.--
            ``(1) Restriction.--A health insurance issuer described in 
        subsection (a) may restrict enrollment in coverage described in 
        such subsection to open or special enrollment periods.
            ``(2) Establishment.--A health insurance issuer described 
        in subsection (a) shall, in accordance with the regulations 
        promulgated under paragraph (3), establish special enrollment 
        periods for qualifying events (under section 603 of the 
        Employee Retirement Income Security Act of 1974).
            ``(3) Regulations.--The Secretary shall promulgate 
        regulations with respect to enrollment periods under paragraphs 
        (1) and (2).

``SEC. 2703. GUARANTEED RENEWABILITY OF COVERAGE.

    ``(a) In General.--Except as provided in this section, if a health 
insurance issuer offers health insurance coverage in the individual or 
group market, the issuer must renew or continue in force such coverage 
at the option of the plan sponsor or the individual, as applicable.

``SEC. 2705. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
              AND BENEFICIARIES BASED ON HEALTH STATUS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
establish rules for eligibility (including continued eligibility) of 
any individual to enroll under the terms of the plan or coverage based 
on any of the following health status-related factors in relation to 
the individual or a dependent of the individual:
            ``(1) Health status.
            ``(2) Medical condition (including both physical and mental 
        illnesses).
            ``(3) Claims experience.
            ``(4) Receipt of health care.
            ``(5) Medical history.
            ``(6) Genetic information.
            ``(7) Evidence of insurability (including conditions 
        arising out of acts of domestic violence).
            ``(8) Disability.
            ``(9) Any other health status-related factor determined 
        appropriate by the Secretary.
    ``(j) Programs of Health Promotion or Disease Prevention.--
            ``(1) General provisions.--
                    ``(A) General rule.--For purposes of subsection 
                (b)(2)(B), a program of health promotion or disease 
                prevention (referred to in this subsection as a 
                `wellness program') shall be a program offered by an 
                employer that is designed to promote health or prevent 
                disease that meets the applicable requirements of this 
                subsection.
                    ``(B) No conditions based on health status 
                factor.--If none of the conditions for obtaining a 
                premium discount or rebate or other reward for 
                participation in a wellness program is based on an 
                individual satisfying a standard that is related to a 
                health status factor, such wellness program shall not 
                violate this section if participation in the program is 
                made available to all similarly situated individuals 
                and the requirements of paragraph (2) are complied 
                with.
                    ``(C) Conditions based on health status factor.--If 
                any of the conditions for obtaining a premium discount 
                or rebate or other reward for participation in a 
                wellness program is based on an individual satisfying a 
                standard that is related to a health status factor, 
                such wellness program shall not violate this section if 
                the requirements of paragraph (3) are complied with.
            ``(2) Wellness programs not subject to requirements.--If 
        none of the conditions for obtaining a premium discount or 
        rebate or other reward under a wellness program as described in 
        paragraph (1)(B) are based on an individual satisfying a 
        standard that is related to a health status factor (or if such 
        a wellness program does not provide such a reward), the 
        wellness program shall not violate this section if 
        participation in the program is made available to all similarly 
        situated individuals. The following programs shall not have to 
        comply with the requirements of paragraph (3) if participation 
        in the program is made available to all similarly situated 
        individuals:
                    ``(A) A program that reimburses all or part of the 
                cost for memberships in a fitness center.
                    ``(B) A diagnostic testing program that provides a 
                reward for participation and does not base any part of 
                the reward on outcomes.
                    ``(C) A program that encourages preventive care 
                related to a health condition through the waiver of the 
                copayment or deductible requirement under group health 
                plan for the costs of certain items or services related 
                to a health condition (such as prenatal care or well-
                baby visits).
                    ``(D) A program that reimburses individuals for the 
                costs of smoking cessation programs without regard to 
                whether the individual quits smoking.
                    ``(E) A program that provides a reward to 
                individuals for attending a periodic health education 
                seminar.
            ``(3) Wellness programs subject to requirements.--If any of 
        the conditions for obtaining a premium discount, rebate, or 
        reward under a wellness program as described in paragraph 
        (1)(C) is based on an individual satisfying a standard that is 
        related to a health status factor, the wellness program shall 
        not violate this section if the following requirements are 
        complied with:
                    ``(A) The reward for the wellness program, together 
                with the reward for other wellness programs with 
                respect to the plan that requires satisfaction of a 
                standard related to a health status factor, shall not 
                exceed 30 percent of the cost of employee-only coverage 
                under the plan. If, in addition to employees or 
                individuals, any class of dependents (such as spouses 
                or spouses and dependent children) may participate 
                fully in the wellness program, such reward shall not 
                exceed 30 percent of the cost of the coverage in which 
                an employee or individual and any dependents are 
                enrolled. For purposes of this paragraph, the cost of 
                coverage shall be determined based on the total amount 
                of employer and employee contributions for the benefit 
                package under which the employee is (or the employee 
                and any dependents are) receiving coverage. A reward 
                may be in the form of a discount or rebate of a premium 
                or contribution, a waiver of all or part of a cost-
                sharing mechanism (such as deductibles, copayments, or 
                coinsurance), the absence of a surcharge, or the value 
                of a benefit that would otherwise not be provided under 
                the plan. The Secretaries of Labor, Health and Human 
                Services, and the Treasury may increase the reward 
                available under this subparagraph to up to 50 percent 
                of the cost of coverage if the Secretaries determine 
                that such an increase is appropriate.
                    ``(B) The wellness program shall be reasonably 
                designed to promote health or prevent disease. A 
                program complies with the preceding sentence if the 
                program has a reasonable chance of improving the health 
                of, or preventing disease in, participating individuals 
                and it is not overly burdensome, is not a subterfuge 
                for discriminating based on a health status factor, and 
                is not highly suspect in the method chosen to promote 
                health or prevent disease.
                    ``(C) The plan shall give individuals eligible for 
                the program the opportunity to qualify for the reward 
                under the program at least once each year.
                    ``(D) The full reward under the wellness program 
                shall be made available to all similarly situated 
                individuals. For such purpose, among other things:
                            ``(i) The reward is not available to all 
                        similarly situated individuals for a period 
                        unless the wellness program allows--
                                    ``(I) for a reasonable alternative 
                                standard (or waiver of the otherwise 
                                applicable standard) for obtaining the 
                                reward for any individual for whom, for 
                                that period, it is unreasonably 
                                difficult due to a medical condition to 
                                satisfy the otherwise applicable 
                                standard; and
                                    ``(II) for a reasonable alternative 
                                standard (or waiver of the otherwise 
                                applicable standard) for obtaining the 
                                reward for any individual for whom, for 
                                that period, it is medically 
                                inadvisable to attempt to satisfy the 
                                otherwise applicable standard.
                            ``(ii) If reasonable under the 
                        circumstances, the plan or issuer may seek 
                        verification, such as a statement from an 
                        individual's physician, that a health status 
                        factor makes it unreasonably difficult or 
                        medically inadvisable for the individual to 
                        satisfy or attempt to satisfy the otherwise 
                        applicable standard.
                    ``(E) The plan or issuer involved shall disclose in 
                all plan materials describing the terms of the wellness 
                program the availability of a reasonable alternative 
                standard (or the possibility of waiver of the otherwise 
                applicable standard) required under subparagraph (D). 
                If plan materials disclose that such a program is 
                available, without describing its terms, the disclosure 
                under this subparagraph shall not be required.
    ``(k) Existing Programs.--Nothing in this section shall prohibit a 
program of health promotion or disease prevention that was established 
prior to the date of enactment of this section and applied with all 
applicable regulations, and that is operating on such date, from 
continuing to be carried out for as long as such regulations remain in 
effect.
    ``(l) Wellness Program Demonstration Project.--
            ``(1) In general.--Not later than July 1, 2014, the 
        Secretary, in consultation with the Secretary of the Treasury 
        and the Secretary of Labor, shall establish a 10-State 
        demonstration project under which participating States shall 
        apply the provisions of subsection (j) to programs of health 
        promotion offered by a health insurance issuer that offers 
        health insurance coverage in the individual market in such 
        State.
            ``(2) Expansion of demonstration project.--If the 
        Secretary, in consultation with the Secretary of the Treasury 
        and the Secretary of Labor, determines that the demonstration 
        project described in paragraph (1) is effective, such 
        Secretaries may, beginning on July 1, 2017 expand such 
        demonstration project to include additional participating 
        States.
            ``(3) Requirements.--
                    ``(A) Maintenance of coverage.--The Secretary, in 
                consultation with the Secretary of the Treasury and the 
                Secretary of Labor, shall not approve the participation 
                of a State in the demonstration project under this 
                section unless the Secretaries determine that the 
                State's project is designed in a manner that--
                            ``(i) will not result in any decrease in 
                        coverage; and
                            ``(ii) will not increase the cost to the 
                        Federal Government in providing credits under 
                        section 36B of the Internal Revenue Code of 
                        1986 or cost-sharing assistance under section 
                        1402 of the Patient Protection and Affordable 
                        Care Act.
                    ``(B) Other requirements.--States that participate 
                in the demonstration project under this subsection--
                            ``(i) may permit premium discounts or 
                        rebates or the modification of otherwise 
                        applicable copayments or deductibles for 
                        adherence to, or participation in, a reasonably 
                        designed program of health promotion and 
                        disease prevention;
                            ``(ii) shall ensure that requirements of 
                        consumer protection are met in programs of 
                        health promotion in the individual market;
                            ``(iii) shall require verification from 
                        health insurance issuers that offer health 
                        insurance coverage in the individual market of 
                        such State that premium discounts--
                                    ``(I) do not create undue burdens 
                                for individuals insured in the 
                                individual market;
                                    ``(II) do not lead to cost 
                                shifting; and
                                    ``(III) are not a subterfuge for 
                                discrimination;
                            ``(iv) shall ensure that consumer data is 
                        protected in accordance with the requirements 
                        of section 264(c) of the Health Insurance 
                        Portability and Accountability Act of 1996 (42 
                        U.S.C. 1320d-2 note); and
                            ``(v) shall ensure and demonstrate to the 
                        satisfaction of the Secretary that the 
                        discounts or other rewards provided under the 
                        project reflect the expected level of 
                        participation in the wellness program involved 
                        and the anticipated effect the program will 
                        have on utilization or medical claim costs.
    ``(m) Report.--
            ``(1) In general.--Not later than 3 years after the date of 
        enactment of the Patient Protection and Affordable Care Act, 
        the Secretary, in consultation with the Secretary of the 
        Treasury and the Secretary of Labor, shall submit a report to 
        the appropriate committees of Congress concerning--
                    ``(A) the effectiveness of wellness programs (as 
                defined in subsection (j)) in promoting health and 
                preventing disease;
                    ``(B) the impact of such wellness programs on the 
                access to care and affordability of coverage for 
                participants and non-participants of such programs;
                    ``(C) the impact of premium-based and cost-sharing 
                incentives on participant behavior and the role of such 
                programs in changing behavior; and
                    ``(D) the effectiveness of different types of 
                rewards.
            ``(2) Data collection.--In preparing the report described 
        in paragraph (1), the Secretaries shall gather relevant 
        information from employers who provide employees with access to 
        wellness programs, including State and Federal agencies.
    ``(n) Regulations.--Nothing in this section shall be construed as 
prohibiting the Secretaries of Labor, Health and Human Services, or the 
Treasury from promulgating regulations in connection with this section.

``SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE.

    ``(a) Providers.--A group health plan and a health insurance issuer 
offering group or individual health insurance coverage shall not 
discriminate with respect to participation under the plan or coverage 
against any health care provider who is acting within the scope of that 
provider's license or certification under applicable State law. This 
section shall not require that a group health plan or health insurance 
issuer contract with any health care provider willing to abide by the 
terms and conditions for participation established by the plan or 
issuer. Nothing in this section shall be construed as preventing a 
group health plan, a health insurance issuer, or the Secretary from 
establishing varying reimbursement rates based on quality or 
performance measures.
    ``(b) Individuals.--The provisions of section 1558 of the Patient 
Protection and Affordable Care Act (relating to non-discrimination) 
shall apply with respect to a group health plan or health insurance 
issuer offering group or individual health insurance coverage.

``SEC. 2707. COMPREHENSIVE HEALTH INSURANCE COVERAGE.

    ``(a) Coverage for Essential Health Benefits Package.--A health 
insurance issuer that offers health insurance coverage in the 
individual or small group market shall ensure that such coverage 
includes the essential health benefits package required under section 
1302(a) of the Patient Protection and Affordable Care Act.
    ``(b) Cost-sharing Under Group Health Plans.--A group health plan 
shall ensure that any annual cost-sharing imposed under the plan does 
not exceed the limitations provided for under paragraphs (1) and (2) of 
section 1302(c).
    ``(c) Child-only Plans.--If a health insurance issuer offers health 
insurance coverage in any level of coverage specified under section 
1302(d) of the Patient Protection and Affordable Care Act, the issuer 
shall also offer such coverage in that level as a plan in which the 
only enrollees are individuals who, as of the beginning of a plan year, 
have not attained the age of 21.
    ``(d) Dental Only.--This section shall not apply to a plan 
described in section 1302(d)(2)(B)(ii)(I).

``SEC. 2708. PROHIBITION ON EXCESSIVE WAITING PERIODS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall not apply any waiting 
period (as defined in section 2704(b)(4)) that exceeds 90 days.''.

                       PART II--OTHER PROVISIONS

SEC. 1251. PRESERVATION OF RIGHT TO MAINTAIN EXISTING COVERAGE.

    (a) No Changes to Existing Coverage.--
            (1) In general.--Nothing in this Act (or an amendment made 
        by this Act) shall be construed to require that an individual 
        terminate coverage under a group health plan or health 
        insurance coverage in which such individual was enrolled on the 
        date of enactment of this Act.
            (2) Continuation of coverage.--With respect to a group 
        health plan or health insurance coverage in which an individual 
        was enrolled on the date of enactment of this Act, this 
        subtitle and subtitle A (and the amendments made by such 
        subtitles) shall not apply to such plan or coverage, regardless 
        of whether the individual renews such coverage after such date 
        of enactment.
    (b) Allowance for Family Members to Join Current Coverage.--With 
respect to a group health plan or health insurance coverage in which an 
individual was enrolled on the date of enactment of this Act and which 
is renewed after such date, family members of such individual shall be 
permitted to enroll in such plan or coverage if such enrollment is 
permitted under the terms of the plan in effect as of such date of 
enactment.
    (c) Allowance for New Employees to Join Current Plan.--A group 
health plan that provides coverage on the date of enactment of this Act 
may provide for the enrolling of new employees (and their families) in 
such plan, and this subtitle and subtitle A (and the amendments made by 
such subtitles) shall not apply with respect to such plan and such new 
employees (and their families).
    (d) Effect on Collective Bargaining Agreements.--In the case of 
health insurance coverage maintained pursuant to one or more collective 
bargaining agreements between employee representatives and one or more 
employers that was ratified before the date of enactment of this Act, 
the provisions of this subtitle and subtitle A (and the amendments made 
by such subtitles) shall not apply until the date on which the last of 
the collective bargaining agreements relating to the coverage 
terminates. Any coverage amendment made pursuant to a collective 
bargaining agreement relating to the coverage which amends the coverage 
solely to conform to any requirement added by this subtitle or subtitle 
A (or amendments) shall not be treated as a termination of such 
collective bargaining agreement.
    (e) Definition.--In this title, the term ``grandfathered health 
plan'' means any group health plan or health insurance coverage to 
which this section applies.

SEC. 1252. RATING REFORMS MUST APPLY UNIFORMLY TO ALL HEALTH INSURANCE 
              ISSUERS AND GROUP HEALTH PLANS.

    Any standard or requirement adopted by a State pursuant to this 
title, or any amendment made by this title, shall be applied uniformly 
to all health plans in each insurance market to which the standard and 
requirements apply. The preceding sentence shall also apply to a State 
standard or requirement relating to the standard or requirement 
required by this title (or any such amendment) that is not the same as 
the standard or requirement but that is not preempted under section 
1321(d).

SEC. 1253. EFFECTIVE DATES.

    This subtitle (and the amendments made by this subtitle) shall 
become effective for plan years beginning on or after January 1, 2014.

        Subtitle D--Available Coverage Choices for All Americans

            PART I--ESTABLISHMENT OF QUALIFIED HEALTH PLANS

SEC. 1301. QUALIFIED HEALTH PLAN DEFINED.

    (a) Qualified Health Plan.--In this title:
            (1) In general.--The term ``qualified health plan'' means a 
        health plan that--
                    (A) has in effect a certification (which may 
                include a seal or other indication of approval) that 
                such plan meets the criteria for certification 
                described in section 1311(c) issued or recognized by 
                each Exchange through which such plan is offered;
                    (B) provides the essential health benefits package 
                described in section 1302(a); and
                    (C) is offered by a health insurance issuer that--
                            (i) is licensed and in good standing to 
                        offer health insurance coverage in each State 
                        in which such issuer offers health insurance 
                        coverage under this title;
                            (ii) agrees to offer at least one qualified 
                        health plan in the silver level and at least 
                        one plan in the gold level in each such 
                        Exchange;
                            (iii) agrees to charge the same premium 
                        rate for each qualified health plan of the 
                        issuer without regard to whether the plan is 
                        offered through an Exchange or whether the plan 
                        is offered directly from the issuer or through 
                        an agent; and
                            (iv) complies with the regulations 
                        developed by the Secretary under section 
                        1311(d) and such other requirements as an 
                        applicable Exchange may establish.
            (2) Inclusion of co-op plans and community health insurance 
        option.--Any reference in this title to a qualified health plan 
        shall be deemed to include a qualified health plan offered 
        through the CO-OP program under section 1322 or a community 
        health insurance option under section 1323, unless specifically 
        provided for otherwise.
    (b) Terms Relating to Health Plans.--In this title:
            (1) Health plan.--
                    (A) In general.--The term ``health plan'' means 
                health insurance coverage and a group health plan.
                    (B) Exception for self-insured plans and mewas.--
                Except to the extent specifically provided by this 
                title, the term ``health plan'' shall not include a 
                group health plan or multiple employer welfare 
                arrangement to the extent the plan or arrangement is 
                not subject to State insurance regulation under section 
                514 of the Employee Retirement Income Security Act of 
                1974.
            (2) Health insurance coverage and issuer.--The terms 
        ``health insurance coverage'' and ``health insurance issuer'' 
        have the meanings given such terms by section 2791(b) of the 
        Public Health Service Act.
            (3) Group health plan.--The term ``group health plan'' has 
        the meaning given such term by section 2791(a) of the Public 
        Health Service Act.

SEC. 1302. ESSENTIAL HEALTH BENEFITS REQUIREMENTS.

    (a) Essential Health Benefits Package.--In this title, the term 
``essential health benefits package'' means, with respect to any health 
plan, coverage that--
            (1) provides for the essential health benefits defined by 
        the Secretary under subsection (b);
            (2) limits cost-sharing for such coverage in accordance 
        with subsection (c); and
            (3) subject to subsection (e), provides either the bronze, 
        silver, gold, or platinum level of coverage described in 
        subsection (d).
    (b) Essential Health Benefits.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall define the essential health benefits, except that such 
        benefits shall include at least the following general 
        categories and the items and services covered within the 
        categories:
                    (A) Ambulatory patient services.
                    (B) Emergency services.
                    (C) Hospitalization.
                    (D) Maternity and newborn care.
                    (E) Mental health and substance use disorder 
                services, including behavioral health treatment.
                    (F) Prescription drugs.
                    (G) Rehabilitative and habilitative services and 
                devices.
                    (H) Laboratory services.
                    (I) Preventive and wellness services and chronic 
                disease management.
                    (J) Pediatric services, including oral and vision 
                care.
            (2) Limitation.--
                    (A) In general.--The Secretary shall ensure that 
                the scope of the essential health benefits under 
                paragraph (1) is equal to the scope of benefits 
                provided under a typical employer plan, as determined 
                by the Secretary. To inform this determination, the 
                Secretary of Labor shall conduct a survey of employer-
                sponsored coverage to determine the benefits typically 
                covered by employers, including multiemployer plans, 
                and provide a report on such survey to the Secretary.
                    (B) Certification.--In defining the essential 
                health benefits described in paragraph (1), and in 
                revising the benefits under paragraph (4)(H), the 
                Secretary shall submit a report to the appropriate 
                committees of Congress containing a certification from 
                the Chief Actuary of the Centers for Medicare & 
                Medicaid Services that such essential health benefits 
                meet the limitation described in paragraph (2).
            (3) Notice and hearing.--In defining the essential health 
        benefits described in paragraph (1), and in revising the 
        benefits under paragraph (4)(H), the Secretary shall provide 
        notice and an opportunity for public comment.
            (4) Required elements for consideration.--In defining the 
        essential health benefits under paragraph (1), the Secretary 
        shall--
                    (A) ensure that such essential health benefits 
                reflect an appropriate balance among the categories 
                described in such subsection, so that benefits are not 
                unduly weighted toward any category;
                    (B) not make coverage decisions, determine 
                reimbursement rates, establish incentive programs, or 
                design benefits in ways that discriminate against 
                individuals because of their age, disability, or 
                expected length of life;
                    (C) take into account the health care needs of 
                diverse segments of the population, including women, 
                children, persons with disabilities, and other groups;
                    (D) ensure that health benefits established as 
                essential not be subject to denial to individuals 
                against their wishes on the basis of the individuals' 
                age or expected length of life or of the individuals' 
                present or predicted disability, degree of medical 
                dependency, or quality of life;
                    (E) provide that a qualified health plan shall not 
                be treated as providing coverage for the essential 
                health benefits described in paragraph (1) unless the 
                plan provides that--
                            (i) coverage for emergency department 
                        services will be provided without imposing any 
                        requirement under the plan for prior 
                        authorization of services or any limitation on 
                        coverage where the provider of services does 
                        not have a contractual relationship with the 
                        plan for the providing of services that is more 
                        restrictive than the requirements or 
                        limitations that apply to emergency department 
                        services received from providers who do have 
                        such a contractual relationship with the plan; 
                        and
                            (ii) if such services are provided out-of-
                        network, the cost-sharing requirement 
                        (expressed as a copayment amount or coinsurance 
                        rate) is the same requirement that would apply 
                        if such services were provided in-network;
                    (F) provide that if a plan described in section 
                1311(b)(2)(B)(ii) (relating to stand-alone dental 
                benefits plans) is offered through an Exchange, another 
                health plan offered through such Exchange shall not 
                fail to be treated as a qualified health plan solely 
                because the plan does not offer coverage of benefits 
                offered through the stand-alone plan that are otherwise 
                required under paragraph (1)(J); and
                    (G) periodically review the essential health 
                benefits under paragraph (1), and provide a report to 
                Congress and the public that contains--
                            (i) an assessment of whether enrollees are 
                        facing any difficulty accessing needed services 
                        for reasons of coverage or cost;
                            (ii) an assessment of whether the essential 
                        health benefits needs to be modified or updated 
                        to account for changes in medical evidence or 
                        scientific advancement;
                            (iii) information on how the essential 
                        health benefits will be modified to address any 
                        such gaps in access or changes in the evidence 
                        base;
                            (iv) an assessment of the potential of 
                        additional or expanded benefits to increase 
                        costs and the interactions between the addition 
                        or expansion of benefits and reductions in 
                        existing benefits to meet actuarial limitations 
                        described in paragraph (2); and
                    (H) periodically update the essential health 
                benefits under paragraph (1) to address any gaps in 
                access to coverage or changes in the evidence base the 
                Secretary identifies in the review conducted under 
                subparagraph (G).
            (5) Rule of construction.--Nothing in this title shall be 
        construed to prohibit a health plan from providing benefits in 
        excess of the essential health benefits described in this 
        subsection.
    (c) Requirements Relating to Cost-Sharing.--
            (1) Annual limitation on cost-sharing.--
                    (A) 2014.--The cost-sharing incurred under a health 
                plan with respect to self-only coverage or coverage 
                other than self-only coverage for a plan year beginning 
                in 2014 shall not exceed the dollar amounts in effect 
                under section 223(c)(2)(A)(ii) of the Internal Revenue 
                Code of 1986 for self-only and family coverage, 
                respectively, for taxable years beginning in 2014.
                    (B) 2015 and later.--In the case of any plan year 
                beginning in a calendar year after 2014, the limitation 
                under this paragraph shall--
                            (i) in the case of self-only coverage, be 
                        equal to the dollar amount under subparagraph 
                        (A) for self-only coverage for plan years 
                        beginning in 2014, increased by an amount equal 
                        to the product of that amount and the premium 
                        adjustment percentage under paragraph (4) for 
                        the calendar year; and
                            (ii) in the case of other coverage, twice 
                        the amount in effect under clause (i).
                If the amount of any increase under clause (i) is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.
            (2) Annual limitation on deductibles for employer-sponsored 
        plans.--
                    (A) In general.--In the case of a health plan 
                offered in the small group market, the deductible under 
                the plan shall not exceed--
                            (i) $2,000 in the case of a plan covering a 
                        single individual; and
                            (ii) $4,000 in the case of any other plan.
                The amounts under clauses (i) and (ii) may be increased 
                by the maximum amount of reimbursement which is 
                reasonably available to a participant under a flexible 
                spending arrangement described in section 106(c)(2) of 
                the Internal Revenue Code of 1986 (determined without 
                regard to any salary reduction arrangement).
                    (B) Indexing of limits.--In the case of any plan 
                year beginning in a calendar year after 2014--
                            (i) the dollar amount under subparagraph 
                        (A)(i) shall be increased by an amount equal to 
                        the product of that amount and the premium 
                        adjustment percentage under paragraph (4) for 
                        the calendar year; and
                            (ii) the dollar amount under subparagraph 
                        (A)(ii) shall be increased to an amount equal 
                        to twice the amount in effect under 
                        subparagraph (A)(i) for plan years beginning in 
                        the calendar year, determined after application 
                        of clause (i).
                If the amount of any increase under clause (i) is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.
                    (C) Actuarial value.--The limitation under this 
                paragraph shall be applied in such a manner so as to 
                not affect the actuarial value of any health plan, 
                including a plan in the bronze level.
                    (D) Coordination with preventive limits.--Nothing 
                in this paragraph shall be construed to allow a plan to 
                have a deductible under the plan apply to benefits 
                described in section 2713 of the Public Health Service 
                Act.
            (3) Cost-sharing.--In this title--
                    (A) In general.--The term ``cost-sharing'' 
                includes--
                            (i) deductibles, coinsurance, copayments, 
                        or similar charges; and
                            (ii) any other expenditure required of an 
                        insured individual which is a qualified medical 
                        expense (within the meaning of section 
                        223(d)(2) of the Internal Revenue Code of 1986) 
                        with respect to essential health benefits 
                        covered under the plan.
                    (B) Exceptions.--Such term does not include 
                premiums, balance billing amounts for non-network 
                providers, or spending for non-covered services.
            (4) Premium adjustment percentage.--For purposes of 
        paragraphs (1)(B)(i) and (2)(B)(i), the premium adjustment 
        percentage for any calendar year is the percentage (if any) by 
        which the average per capita premium for health insurance 
        coverage in the United States for the preceding calendar year 
        (as estimated by the Secretary no later than October 1 of such 
        preceding calendar year) exceeds such average per capita 
        premium for 2013 (as determined by the Secretary).
    (d) Levels of Coverage.--
            (1) Levels of coverage defined.--The levels of coverage 
        described in this subsection are as follows:
                    (A) Bronze level.--A plan in the bronze level shall 
                provide a level of coverage that is designed to provide 
                benefits that are actuarially equivalent to 60 percent 
                of the full actuarial value of the benefits provided 
                under the plan.
                    (B) Silver level.--A plan in the silver level shall 
                provide a level of coverage that is designed to provide 
                benefits that are actuarially equivalent to 70 percent 
                of the full actuarial value of the benefits provided 
                under the plan.
                    (C) Gold level.--A plan in the gold level shall 
                provide a level of coverage that is designed to provide 
                benefits that are actuarially equivalent to 80 percent 
                of the full actuarial value of the benefits provided 
                under the plan.
                    (D) Platinum level.--A plan in the platinum level 
                shall provide a level of coverage that is designed to 
                provide benefits that are actuarially equivalent to 90 
                percent of the full actuarial value of the benefits 
                provided under the plan.
            (2) Actuarial value.--
                    (A) In general.--Under regulations issued by the 
                Secretary, the level of coverage of a plan shall be 
                determined on the basis that the essential health 
                benefits described in subsection (b) shall be provided 
                to a standard population (and without regard to the 
                population the plan may actually provide benefits to).
                    (B) Employer contributions.--The Secretary may 
                issue regulations under which employer contributions to 
                a health savings account (within the meaning of section 
                223 of the Internal Revenue Code of 1986) may be taken 
                into account in determining the level of coverage for a 
                plan of the employer.
                    (C) Application.--In determining under this title, 
                the Public Health Service Act, or the Internal Revenue 
                Code of 1986 the percentage of the total allowed costs 
                of benefits provided under a group health plan or 
                health insurance coverage that are provided by such 
                plan or coverage, the rules contained in the 
                regulations under this paragraph shall apply.
            (3) Allowable variance.--The Secretary shall develop 
        guidelines to provide for a de minimis variation in the 
        actuarial valuations used in determining the level of coverage 
        of a plan to account for differences in actuarial estimates.
            (4) Plan reference.--In this title, any reference to a 
        bronze, silver, gold, or platinum plan shall be treated as a 
        reference to a qualified health plan providing a bronze, 
        silver, gold, or platinum level of coverage, as the case may 
        be.
    (e) Catastrophic Plan.--
            (1) In general.--A health plan not providing a bronze, 
        silver, gold, or platinum level of coverage shall be treated as 
        meeting the requirements of subsection (d) with respect to any 
        plan year if--
                    (A) the only individuals who are eligible to enroll 
                in the plan are individuals described in paragraph (2); 
                and
                    (B) the plan provides--
                            (i) except as provided in clause (ii), the 
                        essential health benefits determined under 
                        subsection (b), except that the plan provides 
                        no benefits for any plan year until the 
                        individual has incurred cost-sharing expenses 
                        in an amount equal to the annual limitation in 
                        effect under subsection (c)(1) for the plan 
                        year (except as provided for in section 2713); 
                        and
                            (ii) coverage for at least three primary 
                        care visits.
            (2) Individuals eligible for enrollment.--An individual is 
        described in this paragraph for any plan year if the 
        individual--
                    (A) has not attained the age of 30 before the 
                beginning of the plan year; or
                    (B) has a certification in effect for any plan year 
                under this title that the individual is exempt from the 
                requirement under section 5000A of the Internal Revenue 
                Code of 1986 by reason of--
                            (i) section 5000A(e)(1) of such Code 
                        (relating to individuals without affordable 
                        coverage); or
                            (ii) section 5000A(e)(5) of such Code 
                        (relating to individuals with hardships).
            (3) Restriction to individual market.--If a health 
        insurance issuer offers a health plan described in this 
        subsection, the issuer may only offer the plan in the 
        individual market.
    (f) Child-only Plans.--If a qualified health plan is offered 
through the Exchange in any level of coverage specified under 
subsection (d), the issuer shall also offer that plan through the 
Exchange in that level as a plan in which the only enrollees are 
individuals who, as of the beginning of a plan year, have not attained 
the age of 21, and such plan shall be treated as a qualified health 
plan.

SEC. 1303. SPECIAL RULES.

    (a) Special Rules Relating to Coverage of Abortion Services.--
            (1) Voluntary choice of coverage of abortion services.--
                    (A) In general.--Notwithstanding any other 
                provision of this title (or any amendment made by this 
                title), and subject to subparagraphs (C) and (D)--
                            (i) nothing in this title (or any amendment 
                        made by this title), shall be construed to 
                        require a qualified health plan to provide 
                        coverage of services described in subparagraph 
                        (B)(i) or (B)(ii) as part of its essential 
                        health benefits for any plan year; and
                            (ii) the issuer of a qualified health plan 
                        shall determine whether or not the plan 
                        provides coverage of services described in 
                        subparagraph (B)(i) or (B)(ii) as part of such 
                        benefits for the plan year.
                    (B) Abortion services.--
                            (i) Abortions for which public funding is 
                        prohibited.--The services described in this 
                        clause are abortions for which the expenditure 
                        of Federal funds appropriated for the 
                        Department of Health and Human Services is not 
                        permitted, based on the law as in effect as of 
                        the date that is 6 months before the beginning 
                        of the plan year involved.
                            (ii) Abortions for which public funding is 
                        allowed.--The services described in this clause 
                        are abortions for which the expenditure of 
                        Federal funds appropriated for the Department 
                        of Health and Human Services is permitted, 
                        based on the law as in effect as of the date 
                        that is 6 months before the beginning of the 
                        plan year involved.
                    (C) Prohibition on federal funds for abortion 
                services in community health insurance option.--
                            (i) Determination by secretary.--The 
                        Secretary may not determine, in accordance with 
                        subparagraph (A)(ii), that the community health 
                        insurance option established under section 1323 
                        shall provide coverage of services described in 
                        subparagraph (B)(i) as part of benefits for the 
                        plan year unless the Secretary--
                                    (I) assures compliance with the 
                                requirements of paragraph (2);
                                    (II) assures, in accordance with 
                                applicable provisions of generally 
                                accepted accounting requirements, 
                                circulars on funds management of the 
                                Office of Management and Budget, and 
                                guidance on accounting of the 
                                Government Accountability Office, that 
                                no Federal funds are used for such 
                                coverage; and
                                    (III) notwithstanding section 
                                1323(e)(1)(C) or any other provision of 
                                this title, takes all necessary steps 
                                to assure that the United States does 
                                not bear the insurance risk for a 
                                community health insurance option's 
                                coverage of services described in 
                                subparagraph (B)(i).
                            (ii) State requirement.--If a State 
                        requires, in addition to the essential health 
                        benefits required under section 1323(b)(3) (A), 
                        coverage of services described in subparagraph 
                        (B)(i) for enrollees of a community health 
                        insurance option offered in such State, the 
                        State shall assure that no funds flowing 
                        through or from the community health insurance 
                        option, and no other Federal funds, pay or 
                        defray the cost of providing coverage of 
                        services described in subparagraph (B)(i). The 
                        United States shall not bear the insurance risk 
                        for a State's required coverage of services 
                        described in subparagraph (B)(i).
                            (iii) Exceptions.--Nothing in this 
                        subparagraph shall apply to coverage of 
                        services described in subparagraph (B)(ii) by 
                        the community health insurance option. Services 
                        described in subparagraph (B)(ii) shall be 
                        covered to the same extent as such services are 
                        covered under title XIX of the Social Security 
                        Act.
                    (D) Assured availability of varied coverage through 
                exchanges.--
                            (i) In general.--The Secretary shall assure 
                        that with respect to qualified health plans 
                        offered in any Exchange established pursuant to 
                        this title--
                                    (I) there is at least one such plan 
                                that provides coverage of services 
                                described in clauses (i) and (ii) of 
                                subparagraph (B); and
                                    (II) there is at least one such 
                                plan that does not provide coverage of 
                                services described in subparagraph 
                                (B)(i).
                            (ii) Special rules.--For purposes of clause 
                        (i)--
                                    (I) a plan shall be treated as 
                                described in clause (i)(II) if the plan 
                                does not provide coverage of services 
                                described in either subparagraph (B)(i) 
                                or (B)(ii); and
                                    (II) if a State has one Exchange 
                                covering more than 1 insurance market, 
                                the Secretary shall meet the 
                                requirements of clause (i) separately 
                                with respect to each such market.
            (2) Prohibition on the use of federal funds.--
                    (A) In general.--If a qualified health plan 
                provides coverage of services described in paragraph 
                (1)(B)(i), the issuer of the plan shall not use any 
                amount attributable to any of the following for 
                purposes of paying for such services:
                            (i) The credit under section 36B of the 
                        Internal Revenue Code of 1986 (and the amount 
                        (if any) of the advance payment of the credit 
                        under section 1412 of the Patient Protection 
                        and Affordable Care Act).
                            (ii) Any cost-sharing reduction under 
                        section 1402 of thePatient Protection and 
                        Affordable Care Act (and the amount (if any) of 
                        the advance payment of the reduction under 
                        section 1412 of the Patient Protection and 
                        Affordable Care Act).
                    (B) Segregation of funds.--In the case of a plan to 
                which subparagraph (A) applies, the issuer of the plan 
                shall, out of amounts not described in subparagraph 
                (A), segregate an amount equal to the actuarial amounts 
                determined under subparagraph (C) for all enrollees 
                from the amounts described in subparagraph (A).
                    (C) Actuarial value of optional service coverage.--
                            (i) In general.--The Secretary shall 
                        estimate the basic per enrollee, per month 
                        cost, determined on an average actuarial basis, 
                        for including coverage under a qualified health 
                        plan of the services described in paragraph 
                        (1)(B)(i).
                            (ii) Considerations.--In making such 
                        estimate, the Secretary--
                                    (I) may take into account the 
                                impact on overall costs of the 
                                inclusion of such coverage, but may not 
                                take into account any cost reduction 
                                estimated to result from such services, 
                                including prenatal care, delivery, or 
                                postnatal care;
                                    (II) shall estimate such costs as 
                                if such coverage were included for the 
                                entire population covered; and
                                    (III) may not estimate such a cost 
                                at less than $1 per enrollee, per 
                                month.
            (3) Provider conscience protections.--No individual health 
        care provider or health care facility may be discriminated 
        against because of a willingness or an unwillingness, if doing 
        so is contrary to the religious or moral beliefs of the 
        provider or facility, to provide, pay for, provide coverage of, 
        or refer for abortions.
    (b) Application of State and Federal Laws Regarding Abortion.--
            (1) No preemption of state laws regarding abortion.--
        Nothing in this Act shall be construed to preempt or otherwise 
        have any effect on State laws regarding the prohibition of (or 
        requirement of) coverage, funding, or procedural requirements 
        on abortions, including parental notification or consent for 
        the performance of an abortion on a minor.
            (2) No effect on federal laws regarding abortion.--
                    (A) In general.--Nothing in this Act shall be 
                construed to have any effect on Federal laws 
                regarding--
                            (i) conscience protection;
                            (ii) willingness or refusal to provide 
                        abortion; and
                            (iii) discrimination on the basis of the 
                        willingness or refusal to provide, pay for, 
                        cover, or refer for abortion or to provide or 
                        participate in training to provide abortion.
            (3) No effect on federal civil rights law.--Nothing in this 
        subsection shall alter the rights and obligations of employees 
        and employers under title VII of the Civil Rights Act of 1964.
    (c) Application of Emergency Services Laws.--Nothing in this Act 
shall be construed to relieve any health care provider from providing 
emergency services as required by State or Federal law, including 
section 1867 of the Social Security Act (popularly known as 
``EMTALA'').

SEC. 1304. RELATED DEFINITIONS.

    (a) Definitions Relating to Markets.--In this title:
            (1) Group market.--The term ``group market'' means the 
        health insurance market under which individuals obtain health 
        insurance coverage (directly or through any arrangement) on 
        behalf of themselves (and their dependents) through a group 
        health plan maintained by an employer.
            (2) Individual market.--The term ``individual market'' 
        means the market for health insurance coverage offered to 
        individuals other than in connection with a group health plan.
            (3) Large and small group markets.--The terms ``large group 
        market'' and ``small group market'' mean the health insurance 
        market under which individuals obtain health insurance coverage 
        (directly or through any arrangement) on behalf of themselves 
        (and their dependents) through a group health plan maintained 
        by a large employer (as defined in subsection (b)(1)) or by a 
        small employer (as defined in subsection (b)(2)), respectively.
    (b) Employers.--In this title:
            (1) Large employer.--The term ``large employer'' means, in 
        connection with a group health plan with respect to a calendar 
        year and a plan year, an employer who employed an average of at 
        least 101 employees on business days during the preceding 
        calendar year and who employs at least 1 employee on the first 
        day of the plan year.
            (2) Small employer.--The term ``small employer'' means, in 
        connection with a group health plan with respect to a calendar 
        year and a plan year, an employer who employed an average of at 
        least 1 but not more than 100 employees on business days during 
        the preceding calendar year and who employs at least 1 employee 
        on the first day of the plan year.
            (3) State option to treat 50 employees as small.--In the 
        case of plan years beginning before January 1, 2016, a State 
        may elect to apply this subsection by substituting ``51 
        employees'' for ``101 employees'' in paragraph (1) and by 
        substituting ``50 employees'' for ``100 employees'' in 
        paragraph (2).
            (4) Rules for determining employer size.--For purposes of 
        this subsection--
                    (A) Application of aggregation rule for 
                employers.--All persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                of the Internal Revenue Code of 1986 shall be treated 
                as 1 employer.
                    (B) Employers not in existence in preceding year.--
                In the case of an employer which was not in existence 
                throughout the preceding calendar year, the 
                determination of whether such employer is a small or 
                large employer shall be based on the average number of 
                employees that it is reasonably expected such employer 
                will employ on business days in the current calendar 
                year.
                    (C) Predecessors.--Any reference in this subsection 
                to an employer shall include a reference to any 
                predecessor of such employer.
                    (D) Continuation of participation for growing small 
                employers.--If--
                            (i) a qualified employer that is a small 
                        employer makes enrollment in qualified health 
                        plans offered in the small group market 
                        available to its employees through an Exchange; 
                        and
                            (ii) the employer ceases to be a small 
                        employer by reason of an increase in the number 
                        of employees of such employer;
                the employer shall continue to be treated as a small 
                employer for purposes of this subtitle for the period 
                beginning with the increase and ending with the first 
                day on which the employer does not make such enrollment 
                available to its employees.
    (c) Secretary.--In this title, the term ``Secretary'' means the 
Secretary of Health and Human Services.
    (d) State.--In this title, the term ``State'' means each of the 50 
States and the District of Columbia.

  PART II--CONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH 
                           BENEFIT EXCHANGES

SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT PLANS.

    (a) Assistance to States to Establish American Health Benefit 
Exchanges.--
            (1) Planning and establishment grants.--There shall be 
        appropriated to the Secretary, out of any moneys in the 
        Treasury not otherwise appropriated, an amount necessary to 
        enable the Secretary to make awards, not later than 1 year 
        after the date of enactment of this Act, to States in the 
        amount specified in paragraph (2) for the uses described in 
        paragraph (3).
            (2) Amount specified.--For each fiscal year, the Secretary 
        shall determine the total amount that the Secretary will make 
        available to each State for grants under this subsection.
            (3) Use of funds.--A State shall use amounts awarded under 
        this subsection for activities (including planning activities) 
        related to establishing an American Health Benefit Exchange, as 
        described in subsection (b).
            (4) Renewability of grant.--
                    (A) In general.--Subject to subsection (d)(4), the 
                Secretary may renew a grant awarded under paragraph (1) 
                if the State recipient of such grant--
                            (i) is making progress, as determined by 
                        the Secretary, toward--
                                    (I) establishing an Exchange; and
                                    (II) implementing the reforms 
                                described in subtitles A and C (and the 
                                amendments made by such subtitles); and
                            (ii) is meeting such other benchmarks as 
                        the Secretary may establish.
                    (B) Limitation.--No grant shall be awarded under 
                this subsection after January 1, 2015.
            (5) Technical assistance to facilitate participation in 
        shop exchanges.--The Secretary shall provide technical 
        assistance to States to facilitate the participation of 
        qualified small businesses in such States in SHOP Exchanges.
    (b) American Health Benefit Exchanges.--
            (1) In general.--Each State shall, not later than January 
        1, 2014, establish an American Health Benefit Exchange 
        (referred to in this title as an ``Exchange'') for the State 
        that--
                    (A) facilitates the purchase of qualified health 
                plans;
                    (B) provides for the establishment of a Small 
                Business Health Options Program (in this title referred 
                to as a ``SHOP Exchange'') that is designed to assist 
                qualified employers in the State who are small 
                employers in facilitating the enrollment of their 
                employees in qualified health plans offered in the 
                small group market in the State; and
                    (C) meets the requirements of subsection (d).
            (2) Merger of individual and shop exchanges.--A State may 
        elect to provide only one Exchange in the State for providing 
        both Exchange and SHOP Exchange services to both qualified 
        individuals and qualified small employers, but only if the 
        Exchange has adequate resources to assist such individuals and 
        employers.
    (c) Responsibilities of the Secretary.--
            (1) In general.--The Secretary shall, by regulation, 
        establish criteria for the certification of health plans as 
        qualified health plans. Such criteria shall require that, to be 
        certified, a plan shall, at a minimum--
                    (A) meet marketing requirements, and not employ 
                marketing practices or benefit designs that have the 
                effect of discouraging the enrollment in such plan by 
                individuals with significant health needs;
                    (B) ensure a sufficient choice of providers (in a 
                manner consistent with applicable network adequacy 
                provisions under section 2702(c) of the Public Health 
                Service Act), and provide information to enrollees and 
                prospective enrollees on the availability of in-network 
                and out-of-network providers;
                    (C) include within health insurance plan networks 
                those essential community providers, where available, 
                that serve predominately low-income, medically-
                underserved individuals, such as health care providers 
                defined in section 340B(a)(4) of the Public Health 
                Service Act and providers described in section 
                1927(c)(1)(D)(i)(IV) of the Social Security Act as set 
                forth by section 221 of Public Law 111-8, except that 
                nothing in this subparagraph shall be construed to 
                require any health plan to provide coverage for any 
                specific medical procedure;
                    (D)(i) be accredited with respect to local 
                performance on clinical quality measures such as the 
                Healthcare Effectiveness Data and Information Set, 
                patient experience ratings on a standardized Consumer 
                Assessment of Healthcare Providers and Systems survey, 
                as well as consumer access, utilization management, 
                quality assurance, provider credentialing, complaints 
                and appeals, network adequacy and access, and patient 
                information programs by any entity recognized by the 
                Secretary for the accreditation of health insurance 
                issuers or plans (so long as any such entity has 
                transparent and rigorous methodological and scoring 
                criteria); or
                    (ii) receive such accreditation within a period 
                established by an Exchange for such accreditation that 
                is applicable to all qualified health plans;
                    (E) implement a quality improvement strategy 
                described in subsection (g)(1);
                    (F) utilize a uniform enrollment form that 
                qualified individuals and qualified employers may use 
                (either electronically or on paper) in enrolling in 
                qualified health plans offered through such Exchange, 
                and that takes into account criteria that the National 
                Association of Insurance Commissioners develops and 
                submits to the Secretary;
                    (G) utilize the standard format established for 
                presenting health benefits plan options; and
                    (H) provide information to enrollees and 
                prospective enrollees, and to each Exchange in which 
                the plan is offered, on any quality measures for health 
                plan performance endorsed under section 399JJ of the 
                Public Health Service Act, as applicable.
            (2) Rule of construction.--Nothing in paragraph (1)(C) 
        shall be construed to require a qualified health plan to 
        contract with a provider described in such paragraph if such 
        provider refuses to accept the generally applicable payment 
        rates of such plan.
            (3) Rating system.--The Secretary shall develop a rating 
        system that would rate qualified health plans offered through 
        an Exchange in each benefits level on the basis of the relative 
        quality and price. The Exchange shall include the quality 
        rating in the information provided to individuals and employers 
        through the Internet portal established under paragraph (4).
            (4) Internet portals.--The Secretary shall--
                    (A) continue to operate, maintain, and update the 
                Internet portal developed under section 1103(a) and to 
                assist States in developing and maintaining their own 
                such portal; and
                    (B) make available for use by Exchanges a model 
                template for an Internet portal that may be used to 
                direct qualified individuals and qualified employers to 
                qualified health plans, to assist such individuals and 
                employers in determining whether they are eligible to 
                participate in an Exchange or eligible for a premium 
                tax credit or cost-sharing reduction, and to present 
                standardized information (including quality ratings) 
                regarding qualified health plans offered through an 
                Exchange to assist consumers in making easy health 
                insurance choices.
        Such template shall include, with respect to each qualified 
        health plan offered through the Exchange in each rating area, 
        access to the uniform outline of coverage the plan is required 
        to provide under section 2716 of the Public Health Service Act 
        and to a copy of the plan's written policy.
            (5) Enrollment periods.--The Secretary shall require an 
        Exchange to provide for--
                    (A) an initial open enrollment, as determined by 
                the Secretary (such determination to be made not later 
                than July 1, 2012);
                    (B) annual open enrollment periods, as determined 
                by the Secretary for calendar years after the initial 
                enrollment period;
                    (C) special enrollment periods specified in section 
                9801 of the Internal Revenue Code of 1986 and other 
                special enrollment periods under circumstances similar 
                to such periods under part D of title XVIII of the 
                Social Security Act; and
                    (D) special monthly enrollment periods for Indians 
                (as defined in section 4 of the Indian Health Care 
                Improvement Act).
    (d) Requirements.--
            (1) In general.--An Exchange shall be a governmental agency 
        or nonprofit entity that is established by a State.
            (2) Offering of coverage.--
                    (A) In general.--An Exchange shall make available 
                qualified health plans to qualified individuals and 
                qualified employers.
                    (B) Limitation.--
                            (i) In general.--An Exchange may not make 
                        available any health plan that is not a 
                        qualified health plan.
                            (ii) Offering of stand-alone dental 
                        benefits.--Each Exchange within a State shall 
                        allow an issuer of a plan that only provides 
                        limited scope dental benefits meeting the 
                        requirements of section 9832(c)(2)(A) of the 
                        Internal Revenue Code of 1986 to offer the plan 
                        through the Exchange (either separately or in 
                        conjunction with a qualified health plan) if 
                        the plan provides pediatric dental benefits 
                        meeting the requirements of section 
                        1302(b)(1)(J)).
            (3) Rules relating to additional required benefits.--
                    (A) In general.--Except as provided in subparagraph 
                (B), an Exchange may make available a qualified health 
                plan notwithstanding any provision of law that may 
                require benefits other than the essential health 
                benefits specified under section 1302(b).
                    (B) States may require additional benefits.--
                            (i) In general.--Subject to the 
                        requirements of clause (ii), a State may 
                        require that a qualified health plan offered in 
                        such State offer benefits in addition to the 
                        essential health benefits specified under 
                        section 1302(b).
                            (ii) State must assume cost.--A State shall 
                        make payments to or on behalf of an individual 
                        eligible for the premium tax credit under 
                        section 36B of the Internal Revenue Code of 
                        1986 and any cost-sharing reduction under 
                        section 1402 to defray the cost to the 
                        individual of any additional benefits described 
                        in clause (i) which are not eligible for such 
                        credit or reduction under section 36B(b)(3)(D) 
                        of such Code and section 1402(c)(4).
            (4) Functions.--An Exchange shall, at a minimum--
                    (A) implement procedures for the certification, 
                recertification, and decertification, consistent with 
                guidelines developed by the Secretary under subsection 
                (c), of health plans as qualified health plans;
                    (B) provide for the operation of a toll-free 
                telephone hotline to respond to requests for 
                assistance;
                    (C) maintain an Internet website through which 
                enrollees and prospective enrollees of qualified health 
                plans may obtain standardized comparative information 
                on such plans;
                    (D) assign a rating to each qualified health plan 
                offered through such Exchange in accordance with the 
                criteria developed by the Secretary under subsection 
                (c)(3);
                    (E) utilize a standardized format for presenting 
                health benefits plan options in the Exchange, including 
                the use of the uniform outline of coverage established 
                under section 2715 of the Public Health Service Act;
                    (F) in accordance with section 1413, inform 
                individuals of eligibility requirements for the 
                medicaid program under title XIX of the Social Security 
                Act, the CHIP program under title XXI of such Act, or 
                any applicable State or local public program and if 
                through screening of the application by the Exchange, 
                the Exchange determines that such individuals are 
                eligible for any such program, enroll such individuals 
                in such program;
                    (G) establish and make available by electronic 
                means a calculator to determine the actual cost of 
                coverage after the application of any premium tax 
                credit under section 36B of the Internal Revenue Code 
                of 1986 and any cost-sharing reduction under section 
                1402;
                    (H) subject to section 1411, grant a certification 
                attesting that, for purposes of the individual 
                responsibility penalty under section 5000A of the 
                Internal Revenue Code of 1986, an individual is exempt 
                from the individual requirement or from the penalty 
                imposed by such section because--
                            (i) there is no affordable qualified health 
                        plan available through the Exchange, or the 
                        individual's employer, covering the individual; 
                        or
                            (ii) the individual meets the requirements 
                        for any other such exemption from the 
                        individual responsibility requirement or 
                        penalty;
                    (I) transfer to the Secretary of the Treasury--
                            (i) a list of the individuals who are 
                        issued a certification under subparagraph (H), 
                        including the name and taxpayer identification 
                        number of each individual;
                            (ii) the name and taxpayer identification 
                        number of each individual who was an employee 
                        of an employer but who was determined to be 
                        eligible for the premium tax credit under 
                        section 36B of the Internal Revenue Code of 
                        1986 because--
                                    (I) the employer did not provide 
                                minimum essential coverage; or
                                    (II) the employer provided such 
                                minimum essential coverage but it was 
                                determined under section 36B(c)(2)(C) 
                                of such Code to either be unaffordable 
                                to the employee or not provide the 
                                required minimum actuarial value; and
                            (iii) the name and taxpayer identification 
                        number of each individual who notifies the 
                        Exchange under section 1411(b)(4) that they 
                        have changed employers and of each individual 
                        who ceases coverage under a qualified health 
                        plan during a plan year (and the effective date 
                        of such cessation);
                    (J) provide to each employer the name of each 
                employee of the employer described in subparagraph 
                (I)(ii) who ceases coverage under a qualified health 
                plan during a plan year (and the effective date of such 
                cessation); and
                    (K) establish the Navigator program described in 
                subsection (i).
            (5) Funding limitations.--
                    (A) No federal funds for continued operations.--In 
                establishing an Exchange under this section, the State 
                shall ensure that such Exchange is self-sustaining 
                beginning on January 1, 2015, including allowing the 
                Exchange to charge assessments or user fees to 
                participating health insurance issuers, or to otherwise 
                generate funding, to support its operations.
                    (B) Prohibiting wasteful use of funds.--In carrying 
                out activities under this subsection, an Exchange shall 
                not utilize any funds intended for the administrative 
                and operational expenses of the Exchange for staff 
                retreats, promotional giveaways, excessive executive 
                compensation, or promotion of Federal or State 
                legislative and regulatory modifications.
            (6) Consultation.--An Exchange shall consult with 
        stakeholders relevant to carrying out the activities under this 
        section, including--
                    (A) health care consumers who are enrollees in 
                qualified health plans;
                    (B) individuals and entities with experience in 
                facilitating enrollment in qualified health plans;
                    (C) representatives of small businesses and self-
                employed individuals;
                    (D) State Medicaid offices; and
                    (E) advocates for enrolling hard to reach 
                populations.
            (7) Publication of costs.--An Exchange shall publish the 
        average costs of licensing, regulatory fees, and any other 
        payments required by the Exchange, and the administrative costs 
        of such Exchange, on an Internet website to educate consumers 
        on such costs. Such information shall also include monies lost 
        to waste, fraud, and abuse.
    (e) Certification.--
            (1) In general.--An Exchange may certify a health plan as a 
        qualified health plan if--
                    (A) such health plan meets the requirements for 
                certification as promulgated by the Secretary under 
                subsection (c)(1); and
                    (B) the Exchange determines that making available 
                such health plan through such Exchange is in the 
                interests of qualified individuals and qualified 
                employers in the State or States in which such Exchange 
                operates, except that the Exchange may not exclude a 
                health plan--
                            (i) on the basis that such plan is a fee-
                        for-service plan;
                            (ii) through the imposition of premium 
                        price controls; or
                            (iii) on the basis that the plan provides 
                        treatments necessary to prevent patients' 
                        deaths in circumstances the Exchange determines 
                        are inappropriate or too costly.
            (2) Premium considerations.--The Exchange shall require 
        health plans seeking certification as qualified health plans to 
        submit a justification for any premium increase prior to 
        implementation of the increase. Such plans shall prominently 
        post such information on their websites. The Exchange may take 
        this information, and the information and the recommendations 
        provided to the Exchange by the State under section 2794(b)(1) 
        of the Public Health Service Act (relating to patterns or 
        practices of excessive or unjustified premium increases), into 
        consideration when determining whether to make such health plan 
        available through the Exchange. The Exchange shall take into 
        account any excess of premium growth outside the Exchange as 
        compared to the rate of such growth inside the Exchange, 
        including information reported by the States.
    (f) Flexibility.--
            (1) Regional or other interstate exchanges.--An Exchange 
        may operate in more than one State if--
                    (A) each State in which such Exchange operates 
                permits such operation; and
                    (B) the Secretary approves such regional or 
                interstate Exchange.
            (2) Subsidiary exchanges.--A State may establish one or 
        more subsidiary Exchanges if--
                    (A) each such Exchange serves a geographically 
                distinct area; and
                    (B) the area served by each such Exchange is at 
                least as large as a rating area described in section 
                2701(a) of the Public Health Service Act.
            (3) Authority to contract.--
                    (A) In general.--A State may elect to authorize an 
                Exchange established by the State under this section to 
                enter into an agreement with an eligible entity to 
                carry out 1 or more responsibilities of the Exchange.
                    (B) Eligible entity.--In this paragraph, the term 
                ``eligible entity'' means--
                            (i) a person--
                                    (I) incorporated under, and subject 
                                to the laws of, 1 or more States;
                                    (II) that has demonstrated 
                                experience on a State or regional basis 
                                in the individual and small group 
                                health insurance markets and in 
                                benefits coverage; and
                                    (III) that is not a health 
                                insurance issuer or that is treated 
                                under subsection (a) or (b) of section 
                                52 of the Internal Revenue Code of 1986 
                                as a member of the same controlled 
                                group of corporations (or under common 
                                control with) as a health insurance 
                                issuer; or
                            (ii) the State medicaid agency under title 
                        XIX of the Social Security Act.
    (g) Rewarding Quality Through Market-Based Incentives.--
            (1) Strategy described.--A strategy described in this 
        paragraph is a payment structure that provides increased 
        reimbursement or other incentives for--
                    (A) improving health outcomes through the 
                implementation of activities that shall include quality 
                reporting, effective case management, care 
                coordination, chronic disease management, medication 
                and care compliance initiatives, including through the 
                use of the medical home model, for treatment or 
                services under the plan or coverage;
                    (B) the implementation of activities to prevent 
                hospital readmissions through a comprehensive program 
                for hospital discharge that includes patient-centered 
                education and counseling, comprehensive discharge 
                planning, and post discharge reinforcement by an 
                appropriate health care professional;
                    (C) the implementation of activities to improve 
                patient safety and reduce medical errors through the 
                appropriate use of best clinical practices, evidence 
                based medicine, and health information technology under 
                the plan or coverage; and
                    (D) the implementation of wellness and health 
                promotion activities.
            (2) Guidelines.--The Secretary, in consultation with 
        experts in health care quality and stakeholders, shall develop 
        guidelines concerning the matters described in paragraph (1).
            (3) Requirements.--The guidelines developed under paragraph 
        (2) shall require the periodic reporting to the applicable 
        Exchange of the activities that a qualified health plan has 
        conducted to implement a strategy described in paragraph (1).
    (h) Quality Improvement.--
            (1) Enhancing patient safety.--Beginning on January 1, 
        2015, a qualified health plan may contract with--
                    (A) a hospital with greater than 50 beds only if 
                such hospital--
                            (i) utilizes a patient safety evaluation 
                        system as described in part C of title IX of 
                        the Public Health Service Act; and
                            (ii) implements a mechanism to ensure that 
                        each patient receives a comprehensive program 
                        for hospital discharge that includes patient-
                        centered education and counseling, 
                        comprehensive discharge planning, and post 
                        discharge reinforcement by an appropriate 
                        health care professional; or
                    (B) a health care provider only if such provider 
                implements such mechanisms to improve health care 
                quality as the Secretary may by regulation require.
            (2) Exceptions.--The Secretary may establish reasonable 
        exceptions to the requirements described in paragraph (1).
            (3) Adjustment.--The Secretary may by regulation adjust the 
        number of beds described in paragraph (1)(A).
    (i) Navigators.--
            (1) In general.--An Exchange shall establish a program 
        under which it awards grants to entities described in paragraph 
        (2) to carry out the duties described in paragraph (3).
            (2) Eligibility.--
                    (A) In general.--To be eligible to receive a grant 
                under paragraph (1), an entity shall demonstrate to the 
                Exchange involved that the entity has existing 
                relationships, or could readily establish 
                relationships, with employers and employees, consumers 
                (including uninsured and underinsured consumers), or 
                self-employed individuals likely to be qualified to 
                enroll in a qualified health plan.
                    (B) Types.--Entities described in subparagraph (A) 
                may include trade, industry, and professional 
                associations, commercial fishing industry 
                organizations, ranching and farming organizations, 
                community and consumer-focused nonprofit groups, 
                chambers of commerce, unions, small business 
                development centers, other licensed insurance agents 
                and brokers, and other entities that--
                            (i) are capable of carrying out the duties 
                        described in paragraph (3);
                            (ii) meet the standards described in 
                        paragraph (4); and
                            (iii) provide information consistent with 
                        the standards developed under paragraph (5).
            (3) Duties.--An entity that serves as a navigator under a 
        grant under this subsection shall--
                    (A) conduct public education activities to raise 
                awareness of the availability of qualified health 
                plans;
                    (B) distribute fair and impartial information 
                concerning enrollment in qualified health plans, and 
                the availability of premium tax credits under section 
                36B of the Internal Revenue Code of 1986 and cost-
                sharing reductions under section 1402;
                    (C) facilitate enrollment in qualified health 
                plans;
                    (D) provide referrals to any applicable office of 
                health insurance consumer assistance or health 
                insurance ombudsman established under section 2793 of 
                the Public Health Service Act, or any other appropriate 
                State agency or agencies, for any enrollee with a 
                grievance, complaint, or question regarding their 
                health plan, coverage, or a determination under such 
                plan or coverage; and
                    (E) provide information in a manner that is 
                culturally and linguistically appropriate to the needs 
                of the population being served by the Exchange or 
                Exchanges.
            (4) Standards.--
                    (A) In general.--The Secretary shall establish 
                standards for navigators under this subsection, 
                including provisions to ensure that any private or 
                public entity that is selected as a navigator is 
                qualified, and licensed if appropriate, to engage in 
                the navigator activities described in this subsection 
                and to avoid conflicts of interest. Under such 
                standards, a navigator shall not--
                            (i) be a health insurance issuer; or
                            (ii) receive any consideration directly or 
                        indirectly from any health insurance issuer in 
                        connection with the enrollment of any qualified 
                        individuals or employees of a qualified 
                        employer in a qualified health plan.
            (5) Fair and impartial information and services.--The 
        Secretary, in collaboration with States, shall develop 
        standards to ensure that information made available by 
        navigators is fair, accurate, and impartial.
            (6) Funding.--Grants under this subsection shall be made 
        from the operational funds of the Exchange and not Federal 
        funds received by the State to establish the Exchange.
    (j) Applicability of Mental Health Parity.--Section 2726 of the 
Public Health Service Act shall apply to qualified health plans in the 
same manner and to the same extent as such section applies to health 
insurance issuers and group health plans.
    (k) Conflict.--An Exchange may not establish rules that conflict 
with or prevent the application of regulations promulgated by the 
Secretary under this subtitle.

SEC. 1312. CONSUMER CHOICE.

    (a) Choice.--
            (1) Qualified individuals.--A qualified individual may 
        enroll in any qualified health plan available to such 
        individual.
            (2) Qualified employers.--
                    (A) Employer may specify level.--A qualified 
                employer may provide support for coverage of employees 
                under a qualified health plan by selecting any level of 
                coverage under section 1302(d) to be made available to 
                employees through an Exchange.
                    (B) Employee may choose plans within a level.--Each 
                employee of a qualified employer that elects a level of 
                coverage under subparagraph (A) may choose to enroll in 
                a qualified health plan that offers coverage at that 
                level.
    (b) Payment of Premiums by Qualified Individuals.--A qualified 
individual enrolled in any qualified health plan may pay any applicable 
premium owed by such individual to the health insurance issuer issuing 
such qualified health plan.
    (c) Single Risk Pool.--
            (1) Individual market.--A health insurance issuer shall 
        consider all enrollees in all health plans (other than 
        grandfathered health plans) offered by such issuer in the 
        individual market, including those enrollees who do not enroll 
        in such plans through the Exchange, to be members of a single 
        risk pool.
            (2) Small group market.--A health insurance issuer shall 
        consider all enrollees in all health plans (other than 
        grandfathered health plans) offered by such issuer in the small 
        group market, including those enrollees who do not enroll in 
        such plans through the Exchange, to be members of a single risk 
        pool.
            (3) Merger of markets.--A State may require the individual 
        and small group insurance markets within a State to be merged 
        if the State determines appropriate.
            (4) State law.--A State law requiring grandfathered health 
        plans to be included in a pool described in paragraph (1) or 
        (2) shall not apply.
    (d) Empowering Consumer Choice.--
            (1) Continued operation of market outside exchanges.--
        Nothing in this title shall be construed to prohibit--
                    (A) a health insurance issuer from offering outside 
                of an Exchange a health plan to a qualified individual 
                or qualified employer; and
                    (B) a qualified individual from enrolling in, or a 
                qualified employer from selecting for its employees, a 
                health plan offered outside of an Exchange.
            (2) Continued operation of state benefit requirements.--
        Nothing in this title shall be construed to terminate, abridge, 
        or limit the operation of any requirement under State law with 
        respect to any policy or plan that is offered outside of an 
        Exchange to offer benefits.
            (3) Voluntary nature of an exchange.--
                    (A) Choice to enroll or not to enroll.--Nothing in 
                this title shall be construed to restrict the choice of 
                a qualified individual to enroll or not to enroll in a 
                qualified health plan or to participate in an Exchange.
                    (B) Prohibition against compelled enrollment.--
                Nothing in this title shall be construed to compel an 
                individual to enroll in a qualified health plan or to 
                participate in an Exchange.
                    (C) Individuals allowed to enroll in any plan.--A 
                qualified individual may enroll in any qualified health 
                plan, except that in the case of a catastrophic plan 
                described in section 1302(e), a qualified individual 
                may enroll in the plan only if the individual is 
                eligible to enroll in the plan under section 
                1302(e)(2).
                    (D) Members of congress in the exchange.--
                            (i) Requirement.--Notwithstanding any other 
                        provision of law, after the effective date of 
                        this subtitle, the only health plans that the 
                        Federal Government may make available to 
                        Members of Congress and congressional staff 
                        with respect to their service as a Member of 
                        Congress or congressional staff shall be health 
                        plans that are--
                                    (I) created under this Act (or an 
                                amendment made by this Act); or
                                    (II) offered through an Exchange 
                                established under this Act (or an 
                                amendment made by this Act).
                            (ii) Definitions.--In this section:
                                    (I) Member of congress.--The term 
                                ``Member of Congress'' means any member 
                                of the House of Representatives or the 
                                Senate.
                                    (II) Congressional staff.--The term 
                                ``congressional staff'' means all full-
                                time and part-time employees employed 
                                by the official office of a Member of 
                                Congress, whether in Washington, DC or 
                                outside of Washington, DC.
            (4) No penalty for transferring to minimum essential 
        coverage outside exchange.--An Exchange, or a qualified health 
        plan offered through an Exchange, shall not impose any penalty 
        or other fee on an individual who cancels enrollment in a plan 
        because the individual becomes eligible for minimum essential 
        coverage (as defined in section 5000A(f) of the Internal 
        Revenue Code of 1986 without regard to paragraph (1)(C) or (D) 
        thereof) or such coverage becomes affordable (within the 
        meaning of section 36B(c)(2)(C) of such Code).
    (e) Enrollment Through Agents or Brokers.--The Secretary shall 
establish procedures under which a State may allow agents or brokers--
            (1) to enroll individuals in any qualified health plans in 
        the individual or small group market as soon as the plan is 
        offered through an Exchange in the State; and
            (2) to assist individuals in applying for premium tax 
        credits and cost-sharing reductions for plans sold through an 
        Exchange.
Such procedures may include the establishment of rate schedules for 
broker commissions paid by health benefits plans offered through an 
exchange.
    (f) Qualified Individuals and Employers; Access Limited to Citizens 
and Lawful Residents.--
            (1) Qualified individuals.--In this title:
                    (A) In general.--The term ``qualified individual'' 
                means, with respect to an Exchange, an individual who--
                            (i) is seeking to enroll in a qualified 
                        health plan in the individual market offered 
                        through the Exchange; and
                            (ii) resides in the State that established 
                        the Exchange (except with respect to 
                        territorial agreements under section 1312(f)).
                    (B) Incarcerated individuals excluded.--An 
                individual shall not be treated as a qualified 
                individual if, at the time of enrollment, the 
                individual is incarcerated, other than incarceration 
                pending the disposition of charges.
            (2) Qualified employer.--In this title:
                    (A) In general.--The term ``qualified employer'' 
                means a small employer that elects to make all full-
                time employees of such employer eligible for 1 or more 
                qualified health plans offered in the small group 
                market through an Exchange that offers qualified health 
                plans.
                    (B) Extension to large groups.--
                            (i) In general.--Beginning in 2017, each 
                        State may allow issuers of health insurance 
                        coverage in the large group market in the State 
                        to offer qualified health plans in such market 
                        through an Exchange. Nothing in this 
                        subparagraph shall be construed as requiring 
                        the issuer to offer such plans through an 
                        Exchange.
                            (ii) Large employers eligible.--If a State 
                        under clause (i) allows issuers to offer 
                        qualified health plans in the large group 
                        market through an Exchange, the term 
                        ``qualified employer'' shall include a large 
                        employer that elects to make all full-time 
                        employees of such employer eligible for 1 or 
                        more qualified health plans offered in the 
                        large group market through the Exchange.
            (3) Access limited to lawful residents.--If an individual 
        is not, or is not reasonably expected to be for the entire 
        period for which enrollment is sought, a citizen or national of 
        the United States or an alien lawfully present in the United 
        States, the individual shall not be treated as a qualified 
        individual and may not be covered under a qualified health plan 
        in the individual market that is offered through an Exchange.

SEC. 1313. FINANCIAL INTEGRITY.

    (a) Accounting for Expenditures.--
            (1) In general.--An Exchange shall keep an accurate 
        accounting of all activities, receipts, and expenditures and 
        shall annually submit to the Secretary a report concerning such 
        accountings.
            (2) Investigations.--The Secretary, in coordination with 
        the Inspector General of the Department of Health and Human 
        Services, may investigate the affairs of an Exchange, may 
        examine the properties and records of an Exchange, and may 
        require periodic reports in relation to activities undertaken 
        by an Exchange. An Exchange shall fully cooperate in any 
        investigation conducted under this paragraph.
            (3) Audits.--An Exchange shall be subject to annual audits 
        by the Secretary.
            (4) Pattern of abuse.--If the Secretary determines that an 
        Exchange or a State has engaged in serious misconduct with 
        respect to compliance with the requirements of, or carrying out 
        of activities required under, this title, the Secretary may 
        rescind from payments otherwise due to such State involved 
        under this or any other Act administered by the Secretary an 
        amount not to exceed 1 percent of such payments per year until 
        corrective actions are taken by the State that are determined 
        to be adequate by the Secretary.
            (5) Protections against fraud and abuse.--With respect to 
        activities carried out under this title, the Secretary shall 
        provide for the efficient and non-discriminatory administration 
        of Exchange activities and implement any measure or procedure 
        that--
                    (A) the Secretary determines is appropriate to 
                reduce fraud and abuse in the administration of this 
                title; and
                    (B) the Secretary has authority to implement under 
                this title or any other Act.
            (6) Application of the false claims act.--
                    (A) In general.--Payments made by, through, or in 
                connection with an Exchange are subject to the False 
                Claims Act (31 U.S.C. 3729 et seq.) if those payments 
                include any Federal funds. Compliance with the 
                requirements of this Act concerning eligibility for a 
                health insurance issuer to participate in the Exchange 
                shall be a material condition of an issuer's 
                entitlement to receive payments, including payments of 
                premium tax credits and cost-sharing reductions, 
                through the Exchange.
                    (B) Damages.--Notwithstanding paragraph (1) of 
                section 3729(a) of title 31, United States Code, and 
                subject to paragraph (2) of such section, the civil 
                penalty assessed under the False Claims Act on any 
                person found liable under such Act as described in 
                subparagraph (A) shall be increased by not less than 3 
                times and not more than 6 times the amount of damages 
                which the Government sustains because of the act of 
                that person.
    (b) GAO Oversight.--Not later than 5 years after the first date on 
which Exchanges are required to be operational under this title, the 
Comptroller General shall conduct an ongoing study of Exchange 
activities and the enrollees in qualified health plans offered through 
Exchanges. Such study shall review--
            (1) the operations and administration of Exchanges, 
        including surveys and reports of qualified health plans offered 
        through Exchanges and on the experience of such plans 
        (including data on enrollees in Exchanges and individuals 
        purchasing health insurance coverage outside of Exchanges), the 
        expenses of Exchanges, claims statistics relating to qualified 
        health plans, complaints data relating to such plans, and the 
        manner in which Exchanges meet their goals;
            (2) any significant observations regarding the utilization 
        and adoption of Exchanges;
            (3) where appropriate, recommendations for improvements in 
        the operations or policies of Exchanges; and
            (4) how many physicians, by area and specialty, are not 
        taking or accepting new patients enrolled in Federal Government 
        health care programs, and the adequacy of provider networks of 
        Federal Government health care programs.

           PART III--STATE FLEXIBILITY RELATING TO EXCHANGES

SEC. 1321. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF EXCHANGES 
              AND RELATED REQUIREMENTS.

    (a) Establishment of Standards.--
            (1) In general.--The Secretary shall, as soon as 
        practicable after the date of enactment of this Act, issue 
        regulations setting standards for meeting the requirements 
        under this title, and the amendments made by this title, with 
        respect to--
                    (A) the establishment and operation of Exchanges 
                (including SHOP Exchanges);
                    (B) the offering of qualified health plans through 
                such Exchanges;
                    (C) the establishment of the reinsurance and risk 
                adjustment programs under part V; and
                    (D) such other requirements as the Secretary 
                determines appropriate.
        The preceding sentence shall not apply to standards for 
        requirements under subtitles A and C (and the amendments made 
        by such subtitles) for which the Secretary issues regulations 
        under the Public Health Service Act.
            (2) Consultation.--In issuing the regulations under 
        paragraph (1), the Secretary shall consult with the National 
        Association of Insurance Commissioners and its members and with 
        health insurance issuers, consumer organizations, and such 
        other individuals as the Secretary selects in a manner designed 
        to ensure balanced representation among interested parties.
    (b) State Action.--Each State that elects, at such time and in such 
manner as the Secretary may prescribe, to apply the requirements 
described in subsection (a) shall, not later than January 1, 2014, 
adopt and have in effect--
            (1) the Federal standards established under subsection (a); 
        or
            (2) a State law or regulation that the Secretary determines 
        implements the standards within the State.
    (c) Failure to Establish Exchange or Implement Requirements.--
            (1) In general.--If--
                    (A) a State is not an electing State under 
                subsection (b); or
                    (B) the Secretary determines, on or before January 
                1, 2013, that an electing State--
                            (i) will not have any required Exchange 
                        operational by January 1, 2014; or
                            (ii) has not taken the actions the 
                        Secretary determines necessary to implement--
                                    (I) the other requirements set 
                                forth in the standards under subsection 
                                (a); or
                                    (II) the requirements set forth in 
                                subtitles A and C and the amendments 
                                made by such subtitles;
        the Secretary shall (directly or through agreement with a not-
        for-profit entity) establish and operate such Exchange within 
        the State and the Secretary shall take such actions as are 
        necessary to implement such other requirements.
            (2) Enforcement authority.--The provisions of section 
        2736(b) of the Public Health Services Act shall apply to the 
        enforcement under paragraph (1) of requirements of subsection 
        (a)(1) (without regard to any limitation on the application of 
        those provisions to group health plans).
    (d) No Interference With State Regulatory Authority.--Nothing in 
this title shall be construed to preempt any State law that does not 
prevent the application of the provisions of this title.
    (e) Presumption for Certain State-Operated Exchanges.--
            (1) In general.--In the case of a State operating an 
        Exchange before January 1, 2010, and which has insured a 
        percentage of its population not less than the percentage of 
        the population projected to be covered nationally after the 
        implementation of this Act, that seeks to operate an Exchange 
        under this section, the Secretary shall presume that such 
        Exchange meets the standards under this section unless the 
        Secretary determines, after completion of the process 
        established under paragraph (2), that the Exchange does not 
        comply with such standards.
            (2) Process.--The Secretary shall establish a process to 
        work with a State described in paragraph (1) to provide 
        assistance necessary to assist the State's Exchange in coming 
        into compliance with the standards for approval under this 
        section.

SEC. 1322. FEDERAL PROGRAM TO ASSIST ESTABLISHMENT AND OPERATION OF 
              NONPROFIT, MEMBER-RUN HEALTH INSURANCE ISSUERS.

    (a) Establishment of Program.--
            (1) In general.--The Secretary shall establish a program to 
        carry out the purposes of this section to be known as the 
        Consumer Operated and Oriented Plan (CO-OP) program.
            (2) Purpose.--It is the purpose of the CO-OP program to 
        foster the creation of qualified nonprofit health insurance 
        issuers to offer qualified health plans in the individual and 
        small group markets in the States in which the issuers are 
        licensed to offer such plans.
    (b) Loans and Grants Under the CO-OP Program.--
            (1) In general.--The Secretary shall provide through the 
        CO-OP program for the awarding to persons applying to become 
        qualified nonprofit health insurance issuers of--
                    (A) loans to provide assistance to such person in 
                meeting its start-up costs; and
                    (B) grants to provide assistance to such person in 
                meeting any solvency requirements of States in which 
                the person seeks to be licensed to issue qualified 
                health plans.
            (2) Requirements for awarding loans and grants.--
                    (A) In general.--In awarding loans and grants under 
                the CO-OP program, the Secretary shall--
                            (i) take into account the recommendations 
                        of the advisory board established under 
                        paragraph (3);
                            (ii) give priority to applicants that will 
                        offer qualified health plans on a Statewide 
                        basis, will utilize integrated care models, and 
                        have significant private support; and
                            (iii) ensure that there is sufficient 
                        funding to establish at least 1 qualified 
                        nonprofit health insurance issuer in each 
                        State, except that nothing in this clause shall 
                        prohibit the Secretary from funding the 
                        establishment of multiple qualified nonprofit 
                        health insurance issuers in any State if the 
                        funding is sufficient to do so.
                    (B) States without issuers in program.--If no 
                health insurance issuer applies to be a qualified 
                nonprofit health insurance issuer within a State, the 
                Secretary may use amounts appropriated under this 
                section for the awarding of grants to encourage the 
                establishment of a qualified nonprofit health insurance 
                issuer within the State or the expansion of a qualified 
                nonprofit health insurance issuer from another State to 
                the State.
                    (C) Agreement.--
                            (i) In general.--The Secretary shall 
                        require any person receiving a loan or grant 
                        under the CO-OP program to enter into an 
                        agreement with the Secretary which requires 
                        such person to meet (and to continue to meet)--
                                    (I) any requirement under this 
                                section for such person to be treated 
                                as a qualified nonprofit health 
                                insurance issuer; and
                                    (II) any requirements contained in 
                                the agreement for such person to 
                                receive such loan or grant.
                            (ii) Restrictions on use of federal 
                        funds.--The agreement shall include a 
                        requirement that no portion of the funds made 
                        available by any loan or grant under this 
                        section may be used--
                                    (I) for carrying on propaganda, or 
                                otherwise attempting, to influence 
                                legislation; or
                                    (II) for marketing.
                        Nothing in this clause shall be construed to 
                        allow a person to take any action prohibited by 
                        section 501(c)(29) of the Internal Revenue Code 
                        of 1986.
                            (iii) Failure to meet requirements.--If the 
                        Secretary determines that a person has failed 
                        to meet any requirement described in clause (i) 
                        or (ii) and has failed to correct such failure 
                        within a reasonable period of time of when the 
                        person first knows (or reasonably should have 
                        known) of such failure, such person shall repay 
                        to the Secretary an amount equal to the sum 
                        of--
                                    (I) 110 percent of the aggregate 
                                amount of loans and grants received 
                                under this section; plus
                                    (II) interest on the aggregate 
                                amount of loans and grants received 
                                under this section for the period the 
                                loans or grants were outstanding.
                        The Secretary shall notify the Secretary of the 
                        Treasury of any determination under this 
                        section of a failure that results in the 
                        termination of an issuer's tax-exempt status 
                        under section 501(c)(29) of such Code.
                    (D) Time for awarding loans and grants.--The 
                Secretary shall not later than July 1, 2013, award the 
                loans and grants under the CO-OP program and begin the 
                distribution of amounts awarded under such loans and 
                grants.
            (3) Advisory board.--
                    (A) In general.--The advisory board under this 
                paragraph shall consist of 15 members appointed by the 
                Comptroller General of the United States from among 
                individuals with qualifications described in section 
                1805(c)(2) of the Social Security Act.
                    (B) Rules relating to appointments.--
                            (i) Standards.--Any individual appointed 
                        under subparagraph (A) shall meet ethics and 
                        conflict of interest standards protecting 
                        against insurance industry involvement and 
                        interference.
                            (ii) Original appointments.--The original 
                        appointment of board members under subparagraph 
                        (A)(ii) shall be made no later than 3 months 
                        after the date of enactment of this Act.
                    (C) Vacancy.--Any vacancy on the advisory board 
                shall be filled in the same manner as the original 
                appointment.
                    (D) Pay and reimbursement.--
                            (i) No compensation for members of advisory 
                        board.--Except as provided in clause (ii), a 
                        member of the advisory board may not receive 
                        pay, allowances, or benefits by reason of their 
                        service on the board.
                            (ii) Travel expenses.--Each member shall 
                        receive travel expenses, including per diem in 
                        lieu of subsistence under subchapter I of 
                        chapter 57 of title 5, United States Code.
                    (E) Application of faca.--The Federal Advisory 
                Committee Act (5 U.S.C. App.) shall apply to the 
                advisory board, except that section 14 of such Act 
                shall not apply.
                    (F) Termination.--The advisory board shall 
                terminate on the earlier of the date that it completes 
                its duties under this section or December 31, 2015.
    (c) Qualified Nonprofit Health Insurance Issuer.--For purposes of 
this section--
            (1) In general.--The term ``qualified nonprofit health 
        insurance issuer'' means a health insurance issuer that is an 
        organization--
                    (A) that is organized under State law as a 
                nonprofit, member corporation;
                    (B) substantially all of the activities of which 
                consist of the issuance of qualified health plans in 
                the individual and small group markets in each State in 
                which it is licensed to issue such plans; and
                    (C) that meets the other requirements of this 
                subsection.
            (2) Certain organizations prohibited.--An organization 
        shall not be treated as a qualified nonprofit health insurance 
        issuer if--
                    (A) the organization or a related entity (or any 
                predecessor of either) was a health insurance issuer on 
                July 16, 2009; or
                    (B) the organization is sponsored by a State or 
                local government, any political subdivision thereof, or 
                any instrumentality of such government or political 
                subdivision.
            (3) Governance requirements.--An organization shall not be 
        treated as a qualified nonprofit health insurance issuer 
        unless--
                    (A) the governance of the organization is subject 
                to a majority vote of its members;
                    (B) its governing documents incorporate ethics and 
                conflict of interest standards protecting against 
                insurance industry involvement and interference; and
                    (C) as provided in regulations promulgated by the 
                Secretary, the organization is required to operate with 
                a strong consumer focus, including timeliness, 
                responsiveness, and accountability to members.
            (4) Profits inure to benefit of members.--An organization 
        shall not be treated as a qualified nonprofit health insurance 
        issuer unless any profits made by the organization are required 
        to be used to lower premiums, to improve benefits, or for other 
        programs intended to improve the quality of health care 
        delivered to its members.
            (5) Compliance with state insurance laws.--An organization 
        shall not be treated as a qualified nonprofit health insurance 
        issuer unless the organization meets all the requirements that 
        other issuers of qualified health plans are required to meet in 
        any State where the issuer offers a qualified health plan, 
        including solvency and licensure requirements, rules on 
        payments to providers, and compliance with network adequacy 
        rules, rate and form filing rules, any applicable State premium 
        assessments and any other State law described in section 
        1324(b).
            (6) Coordination with state insurance reforms.--An 
        organization shall not be treated as a qualified nonprofit 
        health insurance issuer unless the organization does not offer 
        a health plan in a State until that State has in effect (or the 
        Secretary has implemented for the State) the market reforms 
        required by part A of title XXVII of the Public Health Service 
        Act (as amended by subtitles A and C of this Act).
    (d) Establishment of Private Purchasing Council.--
            (1) In general.--Qualified nonprofit health insurance 
        issuers participating in the CO-OP program under this section 
        may establish a private purchasing council to enter into 
        collective purchasing arrangements for items and services that 
        increase administrative and other cost efficiencies, including 
        claims administration, administrative services, health 
        information technology, and actuarial services.
            (2) Council may not set payment rates.--The private 
        purchasing council established under paragraph (1) shall not 
        set payment rates for health care facilities or providers 
        participating in health insurance coverage provided by 
        qualified nonprofit health insurance issuers.
            (3) Continued application of antitrust laws.--
                    (A) In general.--Nothing in this section shall be 
                construed to limit the application of the antitrust 
                laws to any private purchasing council (whether or not 
                established under this subsection) or to any qualified 
                nonprofit health insurance issuer participating in such 
                a council.
                    (B) Antitrust laws.--For purposes of this 
                subparagraph, the term ``antitrust laws'' has the 
                meaning given the term in subsection (a) of the first 
                section of the Clayton Act (15 U.S.C. 12(a)). Such term 
                also includes section 5 of the Federal Trade Commission 
                Act (15 U.S.C. 45) to the extent that such section 5 
                applies to unfair methods of competition.
    (e) Limitation on Participation.--No representative of any Federal, 
State, or local government (or of any political subdivision or 
instrumentality thereof), and no representative of a person described 
in subsection (c)(2)(A), may serve on the board of directors of a 
qualified nonprofit health insurance issuer or with a private 
purchasing council established under subsection (d).
    (f) Limitations on Secretary.--
            (1) In general.--The Secretary shall not--
                    (A) participate in any negotiations between 1 or 
                more qualified nonprofit health insurance issuers (or a 
                private purchasing council established under subsection 
                (d)) and any health care facilities or providers, 
                including any drug manufacturer, pharmacy, or hospital; 
                and
                    (B) establish or maintain a price structure for 
                reimbursement of any health benefits covered by such 
                issuers.
            (2) Competition.--Nothing in this section shall be 
        construed as authorizing the Secretary to interfere with the 
        competitive nature of providing health benefits through 
        qualified nonprofit health insurance issuers.
    (g) Appropriations.--There are hereby appropriated, out of any 
funds in the Treasury not otherwise appropriated, $6,000,000,000 to 
carry out this section.
    (h) Tax Exemption for Qualified Nonprofit Health Insurance 
Issuer.--
            (1) In general.--Section 501(c) of the Internal Revenue 
        Code of 1986 (relating to list of exempt organizations) is 
        amended by adding at the end the following:
            ``(29) CO-OP health insurance issuers.--
                    ``(A) In general.--A qualified nonprofit health 
                insurance issuer (within the meaning of section 1322 of 
                the Patient Protection and Affordable Care Act) which 
                has received a loan or grant under the CO-OP program 
                under such section, but only with respect to periods 
                for which the issuer is in compliance with the 
                requirements of such section and any agreement with 
                respect to the loan or grant.
                    ``(B) Conditions for exemption.--Subparagraph (A) 
                shall apply to an organization only if--
                            ``(i) the organization has given notice to 
                        the Secretary, in such manner as the Secretary 
                        may by regulations prescribe, that it is 
                        applying for recognition of its status under 
                        this paragraph,
                            ``(ii) except as provided in section 
                        1322(c)(4) of the Patient Protection and 
                        Affordable Care Act, no part of the net 
                        earnings of which inures to the benefit of any 
                        private shareholder or individual,
                            ``(iii) no substantial part of the 
                        activities of which is carrying on propaganda, 
                        or otherwise attempting, to influence 
                        legislation, and
                            ``(iv) the organization does not 
                        participate in, or intervene in (including the 
                        publishing or distributing of statements), any 
                        political campaign on behalf of (or in 
                        opposition to) any candidate for public 
                        office.''.
            (2) Additional reporting requirement.--Section 6033 of such 
        Code (relating to returns by exempt organizations) is amended 
        by redesignating subsection (m) as subsection (n) and by 
        inserting after subsection (l) the following:
    ``(m) Additional Information Required From CO-OP Insurers.--An 
organization described in section 501(c)(29) shall include on the 
return required under subsection (a) the following information:
            ``(1) The amount of the reserves required by each State in 
        which the organization is licensed to issue qualified health 
        plans.
            ``(2) The amount of reserves on hand.''.
            (3) Application of tax on excess benefit transactions.--
        Section 4958(e)(1) of such Code (defining applicable tax-exempt 
        organization) is amended by striking ``paragraph (3) or (4)'' 
        and inserting ``paragraph (3), (4), or (29)''.
    (i) GAO Study and Report.--
            (1) Study.--The Comptroller General of the General 
        Accountability Office shall conduct an ongoing study on 
        competition and market concentration in the health insurance 
        market in the United States after the implementation of the 
        reforms in such market under the provisions of, and the 
        amendments made by, this Act. Such study shall include an 
        analysis of new issuers of health insurance in such market.
            (2) Report.--The Comptroller General shall, not later than 
        December 31 of each even-numbered year (beginning with 2014), 
        report to the appropriate committees of the Congress the 
        results of the study conducted under paragraph (1), including 
        any recommendations for administrative or legislative changes 
        the Comptroller General determines necessary or appropriate to 
        increase competition in the health insurance market.

SEC. 1323. COMMUNITY HEALTH INSURANCE OPTION.

    (a) Voluntary Nature.--
            (1) No requirement for health care providers to 
        participate.--Nothing in this section shall be construed to 
        require a health care provider to participate in a community 
        health insurance option, or to impose any penalty for non-
        participation.
            (2) No requirement for individuals to join.--Nothing in 
        this section shall be construed to require an individual to 
        participate in a community health insurance option, or to 
        impose any penalty for non-participation.
            (3) State opt out.--
                    (A) In general.--A State may elect to prohibit 
                Exchanges in such State from offering a community 
                health insurance option if such State enacts a law to 
                provide for such prohibition.
                    (B) Termination of opt out.--A State may repeal a 
                law described in subparagraph (A) and provide for the 
                offering of such an option through the Exchange.
    (b) Establishment of Community Health Insurance Option.--
            (1) Establishment.--The Secretary shall establish a 
        community health insurance option to offer, through the 
        Exchanges established under this title (other than Exchanges in 
        States that elect to opt out as provided for in subsection 
        (a)(3)), health care coverage that provides value, choice, 
        competition, and stability of affordable, high quality coverage 
        throughout the United States.
            (2) Community health insurance option.--In this section, 
        the term ``community health insurance option'' means health 
        insurance coverage that--
                    (A) except as specifically provided for in this 
                section, complies with the requirements for being a 
                qualified health plan;
                    (B) provides high value for the premium charged;
                    (C) reduces administrative costs and promotes 
                administrative simplification for beneficiaries;
                    (D) promotes high quality clinical care;
                    (E) provides high quality customer service to 
                beneficiaries;
                    (F) offers a sufficient choice of providers; and
                    (G) complies with State laws (if any), except as 
                otherwise provided for in this title, relating to the 
                laws described in section 1324(b).
            (3) Essential health benefits.--
                    (A) General rule.--Except as provided in 
                subparagraph (B), a community health insurance option 
                offered under this section shall provide coverage only 
                for the essential health benefits described in section 
                1302(b).
                    (B) States may offer additional benefits.--Nothing 
                in this section shall preclude a State from requiring 
                that benefits in addition to the essential health 
                benefits required under subparagraph (A) be provided to 
                enrollees of a community health insurance option 
                offered in such State.
                    (C) Credits.--
                            (i) In general.--An individual enrolled in 
                        a community health insurance option under this 
                        section shall be eligible for credits under 
                        section 36B of the Internal Revenue Code of 
                        1986 in the same manner as an individual who is 
                        enrolled in a qualified health plan.
                            (ii) No additional federal cost.--A 
                        requirement by a State under subparagraph (B) 
                        that benefits in addition to the essential 
                        health benefits required under subparagraph (A) 
                        be provided to enrollees of a community health 
                        insurance option shall not affect the amount of 
                        a premium tax credit provided under section 36B 
                        of the Internal Revenue Code of 1986 with 
                        respect to such plan.
                    (D) State must assume cost.--A State shall make 
                payments to or on behalf of an eligible individual to 
                defray the cost of any additional benefits described in 
                subparagraph (B).
                    (E) Ensuring access to all services.--Nothing in 
                this Act shall prohibit an individual enrolled in a 
                community health insurance option from paying out-of-
                pocket the full cost of any item or service not 
                included as an essential health benefit or otherwise 
                covered as a benefit by a health plan. Nothing in 
                subparagraph (B) shall prohibit any type of medical 
                provider from accepting an out-of-pocket payment from 
                an individual enrolled in a community health insurance 
                option for a service otherwise not included as an 
                essential health benefit.
                    (F) Protecting access to end of life care.--A 
                community health insurance option offered under this 
                section shall be prohibited from limiting access to end 
                of life care.
            (4) Cost sharing.--A community health insurance option 
        shall offer coverage at each of the levels of coverage 
        described in section 1302(d).
            (5) Premiums.--
                    (A) Premiums sufficient to cover costs.--The 
                Secretary shall establish geographically adjusted 
                premium rates in an amount sufficient to cover expected 
                costs (including claims and administrative costs) using 
                methods in general use by qualified health plans.
                    (B) Applicable rules.--The provisions of title 
                XXVII of the Public Health Service Act relating to 
                premiums shall apply to community health insurance 
                options under this section, including modified 
                community rating provisions under section 2701 of such 
                Act.
                    (C) Collection of data.--The Secretary shall 
                collect data as necessary to set premium rates under 
                subparagraph (A).
                    (D) National pooling.--Notwithstanding any other 
                provision of law, the Secretary may treat all enrollees 
                in community health insurance options as members of a 
                single pool.
                    (E) Contingency margin.--In establishing premium 
                rates under subparagraph (A), the Secretary shall 
                include an appropriate amount for a contingency margin.
            (6) Reimbursement rates.--
                    (A) Negotiated rates.--The Secretary shall 
                negotiate rates for the reimbursement of health care 
                providers for benefits covered under a community health 
                insurance option.
                    (B) Limitation.--The rates described in 
                subparagraph (A) shall not be higher, in aggregate, 
                than the average reimbursement rates paid by health 
                insurance issuers offering qualified health plans 
                through the Exchange.
                    (C) Innovation.--Subject to the limits contained in 
                subparagraph (A), a State Advisory Council established 
                or designated under subsection (d) may develop or 
                encourage the use of innovative payment policies that 
                promote quality, efficiency and savings to consumers.
            (7) Solvency and consumer protection.--
                    (A) Solvency.--The Secretary shall establish a 
                Federal solvency standard to be applied with respect to 
                a community health insurance option. A community health 
                insurance option shall also be subject to the solvency 
                standard of each State in which such community health 
                insurance option is offered.
                    (B) Minimum required.--In establishing the standard 
                described under subparagraph (A), the Secretary shall 
                require a reserve fund that shall be equal to at least 
                the dollar value of the incurred but not reported 
                claims of a community health insurance option.
                    (C) Consumer protections.--The consumer protection 
                laws of a State shall apply to a community health 
                insurance option.
            (8) Requirements established in partnership with insurance 
        commissioners.--
                    (A) In general.--The Secretary, in collaboration 
                with the National Association of Insurance 
                Commissioners (in this paragraph referred to as the 
                ``NAIC''), may promulgate regulations to establish 
                additional requirements for a community health 
                insurance option.
                    (B) Applicability.--Any requirement promulgated 
                under subparagraph (A) shall be applicable to such 
                option beginning 90 days after the date on which the 
                regulation involved becomes final.
    (c) Start-up Fund.--
            (1) Establishment of fund.--
                    (A) In general.--There is established in the 
                Treasury of the United States a trust fund to be known 
                as the ``Health Benefit Plan Start-Up Fund'' (referred 
                to in this section as the ``Start-Up Fund''), that 
                shall consist of such amounts as may be appropriated or 
                credited to the Start-Up Fund as provided for in this 
                subsection to provide loans for the initial operations 
                of a community health insurance option. Such amounts 
                shall remain available until expended.
                    (B) Funding.--There is hereby appropriated to the 
                Start-Up Fund, out of any moneys in the Treasury not 
                otherwise appropriated an amount requested by the 
                Secretary of Health and Human Services as necessary 
                to--
                            (i) pay the start-up costs associated with 
                        the initial operations of a community health 
                        insurance option; and
                            (ii) pay the costs of making payments on 
                        claims submitted during the period that is not 
                        more than 90 days from the date on which such 
                        option is offered.
            (2) Use of start-up fund.--The Secretary shall use amounts 
        contained in the Start-Up Fund to make payments (subject to the 
        repayment requirements in paragraph (4)) for the purposes 
        described in paragraph (1)(B).
            (3) Pass through of rebates.--The Secretary may establish 
        procedures for reducing the amount of payments to a contracting 
        administrator to take into account any rebates or price 
        concessions.
            (4) Repayment.--
                    (A) In general.--A community health insurance 
                option shall be required to repay the Secretary of the 
                Treasury (on such terms as the Secretary may require) 
                for any payments made under paragraph (1)(B) by the 
                date that is not later than 9 years after the date on 
                which the payment is made. The Secretary may require 
                the payment of interest with respect to such repayments 
                at rates that do not exceed the market interest rate 
                (as determined by the Secretary).
                    (B) Sanctions in case of for-profit conversion.--In 
                any case in which the Secretary enters into a contract 
                with a qualified entity for the offering of a community 
                health insurance option and such entity is determined 
                to be a for-profit entity by the Secretary, such entity 
                shall be--
                            (i) immediately liable to the Secretary for 
                        any payments received by such entity from the 
                        Start-Up Fund; and
                            (ii) permanently ineligible to offer a 
                        qualified health plan.
    (d) State Advisory Council.--
            (1) Establishment.--A State (other than a State that elects 
        to opt out as provided for in subsection (a)(3)) shall 
        establish or designate a public or non-profit private entity to 
        serve as the State Advisory Council to provide recommendations 
        to the Secretary on the operations and policies of a community 
        health insurance option in the State. Such Council shall 
        provide recommendations on at least the following:
                    (A) policies and procedures to integrate quality 
                improvement and cost containment mechanisms into the 
                health care delivery system;
                    (B) mechanisms to facilitate public awareness of 
                the availability of a community health insurance 
                option; and
                    (C) alternative payment structures under a 
                community health insurance option for health care 
                providers that encourage quality improvement and cost 
                control.
            (2) Members.--The members of the State Advisory Council 
        shall be representatives of the public and shall include health 
        care consumers and providers.
            (3) Applicability of recommendations.--The Secretary may 
        apply the recommendations of a State Advisory Council to a 
        community health insurance option in that State, in any other 
        State, or in all States.
    (e) Authority to Contract; Terms of Contract.--
            (1) Authority.--
                    (A) In general.--The Secretary may enter into a 
                contract or contracts with one or more qualified 
                entities for the purpose of performing administrative 
                functions (including functions described in subsection 
                (a)(4) of section 1874A of the Social Security Act) 
                with respect to a community health insurance option in 
                the same manner as the Secretary may enter into 
                contracts under subsection (a)(1) of such section. The 
                Secretary shall have the same authority with respect to 
                a community health insurance option under this section 
                as the Secretary has under subsections (a)(1) and (b) 
                of section 1874A of the Social Security Act with 
                respect to title XVIII of such Act.
                    (B) Requirements apply.--If the Secretary enters 
                into a contract with a qualified entity to offer a 
                community health insurance option, under such contract 
                such entity--
                            (i) shall meet the criteria established 
                        under paragraph (2); and
                            (ii) shall receive an administrative fee 
                        under paragraph (7).
                    (C) Limitation.--Contracts under this subsection 
                shall not involve the transfer of insurance risk to the 
                contracting administrator.
                    (D) Reference.--An entity with which the Secretary 
                has entered into a contract under this paragraph shall 
                be referred to as a ``contracting administrator''.
            (2) Qualified entity.--To be qualified to be selected by 
        the Secretary to offer a community health insurance option, an 
        entity shall--
                    (A) meet the criteria established under section 
                1874A(a)(2) of the Social Security Act;
                    (B) be a nonprofit entity for purposes of offering 
                such option;
                    (C) meet the solvency standards applicable under 
                subsection (b)(7);
                    (D) be eligible to offer health insurance or health 
                benefits coverage;
                    (E) meet quality standards specified by the 
                Secretary;
                    (F) have in place effective procedures to control 
                fraud, abuse, and waste; and
                    (G) meet such other requirements as the Secretary 
                may impose.
        Procedures described under subparagraph (F) shall include the 
        implementation of procedures to use beneficiary identifiers to 
        identify individuals entitled to benefits so that such an 
        individual's social security account number is not used, and 
        shall also include procedures for the use of technology 
        (including front-end, prepayment intelligent data-matching 
        technology similar to that used by hedge funds, investment 
        funds, and banks) to provide real-time data analysis of claims 
        for payment under this title to identify and investigate 
        unusual billing or order practices under this title that could 
        indicate fraud or abuse.
            (3) Term.--A contract provided for under paragraph (1) 
        shall be for a term of at least 5 years but not more than 10 
        years, as determined by the Secretary. At the end of each such 
        term, the Secretary shall conduct a competitive bidding process 
        for the purposes of renewing existing contracts or selecting 
        new qualified entities with which to enter into contracts under 
        such paragraph.
            (4) Limitation.--A contract may not be renewed under this 
        subsection unless the Secretary determines that the contracting 
        administrator has met performance requirements established by 
        the Secretary in the areas described in paragraph (7)(B).
            (5) Audits.--The Inspector General shall conduct periodic 
        audits with respect to contracting administrators under this 
        subsection to ensure that the administrator involved is in 
        compliance with this section.
            (6) Revocation.--A contract awarded under this subsection 
        shall be revoked by the Secretary, upon the recommendation of 
        the Inspector General, only after notice to the contracting 
        administrator involved and an opportunity for a hearing. The 
        Secretary may revoke such contract if the Secretary determines 
        that such administrator has engaged in fraud, deception, waste, 
        abuse of power, negligence, mismanagement of taxpayer dollars, 
        or gross mismanagement. An entity that has had a contract 
        revoked under this paragraph shall not be qualified to enter 
        into a subsequent contract under this subsection.
            (7) Fee for administration.--
                    (A) In general.--The Secretary shall pay the 
                contracting administrator a fee for the management, 
                administration, and delivery of the benefits under this 
                section.
                    (B) Requirement for high quality administration.--
                The Secretary may increase the fee described in 
                subparagraph (A) by not more than 10 percent, or reduce 
                the fee described in subparagraph (A) by not more than 
                50 percent, based on the extent to which the 
                contracting administrator, in the determination of the 
                Secretary, meets performance requirements established 
                by the Secretary, in at least the following areas:
                            (i) Maintaining low premium costs and low 
                        cost sharing requirements, provided that such 
                        requirements are consistent with section 1302.
                            (ii) Reducing administrative costs and 
                        promoting administrative simplification for 
                        beneficiaries.
                            (iii) Promoting high quality clinical care.
                            (iv) Providing high quality customer 
                        service to beneficiaries.
                    (C) Non-renewal.--The Secretary may not renew a 
                contract to offer a community health insurance option 
                under this section with any contracting entity that has 
                been assessed more than one reduction under 
                subparagraph (B) during the contract period.
            (8) Limitation.--Notwithstanding the terms of a contract 
        under this subsection, the Secretary shall negotiate the 
        reimbursement rates for purposes of subsection (b)(6).
    (f) Report by HHS and Insolvency Warnings.--
            (1) In general.--On an annual basis, the Secretary shall 
        conduct a study on the solvency of a community health insurance 
        option and submit to Congress a report describing the results 
        of such study.
            (2) Result.--If, in any year, the result of the study under 
        paragraph (1) is that a community health insurance option is 
        insolvent, such result shall be treated as a community health 
        insurance option solvency warning.
            (3) Submission of plan and procedure.--
                    (A) In general.--If there is a community health 
                insurance option solvency warning under paragraph (2) 
                made in a year, the President shall submit to Congress, 
                within the 15-day period beginning on the date of the 
                budget submission to Congress under section 1105(a) of 
                title 31, United States Code, for the succeeding year, 
                proposed legislation to respond to such warning.
                    (B) Procedure.--In the case of a legislative 
                proposal submitted by the President pursuant to 
                subparagraph (A), such proposal shall be considered by 
                Congress using the same procedures described under 
                sections 803 and 804 of the Medicare Prescription Drug, 
                Improvement, and Modernization Act of 2003 that shall 
                be used for a medicare funding warning.
    (g) Marketing Parity.--In a facility controlled by the Federal 
Government, or by a State, where marketing or promotional materials 
related to a community health insurance option are made available to 
the public, making available marketing or promotional materials 
relating to private health insurance plans shall not be prohibited. 
Such materials include informational pamphlets, guidebooks, enrollment 
forms, or other materials determined reasonable for display.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 1324. LEVEL PLAYING FIELD.

    (a) In General.--Notwithstanding any other provision of law, any 
health insurance coverage offered by a private health insurance issuer 
shall not be subject to any Federal or State law described in 
subsection (b) if a qualified health plan offered under the Consumer 
Operated and Oriented Plan program under section 1322, a community 
health insurance option under section 1323, or a nationwide qualified 
health plan under section 1333(b), is not subject to such law.
    (b) Laws Described.--The Federal and State laws described in this 
subsection are those Federal and State laws relating to--
            (1) guaranteed renewal;
            (2) rating;
            (3) preexisting conditions;
            (4) non-discrimination;
            (5) quality improvement and reporting;
            (6) fraud and abuse;
            (7) solvency and financial requirements;
            (8) market conduct;
            (9) prompt payment;
            (10) appeals and grievances;
            (11) privacy and confidentiality;
            (12) licensure; and
            (13) benefit plan material or information.

      PART IV--STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS

SEC. 1331. STATE FLEXIBILITY TO ESTABLISH BASIC HEALTH PROGRAMS FOR 
              LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR MEDICAID.

    (a) Establishment of Program.--
            (1) In general.--The Secretary shall establish a basic 
        health program meeting the requirements of this section under 
        which a State may enter into contracts to offer 1 or more 
        standard health plans providing at least the essential health 
        benefits described in section 1302(b) to eligible individuals 
        in lieu of offering such individuals coverage through an 
        Exchange.
            (2) Certifications as to benefit coverage and costs.--Such 
        program shall provide that a State may not establish a basic 
        health program under this section unless the State establishes 
        to the satisfaction of the Secretary, and the Secretary 
        certifies, that--
                    (A) in the case of an eligible individual enrolled 
                in a standard health plan offered through the program, 
                the State provides--
                            (i) that the amount of the monthly premium 
                        an eligible individual is required to pay for 
                        coverage under the standard health plan for the 
                        individual and the individual's dependents does 
                        not exceed the amount of the monthly premium 
                        that the eligible individual would have been 
                        required to pay (in the rating area in which 
                        the individual resides) if the individual had 
                        enrolled in the applicable second lowest cost 
                        silver plan (as defined in section 36B(b)(3)(B) 
                        of the Internal Revenue Code of 1986) offered 
                        to the individual through an Exchange; and
                            (ii) that the cost-sharing an eligible 
                        individual is required to pay under the 
                        standard health plan does not exceed--
                                    (I) the cost-sharing required under 
                                a platinum plan in the case of an 
                                eligible individual with household 
                                income not in excess of 150 percent of 
                                the poverty line for the size of the 
                                family involved; and
                                    (II) the cost-sharing required 
                                under a gold plan in the case of an 
                                eligible individual not described in 
                                subclause (I); and
                    (B) the benefits provided under the standard health 
                plans offered through the program cover at least the 
                essential health benefits described in section 1302(b).
        For purposes of subparagraph (A)(i), the amount of the monthly 
        premium an individual is required to pay under either the 
        standard health plan or the applicable second lowest cost 
        silver plan shall be determined after reduction for any premium 
        tax credits and cost-sharing reductions allowable with respect 
        to either plan.
    (b) Standard Health Plan.--In this section, the term ``standard 
heath plan'' means a health benefits plan that the State contracts with 
under this section--
            (1) under which the only individuals eligible to enroll are 
        eligible individuals;
            (2) that provides at least the essential health benefits 
        described in section 1302(b); and
            (3) in the case of a plan that provides health insurance 
        coverage offered by a health insurance issuer, that has a 
        medical loss ratio of at least 85 percent.
    (c) Contracting Process.--
            (1) In general.--A State basic health program shall 
        establish a competitive process for entering into contracts 
        with standard health plans under subsection (a), including 
        negotiation of premiums and cost-sharing and negotiation of 
        benefits in addition to the essential health benefits described 
        in section 1302(b).
            (2) Specific items to be considered.--A State shall, as 
        part of its competitive process under paragraph (1), include at 
        least the following:
                    (A) Innovation.--Negotiation with offerors of a 
                standard health plan for the inclusion of innovative 
                features in the plan, including--
                            (i) care coordination and care management 
                        for enrollees, especially for those with 
                        chronic health conditions;
                            (ii) incentives for use of preventive 
                        services; and
                            (iii) the establishment of relationships 
                        between providers and patients that maximize 
                        patient involvement in health care decision-
                        making, including providing incentives for 
                        appropriate utilization under the plan.
                    (B) Health and resource differences.--Consideration 
                of, and the making of suitable allowances for, 
                differences in health care needs of enrollees and 
                differences in local availability of, and access to, 
                health care providers. Nothing in this subparagraph 
                shall be construed as allowing discrimination on the 
                basis of pre-existing conditions or other health 
                status-related factors.
                    (C) Managed care.--Contracting with managed care 
                systems, or with systems that offer as many of the 
                attributes of managed care as are feasible in the local 
                health care market.
                    (D) Performance measures.--Establishing specific 
                performance measures and standards for issuers of 
                standard health plans that focus on quality of care and 
                improved health outcomes, requiring such plans to 
                report to the State with respect to the measures and 
                standards, and making the performance and quality 
                information available to enrollees in a useful form.
            (3) Enhanced availability.--
                    (A) Multiple plans.--A State shall, to the maximum 
                extent feasible, seek to make multiple standard health 
                plans available to eligible individuals within a State 
                to ensure individuals have a choice of such plans.
                    (B) Regional compacts.--A State may negotiate a 
                regional compact with other States to include coverage 
                of eligible individuals in all such States in 
                agreements with issuers of standard health plans.
            (4) Coordination with other state programs.--A State shall 
        seek to coordinate the administration of, and provision of 
        benefits under, its program under this section with the State 
        medicaid program under title XIX of the Social Security Act, 
        the State child health plan under title XXI of such Act, and 
        other State-administered health programs to maximize the 
        efficiency of such programs and to improve the continuity of 
        care.
    (d) Transfer of Funds to States.--
            (1) In general.--If the Secretary determines that a State 
        electing the application of this section meets the requirements 
        of the program established under subsection (a), the Secretary 
        shall transfer to the State for each fiscal year for which 1 or 
        more standard health plans are operating within the State the 
        amount determined under paragraph (3).
            (2) Use of funds.--A State shall establish a trust for the 
        deposit of the amounts received under paragraph (1) and amounts 
        in the trust fund shall only be used to reduce the premiums and 
        cost-sharing of, or to provide additional benefits for, 
        eligible individuals enrolled in standard health plans within 
        the State. Amounts in the trust fund, and expenditures of such 
        amounts, shall not be included in determining the amount of any 
        non-Federal funds for purposes of meeting any matching or 
        expenditure requirement of any federally-funded program.
            (3) Amount of payment.--
                    (A) Secretarial determination.--
                            (i) In general.--The amount determined 
                        under this paragraph for any fiscal year is the 
                        amount the Secretary determines is equal to 85 
                        percent of the premium tax credits under 
                        section 36B of the Internal Revenue Code of 
                        1986, and the cost-sharing reductions under 
                        section 1402, that would have been provided for 
                        the fiscal year to eligible individuals 
                        enrolled in standard health plans in the State 
                        if such eligible individuals were allowed to 
                        enroll in qualified health plans through an 
                        Exchange established under this subtitle.
                            (ii) Specific requirements.--The Secretary 
                        shall make the determination under clause (i) 
                        on a per enrollee basis and shall take into 
                        account all relevant factors necessary to 
                        determine the value of the premium tax credits 
                        and cost-sharing reductions that would have 
                        been provided to eligible individuals described 
                        in clause (i), including the age and income of 
                        the enrollee, whether the enrollment is for 
                        self-only or family coverage, geographic 
                        differences in average spending for health care 
                        across rating areas, the health status of the 
                        enrollee for purposes of determining risk 
                        adjustment payments and reinsurance payments 
                        that would have been made if the enrollee had 
                        enrolled in a qualified health plan through an 
                        Exchange, and whether any reconciliation of the 
                        credit or cost-sharing reductions would have 
                        occurred if the enrollee had been so enrolled. 
                        This determination shall take into 
                        consideration the experience of other States 
                        with respect to participation in an Exchange 
                        and such credits and reductions provided to 
                        residents of the other States, with a special 
                        focus on enrollees with income below 200 
                        percent of poverty.
                            (iii) Certification.--The Chief Actuary of 
                        the Centers for Medicare & Medicaid Services, 
                        in consultation with the Office of Tax Analysis 
                        of the Department of the Treasury, shall 
                        certify whether the methodology used to make 
                        determinations under this subparagraph, and 
                        such determinations, meet the requirements of 
                        clause (ii). Such certifications shall be based 
                        on sufficient data from the State and from 
                        comparable States about their experience with 
                        programs created by this Act.
                    (B) Corrections.--The Secretary shall adjust the 
                payment for any fiscal year to reflect any error in the 
                determinations under subparagraph (A) for any preceding 
                fiscal year.
            (4) Application of special rules.--The provisions of 
        section 1303 shall apply to a State basic health program, and 
        to standard health plans offered through such program, in the 
        same manner as such rules apply to qualified health plans.
    (e) Eligible Individual.--
            (1) In general.--In this section, the term ``eligible 
        individual'' means, with respect to any State, an individual--
                    (A) who a resident of the State who is not eligible 
                to enroll in the State's medicaid program under title 
                XIX of the Social Security Act for benefits that at a 
                minimum consist of the essential health benefits 
                described in section 1302(b);
                    (B) whose household income exceeds 133 percent but 
                does not exceed 200 percent of the poverty line for the 
                size of the family involved;
                    (C) who is not eligible for minimum essential 
                coverage (as defined in section 5000A(f) of the 
                Internal Revenue Code of 1986) or is eligible for an 
                employer-sponsored plan that is not affordable coverage 
                (as determined under section 5000A(e)(2) of such Code); 
                and
                    (D) who has not attained age 65 as of the beginning 
                of the plan year.
        Such term shall not include any individual who is not a 
        qualified individual under section 1312 who is eligible to be 
        covered by a qualified health plan offered through an Exchange.
            (2) Eligible individuals may not use exchange.--An eligible 
        individual shall not be treated as a qualified individual under 
        section 1312 eligible for enrollment in a qualified health plan 
        offered through an Exchange established under section 1311.
    (f) Secretarial Oversight.--The Secretary shall each year conduct a 
review of each State program to ensure compliance with the requirements 
of this section, including ensuring that the State program meets--
            (1) eligibility verification requirements for participation 
        in the program;
            (2) the requirements for use of Federal funds received by 
        the program; and
            (3) the quality and performance standards under this 
        section.
    (g) Standard Health Plan Offerors.--A State may provide that 
persons eligible to offer standard health plans under a basic health 
program established under this section may include a licensed health 
maintenance organization, a licensed health insurance insurer, or a 
network of health care providers established to offer services under 
the program.
    (h) Definitions.--Any term used in this section which is also used 
in section 36B of the Internal Revenue Code of 1986 shall have the 
meaning given such term by such section.

SEC. 1332. WAIVER FOR STATE INNOVATION.

    (a) Application.--
            (1) In general.--A State may apply to the Secretary for the 
        waiver of all or any requirements described in paragraph (2) 
        with respect to health insurance coverage within that State for 
        plan years beginning on or after January 1, 2017. Such 
        application shall--
                    (A) be filed at such time and in such manner as the 
                Secretary may require;
                    (B) contain such information as the Secretary may 
                require, including--
                            (i) a comprehensive description of the 
                        State legislation and program to implement a 
                        plan meeting the requirements for a waiver 
                        under this section; and
                            (ii) a 10-year budget plan for such plan 
                        that is budget neutral for the Federal 
                        Government; and
                    (C) provide an assurance that the State has enacted 
                the law described in subsection (b)(2).
            (2) Requirements.--The requirements described in this 
        paragraph with respect to health insurance coverage within the 
        State for plan years beginning on or after January 1, 2014, are 
        as follows:
                    (A) Part I of subtitle D.
                    (B) Part II of subtitle D.
                    (C) Section 1402.
                    (D) Sections 36B, 4980H, and 5000A of the Internal 
                Revenue Code of 1986.
            (3) Pass through of funding.--With respect to a State 
        waiver under paragraph (1), under which, due to the structure 
        of the State plan, individuals and small employers in the State 
        would not qualify for the premium tax credits, cost-sharing 
        reductions, or small business credits under sections 36B of the 
        Internal Revenue Code of 1986 or under part I of subtitle E for 
        which they would otherwise be eligible, the Secretary shall 
        provide for an alternative means by which the aggregate amount 
        of such credits or reductions that would have been paid on 
        behalf of participants in the Exchanges established under this 
        title had the State not received such waiver, shall be paid to 
        the State for purposes of implementing the State plan under the 
        waiver. Such amount shall be determined annually by the 
        Secretary, taking into consideration the experience of other 
        States with respect to participation in an Exchange and credits 
        and reductions provided under such provisions to residents of 
        the other States.
            (4) Waiver consideration and transparency.--
                    (A) In general.--An application for a waiver under 
                this section shall be considered by the Secretary in 
                accordance with the regulations described in 
                subparagraph (B).
                    (B) Regulations.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary shall 
                promulgate regulations relating to waivers under this 
                section that provide--
                            (i) a process for public notice and comment 
                        at the State level, including public hearings, 
                        sufficient to ensure a meaningful level of 
                        public input;
                            (ii) a process for the submission of an 
                        application that ensures the disclosure of--
                                    (I) the provisions of law that the 
                                State involved seeks to waive; and
                                    (II) the specific plans of the 
                                State to ensure that the waiver will be 
                                in compliance with subsection (b);
                            (iii) a process for providing public notice 
                        and comment after the application is received 
                        by the Secretary, that is sufficient to ensure 
                        a meaningful level of public input and that 
                        does not impose requirements that are in 
                        addition to, or duplicative of, requirements 
                        imposed under the Administrative Procedures 
                        Act, or requirements that are unreasonable or 
                        unnecessarily burdensome with respect to State 
                        compliance;
                            (iv) a process for the submission to the 
                        Secretary of periodic reports by the State 
                        concerning the implementation of the program 
                        under the waiver; and
                            (v) a process for the periodic evaluation 
                        by the Secretary of the program under the 
                        waiver.
                    (C) Report.--The Secretary shall annually report to 
                Congress concerning actions taken by the Secretary with 
                respect to applications for waivers under this section.
            (5) Coordinated waiver process.--The Secretary shall 
        develop a process for coordinating and consolidating the State 
        waiver processes applicable under the provisions of this 
        section, and the existing waiver processes applicable under 
        titles XVIII, XIX, and XXI of the Social Security Act, and any 
        other Federal law relating to the provision of health care 
        items or services. Such process shall permit a State to submit 
        a single application for a waiver under any or all of such 
        provisions.
            (6) Definition.--In this section, the term ``Secretary'' 
        means--
                    (A) the Secretary of Health and Human Services with 
                respect to waivers relating to the provisions described 
                in subparagraph (A) through (C) of paragraph (2); and
                    (B) the Secretary of the Treasury with respect to 
                waivers relating to the provisions described in 
                paragraph (2)(D).
    (b) Granting of Waivers.--
            (1) In general.--The Secretary may grant a request for a 
        waiver under subsection (a)(1) only if the Secretary determines 
        that the State plan--
                    (A) will provide coverage that is at least as 
                comprehensive as the coverage defined in section 
                1302(b) and offered through Exchanges established under 
                this title as certified by Office of the Actuary of the 
                Centers for Medicare & Medicaid Services based on 
                sufficient data from the State and from comparable 
                States about their experience with programs created by 
                this Act and the provisions of this Act that would be 
                waived;
                    (B) will provide coverage and cost sharing 
                protections against excessive out-of-pocket spending 
                that are at least as affordable as the provisions of 
                this title would provide;
                    (C) will provide coverage to at least a comparable 
                number of its residents as the provisions of this title 
                would provide; and
                    (D) will not increase the Federal deficit.
            (2) Requirement to enact a law.--
                    (A) In general.--A law described in this paragraph 
                is a State law that provides for State actions under a 
                waiver under this section, including the implementation 
                of the State plan under subsection (a)(1)(B).
                    (B) Termination of opt out.--A State may repeal a 
                law described in subparagraph (A) and terminate the 
                authority provided under the waiver with respect to the 
                State.
    (c) Scope of Waiver.--
            (1) In general.--The Secretary shall determine the scope of 
        a waiver of a requirement described in subsection (a)(2) 
        granted to a State under subsection (a)(1).
            (2) Limitation.--The Secretary may not waive under this 
        section any Federal law or requirement that is not within the 
        authority of the Secretary.
    (d) Determinations by Secretary.--
            (1) Time for determination.--The Secretary shall make a 
        determination under subsection (a)(1) not later than 180 days 
        after the receipt of an application from a State under such 
        subsection.
            (2) Effect of determination.--
                    (A) Granting of waivers.--If the Secretary 
                determines to grant a waiver under subsection (a)(1), 
                the Secretary shall notify the State involved of such 
                determination and the terms and effectiveness of such 
                waiver.
                    (B) Denial of waiver.--If the Secretary determines 
                a waiver should not be granted under subsection (a)(1), 
                the Secretary shall notify the State involved, and the 
                appropriate committees of Congress of such 
                determination and the reasons therefore.
    (e) Term of Waiver.--No waiver under this section may extend over a 
period of longer than 5 years unless the State requests continuation of 
such waiver, and such request shall be deemed granted unless the 
Secretary, within 90 days after the date of its submission to the 
Secretary, either denies such request in writing or informs the State 
in writing with respect to any additional information which is needed 
in order to make a final determination with respect to the request.

SEC. 1333. PROVISIONS RELATING TO OFFERING OF PLANS IN MORE THAN ONE 
              STATE.

    (a) Health Care Choice Compacts.--
            (1) In general.--Not later than July 1, 2013, the Secretary 
        shall, in consultation with the National Association of 
        Insurance Commissioners, issue regulations for the creation of 
        health care choice compacts under which 2 or more States may 
        enter into an agreement under which--
                    (A) 1 or more qualified health plans could be 
                offered in the individual markets in all such States 
                but, except as provided in subparagraph (B), only be 
                subject to the laws and regulations of the State in 
                which the plan was written or issued;
                    (B) the issuer of any qualified health plan to 
                which the compact applies--
                            (i) would continue to be subject to market 
                        conduct, unfair trade practices, network 
                        adequacy, and consumer protection standards 
                        (including standards relating to rating), 
                        including addressing disputes as to the 
                        performance of the contract, of the State in 
                        which the purchaser resides;
                            (ii) would be required to be licensed in 
                        each State in which it offers the plan under 
                        the compact or to submit to the jurisdiction of 
                        each such State with regard to the standards 
                        described in clause (i) (including allowing 
                        access to records as if the insurer were 
                        licensed in the State); and
                            (iii) must clearly notify consumers that 
                        the policy may not be subject to all the laws 
                        and regulations of the State in which the 
                        purchaser resides.
            (2) State authority.--A State may not enter into an 
        agreement under this subsection unless the State enacts a law 
        after the date of the enactment of this title that specifically 
        authorizes the State to enter into such agreements.
            (3) Approval of compacts.--The Secretary may approve 
        interstate health care choice compacts under paragraph (1) only 
        if the Secretary determines that such health care choice 
        compact--
                    (A) will provide coverage that is at least as 
                comprehensive as the coverage defined in section 
                1302(b) and offered through Exchanges established under 
                this title;
                    (B) will provide coverage and cost sharing 
                protections against excessive out-of-pocket spending 
                that are at least as affordable as the provisions of 
                this title would provide;
                    (C) will provide coverage to at least a comparable 
                number of its residents as the provisions of this title 
                would provide;
                    (D) will not increase the Federal deficit; and
                    (E) will not weaken enforcement of laws and 
                regulations described in paragraph (1)(B)(i) in any 
                State that is included in such compact.
            (4) Effective date.--A health care choice compact described 
        in paragraph (1) shall not take effect before January 1, 2016.
    (b) Authority for Nationwide Plans.--
            (1) In general.--Except as provided in paragraph (2), if an 
        issuer (including a group of health insurance issuers 
        affiliated either by common ownership and control or by the 
        common use of a nationally licensed service mark) of a 
        qualified health plan in the individual or small group market 
        meets the requirements of this subsection (in this subsection a 
        ``nationwide qualified health plan'')--
                    (A) the issuer of the plan may offer the nationwide 
                qualified health plan in the individual or small group 
                market in more than 1 State; and
                    (B) with respect to State laws mandating benefit 
                coverage by a health plan, only the State laws of the 
                State in which such plan is written or issued shall 
                apply to the nationwide qualified health plan.
            (2) State opt-out.--A State may, by specific reference in a 
        law enacted after the date of enactment of this title, provide 
        that this subsection shall not apply to that State. Such opt-
        out shall be effective until such time as the State by law 
        revokes it.
            (3) Plan requirements.--An issuer meets the requirements of 
        this subsection with respect to a nationwide qualified health 
        plan if, in the determination of the Secretary--
                    (A) the plan offers a benefits package that is 
                uniform in each State in which the plan is offered and 
                meets the requirements set forth in paragraphs (4) 
                through (6);
                    (B) the issuer is licensed in each State in which 
                it offers the plan and is subject to all requirements 
                of State law not inconsistent with this section, 
                including but not limited to, the standards and 
                requirements that a State imposes that do not prevent 
                the application of a requirement of part A of title 
                XXVII of the Public Health Service Act or a requirement 
                of this title;
                    (C) the issuer meets all requirements of this title 
                with respect to a qualified health plan, including the 
                requirement to offer the silver and gold levels of the 
                plan in each Exchange in the State for the market in 
                which the plan is offered;
                    (D) the issuer determines the premiums for the plan 
                in any State on the basis of the rating rules in effect 
                in that State for the rating areas in which it is 
                offered;
                    (E) the issuer offers the nationwide qualified 
                health plan in at least 60 percent of the participating 
                States in the first year in which the plan is offered, 
                65 percent of such States in the second year, 70 
                percent of such States in the third year, 75 percent of 
                such States in the fourth year, and 80 percent of such 
                States in the fifth and subsequent years;
                    (F) the issuer shall offer the plan in 
                participating States across the country, in all 
                geographic regions, and in all States that have adopted 
                adjusted community rating before the date of enactment 
                of this Act; and
                    (G) the issuer clearly notifies consumers that the 
                policy may not contain some benefits otherwise mandated 
                for plans in the State in which the purchaser resides 
                and provides a detailed statement of the benefits 
                offered and the benefit differences in that State, in 
                accordance with rules promulgated by the Secretary.
            (4) Form review for nationwide plans.--Notwithstanding any 
        contrary provision of State law, at least 3 months before any 
        nationwide qualified health plan is offered, the issuer shall 
        file all nationwide qualified health plan forms with the 
        regulator in each participating State in which the plan will be 
        offered. An issuer may appeal the disapproval of a nationwide 
        qualified health plan form to the Secretary.
            (5) Applicable rules.--The Secretary shall, in consultation 
        with the National Association of Insurance Commissioners, issue 
        rules for the offering of nationwide qualified health plans 
        under this subsection. Nationwide qualified health plans may be 
        offered only after such rules have taken effect.
            (6) Coverage.--The Secretary shall provide that the health 
        benefits coverage provided to an individual through a 
        nationwide qualified health plan under this subsection shall 
        include at least the essential benefits package described in 
        section 1302.
            (7) State law mandating benefit coverage by a health 
        benefits plan.--For the purposes of this subsection, a State 
        law mandating benefit coverage by a health plan is a law that 
        mandates health insurance coverage or the offer of health 
        insurance coverage for specific health services or specific 
        diseases. A law that mandates health insurance coverage or 
        reimbursement for services provided by certain classes of 
        providers of health care services, or a law that mandates that 
        certain classes of individuals must be covered as a group or as 
        dependents, is not a State law mandating benefit coverage by a 
        health benefits plan.

                PART V--REINSURANCE AND RISK ADJUSTMENT

SEC. 1341. TRANSITIONAL REINSURANCE PROGRAM FOR INDIVIDUAL AND SMALL 
              GROUP MARKETS IN EACH STATE.

    (a) In General.--Each State shall, not later than January 1, 2014--
            (1) include in the Federal standards or State law or 
        regulation the State adopts and has in effect under section 
        1321(b) the provisions described in subsection (b); and
            (2) establish (or enter into a contract with) 1 or more 
        applicable reinsurance entities to carry out the reinsurance 
        program under this section.
    (b) Model Regulation.--
            (1) In general.--In establishing the Federal standards 
        under section 1321(a), the Secretary, in consultation with the 
        National Association of Insurance Commissioners (the ``NAIC''), 
        shall include provisions that enable States to establish and 
        maintain a program under which--
                    (A) health insurance issuers, and third party 
                administrators on behalf of group health plans, are 
                required to make payments to an applicable reinsurance 
                entity for any plan year beginning in the 3-year period 
                beginning January 1, 2014 (as specified in paragraph 
                (3); and
                    (B) the applicable reinsurance entity collects 
                payments under subparagraph (A) and uses amounts so 
                collected to make reinsurance payments to health 
                insurance issuers described in subparagraph (A) that 
                cover high risk individuals in the individual market 
                (excluding grandfathered health plans) for any plan 
                year beginning in such 3-year period.
            (2) High-risk individual; payment amounts.--The Secretary 
        shall include the following in the provisions under paragraph 
        (1):
                    (A) Determination of high-risk individuals.--The 
                method by which individuals will be identified as high 
                risk individuals for purposes of the reinsurance 
                program established under this section. Such method 
                shall provide for identification of individuals as 
                high-risk individuals on the basis of--
                            (i) a list of at least 50 but not more than 
                        100 medical conditions that are identified as 
                        high-risk conditions and that may be based on 
                        the identification of diagnostic and procedure 
                        codes that are indicative of individuals with 
                        pre-existing, high-risk conditions; or
                            (ii) any other comparable objective method 
                        of identification recommended by the American 
                        Academy of Actuaries.
                    (B) Payment amount.--The formula for determining 
                the amount of payments that will be paid to health 
                insurance issuers described in paragraph (1)(A) that 
                insure high-risk individuals. Such formula shall 
                provide for the equitable allocation of available funds 
                through reconciliation and may be designed--
                            (i) to provide a schedule of payments that 
                        specifies the amount that will be paid for each 
                        of the conditions identified under subparagraph 
                        (A); or
                            (ii) to use any other comparable method for 
                        determining payment amounts that is recommended 
                        by the American Academy of Actuaries and that 
                        encourages the use of care coordination and 
                        care management programs for high risk 
                        conditions.
            (3) Determination of required contributions.--
                    (A) In general.--The Secretary shall include in the 
                provisions under paragraph (1) the method for 
                determining the amount each health insurance issuer and 
                group health plan described in paragraph (1)(A) 
                contributing to the reinsurance program under this 
                section is required to contribute under such paragraph 
                for each plan year beginning in the 36-month period 
                beginning January 1, 2014. The contribution amount for 
                any plan year may be based on the percentage of revenue 
                of each issuer and the total costs of providing 
                benefits to enrollees in self-insured plans or on a 
                specified amount per enrollee and may be required to be 
                paid in advance or periodically throughout the plan 
                year.
                    (B) Specific requirements.--The method under this 
                paragraph shall be designed so that--
                            (i) the contribution amount for each issuer 
                        proportionally reflects each issuer's fully 
                        insured commercial book of business for all 
                        major medical products and the total value of 
                        all fees charged by the issuer and the costs of 
                        coverage administered by the issuer as a third 
                        party administrator;
                            (ii) the contribution amount can include an 
                        additional amount to fund the administrative 
                        expenses of the applicable reinsurance entity;
                            (iii) the aggregate contribution amounts 
                        for all States shall, based on the best 
                        estimates of the NAIC and without regard to 
                        amounts described in clause (ii), equal 
                        $10,000,000,000 for plan years beginning in 
                        2014, $6,000,000,000 for plan years beginning 
                        2015, and $4,000,000,000 for plan years 
                        beginning in 2016; and
                            (iv) in addition to the aggregate 
                        contribution amounts under clause (iii), each 
                        issuer's contribution amount for any calendar 
                        year under clause (iii) reflects its 
                        proportionate share of an additional 
                        $2,000,000,000 for 2014, an additional 
                        $2,000,000,000 for 2015, and an additional 
                        $1,000,000,000 for 2016.
                Nothing in this subparagraph shall be construed to 
                preclude a State from collecting additional amounts 
                from issuers on a voluntary basis.
            (4) Expenditure of funds.--The provisions under paragraph 
        (1) shall provide that--
                    (A) the contribution amounts collected for any 
                calendar year may be allocated and used in any of the 
                three calendar years for which amounts are collected 
                based on the reinsurance needs of a particular period 
                or to reflect experience in a prior period; and
                    (B) amounts remaining unexpended as of December, 
                2016, may be used to make payments under any 
                reinsurance program of a State in the individual market 
                in effect in the 2-year period beginning on January 1, 
                2017.
        Notwithstanding the preceding sentence, any contribution 
        amounts described in paragraph (3)(B)(iv) shall be deposited 
        into the general fund of the Treasury of the United States and 
        may not be used for the program established under this section.
    (c) Applicable Reinsurance Entity.--For purposes of this section--
            (1) In general.--The term ``applicable reinsurance entity'' 
        means a not-for-profit organization--
                    (A) the purpose of which is to help stabilize 
                premiums for coverage in the individual and small group 
                markets in a State during the first 3 years of 
                operation of an Exchange for such markets within the 
                State when the risk of adverse selection related to new 
                rating rules and market changes is greatest; and
                    (B) the duties of which shall be to carry out the 
                reinsurance program under this section by coordinating 
                the funding and operation of the risk-spreading 
                mechanisms designed to implement the reinsurance 
                program.
            (2) State discretion.--A State may have more than 1 
        applicable reinsurance entity to carry out the reinsurance 
        program under this section within the State and 2 or more 
        States may enter into agreements to provide for an applicable 
        reinsurance entity to carry out such program in all such 
        States.
            (3) Entities are tax-exempt.--An applicable reinsurance 
        entity established under this section shall be exempt from 
        taxation under chapter 1 of the Internal Revenue Code of 1986. 
        The preceding sentence shall not apply to the tax imposed by 
        section 511 such Code (relating to tax on unrelated business 
        taxable income of an exempt organization).
    (d) Coordination With State High-risk Pools.--The State shall 
eliminate or modify any State high-risk pool to the extent necessary to 
carry out the reinsurance program established under this section. The 
State may coordinate the State high-risk pool with such program to the 
extent not inconsistent with the provisions of this section.

SEC. 1342. ESTABLISHMENT OF RISK CORRIDORS FOR PLANS IN INDIVIDUAL AND 
              SMALL GROUP MARKETS.

    (a) In General.--The Secretary shall establish and administer a 
program of risk corridors for calendar years 2014, 2015, and 2016 under 
which a qualified health plan offered in the individual or small group 
market shall participate in a payment adjustment system based on the 
ratio of the allowable costs of the plan to the plan's aggregate 
premiums. Such program shall be based on the program for regional 
participating provider organizations under part D of title XVIII of the 
Social Security Act.
    (b) Payment Methodology.--
            (1) Payments out.--The Secretary shall provide under the 
        program established under subsection (a) that if--
                    (A) a participating plan's allowable costs for any 
                plan year are more than 103 percent but not more than 
                108 percent of the target amount, the Secretary shall 
                pay to the plan an amount equal to 50 percent of the 
                target amount in excess of 103 percent of the target 
                amount; and
                    (B) a participating plan's allowable costs for any 
                plan year are more than 108 percent of the target 
                amount, the Secretary shall pay to the plan an amount 
                equal to the sum of 2.5 percent of the target amount 
                plus 80 percent of allowable costs in excess of 108 
                percent of the target amount.
            (2) Payments in.--The Secretary shall provide under the 
        program established under subsection (a) that if--
                    (A) a participating plan's allowable costs for any 
                plan year are less than 97 percent but not less than 92 
                percent of the target amount, the plan shall pay to the 
                Secretary an amount equal to 50 percent of the excess 
                of 97 percent of the target amount over the allowable 
                costs; and
                    (B) a participating plan's allowable costs for any 
                plan year are less than 92 percent of the target 
                amount, the plan shall pay to the Secretary an amount 
                equal to the sum of 2.5 percent of the target amount 
                plus 80 percent of the excess of 92 percent of the 
                target amount over the allowable costs.
    (c) Definitions.--In this section:
            (1) Allowable costs.--
                    (A) In general.--The amount of allowable costs of a 
                plan for any year is an amount equal to the total costs 
                (other than administrative costs) of the plan in 
                providing benefits covered by the plan.
                    (B) Reduction for risk adjustment and reinsurance 
                payments.--Allowable costs shall reduced by any risk 
                adjustment and reinsurance payments received under 
                section 1341 and 1343.
            (2) Target amount.--The target amount of a plan for any 
        year is an amount equal to the total premiums (including any 
        premium subsidies under any governmental program), reduced by 
        the administrative costs of the plan.

SEC. 1343. RISK ADJUSTMENT.

    (a) In General.--
            (1) Low actuarial risk plans.--Using the criteria and 
        methods developed under subsection (b), each State shall assess 
        a charge on health plans and health insurance issuers (with 
        respect to health insurance coverage) described in subsection 
        (c) if the actuarial risk of the enrollees of such plans or 
        coverage for a year is less than the average actuarial risk of 
        all enrollees in all plans or coverage in such State for such 
        year that are not self-insured group health plans (which are 
        subject to the provisions of the Employee Retirement Income 
        Security Act of 1974).
            (2) High actuarial risk plans.--Using the criteria and 
        methods developed under subsection (b), each State shall 
        provide a payment to health plans and health insurance issuers 
        (with respect to health insurance coverage) described in 
        subsection (c) if the actuarial risk of the enrollees of such 
        plans or coverage for a year is greater than the average 
        actuarial risk of all enrollees in all plans and coverage in 
        such State for such year that are not self-insured group health 
        plans (which are subject to the provisions of the Employee 
        Retirement Income Security Act of 1974).
    (b) Criteria and Methods.--The Secretary, in consultation with 
States, shall establish criteria and methods to be used in carrying out 
the risk adjustment activities under this section. The Secretary may 
utilize criteria and methods similar to the criteria and methods 
utilized under part C or D of title XVIII of the Social Security Act. 
Such criteria and methods shall be included in the standards and 
requirements the Secretary prescribes under section 1321.
    (c) Scope.--A health plan or a health insurance issuer is described 
in this subsection if such health plan or health insurance issuer 
provides coverage in the individual or small group market within the 
State. This subsection shall not apply to a grandfathered health plan 
or the issuer of a grandfathered health plan with respect to that plan.

       Subtitle E--Affordable Coverage Choices for All Americans

        PART I--PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS

       Subpart A--Premium Tax Credits and Cost-sharing Reductions

SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSISTANCE FOR 
              COVERAGE UNDER A QUALIFIED HEALTH PLAN.

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

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

    ``(a) In General.--In the case of an applicable taxpayer, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for any taxable year an amount equal to the premium assistance credit 
amount of the taxpayer for the taxable year.
    ``(b) Premium Assistance Credit Amount.--For purposes of this 
section--
            ``(1) In general.--The term `premium assistance credit 
        amount' means, with respect to any taxable year, the sum of the 
        premium assistance amounts determined under paragraph (2) with 
        respect to all coverage months of the taxpayer occurring during 
        the taxable year.
            ``(2) Premium assistance amount.--The premium assistance 
        amount determined under this subsection with respect to any 
        coverage month is the amount equal to the lesser of--
                    ``(A) the monthly premiums for such month for 1 or 
                more qualified health plans offered in the individual 
                market within a State which cover the taxpayer, the 
                taxpayer's spouse, or any dependent (as defined in 
                section 152) of the taxpayer and which were enrolled in 
                through an Exchange established by the State under 1311 
                of the Patient Protection and Affordable Care Act, or
                    ``(B) the excess (if any) of--
                            ``(i) the adjusted monthly premium for such 
                        month for the applicable second lowest cost 
                        silver plan with respect to the taxpayer, over
                            ``(ii) an amount equal to 1/12 of the 
                        product of the applicable percentage and the 
                        taxpayer's household income for the taxable 
                        year.
            ``(3) Other terms and rules relating to premium assistance 
        amounts.--For purposes of paragraph (2)--
                    ``(A) Applicable percentage.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the applicable percentage with 
                        respect to any taxpayer for any taxable year is 
                        equal to 2.8 percent, increased by the number 
                        of percentage points (not greater than 7) which 
                        bears the same ratio to 7 percentage points 
                        as--
                                    ``(I) the taxpayer's household 
                                income for the taxable year in excess 
                                of 100 percent of the poverty line for 
                                a family of the size involved, bears to
                                    ``(II) an amount equal to 200 
                                percent of the poverty line for a 
                                family of the size involved.
                            ``(ii) Special rule for taxpayers under 133 
                        percent of poverty line.--If a taxpayer's 
                        household income for the taxable year is in 
                        excess of 100 percent, but not more than 133 
                        percent, of the poverty line for a family of 
                        the size involved, the taxpayer's applicable 
                        percentage shall be 2 percent.
                            ``(iii) Indexing.--In the case of taxable 
                        years beginning in any calendar year after 
                        2014, the Secretary shall adjust the initial 
                        and final applicable percentages under clause 
                        (i), and the 2 percent under clause (ii), for 
                        the calendar year to reflect the excess of the 
                        rate of premium growth between the preceding 
                        calendar year and 2013 over the rate of income 
                        growth for such period.
                    ``(B) Applicable second lowest cost silver plan.--
                The applicable second lowest cost silver plan with 
                respect to any applicable taxpayer is the second lowest 
                cost silver plan of the individual market in the rating 
                area in which the taxpayer resides which--
                            ``(i) is offered through the same Exchange 
                        through which the qualified health plans taken 
                        into account under paragraph (2)(A) were 
                        offered, and
                            ``(ii) provides--
                                    ``(I) self-only coverage in the 
                                case of an applicable taxpayer--
                                            ``(aa) whose tax for the 
                                        taxable year is determined 
                                        under section 1(c) (relating to 
                                        unmarried individuals other 
                                        than surviving spouses and 
                                        heads of households) and who is 
                                        not allowed a deduction under 
                                        section 151 for the taxable 
                                        year with respect to a 
                                        dependent, or
                                            ``(bb) who is not described 
                                        in item (aa) but who purchases 
                                        only self-only coverage, and
                                    ``(II) family coverage in the case 
                                of any other applicable taxpayer.
                If a taxpayer files a joint return and no credit is 
                allowed under this section with respect to 1 of the 
                spouses by reason of subsection (e), the taxpayer shall 
                be treated as described in clause (ii)(I) unless a 
                deduction is allowed under section 151 for the taxable 
                year with respect to a dependent other than either 
                spouse and subsection (e) does not apply to the 
                dependent.
                    ``(C) Adjusted monthly premium.--The adjusted 
                monthly premium for an applicable second lowest cost 
                silver plan is the monthly premium which would have 
                been charged (for the rating area with respect to which 
                the premiums under paragraph (2)(A) were determined) 
                for the plan if each individual covered under a 
                qualified health plan taken into account under 
                paragraph (2)(A) were covered by such silver plan and 
                the premium was adjusted only for the age of each such 
                individual in the manner allowed under section 2701 of 
                the Public Health Service Act. In the case of a State 
                participating in the wellness discount demonstration 
                project under section 2705(d) of the Public Health 
                Service Act, the adjusted monthly premium shall be 
                determined without regard to any premium discount or 
                rebate under such project.
                    ``(D) Additional benefits.--If--
                            ``(i) a qualified health plan under section 
                        1302(b)(5) of the Patient Protection and 
                        Affordable Care Act offers benefits in addition 
                        to the essential health benefits required to be 
                        provided by the plan, or
                            ``(ii) a State requires a qualified health 
                        plan under section 1311(d)(3)(B) of such Act to 
                        cover benefits in addition to the essential 
                        health benefits required to be provided by the 
                        plan,
                the portion of the premium for the plan properly 
                allocable (under rules prescribed by the Secretary of 
                Health and Human Services) to such additional benefits 
                shall not be taken into account in determining either 
                the monthly premium or the adjusted monthly premium 
                under paragraph (2).
                    ``(E) Special rule for pediatric dental coverage.--
                For purposes of determining the amount of any monthly 
                premium, if an individual enrolls in both a qualified 
                health plan and a plan described in section 
                1311(d)(2)(B)(ii)(I) of the Patient Protection and 
                Affordable Care Act for any plan year, the portion of 
                the premium for the plan described in such section that 
                (under regulations prescribed by the Secretary) is 
                properly allocable to pediatric dental benefits which 
                are included in the essential health benefits required 
                to be provided by a qualified health plan under section 
                1302(b)(1)(J) of such Act shall be treated as a premium 
                payable for a qualified health plan.
    ``(c) Definition and Rules Relating to Applicable Taxpayers, 
Coverage Months, and Qualified Health Plan.--For purposes of this 
section--
            ``(1) Applicable taxpayer.--
                    ``(A) In general.--The term `applicable taxpayer' 
                means, with respect to any taxable year, a taxpayer 
                whose household income for the taxable year exceeds 100 
                percent but does not exceed 400 percent of an amount 
                equal to the poverty line for a family of the size 
                involved.
                    ``(B) Special rule for certain individuals lawfully 
                present in the united states.--If--
                            ``(i) a taxpayer has a household income 
                        which is not greater than 100 percent of an 
                        amount equal to the poverty line for a family 
                        of the size involved, and
                            ``(ii) the taxpayer is an alien lawfully 
                        present in the United States, but is not 
                        eligible for the medicaid program under title 
                        XIX of the Social Security Act by reason of 
                        such alien status,
                the taxpayer shall, for purposes of the credit under 
                this section, be treated as an applicable taxpayer with 
                a household income which is equal to 100 percent of the 
                poverty line for a family of the size involved.
                    ``(C) Married couples must file joint return.--If 
                the taxpayer is married (within the meaning of section 
                7703) at the close of the taxable year, the taxpayer 
                shall be treated as an applicable taxpayer only if the 
                taxpayer and the taxpayer's spouse file a joint return 
                for the taxable year.
                    ``(D) Denial of credit to dependents.--No credit 
                shall be allowed under this section to any individual 
                with respect to whom a deduction under section 151 is 
                allowable to another taxpayer for a taxable year 
                beginning in the calendar year in which such 
                individual's taxable year begins.
            ``(2) Coverage month.--For purposes of this subsection--
                    ``(A) In general.--The term `coverage month' means, 
                with respect to an applicable taxpayer, any month if--
                            ``(i) as of the first day of such month the 
                        taxpayer, the taxpayer's spouse, or any 
                        dependent of the taxpayer is covered by a 
                        qualified health plan described in subsection 
                        (b)(2)(A) that was enrolled in through an 
                        Exchange established by the State under section 
                        1311 of the Patient Protection and Affordable 
                        Care Act, and
                            ``(ii) the premium for coverage under such 
                        plan for such month is paid by the taxpayer (or 
                        through advance payment of the credit under 
                        subsection (a) under section 1412 of the 
                        Patient Protection and Affordable Care Act).
                    ``(B) Exception for minimum essential coverage.--
                            ``(i) In general.--The term `coverage 
                        month' shall not include any month with respect 
                        to an individual if for such month the 
                        individual is eligible for minimum essential 
                        coverage other than eligibility for coverage 
                        described in section 5000A(f)(1)(C) (relating 
                        to coverage in the individual market).
                            ``(ii) Minimum essential coverage.--The 
                        term `minimum essential coverage' has the 
                        meaning given such term by section 5000A(f).
                    ``(C) Special rule for employer-sponsored minimum 
                essential coverage.--For purposes of subparagraph (B)--
                            ``(i) Coverage must be affordable.--Except 
                        as provided in clause (iii), an employee shall 
                        not be treated as eligible for minimum 
                        essential coverage if such coverage--
                                    ``(I) consists of an eligible 
                                employer-sponsored plan (as defined in 
                                section 5000A(f)(2)), and
                                    ``(II) the employee's required 
                                contribution (within the meaning of 
                                section 5000A(e)(1)(B)) with respect to 
                                the plan exceeds 9.8 percent of the 
                                applicable taxpayer's household income.
                        This clause shall also apply to an individual 
                        who is eligible to enroll in the plan by reason 
                        of a relationship the individual bears to the 
                        employee.
                            ``(ii) Coverage must provide minimum 
                        value.--Except as provided in clause (iii), an 
                        employee shall not be treated as eligible for 
                        minimum essential coverage if such coverage 
                        consists of an eligible employer-sponsored plan 
                        (as defined in section 5000A(f)(2)) and the 
                        plan's share of the total allowed costs of 
                        benefits provided under the plan is less than 
                        60 percent of such costs.
                            ``(iii) Employee or family must not be 
                        covered under employer plan.--Clauses (i) and 
                        (ii) shall not apply if the employee (or any 
                        individual described in the last sentence of 
                        clause (i)) is covered under the eligible 
                        employer-sponsored plan or the grandfathered 
                        health plan.
                            ``(iv) Indexing.--In the case of plan years 
                        beginning in any calendar year after 2014, the 
                        Secretary shall adjust the 9.8 percent under 
                        clause (i)(II) in the same manner as the 
                        percentages are adjusted under subsection 
                        (b)(3)(A)(ii).
            ``(3) Definitions and other rules.--
                    ``(A) Qualified health plan.--The term `qualified 
                health plan' has the meaning given such term by section 
                1301(a) of the Patient Protection and Affordable Care 
                Act, except that such term shall not include a 
                qualified health plan which is a catastrophic plan 
                described in section 1302(e) of such Act.
                    ``(B) Grandfathered health plan.--The term 
                `grandfathered health plan' has the meaning given such 
                term by section 1251 of the Patient Protection and 
                Affordable Care Act.
    ``(d) Terms Relating to Income and Families.--For purposes of this 
section--
            ``(1) Family size.--The family size involved with respect 
        to any taxpayer shall be equal to the number of individuals for 
        whom the taxpayer is allowed a deduction under section 151 
        (relating to allowance of deduction for personal exemptions) 
        for the taxable year.
            ``(2) Household income.--
                    ``(A) Household income.--The term `household 
                income' means, with respect to any taxpayer, an amount 
                equal to the sum of--
                            ``(i) the modified gross income of the 
                        taxpayer, plus
                            ``(ii) the aggregate modified gross incomes 
                        of all other individuals who--
                                    ``(I) were taken into account in 
                                determining the taxpayer's family size 
                                under paragraph (1), and
                                    ``(II) were required to file a 
                                return of tax imposed by section 1 for 
                                the taxable year.
                    ``(B) Modified gross income.--The term `modified 
                gross income' means gross income--
                            ``(i) decreased by the amount of any 
                        deduction allowable under paragraph (1), (3), 
                        (4), or (10) of section 62(a),
                            ``(ii) increased by the amount of interest 
                        received or accrued during the taxable year 
                        which is exempt from tax imposed by this 
                        chapter, and
                            ``(iii) determined without regard to 
                        sections 911, 931, and 933.
            ``(3) Poverty line.--
                    ``(A) In general.--The term `poverty line' has the 
                meaning given that term in section 2110(c)(5) of the 
                Social Security Act (42 U.S.C. 1397jj(c)(5)).
                    ``(B) Poverty line used.--In the case of any 
                qualified health plan offered through an Exchange for 
                coverage during a taxable year beginning in a calendar 
                year, the poverty line used shall be the most recently 
                published poverty line as of the 1st day of the regular 
                enrollment period for coverage during such calendar 
                year.
    ``(e) Rules for Individuals Not Lawfully Present.--
            ``(1) In general.--If 1 or more individuals for whom a 
        taxpayer is allowed a deduction under section 151 (relating to 
        allowance of deduction for personal exemptions) for the taxable 
        year (including the taxpayer or his spouse) are individuals who 
        are not lawfully present--
                    ``(A) the aggregate amount of premiums otherwise 
                taken into account under clauses (i) and (ii) of 
                subsection (b)(2)(A) shall be reduced by the portion 
                (if any) of such premiums which is attributable to such 
                individuals, and
                    ``(B) for purposes of applying this section, the 
                determination as to what percentage a taxpayer's 
                household income bears to the poverty level for a 
                family of the size involved shall be made under one of 
                the following methods:
                            ``(i) A method under which--
                                    ``(I) the taxpayer's family size is 
                                determined by not taking such 
                                individuals into account, and
                                    ``(II) the taxpayer's household 
                                income is equal to the product of the 
                                taxpayer's household income (determined 
                                without regard to this subsection) and 
                                a fraction--
                                            ``(aa) the numerator of 
                                        which is the poverty line for 
                                        the taxpayer's family size 
                                        determined after application of 
                                        subclause (I), and
                                            ``(bb) the denominator of 
                                        which is the poverty line for 
                                        the taxpayer's family size 
                                        determined without regard to 
                                        subclause (I).
                            ``(ii) A comparable method reaching the 
                        same result as the method under clause (i).
            ``(2) Lawfully present.--For purposes of this section, an 
        individual shall be treated as lawfully present only if the 
        individual is, and is reasonably expected to be for the entire 
        period of enrollment for which the credit under this section is 
        being claimed, a citizen or national of the United States or an 
        alien lawfully present in the United States.
            ``(3) Secretarial authority.--The Secretary of Health and 
        Human Services, in consultation with the Secretary, shall 
        prescribe rules setting forth the methods by which calculations 
        of family size and household income are made for purposes of 
        this subsection. Such rules shall be designed to ensure that 
        the least burden is placed on individuals enrolling in 
        qualified health plans through an Exchange and taxpayers 
        eligible for the credit allowable under this section.
    ``(f) Reconciliation of Credit and Advance Credit.--
            ``(1) In general.--The amount of the credit allowed under 
        this section for any taxable year shall be reduced (but not 
        below zero) by the amount of any advance payment of such credit 
        under section 1412 of the Patient Protection and Affordable 
        Care Act.
            ``(2) Excess advance payments.--
                    ``(A) In general.--If the advance payments to a 
                taxpayer under section 1412 of the Patient Protection 
                and Affordable Care Act for a taxable year exceed the 
                credit allowed by this section (determined without 
                regard to paragraph (1)), the tax imposed by this 
                chapter for the taxable year shall be increased by the 
                amount of such excess.
                    ``(B) Limitation on increase where income less than 
                400 percent of poverty line.--
                            ``(i) In general.--In the case of an 
                        applicable taxpayer whose household income is 
                        less than 400 percent of the poverty line for 
                        the size of the family involved for the taxable 
                        year, the amount of the increase under 
                        subparagraph (A) shall in no event exceed $400 
                        ($250 in the case of a taxpayer whose tax is 
                        determined under section 1(c) for the taxable 
                        year).
                            ``(ii) Indexing of amount.--In the case of 
                        any calendar year beginning after 2014, each of 
                        the dollar amounts under clause (i) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year, 
                                determined by substituting `calendar 
                                year 2013' for `calendar year 1992' in 
                                subparagraph (B) thereof.
                        If the amount of any increase under clause (i) 
                        is not a multiple of $50, such increase shall 
                        be rounded to the next lowest multiple of $50.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations which provide for--
            ``(1) the coordination of the credit allowed under this 
        section with the program for advance payment of the credit 
        under section 1412 of the Patient Protection and Affordable 
        Care Act, and
            ``(2) the application of subsection (f) where the filing 
        status of the taxpayer for a taxable year is different from 
        such status used for determining the advance payment of the 
        credit.''.
    (b) Disallowance of Deduction.--Section 280C of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(g) Credit for Health Insurance Premiums.--No deduction shall be 
allowed for the portion of the premiums paid by the taxpayer for 
coverage of 1 or more individuals under a qualified health plan which 
is equal to the amount of the credit determined for the taxable year 
under section 36B(a) with respect to such premiums.''.
    (c) Study on Affordable Coverage.--
            (1) Study and report.--
                    (A) In general.--Not later than 5 years after the 
                date of the enactment of this Act, the Comptroller 
                General shall conduct a study on the affordability of 
                health insurance coverage, including--
                            (i) the impact of the tax credit for 
                        qualified health insurance coverage of 
                        individuals under section 36B of the Internal 
                        Revenue Code of 1986 and the tax credit for 
                        employee health insurance expenses of small 
                        employers under section 45R of such Code on 
                        maintaining and expanding the health insurance 
                        coverage of individuals;
                            (ii) the availability of affordable health 
                        benefits plans, including a study of whether 
                        the percentage of household income used for 
                        purposes of section 36B(c)(2)(C) of the 
                        Internal Revenue Code of 1986 (as added by this 
                        section) is the appropriate level for 
                        determining whether employer-provided coverage 
                        is affordable for an employee and whether such 
                        level may be lowered without significantly 
                        increasing the costs to the Federal Government 
                        and reducing employer-provided coverage; and
                            (iii) the ability of individuals to 
                        maintain essential health benefits coverage (as 
                        defined in section 5000A(f) of the Internal 
                        Revenue Code of 1986).
                    (B) Report.--The Comptroller General shall submit 
                to the appropriate committees of Congress a report on 
                the study conducted under subparagraph (A), together 
                with legislative recommendations relating to the 
                matters studied under such subparagraph.
            (2) Appropriate committees of congress.--In this 
        subsection, the term ``appropriate committees of Congress'' 
        means the Committee on Ways and Means, the Committee on 
        Education and Labor, and the Committee on Energy and Commerce 
        of the House of Representatives and the Committee on Finance 
        and the Committee on Health, Education, Labor and Pensions of 
        the Senate.
    (d) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36B,'' after ``36A,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36A 
        the following new item:

``Sec. 36B. Refundable credit for coverage under a qualified health 
                            plan.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2013.

SEC. 1402. REDUCED COST-SHARING FOR INDIVIDUALS ENROLLING IN QUALIFIED 
              HEALTH PLANS.

    (a) In General.--In the case of an eligible insured enrolled in a 
qualified health plan--
            (1) the Secretary shall notify the issuer of the plan of 
        such eligibility; and
            (2) the issuer shall reduce the cost-sharing under the plan 
        at the level and in the manner specified in subsection (c).
    (b) Eligible Insured.--In this section, the term ``eligible 
insured'' means an individual--
            (1) who enrolls in a qualified health plan in the silver 
        level of coverage in the individual market offered through an 
        Exchange; and
            (2) whose household income exceeds 100 percent but does not 
        exceed 400 percent of the poverty line for a family of the size 
        involved.
In the case of an individual described in section 36B(c)(1)(B) of the 
Internal Revenue Code of 1986, the individual shall be treated as 
having household income equal to 100 percent for purposes of applying 
this section.
    (c) Determination of Reduction in Cost-sharing.--
            (1) Reduction in out-of-pocket limit.--
                    (A) In general.--The reduction in cost-sharing 
                under this subsection shall first be achieved by 
                reducing the applicable out-of pocket limit under 
                section 1302(c)(1) in the case of--
                            (i) an eligible insured whose household 
                        income is more than 100 percent but not more 
                        than 200 percent of the poverty line for a 
                        family of the size involved, by two-thirds;
                            (ii) an eligible insured whose household 
                        income is more than 200 percent but not more 
                        than 300 percent of the poverty line for a 
                        family of the size involved, by one-half; and
                            (iii) an eligible insured whose household 
                        income is more than 300 percent but not more 
                        than 400 percent of the poverty line for a 
                        family of the size involved, by one-third.
                    (B) Coordination with actuarial value limits.--
                            (i) In general.--The Secretary shall ensure 
                        the reduction under this paragraph shall not 
                        result in an increase in the plan's share of 
                        the total allowed costs of benefits provided 
                        under the plan above--
                                    (I) 90 percent in the case of an 
                                eligible insured described in paragraph 
                                (2)(A);
                                    (II) 80 percent in the case of an 
                                eligible insured described in paragraph 
                                (2)(B); and
                                    (III) 70 percent in the case of an 
                                eligible insured described in clause 
                                (ii) or (iii) of subparagraph (A).
                            (ii) Adjustment.--The Secretary shall 
                        adjust the out-of pocket limits under paragraph 
                        (1) if necessary to ensure that such limits do 
                        not cause the respective actuarial values to 
                        exceed the levels specified in clause (i).
            (2) Additional reduction for lower income insureds.--The 
        Secretary shall establish procedures under which the issuer of 
        a qualified health plan to which this section applies shall 
        further reduce cost-sharing under the plan in a manner 
        sufficient to--
                    (A) in the case of an eligible insured whose 
                household income is not less than 100 percent but not 
                more than 150 percent of the poverty line for a family 
                of the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 90 percent of such costs; and
                    (B) in the case of an eligible insured whose 
                household income is more than 150 percent but not more 
                than 200 percent of the poverty line for a family of 
                the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 80 percent of such costs.
            (3) Methods for reducing cost-sharing.--
                    (A) In general.--An issuer of a qualified health 
                plan making reductions under this subsection shall 
                notify the Secretary of such reductions and the 
                Secretary shall make periodic and timely payments to 
                the issuer equal to the value of the reductions.
                    (B) Capitated payments.--The Secretary may 
                establish a capitated payment system to carry out the 
                payment of cost-sharing reductions under this section. 
                Any such system shall take into account the value of 
                the reductions and make appropriate risk adjustments to 
                such payments.
            (4) Additional benefits.--If a qualified health plan under 
        section 1302(b)(5) offers benefits in addition to the essential 
        health benefits required to be provided by the plan, or a State 
        requires a qualified health plan under section 1311(d)(3)(B) to 
        cover benefits in addition to the essential health benefits 
        required to be provided by the plan, the reductions in cost-
        sharing under this section shall not apply to such additional 
        benefits.
            (5) Special rule for pediatric dental plans.--If an 
        individual enrolls in both a qualified health plan and a plan 
        described in section 1311(d)(2)(B)(ii)(I) for any plan year, 
        subsection (a) shall not apply to that portion of any reduction 
        in cost-sharing under subsection (c) that (under regulations 
        prescribed by the Secretary) is properly allocable to pediatric 
        dental benefits which are included in the essential health 
        benefits required to be provided by a qualified health plan 
        under section 1302(b)(1)(J).
    (d) Special Rules for Indians.--
            (1) Indians under 300 percent of poverty.--If an individual 
        enrolled in any qualified health plan in the individual market 
        through an Exchange is an Indian (as defined in section 4(d) of 
        the Indian Self-Determination and Education Assistance Act (25 
        U.S.C. 450b(d))) whose household income is not more than 300 
        percent of the poverty line for a family of the size involved, 
        then, for purposes of this section--
                    (A) such individual shall be treated as an eligible 
                insured; and
                    (B) the issuer of the plan shall eliminate any 
                cost-sharing under the plan.
            (2) Items or services furnished through indian health 
        providers.--If an Indian (as so defined) enrolled in a 
        qualified health plan is furnished an item or service directly 
        by the Indian Health Service, an Indian Tribe, Tribal 
        Organization, or Urban Indian Organization or through referral 
        under contract health services--
                    (A) no cost-sharing under the plan shall be imposed 
                under the plan for such item or service; and
                    (B) the issuer of the plan shall not reduce the 
                payment to any such entity for such item or service by 
                the amount of any cost-sharing that would be due from 
                the Indian but for subparagraph (A).
            (3) Payment.--The Secretary shall pay to the issuer of a 
        qualified health plan the amount necessary to reflect the 
        increase in actuarial value of the plan required by reason of 
        this subsection.
    (e) Rules for Individuals Not Lawfully Present.--
            (1) In general.--If an individual who is an eligible 
        insured is not lawfully present--
                    (A) no cost-sharing reduction under this section 
                shall apply with respect to the individual; and
                    (B) for purposes of applying this section, the 
                determination as to what percentage a taxpayer's 
                household income bears to the poverty level for a 
                family of the size involved shall be made under one of 
                the following methods:
                            (i) A method under which--
                                    (I) the taxpayer's family size is 
                                determined by not taking such 
                                individuals into account, and
                                    (II) the taxpayer's household 
                                income is equal to the product of the 
                                taxpayer's household income (determined 
                                without regard to this subsection) and 
                                a fraction--
                                            (aa) the numerator of which 
                                        is the poverty line for the 
                                        taxpayer's family size 
                                        determined after application of 
                                        subclause (I), and
                                            (bb) the denominator of 
                                        which is the poverty line for 
                                        the taxpayer's family size 
                                        determined without regard to 
                                        subclause (I).
                            (ii) A comparable method reaching the same 
                        result as the method under clause (i).
            (2) Lawfully present.--For purposes of this section, an 
        individual shall be treated as lawfully present only if the 
        individual is, and is reasonably expected to be for the entire 
        period of enrollment for which the cost-sharing reduction under 
        this section is being claimed, a citizen or national of the 
        United States or an alien lawfully present in the United 
        States.
            (3) Secretarial authority.--The Secretary, in consultation 
        with the Secretary of the Treasury, shall prescribe rules 
        setting forth the methods by which calculations of family size 
        and household income are made for purposes of this subsection. 
        Such rules shall be designed to ensure that the least burden is 
        placed on individuals enrolling in qualified health plans 
        through an Exchange and taxpayers eligible for the credit 
        allowable under this section.
    (f) Definitions and Special Rules.--In this section:
            (1) In general.--Any term used in this section which is 
        also used in section 36B of the Internal Revenue Code of 1986 
        shall have the meaning given such term by such section.
            (2) Limitations on reduction.--No cost-sharing reduction 
        shall be allowed under this section with respect to coverage 
        for any month unless the month is a coverage month with respect 
        to which a credit is allowed to the insured (or an applicable 
        taxpayer on behalf of the insured) under section 36B of such 
        Code.
            (3) Data used for eligibility.--Any determination under 
        this section shall be made on the basis of the taxable year for 
        which the advance determination is made under section 1412 and 
        not the taxable year for which the credit under section 36B of 
        such Code is allowed.

                 Subpart B--Eligibility Determinations

SEC. 1411. PROCEDURES FOR DETERMINING ELIGIBILITY FOR EXCHANGE 
              PARTICIPATION, PREMIUM TAX CREDITS AND REDUCED COST-
              SHARING , AND INDIVIDUAL RESPONSIBILITY EXEMPTIONS.

    (a) Establishment of Program.--The Secretary shall establish a 
program meeting the requirements of this section for determining--
            (1) whether an individual who is to be covered in the 
        individual market by a qualified health plan offered through an 
        Exchange, or who is claiming a premium tax credit or reduced 
        cost-sharing, meets the requirements of sections 1312(f)(3), 
        1402(e), and 1412(d) of this title and section 36B(e) of the 
        Internal Revenue Code of 1986 that the individual be a citizen 
        or national of the United States or an alien lawfully present 
        in the United States;
            (2) in the case of an individual claiming a premium tax 
        credit or reduced cost-sharing under section 36B of such Code 
        or section 1402--
                    (A) whether the individual meets the income and 
                coverage requirements of such sections; and
                    (B) the amount of the tax credit or reduced cost-
                sharing;
            (3) whether an individual's coverage under an employer-
        sponsored health benefits plan is treated as unaffordable under 
        sections 36B(c)(2)(C) and 5000A(e)(2); and
            (4) whether to grant a certification under section 
        1311(d)(4)(H) attesting that, for purposes of the individual 
        responsibility requirement under section 5000A of the Internal 
        Revenue Code of 1986, an individual is entitled to an exemption 
        from either the individual responsibility requirement or the 
        penalty imposed by such section.
    (b) Information Required to Be Provided by Applicants.--
            (1) In general.--An applicant for enrollment in a qualified 
        health plan offered through an Exchange in the individual 
        market shall provide--
                    (A) the name, address, and date of birth of each 
                individual who is to be covered by the plan (in this 
                subsection referred to as an ``enrollee''); and
                    (B) the information required by any of the 
                following paragraphs that is applicable to an enrollee.
            (2) Citizenship or immigration status.--The following 
        information shall be provided with respect to every enrollee:
                    (A) In the case of an enrollee whose eligibility is 
                based on an attestation of citizenship of the enrollee, 
                the enrollee's social security number.
                    (B) In the case of an individual whose eligibility 
                is based on an attestation of the enrollee's 
                immigration status, the enrollee's social security 
                number (if applicable) and such identifying information 
                with respect to the enrollee's immigration status as 
                the Secretary, after consultation with the Secretary of 
                Homeland Security, determines appropriate.
            (3) Eligibility and amount of tax credit or reduced cost-
        sharing.--In the case of an enrollee with respect to whom a 
        premium tax credit or reduced cost-sharing under section 36B of 
        such Code or section 1402 is being claimed, the following 
        information:
                    (A) Information regarding income and family size.--
                The information described in section 6103(l)(21) for 
                the taxable year ending with or within the second 
                calendar year preceding the calendar year in which the 
                plan year begins.
                    (B) Changes in circumstances.--The information 
                described in section 1412(b)(2), including information 
                with respect to individuals who were not required to 
                file an income tax return for the taxable year 
                described in subparagraph (A) or individuals who 
                experienced changes in marital status or family size or 
                significant reductions in income.
            (4) Employer-sponsored coverage.--In the case of an 
        enrollee with respect to whom eligibility for a premium tax 
        credit under section 36B of such Code or cost-sharing reduction 
        under section 1402 is being established on the basis that the 
        enrollee's (or related individual's) employer is not treated 
        under section 36B(c)(2)(C) of such Code as providing minimum 
        essential coverage or affordable minimum essential coverage, 
        the following information:
                    (A) The name, address, and employer identification 
                number (if available) of the employer.
                    (B) Whether the enrollee or individual is a full-
                time employee and whether the employer provides such 
                minimum essential coverage.
                    (C) If the employer provides such minimum essential 
                coverage, the lowest cost option for the enrollee's or 
                individual's enrollment status and the enrollee's or 
                individual's required contribution (within the meaning 
                of section 5000A(e)(1)(B) of such Code) under the 
                employer-sponsored plan.
                    (D) If an enrollee claims an employer's minimum 
                essential coverage is unaffordable, the information 
                described in paragraph (3).
        If an enrollee changes employment or obtains additional 
        employment while enrolled in a qualified health plan for which 
        such credit or reduction is allowed, the enrollee shall notify 
        the Exchange of such change or additional employment and 
        provide the information described in this paragraph with 
        respect to the new employer.
            (5) Exemptions from individual responsibility 
        requirements.--In the case of an individual who is seeking an 
        exemption certificate under section 1311(d)(4)(H) from any 
        requirement or penalty imposed by section 5000A, the following 
        information:
                    (A) In the case of an individual seeking exemption 
                based on the individual's status as a member of an 
                exempt religious sect or division, as a member of a 
                health care sharing ministry, as an Indian, or as an 
                individual eligible for a hardship exemption, such 
                information as the Secretary shall prescribe.
                    (B) In the case of an individual seeking exemption 
                based on the lack of affordable coverage or the 
                individual's status as a taxpayer with household income 
                less than 100 percent of the poverty line, the 
                information described in paragraphs (3) and (4), as 
                applicable.
    (c) Verification of Information Contained in Records of Specific 
Federal Officials.--
            (1) Information transferred to secretary.--An Exchange 
        shall submit the information provided by an applicant under 
        subsection (b) to the Secretary for verification in accordance 
        with the requirements of this subsection and subsection (d).
            (2) Citizenship or immigration status.--
                    (A) Commissioner of social security.--The Secretary 
                shall submit to the Commissioner of Social Security the 
                following information for a determination as to whether 
                the information provided is consistent with the 
                information in the records of the Commissioner:
                            (i) The name, date of birth, and social 
                        security number of each individual for whom 
                        such information was provided under subsection 
                        (b)(2).
                            (ii) The attestation of an individual that 
                        the individual is a citizen.
                    (B) Secretary of homeland security.--
                            (i) In general.--In the case of an 
                        individual--
                                    (I) who attests that the individual 
                                is an alien lawfully present in the 
                                United States; or
                                    (II) who attests that the 
                                individual is a citizen but with 
                                respect to whom the Commissioner of 
                                Social Security has notified the 
                                Secretary under subsection (e)(3) that 
                                the attestation is inconsistent with 
                                information in the records maintained 
                                by the Commissioner;
                        the Secretary shall submit to the Secretary of 
                        Homeland Security the information described in 
                        clause (ii) for a determination as to whether 
                        the information provided is consistent with the 
                        information in the records of the Secretary of 
                        Homeland Security.
                            (ii) Information.--The information 
                        described in clause (ii) is the following:
                                    (I) The name, date of birth, and 
                                any identifying information with 
                                respect to the individual's immigration 
                                status provided under subsection 
                                (b)(2).
                                    (II) The attestation that the 
                                individual is an alien lawfully present 
                                in the United States or in the case of 
                                an individual described in clause 
                                (i)(II), the attestation that the 
                                individual is a citizen.
            (3) Eligibility for tax credit and cost-sharing 
        reduction.--The Secretary shall submit the information 
        described in subsection (b)(3)(A) provided under paragraph (3), 
        (4), or (5) of subsection (b) to the Secretary of the Treasury 
        for verification of household income and family size for 
        purposes of eligibility.
            (4) Methods.--
                    (A) In general.--The Secretary, in consultation 
                with the Secretary of the Treasury, the Secretary of 
                Homeland Security, and the Commissioner of Social 
                Security, shall provide that verifications and 
                determinations under this subsection shall be done--
                            (i) through use of an on-line system or 
                        otherwise for the electronic submission of, and 
                        response to, the information submitted under 
                        this subsection with respect to an applicant; 
                        or
                            (ii) by determining the consistency of the 
                        information submitted with the information 
                        maintained in the records of the Secretary of 
                        the Treasury, the Secretary of Homeland 
                        Security, or the Commissioner of Social 
                        Security through such other method as is 
                        approved by the Secretary.
                    (B) Flexibility.--The Secretary may modify the 
                methods used under the program established by this 
                section for the Exchange and verification of 
                information if the Secretary determines such 
                modifications would reduce the administrative costs and 
                burdens on the applicant, including allowing an 
                applicant to request the Secretary of the Treasury to 
                provide the information described in paragraph (3) 
                directly to the Exchange or to the Secretary. The 
                Secretary shall not make any such modification unless 
                the Secretary determines that any applicable 
                requirements under this section and section 6103 of the 
                Internal Revenue Code of 1986 with respect to the 
                confidentiality, disclosure, maintenance, or use of 
                information will be met.
    (d) Verification by Secretary.--In the case of information provided 
under subsection (b) that is not required under subsection (c) to be 
submitted to another person for verification, the Secretary shall 
verify the accuracy of such information in such manner as the Secretary 
determines appropriate, including delegating responsibility for 
verification to the Exchange.
    (e) Actions Relating to Verification.--
            (1) In general.--Each person to whom the Secretary provided 
        information under subsection (c) shall report to the Secretary 
        under the method established under subsection (c)(4) the 
        results of its verification and the Secretary shall notify the 
        Exchange of such results. Each person to whom the Secretary 
        provided information under subsection (d) shall report to the 
        Secretary in such manner as the Secretary determines 
        appropriate.
            (2) Verification.--
                    (A) Eligibility for enrollment and premium tax 
                credits and cost-sharing reductions.--If information 
                provided by an applicant under paragraphs (1), (2), 
                (3), and (4) of subsection (b) is verified under 
                subsections (c) and (d)--
                            (i) the individual's eligibility to enroll 
                        through the Exchange and to apply for premium 
                        tax credits and cost-sharing reductions shall 
                        be satisfied; and
                            (ii) the Secretary shall, if applicable, 
                        notify the Secretary of the Treasury under 
                        section 1412(c) of the amount of any advance 
                        payment to be made.
                    (B) Exemption from individual responsibility.--If 
                information provided by an applicant under subsection 
                (b)(5) is verified under subsections (c) and (d), the 
                Secretary shall issue the certification of exemption 
                described in section 1311(d)(4)(H).
            (3) Inconsistencies involving attestation of citizenship or 
        lawful presence.--If the information provided by any applicant 
        under subsection (b)(2) is inconsistent with information in the 
        records maintained by the Commissioner of Social Security or 
        Secretary of Homeland Security, whichever is applicable, the 
        applicant's eligibility will be determined in the same manner 
        as an individual's eligibility under the medicaid program is 
        determined under section 1902(ee) of the Social Security Act 
        (as in effect on January 1, 2010).
            (4) Inconsistencies involving other information.--
                    (A) In general.--If the information provided by an 
                applicant under subsection (b) (other than subsection 
                (b)(2)) is inconsistent with information in the records 
                maintained by persons under subsection (c) or is not 
                verified under subsection (d), the Secretary shall 
                notify the Exchange and the Exchange shall take the 
                following actions:
                            (i) Reasonable effort.--The Exchange shall 
                        make a reasonable effort to identify and 
                        address the causes of such inconsistency, 
                        including through typographical or other 
                        clerical errors, by contacting the applicant to 
                        confirm the accuracy of the information, and by 
                        taking such additional actions as the 
                        Secretary, through regulation or other 
                        guidance, may identify.
                            (ii) Notice and opportunity to correct.--In 
                        the case the inconsistency or inability to 
                        verify is not resolved under subparagraph (A), 
                        the Exchange shall--
                                    (I) notify the applicant of such 
                                fact;
                                    (II) provide the applicant an 
                                opportunity to either present 
                                satisfactory documentary evidence or 
                                resolve the inconsistency with the 
                                person verifying the information under 
                                subsection (c) or (d) during the 90-day 
                                period beginning the date on which the 
                                notice required under subclause (I) is 
                                sent to the applicant.
                        The Secretary may extend the 90-day period 
                        under subclause (II) for enrollments occurring 
                        during 2014.
                    (B) Specific actions not involving citizenship or 
                lawful presence.--
                            (i) In general.--Except as provided in 
                        paragraph (3), the Exchange shall, during any 
                        period before the close of the period under 
                        subparagraph (A)(ii)(II), make any 
                        determination under paragraphs (2), (3), and 
                        (4) of subsection (a) on the basis of the 
                        information contained on the application.
                            (ii) Eligibility or amount of credit or 
                        reduction.--If an inconsistency involving the 
                        eligibility for, or amount of, any premium tax 
                        credit or cost-sharing reduction is unresolved 
                        under this subsection as of the close of the 
                        period under subparagraph (A)(ii)(II), the 
                        Exchange shall notify the applicant of the 
                        amount (if any) of the credit or reduction that 
                        is determined on the basis of the records 
                        maintained by persons under subsection (c).
                            (iii) Employer affordability.--If the 
                        Secretary notifies an Exchange that an enrollee 
                        is eligible for a premium tax credit under 
                        section 36B of such Code or cost-sharing 
                        reduction under section 1402 because the 
                        enrollee's (or related individual's) employer 
                        does not provide minimum essential coverage 
                        through an employer-sponsored plan or that the 
                        employer does provide that coverage but it is 
                        not affordable coverage, the Exchange shall 
                        notify the employer of such fact and that the 
                        employer may be liable for the payment assessed 
                        under section 4980H of such Code.
                            (iv) Exemption.--In any case where the 
                        inconsistency involving, or inability to 
                        verify, information provided under subsection 
                        (b)(5) is not resolved as of the close of the 
                        period under subparagraph (A)(ii)(II), the 
                        Exchange shall notify an applicant that no 
                        certification of exemption from any requirement 
                        or payment under section 5000A of such Code 
                        will be issued.
                    (C) Appeals process.--The Exchange shall also 
                notify each person receiving notice under this 
                paragraph of the appeals processes established under 
                subsection (f).
    (f) Appeals and Redeterminations.--
            (1) In general.--The Secretary, in consultation with the 
        Secretary of the Treasury, the Secretary of Homeland Security, 
        and the Commissioner of Social Security, shall establish 
        procedures by which the Secretary or one of such other Federal 
        officers--
                    (A) hears and makes decisions with respect to 
                appeals of any determination under subsection (e); and
                    (B) redetermines eligibility on a periodic basis in 
                appropriate circumstances.
            (2) Employer liability.--
                    (A) In general.--The Secretary shall establish a 
                separate appeals process for employers who are notified 
                under subsection (e)(4)(C) that the employer may be 
                liable for a tax imposed by section 4980H of the 
                Internal Revenue Code of 1986 with respect to an 
                employee because of a determination that the employer 
                does not provide minimum essential coverage through an 
                employer-sponsored plan or that the employer does 
                provide that coverage but it is not affordable coverage 
                with respect to an employee. Such process shall provide 
                an employer the opportunity to--
                            (i) present information to the Exchange for 
                        review of the determination either by the 
                        Exchange or the person making the 
                        determination, including evidence of the 
                        employer-sponsored plan and employer 
                        contributions to the plan; and
                            (ii) have access to the data used to make 
                        the determination to the extent allowable by 
                        law.
                Such process shall be in addition to any rights of 
                appeal the employer may have under subtitle F of such 
                Code.
                    (B) Confidentiality.--Notwithstanding any provision 
                of this title (or the amendments made by this title) or 
                section 6103 of the Internal Revenue Code of 1986, an 
                employer shall not be entitled to any taxpayer return 
                information with respect to an employee for purposes of 
                determining whether the employer is subject to the 
                penalty under section 4980H of such Code with respect 
                to the employee, except that--
                            (i) the employer may be notified as to the 
                        name of an employee and whether or not the 
                        employee's income is above or below the 
                        threshold by which the affordability of an 
                        employer's health insurance coverage is 
                        measured; and
                            (ii) this subparagraph shall not apply to 
                        an employee who provides a waiver (at such time 
                        and in such manner as the Secretary may 
                        prescribe) authorizing an employer to have 
                        access to the employee's taxpayer return 
                        information.
    (g) Confidentiality of Applicant Information.--
            (1) In general.--An applicant for insurance coverage or for 
        a premium tax credit or cost-sharing reduction shall be 
        required to provide only the information strictly necessary to 
        authenticate identity, determine eligibility, and determine the 
        amount of the credit or reduction.
            (2) Receipt of information.--Any person who receives 
        information provided by an applicant under subsection (b) 
        (whether directly or by another person at the request of the 
        applicant), or receives information from a Federal agency under 
        subsection (c), (d), or (e), shall--
                    (A) use the information only for the purposes of, 
                and to the extent necessary in, ensuring the efficient 
                operation of the Exchange, including verifying the 
                eligibility of an individual to enroll through an 
                Exchange or to claim a premium tax credit or cost-
                sharing reduction or the amount of the credit or 
                reduction; and
                    (B) not disclose the information to any other 
                person except as provided in this section.
    (h) Penalties.--
            (1) False or fraudulent information.--
                    (A) Civil penalty.--
                            (i) In general.--If--
                                    (I) any person fails to provides 
                                correct information under subsection 
                                (b); and
                                    (II) such failure is attributable 
                                to negligence or disregard of any rules 
                                or regulations of the Secretary,
                        such person shall be subject, in addition to 
                        any other penalties that may be prescribed by 
                        law, to a civil penalty of not more than 
                        $25,000 with respect to any failures involving 
                        an application for a plan year. For purposes of 
                        this subparagraph, the terms ``negligence'' and 
                        ``disregard'' shall have the same meanings as 
                        when used in section 6662 of the Internal 
                        Revenue Code of 1986.
                            (ii) Reasonable cause exception.--No 
                        penalty shall be imposed under clause (i) if 
                        the Secretary determines that there was a 
                        reasonable cause for the failure and that the 
                        person acted in good faith.
                    (B) Knowing and willful violations.--Any person who 
                knowingly and willfully provides false or fraudulent 
                information under subsection (b) shall be subject, in 
                addition to any other penalties that may be prescribed 
                by law, to a civil penalty of not more than $250,000.
            (2) Improper use or disclosure of information.--Any person 
        who knowingly and willfully uses or discloses information in 
        violation of subsection (g) shall be subject, in addition to 
        any other penalties that may be prescribed by law, to a civil 
        penalty of not more than $25,000.
            (3) Limitations on liens and levies.--The Secretary (or, if 
        applicable, the Attorney General of the United States) shall 
        not--
                    (A) file notice of lien with respect to any 
                property of a person by reason of any failure to pay 
                the penalty imposed by this subsection; or
                    (B) levy on any such property with respect to such 
                failure.
    (i) Study of Administration of Employer Responsibility.--
            (1) In general.--The Secretary of Health and Human Services 
        shall, in consultation with the Secretary of the Treasury, 
        conduct a study of the procedures that are necessary to ensure 
        that in the administration of this title and section 4980H of 
        the Internal Revenue Code of 1986 (as added by section 1513) 
        that the following rights are protected:
                    (A) The rights of employees to preserve their right 
                to confidentiality of their taxpayer return information 
                and their right to enroll in a qualified health plan 
                through an Exchange if an employer does not provide 
                affordable coverage.
                    (B) The rights of employers to adequate due process 
                and access to information necessary to accurately 
                determine any payment assessed on employers.
            (2) Report.--Not later than January 1, 2013, the Secretary 
        of Health and Human Services shall report the results of the 
        study conducted under paragraph (1), including any 
        recommendations for legislative changes, to the Committees on 
        Finance and Health, Education, Labor and Pensions of the Senate 
        and the Committees of Education and Labor and Ways and Means of 
        the House of Representatives.

SEC. 1412. ADVANCE DETERMINATION AND PAYMENT OF PREMIUM TAX CREDITS AND 
              COST-SHARING REDUCTIONS.

    (a) In General.--The Secretary, in consultation with the Secretary 
of the Treasury, shall establish a program under which--
            (1) upon request of an Exchange, advance determinations are 
        made under section 1411 with respect to the income eligibility 
        of individuals enrolling in a qualified health plan in the 
        individual market through the Exchange for the premium tax 
        credit allowable under section 36B of the Internal Revenue Code 
        of 1986 and the cost-sharing reductions under section 1402;
            (2) the Secretary notifies--
                    (A) the Exchange and the Secretary of the Treasury 
                of the advance determinations; and
                    (B) the Secretary of the Treasury of the name and 
                employer identification number of each employer with 
                respect to whom 1 or more employee of the employer were 
                determined to be eligible for the premium tax credit 
                under section 36B of the Internal Revenue Code of 1986 
                and the cost-sharing reductions under section 1402 
                because--
                            (i) the employer did not provide minimum 
                        essential coverage; or
                            (ii) the employer provided such minimum 
                        essential coverage but it was determined under 
                        section 36B(c)(2)(C) of such Code to either be 
                        unaffordable to the employee or not provide the 
                        required minimum actuarial value; and
            (3) the Secretary of the Treasury makes advance payments of 
        such credit or reductions to the issuers of the qualified 
        health plans in order to reduce the premiums payable by 
        individuals eligible for such credit.
    (b) Advance Determinations.--
            (1) In general.--The Secretary shall provide under the 
        program established under subsection (a) that advance 
        determination of eligibility with respect to any individual 
        shall be made--
                    (A) during the annual open enrollment period 
                applicable to the individual (or such other enrollment 
                period as may be specified by the Secretary); and
                    (B) on the basis of the individual's household 
                income for the most recent taxable year for which the 
                Secretary, after consultation with the Secretary of the 
                Treasury, determines information is available.
            (2) Changes in circumstances.--The Secretary shall provide 
        procedures for making advance determinations on the basis of 
        information other than that described in paragraph (1)(B) in 
        cases where information included with an application form 
        demonstrates substantial changes in income, changes in family 
        size or other household circumstances, change in filing status, 
        the filing of an application for unemployment benefits, or 
        other significant changes affecting eligibility, including--
                    (A) allowing an individual claiming a decrease of 
                20 percent or more in income, or filing an application 
                for unemployment benefits, to have eligibility for the 
                credit determined on the basis of household income for 
                a later period or on the basis of the individual's 
                estimate of such income for the taxable year; and
                    (B) the determination of household income in cases 
                where the taxpayer was not required to file a return of 
                tax imposed by this chapter for the second preceding 
                taxable year.
    (c) Payment of Premium Tax Credits and Cost-sharing Reductions.--
            (1) In general.--The Secretary shall notify the Secretary 
        of the Treasury and the Exchange through which the individual 
        is enrolling of the advance determination under section 1411.
            (2) Premium tax credit.--
                    (A) In general.--The Secretary of the Treasury 
                shall make the advance payment under this section of 
                any premium tax credit allowed under section 36B of the 
                Internal Revenue Code of 1986 to the issuer of a 
                qualified health plan on a monthly basis (or such other 
                periodic basis as the Secretary may provide).
                    (B) Issuer responsibilities.--An issuer of a 
                qualified health plan receiving an advance payment with 
                respect to an individual enrolled in the plan shall--
                            (i) reduce the premium charged the insured 
                        for any period by the amount of the advance 
                        payment for the period;
                            (ii) notify the Exchange and the Secretary 
                        of such reduction;
                            (iii) include with each billing statement 
                        the amount by which the premium for the plan 
                        has been reduced by reason of the advance 
                        payment; and
                            (iv) in the case of any nonpayment of 
                        premiums by the insured--
                                    (I) notify the Secretary of such 
                                nonpayment; and
                                    (II) allow a 3-month grace period 
                                for nonpayment of premiums before 
                                discontinuing coverage.
            (3) Cost-sharing reductions.--The Secretary shall also 
        notify the Secretary of the Treasury and the Exchange under 
        paragraph (1) if an advance payment of the cost-sharing 
        reductions under section 1402 is to be made to the issuer of 
        any qualified health plan with respect to any individual 
        enrolled in the plan. The Secretary of the Treasury shall make 
        such advance payment at such time and in such amount as the 
        Secretary specifies in the notice.
    (d) No Federal Payments for Individuals Not Lawfully Present.--
Nothing in this subtitle or the amendments made by this subtitle allows 
Federal payments, credits, or cost-sharing reductions for individuals 
who are not lawfully present in the United States.
    (e) State Flexibility.--Nothing in this subtitle or the amendments 
made by this subtitle shall be construed to prohibit a State from 
making payments to or on behalf of an individual for coverage under a 
qualified health plan offered through an Exchange that are in addition 
to any credits or cost-sharing reductions allowable to the individual 
under this subtitle and such amendments.

SEC. 1413. STREAMLINING OF PROCEDURES FOR ENROLLMENT THROUGH AN 
              EXCHANGE AND STATE MEDICAID, CHIP, AND HEALTH SUBSIDY 
              PROGRAMS.

    (a) In General.--The Secretary shall establish a system meeting the 
requirements of this section under which residents of each State may 
apply for enrollment in, receive a determination of eligibility for 
participation in, and continue participation in, applicable State 
health subsidy programs. Such system shall ensure that if an individual 
applying to an Exchange is found through screening to be eligible for 
medical assistance under the State medicaid plan under title XIX, or 
eligible for enrollment under a State children's health insurance 
program (CHIP) under title XXI of such Act, the individual is enrolled 
for assistance under such plan or program.
    (b) Requirements Relating to Forms and Notice.--
            (1) Requirements relating to forms.--
                    (A) In general.--The Secretary shall develop and 
                provide to each State a single, streamlined form that--
                            (i) may be used to apply for all applicable 
                        State health subsidy programs within the State;
                            (ii) may be filed online, in person, by 
                        mail, or by telephone;
                            (iii) may be filed with an Exchange or with 
                        State officials operating one of the other 
                        applicable State health subsidy programs; and
                            (iv) is structured to maximize an 
                        applicant's ability to complete the form 
                        satisfactorily, taking into account the 
                        characteristics of individuals who qualify for 
                        applicable State health subsidy programs.
                    (B) State authority to establish form.--A State may 
                develop and use its own single, streamlined form as an 
                alternative to the form developed under subparagraph 
                (A) if the alternative form is consistent with 
                standards promulgated by the Secretary under this 
                section.
                    (C) Supplemental eligibility forms.--The Secretary 
                may allow a State to use a supplemental or alternative 
                form in the case of individuals who apply for 
                eligibility that is not determined on the basis of the 
                household income (as defined in section 36B of the 
                Internal Revenue Code of 1986).
            (2) Notice.--The Secretary shall provide that an applicant 
        filing a form under paragraph (1) shall receive notice of 
        eligibility for an applicable State health subsidy program 
        without any need to provide additional information or paperwork 
        unless such information or paperwork is specifically required 
        by law when information provided on the form is inconsistent 
        with data used for the electronic verification under paragraph 
        (3) or is otherwise insufficient to determine eligibility.
    (c) Requirements Relating to Eligibility Based on Data Exchanges.--
            (1) Development of secure interfaces.--Each State shall 
        develop for all applicable State health subsidy programs a 
        secure, electronic interface allowing an exchange of data 
        (including information contained in the application forms 
        described in subsection (b)) that allows a determination of 
        eligibility for all such programs based on a single 
        application. Such interface shall be compatible with the method 
        established for data verification under section 1411(c)(4).
            (2) Data matching program.--Each applicable State health 
        subsidy program shall participate in a data matching 
        arrangement for determining eligibility for participation in 
        the program under paragraph (3) that--
                    (A) provides access to data described in paragraph 
                (3);
                    (B) applies only to individuals who--
                            (i) receive assistance from an applicable 
                        State health subsidy program; or
                            (ii) apply for such assistance--
                                    (I) by filing a form described in 
                                subsection (b); or
                                    (II) by requesting a determination 
                                of eligibility and authorizing 
                                disclosure of the information described 
                                in paragraph (3) to applicable State 
                                health coverage subsidy programs for 
                                purposes of determining and 
                                establishing eligibility; and
                    (C) consistent with standards promulgated by the 
                Secretary, including the privacy and data security 
                safeguards described in section 1942 of the Social 
                Security Act or that are otherwise applicable to such 
                programs.
            (3) Determination of eligibility.--
                    (A) In general.--Each applicable State health 
                subsidy program shall, to the maximum extent 
                practicable--
                            (i) establish, verify, and update 
                        eligibility for participation in the program 
                        using the data matching arrangement under 
                        paragraph (2); and
                            (ii) determine such eligibility on the 
                        basis of reliable, third party data, including 
                        information described in sections 1137, 453(i), 
                        and 1942(a) of the Social Security Act, 
                        obtained through such arrangement.
                    (B) Exception.--This paragraph shall not apply in 
                circumstances with respect to which the Secretary 
                determines that the administrative and other costs of 
                use of the data matching arrangement under paragraph 
                (2) outweigh its expected gains in accuracy, 
                efficiency, and program participation.
            (4) Secretarial standards.--The Secretary shall, after 
        consultation with persons in possession of the data to be 
        matched and representatives of applicable State health subsidy 
        programs, promulgate standards governing the timing, contents, 
        and procedures for data matching described in this subsection. 
        Such standards shall take into account administrative and other 
        costs and the value of data matching to the establishment, 
        verification, and updating of eligibility for applicable State 
        health subsidy programs.
    (d) Administrative Authority.--
            (1) Agreements.--Subject to section 1411 and section 
        6103(l)(21) of the Internal Revenue Code of 1986 and any other 
        requirement providing safeguards of privacy and data integrity, 
        the Secretary may establish model agreements, and enter into 
        agreements, for the sharing of data under this section.
            (2) Authority of exchange to contract out.--Nothing in this 
        section shall be construed to--
                    (A) prohibit contractual arrangements through which 
                a State medicaid agency determines eligibility for all 
                applicable State health subsidy programs, but only if 
                such agency complies with the Secretary's requirements 
                ensuring reduced administrative costs, eligibility 
                errors, and disruptions in coverage; or
                    (B) change any requirement under title XIX that 
                eligibility for participation in a State's medicaid 
                program must be determined by a public agency.
    (e) Applicable State Health Subsidy Program.--In this section, the 
term ``applicable State health subsidy program'' means--
            (1) the program under this title for the enrollment in 
        qualified health plans offered through an Exchange, including 
        the premium tax credits under section 36B of the Internal 
        Revenue Code of 1986 and cost-sharing reductions under section 
        1402;
            (2) a State medicaid program under title XIX of the Social 
        Security Act;
            (3) a State children's health insurance program (CHIP) 
        under title XXI of such Act; and
            (4) a State program under section 1331 establishing 
        qualified basic health plans.

SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR 
              CERTAIN PROGRAMS.

    (a) Disclosure of Taxpayer Return Information and Social Security 
Numbers.--
            (1) Taxpayer return information.--Subsection (l) of section 
        6103 of the Internal Revenue Code of 1986 is amended by adding 
        at the end the following new paragraph:
            ``(21) Disclosure of return information to carry out 
        eligibility requirements for certain programs.--
                    ``(A) In general.--The Secretary, upon written 
                request from the Secretary of Health and Human 
                Services, shall disclose to officers, employees, and 
                contractors of the Department of Health and Human 
                Services return information of any taxpayer whose 
                income is relevant in determining any premium tax 
                credit under section 36B or any cost-sharing reduction 
                under section 1402 of the Patient Protection and 
                Affordable Care Act or eligibility for participation in 
                a State medicaid program under title XIX of the Social 
                Security Act, a State's children's health insurance 
                program under title XXI of the Social Security Act, or 
                a basic health program under section 1331 of Patient 
                Protection and Affordable Care Act. Such return 
                information shall be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer,
                            ``(iii) the number of individuals for whom 
                        a deduction is allowed under section 151 with 
                        respect to the taxpayer (including the taxpayer 
                        and the taxpayer's spouse),
                            ``(iv) the modified gross income (as 
                        defined in section 36B) of such taxpayer and 
                        each of the other individuals included under 
                        clause (iii) who are required to file a return 
                        of tax imposed by chapter 1 for the taxable 
                        year,
                            ``(v) such other information as is 
                        prescribed by the Secretary by regulation as 
                        might indicate whether the taxpayer is eligible 
                        for such credit or reduction (and the amount 
                        thereof), and
                            ``(vi) the taxable year with respect to 
                        which the preceding information relates or, if 
                        applicable, the fact that such information is 
                        not available.
                    ``(B) Information to exchange and state agencies.--
                The Secretary of Health and Human Services may disclose 
                to an Exchange established under the Patient Protection 
                and Affordable Care Act or its contractors, or to a 
                State agency administering a State program described in 
                subparagraph (A) or its contractors, any inconsistency 
                between the information provided by the Exchange or 
                State agency to the Secretary and the information 
                provided to the Secretary under subparagraph (A).
                    ``(C) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) or (B) may be used by officers, 
                employees, and contractors of the Department of Health 
                and Human Services, an Exchange, or a State agency only 
                for the purposes of, and to the extent necessary in--
                            ``(i) establishing eligibility for 
                        participation in the Exchange, and verifying 
                        the appropriate amount of, any credit or 
                        reduction described in subparagraph (A),
                            ``(ii) determining eligibility for 
                        participation in the State programs described 
                        in subparagraph (A).''.
            (2) Social security numbers.--Section 205(c)(2)(C) of the 
        Social Security Act is amended by adding at the end the 
        following new clause:
                            ``(x) The Secretary of Health and Human 
                        Services, and the Exchanges established under 
                        section 1311 of the Patient Protection and 
                        Affordable Care Act, are authorized to collect 
                        and use the names and social security account 
                        numbers of individuals as required to 
                        administer the provisions of, and the 
                        amendments made by, the such Act.''.
    (b) Confidentiality and Disclosure.--Paragraph (3) of section 
6103(a) of such Code is amended by striking ``or (20)'' and inserting 
``(20), or (21)''.
    (c) Procedures and Recordkeeping Related to Disclosures.--Paragraph 
(4) of section 6103(p) of such Code is amended--
            (1) by inserting ``, or any entity described in subsection 
        (l)(21),'' after ``or (20)'' in the matter preceding 
        subparagraph (A),
            (2) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
            (3) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (20)'' both places it appears in the 
        matter after subparagraph (F).
    (d) Unauthorized Disclosure or Inspection.--Paragraph (2) of 
section 7213(a) of such Code is amended by striking ``or (20)'' and 
inserting ``(20), or (21)''.

SEC. 1415. PREMIUM TAX CREDIT AND COST-SHARING REDUCTION PAYMENTS 
              DISREGARDED FOR FEDERAL AND FEDERALLY-ASSISTED PROGRAMS.

    For purposes of determining the eligibility of any individual for 
benefits or assistance, or the amount or extent of benefits or 
assistance, under any Federal program or under any State or local 
program financed in whole or in part with Federal funds--
            (1) any credit or refund allowed or made to any individual 
        by reason of section 36B of the Internal Revenue Code of 1986 
        (as added by section 1401) shall not be taken into account as 
        income and shall not be taken into account as resources for the 
        month of receipt and the following 2 months; and
            (2) any cost-sharing reduction payment or advance payment 
        of the credit allowed under such section 36B that is made under 
        section 1402 or 1412 shall be treated as made to the qualified 
        health plan in which an individual is enrolled and not to that 
        individual.

                   PART II--SMALL BUSINESS TAX CREDIT

SEC. 1421. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL 
              BUSINESSES.

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

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

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible small employer, the small employer health insurance credit 
determined under this section for any taxable year in the credit period 
is the amount determined under subsection (b).
    ``(b) Health Insurance Credit Amount.--Subject to subsection (c), 
the amount determined under this subsection with respect to any 
eligible small employer is equal to 50 percent (35 percent in the case 
of a tax-exempt eligible small employer) of the lesser of--
            ``(1) the aggregate amount of nonelective contributions the 
        employer made on behalf of its employees during the taxable 
        year under the arrangement described in subsection (d)(4) for 
        premiums for qualified health plans offered by the employer to 
        its employees through an Exchange, or
            ``(2) the aggregate amount of nonelective contributions 
        which the employer would have made during the taxable year 
        under the arrangement if each employee taken into account under 
        paragraph (1) had enrolled in a qualified health plan which had 
        a premium equal to the average premium (as determined by the 
        Secretary of Health and Human Services) for the small group 
        market in the rating area in which the employee enrolls for 
        coverage.
    ``(c) Phaseout of Credit Amount Based on Number of Employees and 
Average Wages.--The amount of the credit determined under subsection 
(b) without regard to this subsection shall be reduced (but not below 
zero) by the sum of the following amounts:
            ``(1) Such amount multiplied by a fraction the numerator of 
        which is the total number of full-time equivalent employees of 
        the employer in excess of 10 and the denominator of which is 
        15.
            ``(2) Such amount multiplied by a fraction the numerator of 
        which is the average annual wages of the employer in excess of 
        the dollar amount in effect under subsection (d)(3)(B) and the 
        denominator of which is such dollar amount.
    ``(d) Eligible Small Employer.--For purposes of this section--
            ``(1) In general.--The term `eligible small employer' 
        means, with respect to any taxable year, an employer--
                    ``(A) which has no more than 25 full-time 
                equivalent employees for the taxable year,
                    ``(B) the average annual wages of which do not 
                exceed an amount equal to twice the dollar amount in 
                effect under paragraph (3)(B) for the taxable year, and
                    ``(C) which has in effect an arrangement described 
                in paragraph (4).
            ``(2) Full-time equivalent employees.--
                    ``(A) In general.--The term `full-time equivalent 
                employees' means a number of employees equal to the 
                number determined by dividing--
                            ``(i) the total number of hours of service 
                        for which wages were paid by the employer to 
                        employees during the taxable year, by
                            ``(ii) 2,080.
                Such number shall be rounded to the next lowest whole 
                number if not otherwise a whole number.
                    ``(B) Excess hours not counted.--If an employee 
                works in excess of 2,080 hours of service during any 
                taxable year, such excess shall not be taken into 
                account under subparagraph (A).
                    ``(C) Hours of service.--The Secretary, in 
                consultation with the Secretary of Labor, shall 
                prescribe such regulations, rules, and guidance as may 
                be necessary to determine the hours of service of an 
                employee, including rules for the application of this 
                paragraph to employees who are not compensated on an 
                hourly basis.
            ``(3) Average annual wages.--
                    ``(A) In general.--The average annual wages of an 
                eligible small employer for any taxable year is the 
                amount determined by dividing--
                            ``(i) the aggregate amount of wages which 
                        were paid by the employer to employees during 
                        the taxable year, by
                            ``(ii) the number of full-time equivalent 
                        employees of the employee determined under 
                        paragraph (2) for the taxable year.
                Such amount shall be rounded to the next lowest 
                multiple of $1,000 if not otherwise such a multiple.
                    ``(B) Dollar amount.--For purposes of paragraph 
                (1)(B)--
                            ``(i) 2011, 2012, and 2013.--The dollar 
                        amount in effect under this paragraph for 
                        taxable years beginning in 2011, 2012, or 2013 
                        is $20,000.
                            ``(ii) Subsequent years.--In the case of a 
                        taxable year beginning in a calendar year after 
                        2013, the dollar amount in effect under this 
                        paragraph shall be equal to $20,000, multiplied 
                        by the cost-of-living adjustment determined 
                        under section 1(f)(3) for the calendar year, 
                        determined by substituting `calendar year 2012' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
            ``(4) Contribution arrangement.--An arrangement is 
        described in this paragraph if it requires an eligible small 
        employer to make a nonelective contribution on behalf of each 
        employee who enrolls in a qualified health plan offered to 
        employees by the employer through an exchange in an amount 
        equal to a uniform percentage (not less than 50 percent) of the 
        premium cost of the qualified health plan.
            ``(5) Seasonal worker hours and wages not counted.--For 
        purposes of this subsection--
                    ``(A) In general.--The number of hours of service 
                worked by, and wages paid to, a seasonal worker of an 
                employer shall not be taken into account in determining 
                the full-time equivalent employees and average annual 
                wages of the employer unless the worker works for the 
                employer on more than 120 days during the taxable year.
                    ``(B) Definition of seasonal worker.--The term 
                `seasonal worker' means a worker who performs labor or 
                services on a seasonal basis as defined by the 
                Secretary of Labor, including workers covered by 
                section 500.20(s)(1) of title 29, Code of Federal 
                Regulations and retail workers employed exclusively 
                during holiday seasons.
    ``(e) Other Rules and Definitions.--For purposes of this section--
            ``(1) Employee.--
                    ``(A) Certain employees excluded.--The term 
                `employee' shall not include--
                            ``(i) an employee within the meaning of 
                        section 401(c)(1),
                            ``(ii) any 2-percent shareholder (as 
                        defined in section 1372(b)) of an eligible 
                        small business which is an S corporation,
                            ``(iii) any 5-percent owner (as defined in 
                        section 416(i)(1)(B)(i)) of an eligible small 
                        business, or
                            ``(iv) any individual who bears any of the 
                        relationships described in subparagraphs (A) 
                        through (G) of section 152(d)(2) to, or is a 
                        dependent described in section 152(d)(2)(H) of, 
                        an individual described in clause (i), (ii), or 
                        (iii).
                    ``(B) Leased employees.--The term `employee' shall 
                include a leased employee within the meaning of section 
                414(n).
            ``(2) Credit period.--The term `credit period' means, with 
        respect to any eligible small employer, the 2-consecutive-
        taxable year period beginning with the 1st taxable year in 
        which the employer (or any predecessor) offers 1 or more 
        qualified health plans to its employees through an Exchange.
            ``(3) Nonelective contribution.--The term `nonelective 
        contribution' means an employer contribution other than an 
        employer contribution pursuant to a salary reduction 
        arrangement.
            ``(4) Wages.--The term `wages' has the meaning given such 
        term by section 3121(a) (determined without regard to any 
        dollar limitation contained in such section).
            ``(5) Aggregation and other rules made applicable.--
                    ``(A) Aggregation rules.--All employers treated as 
                a single employer under subsection (b), (c), (m), or 
                (o) of section 414 shall be treated as a single 
                employer for purposes of this section.
                    ``(B) Other rules.--Rules similar to the rules of 
                subsections (c), (d), and (e) of section 52 shall 
                apply.
    ``(f) Credit Made Available to Tax-exempt Eligible Small 
Employers.--
            ``(1) In general.--In the case of a tax-exempt eligible 
        small employer, there shall be treated as a credit allowable 
        under subpart C (and not allowable under this subpart) the 
        lesser of--
                    ``(A) the amount of the credit determined under 
                this section with respect to such employer, or
                    ``(B) the amount of the payroll taxes of the 
                employer during the calendar year in which the taxable 
                year begins.
            ``(2) Tax-exempt eligible small employer.--For purposes of 
        this section, the term `tax-exempt eligible small employer' 
        means an eligible small employer which is any organization 
        described in section 501(c) which is exempt from taxation under 
        section 501(a).
            ``(3) Payroll taxes.--For purposes of this subsection--
                    ``(A) In general.--The term `payroll taxes' means--
                            ``(i) amounts required to be withheld from 
                        the employees of the tax-exempt eligible small 
                        employer under section 3401(a),
                            ``(ii) amounts required to be withheld from 
                        such employees under section 3101(b), and
                            ``(iii) amounts of the taxes imposed on the 
                        tax-exempt eligible small employer under 
                        section 3111(b).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(g) Application of Section for Calendar Years 2011, 2012, and 
2013.--In the case of any taxable year beginning in 2011, 2012, or 
2013, the following modifications to this section shall apply in 
determining the amount of the credit under subsection (a):
            ``(1) No credit period required.--The credit shall be 
        determined without regard to whether the taxable year is in a 
        credit period and for purposes of applying this section to 
        taxable years beginning after 2013, no credit period shall be 
        treated as beginning with a taxable year beginning before 2014.
            ``(2) Amount of credit.--The amount of the credit 
        determined under subsection (b) shall be determined--
                    ``(A) by substituting `35 percent (25 percent in 
                the case of a tax-exempt eligible small employer)' for 
                `50 percent (35 percent in the case of a tax-exempt 
                eligible small employer)',
                    ``(B) by reference to an eligible small employer's 
                nonelective contributions for premiums paid for health 
                insurance coverage (within the meaning of section 
                9832(b)(1)) of an employee, and
                    ``(C) by substituting for the average premium 
                determined under subsection (b)(2) the amount the 
                Secretary of Health and Human Services determines is 
                the average premium for the small group market in the 
                State in which the employer is offering health 
                insurance coverage (or for such area within the State 
                as is specified by the Secretary).
            ``(3) Contribution arrangement.--An arrangement shall not 
        fail to meet the requirements of subsection (d)(4) solely 
        because it provides for the offering of insurance outside of an 
        Exchange.
    ``(h) Insurance Definitions.--Any term used in this section which 
is also used in the Public Health Service Act or subtitle A of title I 
of the Patient Protection and Affordable Care Act shall have the 
meaning given such term by such Act or subtitle.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations to prevent the avoidance of the 2-year limit on 
the credit period through the use of successor entities and the 
avoidance of the limitations under subsection (c) through the use of 
multiple entities.''.
    (b) Credit to Be Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (34), 
by striking the period at the end of paragraph (35) and inserting ``, 
plus'', and by inserting after paragraph (35) the following:
            ``(36) the small employer health insurance credit 
        determined under section 45R.''.
    (c) Credit Allowed Against Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by redesignating clauses (vi), (vii), and (viii) as 
clauses (vii), (viii), and (ix), respectively, and by inserting after 
clause (v) the following new clause:
                            ``(vi) the credit determined under section 
                        45R,''.
    (d) Disallowance of Deduction for Certain Expenses for Which Credit 
Allowed.--
            (1) In general.--Section 280C of the Internal Revenue Code 
        of 1986 (relating to disallowance of deduction for certain 
        expenses for which credit allowed), as amended by section 
        1401(b), is amended by adding at the end the following new 
        subsection:
    ``(h) Credit for Employee Health Insurance Expenses of Small 
Employers.--No deduction shall be allowed for that portion of the 
premiums for qualified health plans (as defined in section 1301(a) of 
the Patient Protection and Affordable Care Act), or for health 
insurance coverage in the case of taxable years beginning in 2011, 
2012, or 2013, paid by an employer which is equal to the amount of the 
credit determined under section 45R(a) with respect to the premiums.''.
            (2) Deduction for expiring credits.--Section 196(c) of such 
        Code is amended by striking ``and'' at the end of paragraph 
        (12), by striking the period at the end of paragraph (13) and 
        inserting ``, and'', and by adding at the end the following new 
        paragraph:
            ``(14) the small employer health insurance credit 
        determined under section 45R(a).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

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

           Subtitle F--Shared Responsibility for Health Care

                   PART I--INDIVIDUAL RESPONSIBILITY

SEC. 1501. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

    (a) Findings.--Congress makes the following findings:
            (1) In general.--The individual responsibility requirement 
        provided for in this section (in this subsection referred to as 
        the ``requirement'') is commercial and economic in nature, and 
        substantially affects interstate commerce, as a result of the 
        effects described in paragraph (2).
            (2) Effects on the national economy and interstate 
        commerce.--The effects described in this paragraph are the 
        following:
                    (A) The requirement regulates activity that is 
                commercial and economic in nature: economic and 
                financial decisions about how and when health care is 
                paid for, and when health insurance is purchased.
                    (B) Health insurance and health care services are a 
                significant part of the national economy. National 
                health spending is projected to increase from 
                $2,500,000,000,000, or 17.6 percent of the economy, in 
                2009 to $4,700,000,000,000 in 2019. Private health 
                insurance spending is projected to be $854,000,000,000 
                in 2009, and pays for medical supplies, drugs, and 
                equipment that are shipped in interstate commerce. 
                Since most health insurance is sold by national or 
                regional health insurance companies, health insurance 
                is sold in interstate commerce and claims payments flow 
                through interstate commerce.
                    (C) The requirement, together with the other 
                provisions of this Act, will add millions of new 
                consumers to the health insurance market, increasing 
                the supply of, and demand for, health care services. 
                According to the Congressional Budget Office, the 
                requirement will increase the number and share of 
                Americans who are insured.
                    (D) The requirement achieves near-universal 
                coverage by building upon and strengthening the private 
                employer-based health insurance system, which covers 
                176,000,000 Americans nationwide. In Massachusetts, a 
                similar requirement has strengthened private employer-
                based coverage: despite the economic downturn, the 
                number of workers offered employer-based coverage has 
                actually increased.
                    (E) Half of all personal bankruptcies are caused in 
                part by medical expenses. By significantly increasing 
                health insurance coverage, the requirement, together 
                with the other provisions of this Act, will improve 
                financial security for families.
                    (F) Under the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health 
                Service Act (42 U.S.C. 201 et seq.), and this Act, the 
                Federal Government has a significant role in regulating 
                health insurance which is in interstate commerce.
                    (G) Under sections 2704 and 2705 of the Public 
                Health Service Act (as added by section 1201 of this 
                Act), if there were no requirement, many individuals 
                would wait to purchase health insurance until they 
                needed care. By significantly increasing health 
                insurance coverage, the requirement, together with the 
                other provisions of this Act, will minimize this 
                adverse selection and broaden the health insurance risk 
                pool to include healthy individuals, which will lower 
                health insurance premiums. The requirement is essential 
                to creating effective health insurance markets in which 
                improved health insurance products that are guaranteed 
                issue and do not exclude coverage of pre-existing 
                conditions can be sold.
                    (H) Administrative costs for private health 
                insurance, which were $90,000,000,000 in 2006, are 26 
                to 30 percent of premiums in the current individual and 
                small group markets. By significantly increasing health 
                insurance coverage and the size of purchasing pools, 
                which will increase economies of scale, the 
                requirement, together with the other provisions of this 
                Act, will significantly reduce administrative costs and 
                lower health insurance premiums. The requirement is 
                essential to creating effective health insurance 
                markets that do not require underwriting and eliminate 
                its associated administrative costs.
            (3) Supreme court ruling.--In United States v. South-
        Eastern Underwriters Association (322 U.S. 533 (1944)), the 
        Supreme Court of the United States ruled that insurance is 
        interstate commerce subject to Federal regulation.
    (b) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

        ``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE

``Sec. 5000A. Requirement to maintain minimum essential coverage.

``SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

    ``(a) Requirement to Maintain Minimum Essential Coverage.--An 
applicable individual shall for each month beginning after 2013 ensure 
that the individual, and any dependent of the individual who is an 
applicable individual, is covered under minimum essential coverage for 
such month.
    ``(b) Shared Responsibility Payment.--
            ``(1) In general.--If an applicable individual fails to 
        meet the requirement of subsection (a) for 1 or more months 
        during any calendar year beginning after 2013, then, except as 
        provided in subsection (d), there is hereby imposed a penalty 
        with respect to the individual in the amount determined under 
        subsection (c).
            ``(2) Inclusion with return.--Any penalty imposed by this 
        section with respect to any month shall be included with a 
        taxpayer's return under chapter 1 for the taxable year which 
        includes such month.
            ``(3) Payment of penalty.--If an individual with respect to 
        whom a penalty is imposed by this section for any month--
                    ``(A) is a dependent (as defined in section 152) of 
                another taxpayer for the other taxpayer's taxable year 
                including such month, such other taxpayer shall be 
                liable for such penalty, or
                    ``(B) files a joint return for the taxable year 
                including such month, such individual and the spouse of 
                such individual shall be jointly liable for such 
                penalty.
    ``(c) Amount of Penalty.--
            ``(1) In general.--The penalty determined under this 
        subsection for any month with respect to any individual is an 
        amount equal to \1/12\ of the applicable dollar amount for the 
        calendar year.
            ``(2) Dollar limitation.--The amount of the penalty imposed 
        by this section on any taxpayer for any taxable year with 
        respect to all individuals for whom the taxpayer is liable 
        under subsection (b)(3) shall not exceed an amount equal to 300 
        percent the applicable dollar amount (determined without regard 
        to paragraph (3)(C)) for the calendar year with or within which 
        the taxable year ends.
            ``(3) Applicable dollar amount.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the applicable dollar amount 
                is $750.
                    ``(B) Phase in.--The applicable dollar amount is 
                $95 for 2014 and $350 for 2015.
                    ``(C) Special rule for individuals under age 18.--
                If an applicable individual has not attained the age of 
                18 as of the beginning of a month, the applicable 
                dollar amount with respect to such individual for the 
                month shall be equal to one-half of the applicable 
                dollar amount for the calendar year in which the month 
                occurs.
                    ``(D) Indexing of amount.--In the case of any 
                calendar year beginning after 2016, the applicable 
                dollar amount shall be equal to $750, increased by an 
                amount equal to--
                            ``(i) $750, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year, determined by substituting 
                        `calendar year 2015' for `calendar year 1992' 
                        in subparagraph (B) thereof.
                If the amount of any increase under clause (i) is not a 
                multiple of $50, such increase shall be rounded to the 
                next lowest multiple of $50.
            ``(4) Terms relating to income and families.--For purposes 
        of this section--
                    ``(A) Family size.--The family size involved with 
                respect to any taxpayer shall be equal to the number of 
                individuals for whom the taxpayer is allowed a 
                deduction under section 151 (relating to allowance of 
                deduction for personal exemptions) for the taxable 
                year.
                    ``(B) Household income.--The term `household 
                income' means, with respect to any taxpayer for any 
                taxable year, an amount equal to the sum of--
                            ``(i) the modified gross income of the 
                        taxpayer, plus
                            ``(ii) the aggregate modified gross incomes 
                        of all other individuals who--
                                    ``(I) were taken into account in 
                                determining the taxpayer's family size 
                                under paragraph (1), and
                                    ``(II) were required to file a 
                                return of tax imposed by section 1 for 
                                the taxable year.
                    ``(C) Modified gross income.--The term `modified 
                gross income' means gross income--
                            ``(i) decreased by the amount of any 
                        deduction allowable under paragraph (1), (3), 
                        (4), or (10) of section 62(a),
                            ``(ii) increased by the amount of interest 
                        received or accrued during the taxable year 
                        which is exempt from tax imposed by this 
                        chapter, and
                            ``(iii) determined without regard to 
                        sections 911, 931, and 933.
                    ``(D) Poverty line.--
                            ``(i) In general.--The term `poverty line' 
                        has the meaning given that term in section 
                        2110(c)(5) of the Social Security Act (42 
                        U.S.C. 1397jj(c)(5)).
                            ``(ii) Poverty line used.--In the case of 
                        any taxable year ending with or within a 
                        calendar year, the poverty line used shall be 
                        the most recently published poverty line as of 
                        the 1st day of such calendar year.
    ``(d) Applicable Individual.--For purposes of this section--
            ``(1) In general.--The term `applicable individual' means, 
        with respect to any month, an individual other than an 
        individual described in paragraph (2), (3), or (4).
            ``(2) Religious exemptions.--
                    ``(A) Religious conscience exemption.--Such term 
                shall not include any individual for any month if such 
                individual has in effect an exemption under section 
                1311(d)(4)(H) of the Patient Protection and Affordable 
                Care Act which certifies that such individual is a 
                member of a recognized religious sect or division 
                thereof described in section 1402(g)(1) and an adherent 
                of established tenets or teachings of such sect or 
                division as described in such section.
                    ``(B) Health care sharing ministry.--
                            ``(i) In general.--Such term shall not 
                        include any individual for any month if such 
                        individual is a member of a health care sharing 
                        ministry for the month.
                            ``(ii) Health care sharing ministry.--The 
                        term `health care sharing ministry' means an 
                        organization--
                                    ``(I) which is described in section 
                                501(c)(3) and is exempt from taxation 
                                under section 501(a),
                                    ``(II) members of which share a 
                                common set of ethical or religious 
                                beliefs and share medical expenses 
                                among members in accordance with those 
                                beliefs and without regard to the State 
                                in which a member resides or is 
                                employed,
                                    ``(III) members of which retain 
                                membership even after they develop a 
                                medical condition,
                                    ``(IV) which (or a predecessor of 
                                which) has been in existence at all 
                                times since December 31, 1999, and 
                                medical expenses of its members have 
                                been shared continuously and without 
                                interruption since at least December 
                                31, 1999, and
                                    ``(V) which conducts an annual 
                                audit which is performed by an 
                                independent certified public accounting 
                                firm in accordance with generally 
                                accepted accounting principles and 
                                which is made available to the public 
                                upon request.
            ``(3) Individuals not lawfully present.--Such term shall 
        not include an individual for any month if for the month the 
        individual is not a citizen or national of the United States or 
        an alien lawfully present in the United States.
            ``(4) Incarcerated individuals.--Such term shall not 
        include an individual for any month if for the month the 
        individual is incarcerated, other than incarceration pending 
        the disposition of charges.
    ``(e) Exemptions.--No penalty shall be imposed under subsection (a) 
with respect to--
            ``(1) Individuals who cannot afford coverage.--
                    ``(A) In general.--Any applicable individual for 
                any month if the applicable individual's required 
                contribution (determined on an annual basis) for 
                coverage for the month exceeds 8 percent of such 
                individual's household income for the taxable year 
                described in section 1412(b)(1)(B) of the Patient 
                Protection and Affordable Care Act. For purposes of 
                applying this subparagraph, the taxpayer's household 
                income shall be increased by any exclusion from gross 
                income for any portion of the required contribution 
                made through a salary reduction arrangement.
                    ``(B) Required contribution.--For purposes of this 
                paragraph, the term `required contribution' means--
                            ``(i) in the case of an individual eligible 
                        to purchase minimum essential coverage 
                        consisting of coverage through an eligible-
                        employer-sponsored plan, the portion of the 
                        annual premium which would be paid by the 
                        individual (without regard to whether paid 
                        through salary reduction or otherwise) for 
                        self-only coverage, or
                            ``(ii) in the case of an individual 
                        eligible only to purchase minimum essential 
                        coverage described in subsection (f)(1)(C), the 
                        annual premium for the lowest cost bronze plan 
                        available in the individual market through the 
                        Exchange in the State in the rating area in 
                        which the individual resides (without regard to 
                        whether the individual purchased a qualified 
                        health plan through the Exchange), reduced by 
                        the amount of the credit allowable under 
                        section 36B for the taxable year (determined as 
                        if the individual was covered by a qualified 
                        health plan offered through the Exchange for 
                        the entire taxable year).
                    ``(C) Special rules for individuals related to 
                employees.--For purposes of subparagraph (B)(i), if an 
                applicable individual is eligible for minimum essential 
                coverage through an employer by reason of a 
                relationship to an employee, the determination shall be 
                made by reference to the affordability of the coverage 
                to the employee.
                    ``(D) Indexing.--In the case of plan years 
                beginning in any calendar year after 2014, subparagraph 
                (A) shall be applied by substituting for `8 percent' 
                the percentage the Secretary of Health and Human 
                Services determines reflects the excess of the rate of 
                premium growth between the preceding calendar year and 
                2013 over the rate of income growth for such period.
            ``(2) Taxpayers with income under 100 percent of poverty 
        line.--Any applicable individual for any month during a 
        calendar year if the individual's household income for the 
        taxable year described in section 1412(b)(1)(B) of the Patient 
        Protection and Affordable Care Act is less than 100 percent of 
        the poverty line for the size of the family involved 
        (determined in the same manner as under subsection (b)(4)).
            ``(3) Members of indian tribes.--Any applicable individual 
        for any month during which the individual is a member of an 
        Indian tribe (as defined in section 45A(c)(6)).
            ``(4) Months during short coverage gaps.--
                    ``(A) In general.--Any month the last day of which 
                occurred during a period in which the applicable 
                individual was not covered by minimum essential 
                coverage for a continuous period of less than 3 months.
                    ``(B) Special rules.--For purposes of applying this 
                paragraph--
                            ``(i) the length of a continuous period 
                        shall be determined without regard to the 
                        calendar years in which months in such period 
                        occur,
                            ``(ii) if a continuous period is greater 
                        than the period allowed under subparagraph (A), 
                        no exception shall be provided under this 
                        paragraph for any month in the period, and
                            ``(iii) if there is more than 1 continuous 
                        period described in subparagraph (A) covering 
                        months in a calendar year, the exception 
                        provided by this paragraph shall only apply to 
                        months in the first of such periods.
                The Secretary shall prescribe rules for the collection 
                of the penalty imposed by this section in cases where 
                continuous periods include months in more than 1 
                taxable year.
            ``(5) Hardships.--Any applicable individual who for any 
        month is determined by the Secretary of Health and Human 
        Services under section 1311(d)(4)(H) to have suffered a 
        hardship with respect to the capability to obtain coverage 
        under a qualified health plan.
    ``(f) Minimum Essential Coverage.--For purposes of this section--
            ``(1) In general.--The term `minimum essential coverage' 
        means any of the following:
                    ``(A) Government sponsored programs.--Coverage 
                under--
                            ``(i) the Medicare program under part A of 
                        title XVIII of the Social Security Act,
                            ``(ii) the Medicaid program under title XIX 
                        of the Social Security Act,
                            ``(iii) the CHIP program under title XXI of 
                        the Social Security Act,
                            ``(iv) the TRICARE for Life program,
                            ``(v) the veteran's health care program 
                        under chapter 17 of title 38, United States 
                        Code, or
                            ``(vi) a health plan under section 2504(e) 
                        of title 22, United States Code (relating to 
                        Peace Corps volunteers).
                    ``(B) Employer-sponsored plan.--Coverage under an 
                eligible employer-sponsored plan.
                    ``(C) Plans in the individual market.--Coverage 
                under a health plan offered in the individual market 
                within a State.
                    ``(D) Grandfathered health plan.--Coverage under a 
                grandfathered health plan.
                    ``(E) Other coverage.--Such other health benefits 
                coverage, such as a State health benefits risk pool, as 
                the Secretary of Health and Human Services, in 
                coordination with the Secretary, recognizes for 
                purposes of this subsection.
            ``(2) Eligible employer-sponsored plan.--The term `eligible 
        employer-sponsored plan' means, with respect to any employee, a 
        group health plan or group health insurance coverage offered by 
        an employer to the employee which is--
                    ``(A) a governmental plan (within the meaning of 
                section 2791(d)(8) of the Public Health Service Act), 
                or
                    ``(B) any other plan or coverage offered in the 
                small or large group market within a State.
        Such term shall include a grandfathered health plan described 
        in paragraph (1)(D) offered in a group market.
            ``(3) Excepted benefits not treated as minimum essential 
        coverage.--The term `minimum essential coverage' shall not 
        include health insurance coverage which consists of coverage of 
        excepted benefits--
                    ``(A) described in paragraph (1) of subsection (c) 
                of section 2791 of the Public Health Service Act; or
                    ``(B) described in paragraph (2), (3), or (4) of 
                such subsection if the benefits are provided under a 
                separate policy, certificate, or contract of insurance.
            ``(4) Individuals residing outside united states or 
        residents of territories.--Any applicable individual shall be 
        treated as having minimum essential coverage for any month--
                    ``(A) if such month occurs during any period 
                described in subparagraph (A) or (B) of section 
                911(d)(1) which is applicable to the individual, or
                    ``(B) if such individual is a bona fide resident of 
                any possession of the United States (as determined 
                under section 937(a)) for such month.
            ``(5) Insurance-related terms.--Any term used in this 
        section which is also used in title I of the Patient Protection 
        and Affordable Care Act shall have the same meaning as when 
        used in such title.
    ``(g) Administration and Procedure.--
            ``(1) In general.--The penalty provided by this section 
        shall be paid upon notice and demand by the Secretary, and 
        except as provided in paragraph (2), shall be assessed and 
        collected in the same manner as an assessable penalty under 
        subchapter B of chapter 68.
            ``(2) Special rules.--Notwithstanding any other provision 
        of law--
                    ``(A) Waiver of criminal penalties.--In the case of 
                any failure by a taxpayer to timely pay any penalty 
                imposed by this section, such taxpayer shall not be 
                subject to any criminal prosecution or penalty with 
                respect to such failure.
                    ``(B) Limitations on liens and levies.--The 
                Secretary shall not--
                            ``(i) file notice of lien with respect to 
                        any property of a taxpayer by reason of any 
                        failure to pay the penalty imposed by this 
                        section, or
                            ``(ii) levy on any such property with 
                        respect to such failure.''.
    (c) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986 is amended by inserting after the 
item relating to chapter 47 the following new item:

      ``Chapter 48--Maintenance of Minimum Essential Coverage.''.

    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2013.

SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.

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

      ``Subpart D--Information Regarding Health Insurance Coverage

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

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

    ``(a) In General.--Every person who provides minimum essential 
coverage to an individual during a calendar year shall, at such time as 
the Secretary may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--
            ``(1) In general.--A return is described in this subsection 
        if such return--
                    ``(A) is in such form as the Secretary may 
                prescribe, and
                    ``(B) contains--
                            ``(i) the name, address and TIN of the 
                        primary insured and the name and TIN of each 
                        other individual obtaining coverage under the 
                        policy,
                            ``(ii) the dates during which such 
                        individual was covered under minimum essential 
                        coverage during the calendar year,
                            ``(iii) in the case of minimum essential 
                        coverage which consists of health insurance 
                        coverage, information concerning--
                                    ``(I) whether or not the coverage 
                                is a qualified health plan offered 
                                through an Exchange established under 
                                section 1311 of the Patient Protection 
                                and Affordable Care Act, and
                                    ``(II) in the case of a qualified 
                                health plan, the amount (if any) of any 
                                advance payment under section 1412 of 
                                the Patient Protection and Affordable 
                                Care Act of any cost-sharing reduction 
                                under section 1402 of such Act or of 
                                any premium tax credit under section 
                                36B with respect to such coverage, and
                            ``(iv) such other information as the 
                        Secretary may require.
            ``(2) Information relating to employer-provided coverage.--
        If minimum essential coverage provided to an individual under 
        subsection (a) consists of health insurance coverage of a 
        health insurance issuer provided through a group health plan of 
        an employer, a return described in this subsection shall 
        include--
                    ``(A) the name, address, and employer 
                identification number of the employer maintaining the 
                plan,
                    ``(B) the portion of the premium (if any) required 
                to be paid by the employer, and
                    ``(C) if the health insurance coverage is a 
                qualified health plan in the small group market offered 
                through an Exchange, such other information as the 
                Secretary may require for administration of the credit 
                under section 45R (relating to credit for employee 
                health insurance expenses of small employers).
    ``(c) Statements to Be Furnished to Individuals With Respect to 
Whom Information Is Reported.--
            ``(1) In general.--Every person required to make a return 
        under subsection (a) shall furnish to each individual whose 
        name is required to be set forth in such return a written 
        statement showing--
                    ``(A) the name and address of the person required 
                to make such return and the phone number of the 
                information contact for such person, and
                    ``(B) the information required to be shown on the 
                return with respect to such individual.
            ``(2) Time for furnishing statements.--The written 
        statement required under paragraph (1) shall be furnished on or 
        before January 31 of the year following the calendar year for 
        which the return under subsection (a) was required to be made.
    ``(d) Coverage Provided by Governmental Units.--In the case of 
coverage provided by any governmental unit or any agency or 
instrumentality thereof, the officer or employee who enters into the 
agreement to provide such coverage (or the person appropriately 
designated for purposes of this section) shall make the returns and 
statements required by this section.
    ``(e) Minimum Essential Coverage.--For purposes of this section, 
the term `minimum essential coverage' has the meaning given such term 
by section 5000A(f).''.
    (b) Assessable Penalties.--
            (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
        Revenue Code of 1986 (relating to definitions) is amended by 
        striking ``or'' at the end of clause (xxii), by striking 
        ``and'' at the end of clause (xxiii) and inserting ``or'', and 
        by inserting after clause (xxiii) the following new clause:
                            ``(xxiv) section 6055 (relating to returns 
                        relating to information regarding health 
                        insurance coverage), and''.
            (2) Paragraph (2) of section 6724(d) of such Code is 
        amended by striking ``or'' at the end of subparagraph (EE), by 
        striking the period at the end of subparagraph (FF) and 
        inserting ``, or'' and by inserting after subparagraph (FF) the 
        following new subparagraph:
                    ``(GG) section 6055(c) (relating to statements 
                relating to information regarding health insurance 
                coverage).''.
    (c) Notification of Nonenrollment.--Not later than June 30 of each 
year, the Secretary of the Treasury, acting through the Internal 
Revenue Service and in consultation with the Secretary of Health and 
Human Services, shall send a notification to each individual who files 
an individual income tax return and who is not enrolled in minimum 
essential coverage (as defined in section 5000A of the Internal Revenue 
Code of 1986). Such notification shall contain information on the 
services available through the Exchange operating in the State in which 
such individual resides.
    (d) Conforming Amendment.--The table of subparts for part III of 
subchapter A of chapter 61 of such Code is amended by inserting after 
the item relating to subpart C the following new item:

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

    (e) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after 2013.

                   PART II--EMPLOYER RESPONSIBILITIES

SEC. 1511. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18 (29 U.S.C. 218) the following:

``SEC. 18A. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.

    ``In accordance with regulations promulgated by the Secretary, an 
employer to which this Act applies that has more than 200 full-time 
employees and that offers employees enrollment in 1 or more health 
benefits plans shall automatically enroll new full-time employees in 
one of the plans offered (subject to any waiting period authorized by 
law) and to continue the enrollment of current employees in a health 
benefits plan offered through the employer. Any automatic enrollment 
program shall include adequate notice and the opportunity for an 
employee to opt out of any coverage the individual or employee were 
automatically enrolled in. Nothing in this section shall be construed 
to supersede any State law which establishes, implements, or continues 
in effect any standard or requirement relating to employers in 
connection with payroll except to the extent that such standard or 
requirement prevents an employer from instituting the automatic 
enrollment program under this section.''.

SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE 
              OPTIONS.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18A (as added by section 1513) the following:

``SEC. 18B. NOTICE TO EMPLOYEES.

    ``(a) In General.--In accordance with regulations promulgated by 
the Secretary, an employer to which this Act applies, shall provide to 
each employee at the time of hiring (or with respect to current 
employees, not later than March 1, 2013), written notice--
            ``(1) informing the employee of the existence of an 
        Exchange, including a description of the services provided by 
        such Exchange, and the manner in which the employee may contact 
        the Exchange to request assistance;
            ``(2) if the employer plan's share of the total allowed 
        costs of benefits provided under the plan is less than 60 
        percent of such costs, that the employee may be eligible for a 
        premium tax credit under section 36B of the Internal Revenue 
        Code of 1986 and a cost sharing reduction under section 1402 of 
        the Patient Protection and Affordable Care Act if the employee 
        purchases a qualified health plan through the Exchange; and
            ``(3) if the employee purchases a qualified health plan 
        through the Exchange, the employee will lose the employer 
        contribution (if any) to any health benefits plan offered by 
        the employer and that all or a portion of such contribution may 
        be excludable from income for Federal income tax purposes.
    ``(b) Effective Date.--Subsection (a) shall take effect with 
respect to employers in a State beginning on March 1, 2013.''.

SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS.

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

``SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH 
              COVERAGE.

    ``(a) Large Employers Not Offering Health Coverage.--If--
            ``(1) any applicable large employer fails to offer to its 
        full-time employees (and their dependents) the opportunity to 
        enroll in minimum essential coverage under an eligible 
        employer-sponsored plan (as defined in section 5000A(f)(2)) for 
        any month, and
            ``(2) at least one full-time employee of the applicable 
        large employer has been certified to the employer under section 
        1411 of the Patient Protection and Affordable Care Act as 
        having enrolled for such month in a qualified health plan with 
        respect to which an applicable premium tax credit or cost-
        sharing reduction is allowed or paid with respect to the 
        employee,
then there is hereby imposed on the employer an assessable payment 
equal to the product of the applicable payment amount and the number of 
individuals employed by the employer as full-time employees during such 
month.
    ``(b) Large Employers With Waiting Periods Exceeding 30 Days.--
            ``(1) In general.--In the case of any applicable large 
        employer which requires an extended waiting period to enroll in 
        any minimum essential coverage under an employer-sponsored plan 
        (as defined in section 5000A(f)(2)), there is hereby imposed on 
        the employer an assessable payment, in the amount specified in 
        paragraph (2), for each full-time employee of the employer to 
        whom the extended waiting period applies.
            ``(2) Amount.--For purposes of paragraph (1), the amount 
        specified in this paragraph for a full-time employee is--
                    ``(A) in the case of an extended waiting period 
                which exceeds 30 days but does not exceed 60 days, 
                $400, and
                    ``(B) in the case of an extended waiting period 
                which exceeds 60 days, $600.
            ``(3) Extended waiting period.--The term `extended waiting 
        period' means any waiting period (as defined in section 
        2701(b)(4) of the Public Health Service Act) which exceeds 30 
        days.
    ``(c) Large Employers Offering Coverage With Employees Who Qualify 
for Premium Tax Credits or Cost-sharing Reductions.--
            ``(1) In general.--If--
                    ``(A) an applicable large employer offers to its 
                full-time employees (and their dependents) the 
                opportunity to enroll in minimum essential coverage 
                under an eligible employer-sponsored plan (as defined 
                in section 5000A(f)(2)) for any month, and
                    ``(B) 1 or more full-time employees of the 
                applicable large employer has been certified to the 
                employer under section 1411 of the Patient Protection 
                and Affordable Care Act as having enrolled for such 
                month in a qualified health plan with respect to which 
                an applicable premium tax credit or cost-sharing 
                reduction is allowed or paid with respect to the 
                employee,
        then there is hereby imposed on the employer an assessable 
        payment equal to the product of the number of full-time 
        employees of the applicable large employer described in 
        subparagraph (B) for such month and 400 percent of the 
        applicable payment amount.
            ``(2) Overall limitation.--The aggregate amount of tax 
        determined under paragraph (1) with respect to all employees of 
        an applicable large employer for any month shall not exceed the 
        product of the applicable payment amount and the number of 
        individuals employed by the employer as full-time employees 
        during such month.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable payment amount.--The term `applicable 
        payment amount' means, with respect to any month, \1/12\ of 
        $750.
            ``(2) Applicable large employer.--
                    ``(A) In general.--The term `applicable large 
                employer' means, with respect to a calendar year, an 
                employer who employed an average of at least 50 full-
                time employees on business days during the preceding 
                calendar year.
                    ``(B) Exemption for certain employers.--
                            ``(i) In general.--An employer shall not be 
                        considered to employ more than 50 full-time 
                        employees if--
                                    ``(I) the employer's workforce 
                                exceeds 50 full-time employees for 120 
                                days or fewer during the calendar year, 
                                and
                                    ``(II) the employees in excess of 
                                50 employed during such 120-day period 
                                were seasonal workers.
                            ``(ii) Definition of seasonal workers.--The 
                        term `seasonal worker' means a worker who 
                        performs labor or services on a seasonal basis 
                        as defined by the Secretary of Labor, including 
                        workers covered by section 500.20(s)(1) of 
                        title 29, Code of Federal Regulations and 
                        retail workers employed exclusively during 
                        holiday seasons.
                    ``(C) Rules for determining employer size.--For 
                purposes of this paragraph--
                            ``(i) Application of aggregation rule for 
                        employers.--All persons treated as a single 
                        employer under subsection (b), (c), (m), or (o) 
                        of section 414 of the Internal Revenue Code of 
                        1986 shall be treated as 1 employer.
                            ``(ii) Employers not in existence in 
                        preceding year.--In the case of an employer 
                        which was not in existence throughout the 
                        preceding calendar year, the determination of 
                        whether such employer is an applicable large 
                        employer shall be based on the average number 
                        of employees that it is reasonably expected 
                        such employer will employ on business days in 
                        the current calendar year.
                            ``(iii) Predecessors.--Any reference in 
                        this subsection to an employer shall include a 
                        reference to any predecessor of such employer.
            ``(3) Applicable premium tax credit and cost-sharing 
        reduction.--The term `applicable premium tax credit and cost-
        sharing reduction' means--
                    ``(A) any premium tax credit allowed under section 
                36B,
                    ``(B) any cost-sharing reduction under section 1402 
                of the Patient Protection and Affordable Care Act, and
                    ``(C) any advance payment of such credit or 
                reduction under section 1412 of such Act.
            ``(4) Full-time employee.--
                    ``(A) In general.--The term `full-time employee' 
                means an employee who is employed on average at least 
                30 hours of service per week.
                    ``(B) Hours of service.--The Secretary, in 
                consultation with the Secretary of Labor, shall 
                prescribe such regulations, rules, and guidance as may 
                be necessary to determine the hours of service of an 
                employee, including rules for the application of this 
                paragraph to employees who are not compensated on an 
                hourly basis.
            ``(5) Inflation adjustment.--
                    ``(A) In general.--In the case of any calendar year 
                after 2014, each of the dollar amounts in subsection 
                (b)(2) and (d)(1) shall be increased by an amount equal 
                to the product of--
                            ``(i) such dollar amount, and
                            ``(ii) the premium adjustment percentage 
                        (as defined in section 1302(c)(4) of the 
                        Patient Protection and Affordable Care Act) for 
                        the calendar year.
                    ``(B) Rounding.--If the amount of any increase 
                under subparagraph (A) is not a multiple of $10, such 
                increase shall be rounded to the next lowest multiple 
                of $10.
            ``(6) Other definitions.--Any term used in this section 
        which is also used in the Patient Protection and Affordable 
        Care Act shall have the same meaning as when used in such Act.
            ``(7) Tax nondeductible.--For denial of deduction for the 
        tax imposed by this section, see section 275(a)(6).
    ``(e) Administration and Procedure.--
            ``(1) In general.--Any assessable payment provided by this 
        section shall be paid upon notice and demand by the Secretary, 
        and shall be assessed and collected in the same manner as an 
        assessable penalty under subchapter B of chapter 68.
            ``(2) Time for payment.--The Secretary may provide for the 
        payment of any assessable payment provided by this section on 
        an annual, monthly, or other periodic basis as the Secretary 
        may prescribe.
            ``(3) Coordination with credits, etc..--The Secretary shall 
        prescribe rules, regulations, or guidance for the repayment of 
        any assessable payment (including interest) if such payment is 
        based on the allowance or payment of an applicable premium tax 
        credit or cost-sharing reduction with respect to an employee, 
        such allowance or payment is subsequently disallowed, and the 
        assessable payment would not have been required to be made but 
        for such allowance or payment.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by adding at the end the following new item:

``Sec. 4980H. Shared responsibility for employers regarding health 
                            coverage.''.
    (c) Study and Report of Effect of Tax on Workers' Wages.--
            (1) In general.--The Secretary of Labor shall conduct a 
        study to determine whether employees' wages are reduced by 
        reason of the application of the assessable payments under 
        section 4980H of the Internal Revenue Code of 1986 (as added by 
        the amendments made by this section). The Secretary shall make 
        such determination on the basis of the National Compensation 
        Survey published by the Bureau of Labor Statistics.
            (2) Report.--The Secretary shall report the results of the 
        study under paragraph (1) to the Committee on Ways and Means of 
        the House of Representatives and to the Committee on Finance of 
        the Senate.
    (d) Effective Date.--The amendments made by this section shall 
apply to months beginning after December 31, 2013.

SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart D of part III of subchapter A of chapter 
61 of the Internal Revenue Code of 1986, as added by section 1502, is 
amended by inserting after section 6055 the following new section:

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

    ``(a) In General.--Every applicable large employer required to meet 
the requirements of section 4980H with respect to its full-time 
employees during a calendar year shall, at such time as the Secretary 
may prescribe, make a return described in subsection (b).
    ``(b) Form and Manner of Return.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, date, and employer identification 
                number of the employer,
                    ``(B) a certification as to whether the employer 
                offers to its full-time employees (and their 
                dependents) the opportunity to enroll in minimum 
                essential coverage under an eligible employer-sponsored 
                plan (as defined in section 5000A(f)(2)),
                    ``(C) if the employer certifies that the employer 
                did offer to its full-time employees (and their 
                dependents) the opportunity to so enroll--
                            ``(i) the length of any waiting period (as 
                        defined in section 2701(b)(4) of the Public 
                        Health Service Act) with respect to such 
                        coverage,
                            ``(ii) the months during the calendar year 
                        for which coverage under the plan was 
                        available,
                            ``(iii) the monthly premium for the lowest 
                        cost option in each of the enrollment 
                        categories under the plan, and
                            ``(iv) the applicable large employer's 
                        share of the total allowed costs of benefits 
                        provided under the plan,
                    ``(D) the number of full-time employees for each 
                month during the calendar year,
                    ``(E) the name, address, and TIN of each full-time 
                employee during the calendar year and the months (if 
                any) during which such employee (and any dependents) 
                were covered under any such health benefits plans, and
                    ``(F) such other information as the Secretary may 
                require.
    ``(c) Statements to Be Furnished to Individuals With Respect to 
Whom Information Is Reported.--
            ``(1) In general.--Every person required to make a return 
        under subsection (a) shall furnish to each full-time employee 
        whose name is required to be set forth in such return under 
        subsection (b)(2)(E) a written statement showing--
                    ``(A) the name and address of the person required 
                to make such return and the phone number of the 
                information contact for such person, and
                    ``(B) the information required to be shown on the 
                return with respect to such individual.
            ``(2) Time for furnishing statements.--The written 
        statement required under paragraph (1) shall be furnished on or 
        before January 31 of the year following the calendar year for 
        which the return under subsection (a) was required to be made.
    ``(d) Coordination With Other Requirements.--To the maximum extent 
feasible, the Secretary may provide that--
            ``(1) any return or statement required to be provided under 
        this section may be provided as part of any return or statement 
        required under section 6051 or 6055, and
            ``(2) in the case of an applicable large employer offering 
        health insurance coverage of a health insurance issuer, the 
        employer may enter into an agreement with the issuer to include 
        information required under this section with the return and 
        statement required to be provided by the issuer under section 
        6055.
    ``(e) Coverage Provided by Governmental Units.--In the case of any 
applicable large employer which is a governmental unit or any agency or 
instrumentality thereof, the person appropriately designated for 
purposes of this section shall make the returns and statements required 
by this section.
    ``(f) Definitions.--For purposes of this section, any term used in 
this section which is also used in section 4980H shall have the meaning 
given such term by section 4980H.''.
    (b) Assessable Penalties.--
            (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
        Revenue Code of 1986 (relating to definitions), as amended by 
        section 1502, is amended by striking ``or'' at the end of 
        clause (xxiii), by striking ``and'' at the end of clause (xxiv) 
        and inserting ``or'', and by inserting after clause (xxiv) the 
        following new clause:
                            ``(xxv) section 6056 (relating to returns 
                        relating to large employers required to report 
                        on health insurance coverage), and''.
            (2) Paragraph (2) of section 6724(d) of such Code, as so 
        amended, is amended by striking ``or'' at the end of 
        subparagraph (FF), by striking the period at the end of 
        subparagraph (GG) and inserting ``, or'' and by inserting after 
        subparagraph (GG) the following new subparagraph:
                    ``(HH) section 6056(c) (relating to statements 
                relating to large employers required to report on 
                health insurance coverage).''.
    (c) Conforming Amendment.--The table of sections for subpart D of 
part III of subchapter A of chapter 61 of such Code, as added by 
section 1502, is amended by adding at the end the following new item:

``Sec. 6056. Large employers required to report on health insurance 
                            coverage.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2013.

SEC. 1515. OFFERING OF EXCHANGE-PARTICIPATING QUALIFIED HEALTH PLANS 
              THROUGH CAFETERIA PLANS.

    (a) In General.--Subsection (f) of section 125 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(3) Certain exchange-participating qualified health plans 
        not qualified.--
                    ``(A) In general.--The term `qualified benefit' 
                shall not include any qualified health plan (as defined 
                in section 1301(a) of the Patient Protection and 
                Affordable Care Act) offered through an Exchange 
                established under section 1311 of such Act.
                    ``(B) Exception for exchange-eligible employers.--
                Subparagraph (A) shall not apply with respect to any 
                employee if such employee's employer is a qualified 
                employer (as defined in section 1312(f)(2) of the 
                Patient Protection and Affordable Care Act) offering 
                the employee the opportunity to enroll through such an 
                Exchange in a qualified health plan in a group 
                market.''.
    (b) Conforming Amendments.--Subsection (f) of section 125 of such 
Code is amended--
            (1) by striking ``For purposes of this section, the term'' 
        and inserting ``For purposes of this section--
    ``(1) In General.--The term'', and
            (2) by striking ``Such term shall not include'' and 
        inserting the following:
            ``(2) Long-term care insurance not qualified.--The term 
        `qualified benefit' shall not include''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

                  Subtitle G--Miscellaneous Provisions

SEC. 1551. DEFINITIONS.

    Unless specifically provided for otherwise, the definitions 
contained in section 2791 of the Public Health Service Act (42 U.S.C. 
300gg-91) shall apply with respect to this title.

SEC. 1552. TRANSPARENCY IN GOVERNMENT.

    Not later than 30 days after the date of enactment of this Act, the 
Secretary of Health and Human Services shall publish on the Internet 
website of the Department of Health and Human Services, a list of all 
of the authorities provided to the Secretary under this Act (and the 
amendments made by this Act).

SEC. 1553. PROHIBITION AGAINST DISCRIMINATION ON ASSISTED SUICIDE.

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

SEC. 1554. ACCESS TO THERAPIES.

    Notwithstanding any other provision of this Act, the Secretary of 
Health and Human Services shall not promulgate any regulation that--
            (1) creates any unreasonable barriers to the ability of 
        individuals to obtain appropriate medical care;
            (2) impedes timely access to health care services;
            (3) interferes with communications regarding a full range 
        of treatment options between the patient and the provider;
            (4) restricts the ability of health care providers to 
        provide full disclosure of all relevant information to patients 
        making health care decisions;
            (5) violates the principles of informed consent and the 
        ethical standards of health care professionals; or
            (6) limits the availability of health care treatment for 
        the full duration of a patient's medical needs.

SEC. 1555. FREEDOM NOT TO PARTICIPATE IN FEDERAL HEALTH INSURANCE 
              PROGRAMS.

    No individual, company, business, nonprofit entity, or health 
insurance issuer offering group or individual health insurance coverage 
shall be required to participate in any Federal health insurance 
program created under this Act (or any amendments made by this Act), or 
in any Federal health insurance program expanded by this Act (or any 
such amendments), and there shall be no penalty or fine imposed upon 
any such issuer for choosing not to participate in such programs.

SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS.

    (a) Rebuttable Presumption.--Section 411(c)(4) of the Black Lung 
Benefits Act (30 U.S.C. 921(c)(4)) is amended by striking the last 
sentence.
    (b) Continuation of Benefits.--Section 422(l) of the Black Lung 
Benefits Act (30 U.S.C. 932(l)) is amended by striking ``, except with 
respect to a claim filed under this part on or after the effective date 
of the Black Lung Benefits Amendments of 1981''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to claims filed under part B or part C of the Black 
Lung Benefits Act (30 U.S.C. 921 et seq., 931 et seq.) after January 1, 
2005, that are pending on or after the date of enactment of this Act.

SEC. 1557. NONDISCRIMINATION.

    (a) In General.--Except as otherwise provided for in this title (or 
an amendment made by this title), an individual shall not, on the 
ground prohibited under title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d et seq.), title IX of the Education Amendments of 1972 (20 
U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 
6101 et seq.), or section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), be excluded from participation in, be denied the benefits 
of, or be subjected to discrimination under, any health program or 
activity, any part of which is receiving Federal financial assistance, 
including credits, subsidies, or contracts of insurance, or under any 
program or activity that is administered by an Executive Agency or any 
entity established under this title (or amendments). The enforcement 
mechanisms provided for and available under such title VI, title IX, 
section 504, or such Age Discrimination Act shall apply for purposes of 
violations of this subsection.
    (b) Continued Application of Laws.--Nothing in this title (or an 
amendment made by this title) shall be construed to invalidate or limit 
the rights, remedies, procedures, or legal standards available to 
individuals aggrieved under title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964 
(42 U.S.C. 2000e et seq.), title IX of the Education Amendments of 1972 
(20 U.S.C. 1681 et seq.), section 504 of the Rehabilitation Act of 1973 
(29 U.S.C. 794), or the Age Discrimination Act of 1975 (42 U.S.C. 611 
et seq.), or to supersede State laws that provide additional 
protections against discrimination on any basis described in subsection 
(a).
    (c) Regulations.--The Secretary may promulgate regulations to 
implement this section.

SEC. 1558. PROTECTIONS FOR EMPLOYEES.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18B (as added by section 1512) the following:

``SEC. 18C. PROTECTIONS FOR EMPLOYEES.

    ``(a) Prohibition.--No employer shall discharge or in any manner 
discriminate against any employee with respect to his or her 
compensation, terms, conditions, or other privileges of employment 
because the employee (or an individual acting at the request of the 
employee) has--
            ``(1) received a credit under section 36B of the Internal 
        Revenue Code of 1986 or a subsidy under section 1402 of this 
        Act;
            ``(2) provided, caused to be provided, or is about to 
        provide or cause to be provided to the employer, the Federal 
        Government, or the attorney general of a State information 
        relating to any violation of, or any act or omission the 
        employee reasonably believes to be a violation of, any 
        provision of this title (or an amendment made by this title);
            ``(3) testified or is about to testify in a proceeding 
        concerning such violation;
            ``(4) assisted or participated, or is about to assist or 
        participate, in such a proceeding; or
            ``(5) objected to, or refused to participate in, any 
        activity, policy, practice, or assigned task that the employee 
        (or other such person) reasonably believed to be in violation 
        of any provision of this title (or amendment), or any order, 
        rule, regulation, standard, or ban under this title (or 
        amendment).
    ``(b) Complaint Procedure.--
            ``(1) In general.--An employee who believes that he or she 
        has been discharged or otherwise discriminated against by any 
        employer in violation of this section may seek relief in 
        accordance with the procedures, notifications, burdens of 
        proof, remedies, and statutes of limitation set forth in 
        section 2087(b) of title 15, United States Code.
            ``(2) No limitation on rights.--Nothing in this section 
        shall be deemed to diminish the rights, privileges, or remedies 
        of any employee under any Federal or State law or under any 
        collective bargaining agreement. The rights and remedies in 
        this section may not be waived by any agreement, policy, form, 
        or condition of employment.''.

SEC. 1559. OVERSIGHT.

    The Inspector General of the Department of Health and Human 
Services shall have oversight authority with respect to the 
administration and implementation of this title as it relates to such 
Department.

SEC. 1560. RULES OF CONSTRUCTION.

    (a) No Effect on Antitrust Laws.--Nothing in this title (or an 
amendment made by this title) shall be construed to modify, impair, or 
supersede the operation of any of the antitrust laws. For the purposes 
of this section, the term ``antitrust laws'' has the meaning given such 
term in subsection (a) of the first section of the Clayton Act, except 
that such term includes section 5 of the Federal Trade Commission Act 
to the extent that such section 5 applies to unfair methods of 
competition.
    (b) Rule of Construction Regarding Hawaii's Prepaid Health Care 
Act.--Nothing in this title (or an amendment made by this title) shall 
be construed to modify or limit the application of the exemption for 
Hawaii's Prepaid Health Care Act (Haw. Rev. Stat. Sec. Sec.  393-1 et 
seq.) as provided for under section 514(b)(5) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(5)).
    (c) Student Health Insurance Plans.--Nothing in this title (or an 
amendment made by this title) shall be construed to prohibit an 
institution of higher education (as such term is defined for purposes 
of the Higher Education Act of 1965) from offering a student health 
insurance plan, to the extent that such requirement is otherwise 
permitted under applicable Federal, State or local law.
    (d) No Effect on Existing Requirements.--Nothing in this title (or 
an amendment made by this title, unless specified by direct statutory 
reference) shall be construed to modify any existing Federal 
requirement concerning the State agency responsible for determining 
eligibility for programs identified in section 1413.

SEC. 1561. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND 
              PROTOCOLS.

    Title XXX of the Public Health Service Act (42 U.S.C. 300jj et 
seq.) is amended by adding at the end the following:

                     ``Subtitle C--Other Provisions

``SEC. 3021. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND 
              PROTOCOLS.

    ``(a) In General.--
            ``(1) Standards and protocols.--Not later than 180 days 
        after the date of enactment of this title, the Secretary, in 
        consultation with the HIT Policy Committee and the HIT 
        Standards Committee, shall develop interoperable and secure 
        standards and protocols that facilitate enrollment of 
        individuals in Federal and State health and human services 
        programs, as determined by the Secretary.
            ``(2) Methods.--The Secretary shall facilitate enrollment 
        in such programs through methods determined appropriate by the 
        Secretary, which shall include providing individuals and third 
        parties authorized by such individuals and their designees 
        notification of eligibility and verification of eligibility 
        required under such programs.
    ``(b) Content.--The standards and protocols for electronic 
enrollment in the Federal and State programs described in subsection 
(a) shall allow for the following:
            ``(1) Electronic matching against existing Federal and 
        State data, including vital records, employment history, 
        enrollment systems, tax records, and other data determined 
        appropriate by the Secretary to serve as evidence of 
        eligibility and in lieu of paper-based documentation.
            ``(2) Simplification and submission of electronic 
        documentation, digitization of documents, and systems 
        verification of eligibility.
            ``(3) Reuse of stored eligibility information (including 
        documentation) to assist with retention of eligible 
        individuals.
            ``(4) Capability for individuals to apply, recertify and 
        manage their eligibility information online, including at home, 
        at points of service, and other community-based locations.
            ``(5) Ability to expand the enrollment system to integrate 
        new programs, rules, and functionalities, to operate at 
        increased volume, and to apply streamlined verification and 
        eligibility processes to other Federal and State programs, as 
        appropriate.
            ``(6) Notification of eligibility, recertification, and 
        other needed communication regarding eligibility, which may 
        include communication via email and cellular phones.
            ``(7) Other functionalities necessary to provide eligibles 
        with streamlined enrollment process.
    ``(c) Approval and Notification.--With respect to any standard or 
protocol developed under subsection (a) that has been approved by the 
HIT Policy Committee and the HIT Standards Committee, the Secretary--
            ``(1) shall notify States of such standards or protocols; 
        and
            ``(2) may require, as a condition of receiving Federal 
        funds for the health information technology investments, that 
        States or other entities incorporate such standards and 
        protocols into such investments.
    ``(d) Grants for Implementation of Appropriate Enrollment HIT.--
            ``(1) In general.--The Secretary shall award grant to 
        eligible entities to develop new, and adapt existing, 
        technology systems to implement the HIT enrollment standards 
        and protocols developed under subsection (a) (referred to in 
        this subsection as `appropriate HIT technology').
            ``(2) Eligible entities.--To be eligible for a grant under 
        this subsection, an entity shall--
                    ``(A) be a State, political subdivision of a State, 
                or a local governmental entity; and
                    ``(B) submit to the Secretary an application at 
                such time, in such manner, and containing--
                            ``(i) a plan to adopt and implement 
                        appropriate enrollment technology that 
                        includes--
                                    ``(I) proposed reduction in 
                                maintenance costs of technology 
                                systems;
                                    ``(II) elimination or updating of 
                                legacy systems; and
                                    ``(III) demonstrated collaboration 
                                with other entities that may receive a 
                                grant under this section that are 
                                located in the same State, political 
                                subdivision, or locality;
                            ``(ii) an assurance that the entity will 
                        share such appropriate enrollment technology in 
                        accordance with paragraph (4); and
                            ``(iii) such other information as the 
                        Secretary may require.
            ``(3) Sharing.--
                    ``(A) In general.--The Secretary shall ensure that 
                appropriate enrollment HIT adopted under grants under 
                this subsection is made available to other qualified 
                State, qualified political subdivisions of a State, or 
                other appropriate qualified entities (as described in 
                subparagraph (B)) at no cost.
                    ``(B) Qualified entities.--The Secretary shall 
                determine what entities are qualified to receive 
                enrollment HIT under subparagraph (A), taking into 
                consideration the recommendations of the HIT Policy 
                Committee and the HIT Standards Committee.''.

SEC. 1562. CONFORMING AMENDMENTS.

    (a) Applicability.--Section 2735 of the Public Health Service Act 
(42 U.S.C. 300gg-21), as so redesignated by section 1001(4), is 
amended--
            (1) by striking subsection (a);
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``1 through 3'' 
                and inserting ``1 and 2''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by striking 
                        ``subparagraph (D)'' and inserting 
                        ``subparagraph (D) or (E)'';
                            (ii) by striking ``1 through 3'' and 
                        inserting ``1 and 2''; and
                            (iii) by adding at the end the following:
                    ``(E) Election not applicable.--The election 
                described in subparagraph (A) shall not be available 
                with respect to the provisions of subpart 1.'';
            (3) in subsection (c), by striking ``1 through 3 shall not 
        apply to any group'' and inserting ``1 and 2 shall not apply to 
        any individual coverage or any group''; and
            (4) in subsection (d)--
                    (A) in paragraph (1), by striking ``1 through 3 
                shall not apply to any group'' and inserting ``1 and 2 
                shall not apply to any individual coverage or any 
                group'';
                    (B) in paragraph (2)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``1 through 3 shall not apply 
                        to any group'' and inserting ``1 and 2 shall 
                        not apply to any individual coverage or any 
                        group''; and
                            (ii) in subparagraph (C), by inserting 
                        ``or, with respect to individual coverage, 
                        under any health insurance coverage maintained 
                        by the same health insurance issuer''; and
                    (C) in paragraph (3), by striking ``any group'' and 
                inserting ``any individual coverage or any group''.
    (b) Definitions.--Section 2791(d) of the Public Health Service Act 
(42 U.S.C. 300gg-91(d)) is amended by adding at the end the following:
            ``(20) Qualified health plan.--The term `qualified health 
        plan' has the meaning given such term in section 1301(a) of the 
        Patient Protection and Affordable Care Act.
            ``(21) Exchange.--The term `Exchange' means an American 
        Health Benefit Exchange established under section 1311 of the 
        Patient Protection and Affordable Care Act.''.
    (c) Technical and Conforming Amendments.--Title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg et seq.) is amended--
            (1) in section 2704 (42 U.S.C. 300gg), as so redesignated 
        by section 1201(2)--
                    (A) in subsection (c)--
                            (i) in paragraph (2), by striking ``group 
                        health plan'' each place that such term appears 
                        and inserting ``group or individual health 
                        plan''; and
                            (ii) in paragraph (3)--
                                    (I) by striking ``group health 
                                insurance'' each place that such term 
                                appears and inserting ``group or 
                                individual health insurance''; and
                                    (II) in subparagraph (D), by 
                                striking ``small or large'' and 
                                inserting ``individual or group'';
                    (B) in subsection (d), by striking ``group health 
                insurance'' each place that such term appears and 
                inserting ``group or individual health insurance''; and
                    (C) in subsection (e)(1)(A), by striking ``group 
                health insurance'' and inserting ``group or individual 
                health insurance'';
            (2) by striking the second heading for subpart 2 of part A 
        (relating to other requirements);
            (3) in section 2725 (42 U.S.C. 300gg-4), as so redesignated 
        by section 1001(2)--
                    (A) in subsection (a), by striking ``health 
                insurance issuer offering group health insurance 
                coverage'' and inserting ``health insurance issuer 
                offering group or individual health insurance 
                coverage'';
                    (B) in subsection (b)--
                            (i) by striking ``health insurance issuer 
                        offering group health insurance coverage in 
                        connection with a group health plan'' in the 
                        matter preceding paragraph (1) and inserting 
                        ``health insurance issuer offering group or 
                        individual health insurance coverage''; and
                            (ii) in paragraph (1), by striking ``plan'' 
                        and inserting ``plan or coverage'';
                    (C) in subsection (c)--
                            (i) in paragraph (2), by striking ``group 
                        health insurance coverage offered by a health 
                        insurance issuer'' and inserting ``health 
                        insurance issuer offering group or individual 
                        health insurance coverage''; and
                            (ii) in paragraph (3), by striking 
                        ``issuer'' and inserting ``health insurance 
                        issuer''; and
                    (D) in subsection (e), by striking ``health 
                insurance issuer offering group health insurance 
                coverage'' and inserting ``health insurance issuer 
                offering group or individual health insurance 
                coverage'';
            (4) in section 2726 (42 U.S.C. 300gg-5), as so redesignated 
        by section 1001(2)--
                    (A) in subsection (a), by striking ``(or health 
                insurance coverage offered in connection with such a 
                plan)'' each place that such term appears and inserting 
                ``or a health insurance issuer offering group or 
                individual health insurance coverage'';
                    (B) in subsection (b), by striking ``(or health 
                insurance coverage offered in connection with such a 
                plan)'' each place that such term appears and inserting 
                ``or a health insurance issuer offering group or 
                individual health insurance coverage''; and
                    (C) in subsection (c)--
                            (i) in paragraph (1), by striking ``(and 
                        group health insurance coverage offered in 
                        connection with a group health plan)'' and 
                        inserting ``and a health insurance issuer 
                        offering group or individual health insurance 
                        coverage'';
                            (ii) in paragraph (2), by striking ``(or 
                        health insurance coverage offered in connection 
                        with such a plan)'' each place that such term 
                        appears and inserting ``or a health insurance 
                        issuer offering group or individual health 
                        insurance coverage'';
            (5) in section 2727 (42 U.S.C. 300gg-6), as so redesignated 
        by section 1001(2), by striking ``health insurance issuers 
        providing health insurance coverage in connection with group 
        health plans'' and inserting ``and health insurance issuers 
        offering group or individual health insurance coverage'';
            (6) in section 2728 (42 U.S.C. 300gg-7), as so redesignated 
        by section 1001(2)--
                    (A) in subsection (a), by striking ``health 
                insurance coverage offered in connection with such 
                plan'' and inserting ``individual health insurance 
                coverage'';
                    (B) in subsection (b)--
                            (i) in paragraph (1), by striking ``or a 
                        health insurance issuer that provides health 
                        insurance coverage in connection with a group 
                        health plan'' and inserting ``or a health 
                        insurance issuer that offers group or 
                        individual health insurance coverage'';
                            (ii) in paragraph (2), by striking ``health 
                        insurance coverage offered in connection with 
                        the plan'' and inserting ``individual health 
                        insurance coverage''; and
                            (iii) in paragraph (3), by striking 
                        ``health insurance coverage offered by an 
                        issuer in connection with such plan'' and 
                        inserting ``individual health insurance 
                        coverage'';
                    (C) in subsection (c), by striking ``health 
                insurance issuer providing health insurance coverage in 
                connection with a group health plan'' and inserting 
                ``health insurance issuer that offers group or 
                individual health insurance coverage''; and
                    (D) in subsection (e)(1), by striking ``health 
                insurance coverage offered in connection with such a 
                plan'' and inserting ``individual health insurance 
                coverage'';
            (7) by striking the heading for subpart 3;
            (8) in section 2731 (42 U.S.C. 300gg-11), as so 
        redesignated by section 1001(3)--
                    (A) by striking the section heading and all that 
                follows through subsection (b);
                    (B) in subsection (c)--
                            (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``small 
                                group'' and inserting ``group and 
                                individual''; and
                                    (II) in subparagraph (B)--
                                            (aa) in the matter 
                                        preceding clause (i), by 
                                        inserting ``and individuals'' 
                                        after ``employers'';
                                            (bb) in clause (i), by 
                                        inserting ``or any additional 
                                        individuals'' after 
                                        ``additional groups''; and
                                            (cc) in clause (ii), by 
                                        striking ``without regard to 
                                        the claims experience of those 
                                        employers and their employees 
                                        (and their dependents) or any 
                                        health status-related factor 
                                        relating to such'' and 
                                        inserting ``and individuals 
                                        without regard to the claims 
                                        experience of those 
                                        individuals, employers and 
                                        their employees (and their 
                                        dependents) or any health 
                                        status-related factor relating 
                                        to such individuals''; and
                            (ii) in paragraph (2), by striking ``small 
                        group'' and inserting ``group or individual'';
                    (C) in subsection (d)--
                            (i) by striking ``small group'' each place 
                        that such appears and inserting ``group or 
                        individual''; and
                            (ii) in paragraph (1)(B)--
                                    (I) by striking ``all employers'' 
                                and inserting ``all employers and 
                                individuals'';
                                    (II) by striking ``those 
                                employers'' and inserting ``those 
                                individuals, employers''; and
                                    (III) by striking ``such 
                                employees'' and inserting ``such 
                                individuals, employees'';
                    (D) by striking subsection (e);
                    (E) by striking subsection (f); and
                    (F) by transferring such section (as amended by 
                this paragraph) to appear at the end of section 2702 
                (as added by section 1001(4));
            (9) in section 2732 (42 U.S.C. 300gg-12), as so 
        redesignated by section 1001(3)--
                    (A) by striking the section heading and all that 
                follows through subsection (a);
                    (B) in subsection (b)--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``group health plan in the small or 
                        large group market'' and inserting ``health 
                        insurance coverage offered in the group or 
                        individual market'';
                            (ii) in paragraph (1), by inserting ``, or 
                        individual, as applicable,'' after ``plan 
                        sponsor'';
                            (iii) in paragraph (2), by inserting ``, or 
                        individual, as applicable,'' after ``plan 
                        sponsor''; and
                            (iv) by striking paragraph (3) and 
                        inserting the following:
            ``(3) Violation of participation or contribution rates.--In 
        the case of a group health plan, the plan sponsor has failed to 
        comply with a material plan provision relating to employer 
        contribution or group participation rules, pursuant to 
        applicable State law.'';
                    (C) in subsection (c)--
                            (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``group 
                                health insurance coverage offered in 
                                the small or large group market'' and 
                                inserting ``group or individual health 
                                insurance coverage'';
                                    (II) in subparagraph (A), by 
                                inserting ``or individual, as 
                                applicable,'' after ``plan sponsor'';
                                    (III) in subparagraph (B)--
                                            (aa) by inserting ``or 
                                        individual, as applicable,'' 
                                        after ``plan sponsor''; and
                                            (bb) by inserting ``or 
                                        individual health insurance 
                                        coverage''; and
                                    (IV) in subparagraph (C), by 
                                inserting ``or individuals, as 
                                applicable,'' after ``those sponsors''; 
                                and
                            (ii) in paragraph (2)(A)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``small group market 
                                or the large group market, or both 
                                markets,'' and inserting ``individual 
                                or group market, or all markets,''; and
                                    (II) in clause (i), by inserting 
                                ``or individual, as applicable,'' after 
                                ``plan sponsor''; and
                    (D) by transferring such section (as amended by 
                this paragraph) to appear at the end of section 2703 
                (as added by section 1001(4));
            (10) in section 2733 (42 U.S.C. 300gg-13), as so 
        redesignated by section 1001(4)--
                    (A) in subsection (a)--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``small employer'' and inserting 
                        ``small employer or an individual'';
                            (ii) in paragraph (1), by inserting ``, or 
                        individual, as applicable,'' after ``employer'' 
                        each place that such appears; and
                            (iii) in paragraph (2), by striking ``small 
                        employer'' and inserting ``employer, or 
                        individual, as applicable,'';
                    (B) in subsection (b)--
                            (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``small 
                                employer'' and inserting ``employer, or 
                                individual, as applicable,'';
                                    (II) in subparagraph (A), by adding 
                                ``and'' at the end;
                                    (III) by striking subparagraphs (B) 
                                and (C); and
                                    (IV) in subparagraph (D)--
                                            (aa) by inserting ``, or 
                                        individual, as applicable,'' 
                                        after ``employer''; and
                                            (bb) by redesignating such 
                                        subparagraph as subparagraph 
                                        (B);
                            (ii) in paragraph (2)--
                                    (I) by striking ``small employers'' 
                                each place that such term appears and 
                                inserting ``employers, or individuals, 
                                as applicable,''; and
                                    (II) by striking ``small employer'' 
                                and inserting ``employer, or 
                                individual, as applicable,''; and
                    (C) by redesignating such section (as amended by 
                this paragraph) as section 2709 and transferring such 
                section to appear after section 2708 (as added by 
                section 1001(5));
            (11) by redesignating subpart 4 as subpart 2;
            (12) in section 2735 (42 U.S.C. 300gg-21), as so 
        redesignated by section 1001(4)--
                    (A) by striking subsection (a);
                    (B) by striking ``subparts 1 through 3'' each place 
                that such appears and inserting ``subpart 1'';
                    (C) by redesignating subsections (b) through (e) as 
                subsections (a) through (d), respectively; and
                    (D) by redesignating such section (as amended by 
                this paragraph) as section 2722;
            (13) in section 2736 (42 U.S.C. 300gg-22), as so 
        redesignated by section 1001(4)--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by striking ``small 
                        or large group markets'' and inserting 
                        ``individual or group market''; and
                            (ii) in paragraph (2), by inserting ``or 
                        individual health insurance coverage'' after 
                        ``group health plans'';
                    (B) in subsection (b)(1)(B), by inserting 
                ``individual health insurance coverage or'' after 
                ``respect to''; and
                    (C) by redesignating such section (as amended by 
                this paragraph) as section 2723;
            (14) in section 2737(a)(1) (42 U.S.C. 300gg-23), as so 
        redesignated by section 1001(4)--
                    (A) by inserting ``individual or'' before ``group 
                health insurance''; and
                    (B) by redesignating such section(as amended by 
                this paragraph) as section 2724;
            (15) in section 2762 (42 U.S.C. 300gg-62)--
                    (A) in the section heading by inserting ``and 
                application'' before the period; and
                    (B) by adding at the end the following:
    ``(c) Application of Part A Provisions.--
            ``(1) In general.--The provisions of part A shall apply to 
        health insurance issuers providing health insurance coverage in 
        the individual market in a State as provided for in such part.
            ``(2) Clarification.--To the extent that any provision of 
        this part conflicts with a provision of part A with respect to 
        health insurance issuers providing health insurance coverage in 
        the individual market in a State, the provisions of such part A 
        shall apply.''; and
            (16) in section 2791(e) (42 U.S.C. 300gg-91(e))--
                    (A) in paragraph (2), by striking ``51'' and 
                inserting ``101''; and
                    (B) in paragraph (4)--
                            (i) by striking ``at least 2'' each place 
                        that such appears and inserting ``at least 1''; 
                        and
                            (ii) by striking ``50'' and inserting 
                        ``100''.
    (d) Application.--Notwithstanding any other provision of the 
Patient Protection and Affordable Care Act, nothing in such Act (or an 
amendment made by such Act) shall be construed to--
            (1) prohibit (or authorize the Secretary of Health and 
        Human Services to promulgate regulations that prohibit) a group 
        health plan or health insurance issuer from carrying out 
        utilization management techniques that are commonly used as of 
        the date of enactment of this Act; or
            (2) restrict the application of the amendments made by this 
        subtitle.
    (e) Technical Amendment to the Employee Retirement Income Security 
Act of 1974.--Subpart B of part 7 of subtitle A of title I of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et. 
seq.) is amended, by adding at the end the following:

``SEC. 715. ADDITIONAL MARKET REFORMS.

    ``(a) General Rule.--Except as provided in subsection (b)--
            ``(1) the provisions of part A of title XXVII of the Public 
        Health Service Act (as amended by the Patient Protection and 
        Affordable Care Act) shall apply to group health plans, and 
        health insurance issuers providing health insurance coverage in 
        connection with group health plans, as if included in this 
        subpart; and
            ``(2) to the extent that any provision of this part 
        conflicts with a provision of such part A with respect to group 
        health plans, or health insurance issuers providing health 
        insurance coverage in connection with group health plans, the 
        provisions of such part A shall apply.
    ``(b) Exception.--Notwithstanding subsection (a), the provisions of 
sections 2716 and 2718 of title XXVII of the Public Health Service Act 
(as amended by the Patient Protection and Affordable Care Act) shall 
not apply with respect to self-insured group health plans, and the 
provisions of this part shall continue to apply to such plans as if 
such sections of the Public Health Service Act (as so amended) had not 
been enacted.''.
    (f) Technical Amendment to the Internal Revenue Code of 1986.--
Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``SEC. 9815. ADDITIONAL MARKET REFORMS.

    ``(a) General Rule.--Except as provided in subsection (b)--
            ``(1) the provisions of part A of title XXVII of the Public 
        Health Service Act (as amended by the Patient Protection and 
        Affordable Care Act) shall apply to group health plans, and 
        health insurance issuers providing health insurance coverage in 
        connection with group health plans, as if included in this 
        subchapter; and
            ``(2) to the extent that any provision of this subchapter 
        conflicts with a provision of such part A with respect to group 
        health plans, or health insurance issuers providing health 
        insurance coverage in connection with group health plans, the 
        provisions of such part A shall apply.
    ``(b) Exception.--Notwithstanding subsection (a), the provisions of 
sections 2716 and 2718 of title XXVII of the Public Health Service Act 
(as amended by the Patient Protection and Affordable Care Act) shall 
not apply with respect to self-insured group health plans, and the 
provisions of this subchapter shall continue to apply to such plans as 
if such sections of the Public Health Service Act (as so amended) had 
not been enacted.''.

                   TITLE II--ROLE OF PUBLIC PROGRAMS

                Subtitle A--Improved Access to Medicaid

SEC. 2001. MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS.

    (a) Coverage for Individuals With Income at or Below 133 Percent of 
the Poverty Line.--
            (1) Beginning 2014.--Section 1902(a)(10)(A)(i) of the 
        Social Security Act (42 U.S.C. 1396a) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by adding ``or'' at the end of subclause (VII); 
                and
                    (C) by inserting after subclause (VII) the 
                following:
                                    ``(VIII) beginning January 1, 2014, 
                                who are under 65 years of age, not 
                                pregnant, not entitled to, or enrolled 
                                for, benefits under part A of title 
                                XVIII, or enrolled for benefits under 
                                part B of title XVIII, and are not 
                                described in a previous subclause of 
                                this clause, and whose income (as 
                                determined under subsection (e)(14)) 
                                does not exceed 133 percent of the 
                                poverty line (as defined in section 
                                2110(c)(5)) applicable to a family of 
                                the size involved, subject to 
                                subsection (k);''.
            (2) Provision of at least minimum essential coverage.--
                    (A) In general.--Section 1902 of such Act (42 
                U.S.C. 1396a) is amended by inserting after subsection 
                (j) the following:
    ``(k)(1) The medical assistance provided to an individual described 
in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of 
benchmark coverage described in section 1937(b)(1) or benchmark 
equivalent coverage described in section 1937(b)(2). Such medical 
assistance shall be provided subject to the requirements of section 
1937, without regard to whether a State otherwise has elected the 
option to provide medical assistance through coverage under that 
section, unless an individual described in subclause (VIII) of 
subsection (a)(10)(A)(i) is also an individual for whom, under 
subparagraph (B) of section 1937(a)(2), the State may not require 
enrollment in benchmark coverage described in subsection (b)(1) of 
section 1937 or benchmark equivalent coverage described in subsection 
(b)(2) of that section.''.
                    (B) Conforming amendment.--Section 1903(i) of the 
                Social Security Act, as amended by section 6402(c), is 
                amended--
                            (i) in paragraph (24), by striking ``or'' 
                        at the end;
                            (ii) in paragraph (25), by striking the 
                        period and inserting ``; or''; and
                            (iii) by adding at the end the following:
            ``(26) with respect to any amounts expended for medical 
        assistance for individuals described in subclause (VIII) of 
        subsection (a)(10)(A)(i) other than medical assistance provided 
        through benchmark coverage described in section 1937(b)(1) or 
        benchmark equivalent coverage described in section 
        1937(b)(2).''.
            (3) Federal funding for cost of covering newly eligible 
        individuals.--Section 1905 of the Social Security Act (42 
        U.S.C. 1396d), is amended--
                    (A) in subsection (b), in the first sentence, by 
                inserting ``subsection (y) and'' before ``section 
                1933(d)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(y) Increased FMAP for Medical Assistance for Newly Eligible 
Mandatory Individuals.--
            ``(1) Amount of increase.--
                    ``(A) 100 percent fmap.--During the period that 
                begins on January 1, 2014, and ends on December 31, 
                2016, notwithstanding subsection (b), the Federal 
                medical assistance percentage determined for a State 
                that is one of the 50 States or the District of 
                Columbia for each fiscal year occurring during that 
                period with respect to amounts expended for medical 
                assistance for newly eligible individuals described in 
                subclause (VIII) of section 1902(a)(10)(A)(i) shall be 
                equal to 100 percent.
                    ``(B) 2017 and 2018.--
                            ``(i) In general.--During the period that 
                        begins on January 1, 2017, and ends on December 
                        31, 2018, notwithstanding subsection (b) and 
                        subject to subparagraph (D), the Federal 
                        medical assistance percentage determined for a 
                        State that is one of the 50 States or the 
                        District of Columbia for each fiscal year 
                        occurring during that period with respect to 
                        amounts expended for medical assistance for 
                        newly eligible individuals described in 
                        subclause (VIII) of section 1902(a)(10)(A)(i), 
                        shall be increased by the applicable percentage 
                        point increase specified in clause (ii) for the 
                        quarter and the State.
                            ``(ii) Applicable percentage point 
                        increase.--
                                    ``(I) In general.--For purposes of 
                                clause (i), the applicable percentage 
                                point increase for a quarter is the 
                                following:

----------------------------------------------------------------------------------------------------------------
                                       If the State is an expansion State,    If the State is not an expansion
    ``For any fiscal year quarter        the applicable percentage point      State, the applicable percentage
   occurring in the calendar year:                increase is:                       point increase is:
----------------------------------------------------------------------------------------------------------------
2017                                  30.3                                  34.3
----------------------------------------------------------------------------------------------------------------
2018                                  31.3                                  33.3
----------------------------------------------------------------------------------------------------------------

                                    ``(II) Expansion state defined.--
                                For purposes of the table in subclause 
                                (I), a State is an expansion State if, 
                                on the date of the enactment of the 
                                Patient Protection and Affordable Care 
                                Act, the State offers health benefits 
                                coverage statewide to parents and 
                                nonpregnant, childless adults whose 
                                income is at least 100 percent of the 
                                poverty line, that is not dependent on 
                                access to employer coverage, employer 
                                contribution, or employment and is not 
                                limited to premium assistance, 
                                hospital-only benefits, a high 
                                deductible health plan, or alternative 
                                benefits under a demonstration program 
                                authorized under section 1938. A State 
                                that offers health benefits coverage to 
                                only parents or only nonpregnant 
                                childless adults described in the 
                                preceding sentence shall not be 
                                considered to be an expansion State.
                    ``(C) 2019 and succeeding years.--Beginning January 
                1, 2019, notwithstanding subsection (b) but subject to 
                subparagraph (D), the Federal medical assistance 
                percentage determined for a State that is one of the 50 
                States or the District of Columbia for each fiscal year 
                quarter occurring during that period with respect to 
                amounts expended for medical assistance for newly 
                eligible individuals described in subclause (VIII) of 
                section 1902(a)(10)(A)(i), shall be increased by 32.3 
                percentage points.
                    ``(D) Limitation.--The Federal medical assistance 
                percentage determined for a State under subparagraph 
                (B) or (C) shall in no case be more than 95 percent.
            ``(2) Definitions.--In this subsection:
                    ``(A) Newly eligible.--The term `newly eligible' 
                means, with respect to an individual described in 
                subclause (VIII) of section 1902(a)(10)(A)(i), an 
                individual who is not under 19 years of age (or such 
                higher age as the State may have elected) and who, on 
                the date of enactment of the Patient Protection and 
                Affordable Care Act, is not eligible under the State 
                plan or under a waiver of the plan for full benefits or 
                for benchmark coverage described in subparagraph (A), 
                (B), or (C) of section 1937(b)(1) or benchmark 
                equivalent coverage described in section 1937(b)(2) 
                that has an aggregate actuarial value that is at least 
                actuarially equivalent to benchmark coverage described 
                in subparagraph (A), (B), or (C) of section 1937(b)(1), 
                or is eligible but not enrolled (or is on a waiting 
                list) for such benefits or coverage through a waiver 
                under the plan that has a capped or limited enrollment 
                that is full.
                    ``(B) Full benefits.--The term `full benefits' 
                means, with respect to an individual, medical 
                assistance for all services covered under the State 
                plan under this title that is not less in amount, 
                duration, or scope, or is determined by the Secretary 
                to be substantially equivalent, to the medical 
                assistance available for an individual described in 
                section 1902(a)(10)(A)(i).''.
            (4) State options to offer coverage earlier and presumptive 
        eligibility; children required to have coverage for parents to 
        be eligible.--
                    (A) In general.--Subsection (k) of section 1902 of 
                the Social Security Act (as added by paragraph (2)), is 
                amended by inserting after paragraph (1) the following:
    ``(2) Beginning with the first day of any fiscal year quarter that 
begins on or after January 1, 2011, and before January 1, 2014, a State 
may elect through a State plan amendment to provide medical assistance 
to individuals who would be described in subclause (VIII) of subsection 
(a)(10)(A)(i) if that subclause were effective before January 1, 2014. 
A State may elect to phase-in the extension of eligibility for medical 
assistance to such individuals based on income, so long as the State 
does not extend such eligibility to individuals described in such 
subclause with higher income before making individuals described in 
such subclause with lower income eligible for medical assistance.
    ``(3) If an individual described in subclause (VIII) of subsection 
(a)(10)(A)(i) is the parent of a child who is under 19 years of age (or 
such higher age as the State may have elected) who is eligible for 
medical assistance under the State plan or under a waiver of such plan 
(under that subclause or under a State plan amendment under paragraph 
(2), the individual may not be enrolled under the State plan unless the 
individual's child is enrolled under the State plan or under a waiver 
of the plan or is enrolled in other health insurance coverage. For 
purposes of the preceding sentence, the term `parent' includes an 
individual treated as a caretaker relative for purposes of carrying out 
section 1931.''.
                    (B) Presumptive eligibility.--Section 1920 of the 
                Social Security Act (42 U.S.C. 1396r-1) is amended by 
                adding at the end the following:
    ``(e) If the State has elected the option to provide a presumptive 
eligibility period under this section or section 1920A, the State may 
elect to provide a presumptive eligibility period (as defined in 
subsection (b)(1)) for individuals who are eligible for medical 
assistance under clause (i)(VIII) of subsection (a)(10)(A) or section 
1931 in the same manner as the State provides for such a period under 
this section or section 1920A, subject to such guidance as the 
Secretary shall establish.''.
            (5) Conforming amendments.--
                    (A) Section 1902(a)(10) of such Act (42 U.S.C. 
                1396a(a)(10)) is amended in the matter following 
                subparagraph (G), by striking ``and (XIV)'' and 
                inserting ``(XIV)'' and by inserting ``and (XV) the 
                medical assistance made available to an individual 
                described in subparagraph (A)(i)(VIII) shall be limited 
                to medical assistance described in subsection (k)(1)'' 
                before the semicolon.
                    (B) Section 1902(l)(2)(C) of such Act (42 U.S.C. 
                1396a(l)(2)(C)) is amended by striking ``100'' and 
                inserting ``133''.
                    (C) Section 1905(a) of such Act (42 U.S.C. 
                1396d(a)) is amended in the matter preceding paragraph 
                (1)--
                            (i) by striking ``or'' at the end of clause 
                        (xii);
                            (ii) by inserting ``or'' at the end of 
                        clause (xiii); and
                            (iii) by inserting after clause (xiii) the 
                        following:
            ``(xiv) individuals described in section 
        1902(a)(10)(A)(i)(VIII),''.
                    (D) Section 1903(f)(4) of such Act (42 U.S.C. 
                1396b(f)(4)) is amended by inserting 
                ``1902(a)(10)(A)(i)(VIII),'' after 
                ``1902(a)(10)(A)(i)(VII),''.
                    (E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 
                1396u-7(a)(1)(B)) is amended by inserting ``subclause 
                (VIII) of section 1902(a)(10)(A)(i) or under'' after 
                ``eligible under''.
    (b) Maintenance of Medicaid Income Eligibility.--Section 1902 of 
the Social Security Act (42 U.S.C. 1396a) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and'' at the end of paragraph 
                (72);
                    (B) by striking the period at the end of paragraph 
                (73) and inserting ``; and''; and
                    (C) by inserting after paragraph (73) the following 
                new paragraph:
            ``(74) provide for maintenance of effort under the State 
        plan or under any waiver of the plan in accordance with 
        subsection (gg).''; and
            (2) by adding at the end the following new subsection:
    ``(gg) Maintenance of Effort.--
            ``(1) General requirement to maintain eligibility standards 
        until state exchange is fully operational.--Subject to the 
        succeeding paragraphs of this subsection, during the period 
        that begins on the date of enactment of the Patient Protection 
        and Affordable Care Act and ends on the date on which the 
        Secretary determines that an Exchange established by the State 
        under section 1311 of the Patient Protection and Affordable 
        Care Act is fully operational, as a condition for receiving any 
        Federal payments under section 1903(a) for calendar quarters 
        occurring during such period, a State shall not have in effect 
        eligibility standards, methodologies, or procedures under the 
        State plan under this title or under any waiver of such plan 
        that is in effect during that period, that are more restrictive 
        than the eligibility standards, methodologies, or procedures, 
        respectively, under the plan or waiver that are in effect on 
        the date of enactment of the Patient Protection and Affordable 
        Care Act.
            ``(2) Continuation of eligibility standards for children 
        until october 1, 2019.--The requirement under paragraph (1) 
        shall continue to apply to a State through September 30, 2019, 
        with respect to the eligibility standards, methodologies, and 
        procedures under the State plan under this title or under any 
        waiver of such plan that are applicable to determining the 
        eligibility for medical assistance of any child who is under 19 
        years of age (or such higher age as the State may have 
        elected).
            ``(3) Nonapplication.--During the period that begins on 
        January 1, 2011, and ends on December 31, 2013, the requirement 
        under paragraph (1) shall not apply to a State with respect to 
        nonpregnant, nondisabled adults who are eligible for medical 
        assistance under the State plan or under a waiver of the plan 
        at the option of the State and whose income exceeds 133 percent 
        of the poverty line (as defined in section 2110(c)(5)) 
        applicable to a family of the size involved if, on or after 
        December 31, 2010, the State certifies to the Secretary that, 
        with respect to the State fiscal year during which the 
        certification is made, the State has a budget deficit, or with 
        respect to the succeeding State fiscal year, the State is 
        projected to have a budget deficit. Upon submission of such a 
        certification to the Secretary, the requirement under paragraph 
        (1) shall not apply to the State with respect to any remaining 
        portion of the period described in the preceding sentence.
            ``(4) Determination of compliance.--
                    ``(A) States shall apply modified gross income.--A 
                State's determination of income in accordance with 
                subsection (e)(14) shall not be considered to be 
                eligibility standards, methodologies, or procedures 
                that are more restrictive than the standards, 
                methodologies, or procedures in effect under the State 
                plan or under a waiver of the plan on the date of 
                enactment of the Patient Protection and Affordable Care 
                Act for purposes of determining compliance with the 
                requirements of paragraph (1), (2), or (3).
                    ``(B) States may expand eligibility or move 
                waivered populations into coverage under the state 
                plan.--With respect to any period applicable under 
                paragraph (1), (2), or (3), a State that applies 
                eligibility standards, methodologies, or procedures 
                under the State plan under this title or under any 
                waiver of the plan that are less restrictive than the 
                eligibility standards, methodologies, or procedures, 
                applied under the State plan or under a waiver of the 
                plan on the date of enactment of the Patient Protection 
                and Affordable Care Act, or that makes individuals who, 
                on such date of enactment, are eligible for medical 
                assistance under a waiver of the State plan, after such 
                date of enactment eligible for medical assistance 
                through a State plan amendment with an income 
                eligibility level that is not less than the income 
                eligibility level that applied under the waiver, or as 
                a result of the application of subclause (VIII) of 
                section 1902(a)(10)(A)(i), shall not be considered to 
                have in effect eligibility standards, methodologies, or 
                procedures that are more restrictive than the 
                standards, methodologies, or procedures in effect under 
                the State plan or under a waiver of the plan on the 
                date of enactment of the Patient Protection and 
                Affordable Care Act for purposes of determining 
                compliance with the requirements of paragraph (1), (2), 
                or (3).''.
    (c) Medicaid Benchmark Benefits Must Consist of at Least Minimum 
Essential Coverage.--Section 1937(b) of such Act (42 U.S.C. 1396u-7(b)) 
is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by inserting ``subject to paragraphs (5) and (6),'' before 
        ``each'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``subject to paragraphs (5) and (6)'' after 
                ``subsection (a)(1),'';
                    (B) in subparagraph (A)--
                            (i) by redesignating clauses (iv) and (v) 
                        as clauses (vi) and (vii), respectively; and
                            (ii) by inserting after clause (iii), the 
                        following:
                            ``(iv) Coverage of prescription drugs.
                            ``(v) Mental health services.''; and
                    (C) in subparagraph (C)--
                            (i) by striking clauses (i) and (ii); and
                            (ii) by redesignating clauses (iii) and 
                        (iv) as clauses (i) and (ii), respectively; and
            (3) by adding at the end the following new paragraphs:
            ``(5) Minimum standards.--Effective January 1, 2014, any 
        benchmark benefit package under paragraph (1) or benchmark 
        equivalent coverage under paragraph (2) must provide at least 
        essential health benefits as described in section 1302(b) of 
        the Patient Protection and Affordable Care Act.
            ``(6) Mental health services parity.--
                    ``(A) In general.--In the case of any benchmark 
                benefit package under paragraph (1) or benchmark 
                equivalent coverage under paragraph (2) that is offered 
                by an entity that is not a medicaid managed care 
                organization and that provides both medical and 
                surgical benefits and mental health or substance use 
                disorder benefits, the entity shall ensure that the 
                financial requirements and treatment limitations 
                applicable to such mental health or substance use 
                disorder benefits comply with the requirements of 
                section 2705(a) of the Public Health Service Act in the 
                same manner as such requirements apply to a group 
                health plan.
                    ``(B) Deemed compliance.--Coverage provided with 
                respect to an individual described in section 
                1905(a)(4)(B) and covered under the State plan under 
                section 1902(a)(10)(A) of the services described in 
                section 1905(a)(4)(B) (relating to early and periodic 
                screening, diagnostic, and treatment services defined 
                in section 1905(r)) and provided in accordance with 
                section 1902(a)(43), shall be deemed to satisfy the 
                requirements of subparagraph (A).''.
    (d) Annual Reports on Medicaid Enrollment.--
            (1) State reports.--Section 1902(a) of the Social Security 
        Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is 
        amended--
                    (A) by striking ``and'' at the end of paragraph 
                (73);
                    (B) by striking the period at the end of paragraph 
                (74) and inserting ``; and''; and
                    (C) by inserting after paragraph (74) the following 
                new paragraph:
            ``(75) provide that, beginning January 2015, and annually 
        thereafter, the State shall submit a report to the Secretary 
        that contains--
                    ``(A) the total number of enrolled and newly 
                enrolled individuals in the State plan or under a 
                waiver of the plan for the fiscal year ending on 
                September 30 of the preceding calendar year, 
                disaggregated by population, including children, 
                parents, nonpregnant childless adults, disabled 
                individuals, elderly individuals, and such other 
                categories or sub-categories of individuals eligible 
                for medical assistance under the State plan or under a 
                waiver of the plan as the Secretary may require;
                    ``(B) a description, which may be specified by 
                population, of the outreach and enrollment processes 
                used by the State during such fiscal year; and
                    ``(C) any other data reporting determined necessary 
                by the Secretary to monitor enrollment and retention of 
                individuals eligible for medical assistance under the 
                State plan or under a waiver of the plan.''.
            (2) Reports to congress.--Beginning April 2015, and 
        annually thereafter, the Secretary of Health and Human Services 
        shall submit a report to the appropriate committees of Congress 
        on the total enrollment and new enrollment in Medicaid for the 
        fiscal year ending on September 30 of the preceding calendar 
        year on a national and State-by-State basis, and shall include 
        in each such report such recommendations for administrative or 
        legislative changes to improve enrollment in the Medicaid 
        program as the Secretary determines appropriate.
    (e) State Option for Coverage for Individuals With Income That 
Exceeds 133 Percent of the Poverty Line.--
            (1) Coverage as optional categorically needy group.--
        Section 1902 of the Social Security Act (42 U.S.C. 1396a) is 
        amended--
                    (A) in subsection (a)(10)(A)(ii)--
                            (i) in subclause (XVIII), by striking 
                        ``or'' at the end;
                            (ii) in subclause (XIX), by adding ``or'' 
                        at the end; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XX) beginning January 1, 2014, 
                                who are under 65 years of age and are 
                                not described in or enrolled under a 
                                previous subclause of this clause, and 
                                whose income (as determined under 
                                subsection (e)(14)) exceeds 133 percent 
                                of the poverty line (as defined in 
                                section 2110(c)(5)) applicable to a 
                                family of the size involved but does 
                                not exceed the highest income 
                                eligibility level established under the 
                                State plan or under a waiver of the 
                                plan, subject to subsection (hh);'' and
                    (B) by adding at the end the following new 
                subsection:
    ``(hh)(1) A State may elect to phase-in the extension of 
eligibility for medical assistance to individuals described in 
subclause (XX) of subsection (a)(10)(A)(ii) based on the categorical 
group (including nonpregnant childless adults) or income, so long as 
the State does not extend such eligibility to individuals described in 
such subclause with higher income before making individuals described 
in such subclause with lower income eligible for medical assistance.
    ``(2) If an individual described in subclause (XX) of subsection 
(a)(10)(A)(ii) is the parent of a child who is under 19 years of age 
(or such higher age as the State may have elected) who is eligible for 
medical assistance under the State plan or under a waiver of such plan, 
the individual may not be enrolled under the State plan unless the 
individual's child is enrolled under the State plan or under a waiver 
of the plan or is enrolled in other health insurance coverage. For 
purposes of the preceding sentence, the term `parent' includes an 
individual treated as a caretaker relative for purposes of carrying out 
section 1931.''.
            (2) Conforming amendments.--
                    (A) Section 1905(a) of such Act (42 U.S.C. 
                1396d(a)), as amended by subsection (a)(5)(C), is 
                amended in the matter preceding paragraph (1)--
                            (i) by striking ``or'' at the end of clause 
                        (xiii);
                            (ii) by inserting ``or'' at the end of 
                        clause (xiv); and
                            (iii) by inserting after clause (xiv) the 
                        following:
            ``(xv) individuals described in section 
        1902(a)(10)(A)(ii)(XX),''.
                    (B) Section 1903(f)(4) of such Act (42 U.S.C. 
                1396b(f)(4)) is amended by inserting 
                ``1902(a)(10)(A)(ii)(XX),'' after 
                ``1902(a)(10)(A)(ii)(XIX),''.
                    (C) Section 1920(e) of such Act (42 U.S.C. 1396r-
                1(e)), as added by subsection (a)(4)(B), is amended by 
                inserting ``or clause (ii)(XX)'' after ``clause 
                (i)(VIII)''.

SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED USING MODIFIED 
              GROSS INCOME.

    (a) In General.--Section 1902(e) of the Social Security Act (42 
U.S.C. 1396a(e)) is amended by adding at the end the following:
            ``(14) Income determined using modified gross income.--
                    ``(A) In general.--Notwithstanding subsection (r) 
                or any other provision of this title, except as 
                provided in subparagraph (D), for purposes of 
                determining income eligibility for medical assistance 
                under the State plan or under any waiver of such plan 
                and for any other purpose applicable under the plan or 
                waiver for which a determination of income is required, 
                including with respect to the imposition of premiums 
                and cost-sharing, a State shall use the modified gross 
                income of an individual and, in the case of an 
                individual in a family greater than 1, the household 
                income of such family. A State shall establish income 
                eligibility thresholds for populations to be eligible 
                for medical assistance under the State plan or a waiver 
                of the plan using modified gross income and household 
                income that are not less than the effective income 
                eligibility levels that applied under the State plan or 
                waiver on the date of enactment of the Patient 
                Protection and Affordable Care Act. For purposes of 
                complying with the maintenance of effort requirements 
                under subsection (gg) during the transition to modified 
                gross income and household income, a State shall, 
                working with the Secretary, establish an equivalent 
                income test that ensures individuals eligible for 
                medical assistance under the State plan or under a 
                waiver of the plan on the date of enactment of the 
                Patient Protection and Affordable Care Act, do not lose 
                coverage under the State plan or under a waiver of the 
                plan. The Secretary may waive such provisions of this 
                title and title XXI as are necessary to ensure that 
                States establish income and eligibility determination 
                systems that protect beneficiaries.
                    ``(B) No income or expense disregards.--No type of 
                expense, block, or other income disregard shall be 
                applied by a State to determine income eligibility for 
                medical assistance under the State plan or under any 
                waiver of such plan or for any other purpose applicable 
                under the plan or waiver for which a determination of 
                income is required.
                    ``(C) No assets test.--A State shall not apply any 
                assets or resources test for purposes of determining 
                eligibility for medical assistance under the State plan 
                or under a waiver of the plan.
                    ``(D) Exceptions.--
                            ``(i) Individuals eligible because of other 
                        aid or assistance, elderly individuals, 
                        medically needy individuals, and individuals 
                        eligible for medicare cost-sharing.--
                        Subparagraphs (A), (B), and (C) shall not apply 
                        to the determination of eligibility under the 
                        State plan or under a waiver for medical 
                        assistance for the following:
                                    ``(I) Individuals who are eligible 
                                for medical assistance under the State 
                                plan or under a waiver of the plan on a 
                                basis that does not require a 
                                determination of income by the State 
                                agency administering the State plan or 
                                waiver, including as a result of 
                                eligibility for, or receipt of, other 
                                Federal or State aid or assistance, 
                                individuals who are eligible on the 
                                basis of receiving (or being treated as 
                                if receiving) supplemental security 
                                income benefits under title XVI, and 
                                individuals who are eligible as a 
                                result of being or being deemed to be a 
                                child in foster care under the 
                                responsibility of the State.
                                    ``(II) Individuals who have 
                                attained age 65.
                                    ``(III) Individuals who qualify for 
                                medical assistance under the State plan 
                                or under any waiver of such plan on the 
                                basis of being blind or disabled (or 
                                being treated as being blind or 
                                disabled) without regard to whether the 
                                individual is eligible for supplemental 
                                security income benefits under title 
                                XVI on the basis of being blind or 
                                disabled and including an individual 
                                who is eligible for medical assistance 
                                on the basis of section 1902(e)(3).
                                    ``(IV) Individuals described in 
                                subsection (a)(10)(C).
                                    ``(V) Individuals described in any 
                                clause of subsection (a)(10)(E).
                            ``(ii) Express lane agency findings.--In 
                        the case of a State that elects the Express 
                        Lane option under paragraph (13), 
                        notwithstanding subparagraphs (A), (B), and 
                        (C), the State may rely on a finding made by an 
                        Express Lane agency in accordance with that 
                        paragraph relating to the income of an 
                        individual for purposes of determining the 
                        individual's eligibility for medical assistance 
                        under the State plan or under a waiver of the 
                        plan.
                            ``(iii) Medicare prescription drug 
                        subsidies determinations.--Subparagraphs (A), 
                        (B), and (C) shall not apply to any 
                        determinations of eligibility for premium and 
                        cost-sharing subsidies under and in accordance 
                        with section 1860D-14 made by the State 
                        pursuant to section 1935(a)(2).
                            ``(iv) Long-term care.--Subparagraphs (A), 
                        (B), and (C) shall not apply to any 
                        determinations of eligibility of individuals 
                        for purposes of medical assistance for nursing 
                        facility services, a level of care in any 
                        institution equivalent to that of nursing 
                        facility services, home or community-based 
                        services furnished under a waiver or State plan 
                        amendment under section 1915 or a waiver under 
                        section 1115, and services described in section 
                        1917(c)(1)(C)(ii).
                            ``(v) Grandfather of current enrollees 
                        until date of next regular redetermination.--An 
                        individual who, on January 1, 2014, is enrolled 
                        in the State plan or under a waiver of the plan 
                        and who would be determined ineligible for 
                        medical assistance solely because of the 
                        application of the modified gross income or 
                        household income standard described in 
                        subparagraph (A), shall remain eligible for 
                        medical assistance under the State plan or 
                        waiver (and subject to the same premiums and 
                        cost-sharing as applied to the individual on 
                        that date) through March 31, 2014, or the date 
                        on which the individual's next regularly 
                        scheduled redetermination of eligibility is to 
                        occur, whichever is later.
                    ``(E) Transition planning and oversight.--Each 
                State shall submit to the Secretary for the Secretary's 
                approval the income eligibility thresholds proposed to 
                be established using modified gross income and 
                household income, the methodologies and procedures to 
                be used to determine income eligibility using modified 
                gross income and household income and, if applicable, a 
                State plan amendment establishing an optional 
                eligibility category under subsection 
                (a)(10)(A)(ii)(XX). To the extent practicable, the 
                State shall use the same methodologies and procedures 
                for purposes of making such determinations as the State 
                used on the date of enactment of the Patient Protection 
                and Affordable Care Act. The Secretary shall ensure 
                that the income eligibility thresholds proposed to be 
                established using modified gross income and household 
                income, including under the eligibility category 
                established under subsection (a)(10)(A)(ii)(XX), and 
                the methodologies and procedures proposed to be used to 
                determine income eligibility, will not result in 
                children who would have been eligible for medical 
                assistance under the State plan or under a waiver of 
                the plan on the date of enactment of the Patient 
                Protection and Affordable Care Act no longer being 
                eligible for such assistance.
                    ``(F) Limitation on secretarial authority.--The 
                Secretary shall not waive compliance with the 
                requirements of this paragraph except to the extent 
                necessary to permit a State to coordinate eligibility 
                requirements for dual eligible individuals (as defined 
                in section 1915(h)(2)(B)) under the State plan or under 
                a waiver of the plan and under title XVIII and 
                individuals who require the level of care provided in a 
                hospital, a nursing facility, or an intermediate care 
                facility for the mentally retarded.
                    ``(G) Definitions of modified gross income and 
                household income.--In this paragraph, the terms 
                `modified gross income' and `household income' have the 
                meanings given such terms in section 36B(d)(2) of the 
                Internal Revenue Code of 1986.
                    ``(H) Continued application of medicaid rules 
                regarding point-in-time income and sources of income.--
                The requirement under this paragraph for States to use 
                modified gross income and household income to determine 
                income eligibility for medical assistance under the 
                State plan or under any waiver of such plan and for any 
                other purpose applicable under the plan or waiver for 
                which a determination of income is required shall not 
                be construed as affecting or limiting the application 
                of--
                            ``(i) the requirement under this title and 
                        under the State plan or a waiver of the plan to 
                        determine an individual's income as of the 
                        point in time at which an application for 
                        medical assistance under the State plan or a 
                        waiver of the plan is processed; or
                            ``(ii) any rules established under this 
                        title or under the State plan or a waiver of 
                        the plan regarding sources of countable 
                        income.''.
    (b) Conforming Amendment.--Section 1902(a)(17) of such Act (42 
U.S.C. 1396a(a)(17)) is amended by inserting ``(e)(14),'' before 
``(l)(3)''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
take effect on January 1, 2014.

SEC. 2003. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR EMPLOYER-
              SPONSORED INSURANCE.

    (a) In General.--Section 1906A of such Act (42 U.S.C. 1396e-1) is 
amended--
            (1) in subsection (a)--
                    (A) by striking ``may elect to'' and inserting 
                ``shall'';
                    (B) by striking ``under age 19''; and
                    (C) by inserting ``, in the case of an individual 
                under age 19,'' after ``(and'';
            (2) in subsection (c), in the first sentence, by striking 
        ``under age 19''; and
            (3) in subsection (d)--
                    (A) in paragraph (2)--
                            (i) in the first sentence, by striking 
                        ``under age 19''; and
                            (ii) by striking the third sentence and 
                        inserting ``A State may not require, as a 
                        condition of an individual (or the individual's 
                        parent) being or remaining eligible for medical 
                        assistance under this title, that the 
                        individual (or the individual's parent) apply 
                        for enrollment in qualified employer-sponsored 
                        coverage under this section.''; and
                    (B) in paragraph (3), by striking ``the parent of 
                an individual under age 19'' and inserting ``an 
                individual (or the parent of an individual)''; and
            (4) in subsection (e), by striking ``under age 19'' each 
        place it appears.
    (b) Conforming Amendment.--The heading for section 1906A of such 
Act (42 U.S.C. 1396e-1) is amended by striking ``option for children''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2014.

SEC. 2004. MEDICAID COVERAGE FOR FORMER FOSTER CARE CHILDREN.

    (a) In General.--Section 1902(a)(10)(A)(i) of the Social Security 
Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is amended--
            (1) by striking ``or'' at the end of subclause (VII);
            (2) by adding ``or'' at the end of subclause (VIII); and
            (3) by inserting after subclause (VIII) the following:
                                    ``(IX) who were in foster care 
                                under the responsibility of a State for 
                                more than 6 months (whether or not 
                                consecutive) but are no longer in such 
                                care, who are not described in any of 
                                subclauses (I) through (VII) of this 
                                clause, and who are under 25 years of 
                                age;''.
    (b) Option to Provide Presumptive Eligibility.--Section 1920(e) of 
such Act (42 U.S.C. 1396r-1(e)), as added by section 2001(a)(4)(B) and 
amended by section 2001(e)(2)(C), is amended by inserting ``, clause 
(i)(IX),'' after ``clause (i)(VIII)''.
    (c) Conforming Amendments.--
            (1) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), 
        as amended by section 2001(a)(5)(D), is amended by inserting 
        ``1902(a)(10)(A)(i)(IX),'' after ``1902(a)(10)(A)(i)(VIII),''.
            (2) Section 1937(a)(2)(B)(viii) of such Act (42 U.S.C. 
        1396u-7(a)(2)(B)(viii)) is amended by inserting ``, or the 
        individual qualifies for medical assistance on the basis of 
        section 1902(a)(10)(A)(i)(IX)'' before the period.
    (d) Effective Date.--The amendments made by this section take 
effect on January 1, 2019.

SEC. 2005. PAYMENTS TO TERRITORIES.

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

SEC. 2006. SPECIAL ADJUSTMENT TO FMAP DETERMINATION FOR CERTAIN STATES 
              RECOVERING FROM A MAJOR DISASTER.

    Section 1905 of the Social Security Act (42 U.S.C. 1396d), as 
amended by sections 2001(a)(3) and 2001(b)(2), is amended--
            (1) in subsection (b), in the first sentence, by striking 
        ``subsection (y)'' and inserting ``subsections (y) and (aa)''; 
        and
            (2) by adding at the end the following new subsection:
    ``(aa)(1) Notwithstanding subsection (b), beginning January 1, 
2011, the Federal medical assistance percentage for a fiscal year for a 
disaster-recovery FMAP adjustment State shall be equal to the 
following:
            ``(A) In the case of the first fiscal year (or part of a 
        fiscal year) for which this subsection applies to the State, 
        the Federal medical assistance percentage determined for the 
        fiscal year without regard to this subsection and subsection 
        (y), increased by 50 percent of the number of percentage points 
        by which the Federal medical assistance percentage determined 
        for the State for the fiscal year without regard to this 
        subsection and subsection (y), is less than the Federal medical 
        assistance percentage determined for the State for the 
        preceding fiscal year after the application of only subsection 
        (a) of section 5001 of Public Law 111-5 (if applicable to the 
        preceding fiscal year) and without regard to this subsection, 
        subsection (y), and subsections (b) and (c) of section 5001 of 
        Public Law 111-5.
            ``(B) In the case of the second or any succeeding fiscal 
        year for which this subsection applies to the State, the 
        Federal medical assistance percentage determined for the 
        preceding fiscal year under this subsection for the State, 
        increased by 25 percent of the number of percentage points by 
        which the Federal medical assistance percentage determined for 
        the State for the fiscal year without regard to this subsection 
        and subsection (y), is less than the Federal medical assistance 
        percentage determined for the State for the preceding fiscal 
        year under this subsection.
    ``(2) In this subsection, the term `disaster-recovery FMAP 
adjustment State' means a State that is one of the 50 States or the 
District of Columbia, for which, at any time during the preceding 7 
fiscal years, the President has declared a major disaster under section 
401 of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act and determined as a result of such disaster that every county or 
parish in the State warrant individual and public assistance or public 
assistance from the Federal Government under such Act and for which--
            ``(A) in the case of the first fiscal year (or part of a 
        fiscal year) for which this subsection applies to the State, 
        the Federal medical assistance percentage determined for the 
        State for the fiscal year without regard to this subsection and 
        subsection (y), is less than the Federal medical assistance 
        percentage determined for the State for the preceding fiscal 
        year after the application of only subsection (a) of section 
        5001 of Public Law 111-5 (if applicable to the preceding fiscal 
        year) and without regard to this subsection, subsection (y), 
        and subsections (b) and (c) of section 5001 of Public Law 111-
        5, by at least 3 percentage points; and
            ``(B) in the case of the second or any succeeding fiscal 
        year for which this subsection applies to the State, the 
        Federal medical assistance percentage determined for the State 
        for the fiscal year without regard to this subsection and 
        subsection (y), is less than the Federal medical assistance 
        percentage determined for the State for the preceding fiscal 
        year under this subsection by at least 3 percentage points.
    ``(3) The Federal medical assistance percentage determined for a 
disaster-recovery FMAP adjustment State under paragraph (1) shall apply 
for purposes of this title (other than with respect to disproportionate 
share hospital payments described in section 1923 and payments under 
this title that are based on the enhanced FMAP described in 2105(b)) 
and shall not apply with respect to payments under title IV (other than 
under part E of title IV) or payments under title XXI.''.

SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

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

   Subtitle B--Enhanced Support for the Children's Health Insurance 
                                Program

SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP.

    (a) In General.--Section 2105(b) of the Social Security Act (42 
U.S.C. 1397ee(b)) is amended by adding at the end the following: 
``Notwithstanding the preceding sentence, during the period that begins 
on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP 
determined for a State for a fiscal year (or for any portion of a 
fiscal year occurring during such period) shall be increased by 23 
percentage points, but in no case shall exceed 100 percent. The 
increase in the enhanced FMAP under the preceding sentence shall not 
apply with respect to determining the payment to a State under 
subsection (a)(1) for expenditures described in subparagraph (D)(iv), 
paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first 
sentence of section 1905(b).''.
    (b) Maintenance of Effort.--
            (1) In general.--Section 2105(d) of the Social Security Act 
        (42 U.S.C. 1397ee(d)) is amended by adding at the end the 
        following:
            ``(3) Continuation of eligibility standards for children 
        until october 1, 2019.--
                    ``(A) In general.--During the period that begins on 
                the date of enactment of the Patient Protection and 
                Affordable Care Act and ends on September 30, 2019, a 
                State shall not have in effect eligibility standards, 
                methodologies, or procedures under its State child 
                health plan (including any waiver under such plan) for 
                children (including children provided medical 
                assistance for which payment is made under section 
                2105(a)(1)(A)) that are more restrictive than the 
                eligibility standards, methodologies, or procedures, 
                respectively, under such plan (or waiver) as in effect 
                on the date of enactment of that Act. The preceding 
                sentence shall not be construed as preventing a State 
                during such period from--
                            ``(i) applying eligibility standards, 
                        methodologies, or procedures for children under 
                        the State child health plan or under any waiver 
                        of the plan that are less restrictive than the 
                        eligibility standards, methodologies, or 
                        procedures, respectively, for children under 
                        the plan or waiver that are in effect on the 
                        date of enactment of such Act; or
                            ``(ii) imposing a limitation described in 
                        section 2112(b)(7) for a fiscal year in order 
                        to limit expenditures under the State child 
                        health plan to those for which Federal 
                        financial participation is available under this 
                        section for the fiscal year.
                    ``(B) Assurance of exchange coverage for targeted 
                low-income children unable to be provided child health 
                assistance as a result of funding shortfalls.--In the 
                event that allotments provided under section 2104 are 
                insufficient to provide coverage to all children who 
                are eligible to be targeted low-income children under 
                the State child health plan under this title, a State 
                shall establish procedures to ensure that such children 
                are provided coverage through an Exchange established 
                by the State under section 1311 of the Patient 
                Protection and Affordable Care Act.''.
            (2) Conforming amendment to title xxi medicaid maintenance 
        of effort.--Section 2105(d)(1) of the Social Security Act (42 
        U.S.C. 1397ee(d)(1)) is amended by adding before the period ``, 
        except as required under section 1902(e)(14)''.
    (c) No Enrollment Bonus Payments for Children Enrolled After Fiscal 
Year 2013.--Section 2105(a)(3)(F)(iii) of the Social Security Act (42 
U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting ``or any children 
enrolled on or after October 1, 2013'' before the period.
    (d) Income Eligibility Determined Using Modified Gross Income.--
            (1) State plan requirement.--Section 2102(b)(1)(B) of the 
        Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
                    (A) in clause (iii), by striking ``and'' after the 
                semicolon;
                    (B) in clause (iv), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(v) shall, beginning January 1, 2014, use 
                        modified gross income and household income (as 
                        defined in section 36B(d)(2) of the Internal 
                        Revenue Code of 1986) to determine eligibility 
                        for child health assistance under the State 
                        child health plan or under any waiver of such 
                        plan and for any other purpose applicable under 
                        the plan or waiver for which a determination of 
                        income is required, including with respect to 
                        the imposition of premiums and cost-sharing, 
                        consistent with section 1902(e)(14).''.
            (2) Conforming amendment.--Section 2107(e)(1) of the Social 
        Security Act (42 U.S.C. 1397gg(e)(1)) is amended--
                    (A) by redesignating subparagraphs (E) through (L) 
                as subparagraphs (F) through (M), respectively; and
                    (B) by inserting after subparagraph (D), the 
                following:
                    ``(E) Section 1902(e)(14) (relating to income 
                determined using modified gross income and household 
                income).''.
    (e) Application of Streamlined Enrollment System.--Section 
2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as 
amended by subsection (d)(2), is amended by adding at the end the 
following:
                    ``(N) Section 1943(b) (relating to coordination 
                with State Exchanges and the State Medicaid agency).''.
    (f) CHIP Eligibility for Children Ineligible for Medicaid as a 
Result of Elimination of Disregards.--Notwithstanding any other 
provision of law, a State shall treat any child who is determined to be 
ineligible for medical assistance under the State Medicaid plan or 
under a waiver of the plan as a result of the elimination of the 
application of an income disregard based on expense or type of income, 
as required under section 1902(e)(14) of the Social Security Act (as 
added by this Act), as a targeted low-income child under section 
2110(b) (unless the child is excluded under paragraph (2) of that 
section) and shall provide child health assistance to the child under 
the State child health plan (whether implemented under title XIX or 
XXI, or both, of the Social Security Act).

SEC. 2102. TECHNICAL CORRECTIONS.

    (a) CHIPRA.--Effective as if included in the enactment of the 
Children's Health Insurance Program Reauthorization Act of 2009 (Public 
Law 111-3) (in this section referred to as ``CHIPRA''):
            (1) Section 2104(m) of the Social Security Act, as added by 
        section 102 of CHIPRA, is amended--
                    (A) by redesignating paragraph (7) as paragraph 
                (8); and
                    (B) by inserting after paragraph (6), the 
                following:
            ``(7) Adjustment of fiscal year 2010 allotments to account 
        for changes in projected spending for certain previously 
        approved expansion programs.--For purposes of recalculating the 
        fiscal year 2010 allotment, in the case of one of the 50 States 
        or the District of Columbia that has an approved State plan 
        amendment effective January 1, 2006, to provide child health 
        assistance through the provision of benefits under the State 
        plan under title XIX for children from birth through age 5 
        whose family income does not exceed 200 percent of the poverty 
        line, the Secretary shall increase the allotment by an amount 
        that would be equal to the Federal share of expenditures that 
        would have been claimed at the enhanced FMAP rate rather than 
        the Federal medical assistance percentage matching rate for 
        such population.''.
            (2) Section 605 of CHIPRA is amended by striking ``legal 
        residents'' and insert ``lawfully residing in the United 
        States''.
            (3) Subclauses (I) and (II) of paragraph (3)(C)(i) of 
        section 2105(a) of the Social Security Act (42 U.S.C. 
        1397ee(a)(3)(ii)), as added by section 104 of CHIPRA, are each 
        amended by striking ``, respectively''.
            (4) Section 2105(a)(3)(E)(ii) of the Social Security Act 
        (42 U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of 
        CHIPRA, is amended by striking subclause (IV).
            (5) Section 2105(c)(9)(B) of the Social Security Act (42 
        U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of 
        CHIPRA, is amended by striking ``section 1903(a)(3)(F)'' and 
        inserting ``section 1903(a)(3)(G)''.
            (6) Section 2109(b)(2)(B) of the Social Security Act (42 
        U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is 
        amended by striking ``the child population growth factor under 
        section 2104(m)(5)(B)'' and inserting ``a high-performing State 
        under section 2111(b)(3)(B)''.
            (7) Section 2110(c)(9)(B)(v) of the Social Security Act (42 
        U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of 
        CHIPRA, is amended by striking ``school or school system'' and 
        inserting ``local educational agency (as defined under section 
        9101 of the Elementary and Secondary Education Act of 1965''.
            (8) Section 211(a)(1)(B) of CHIPRA is amended--
                    (A) by striking ``is amended'' and all that follows 
                through ``adding'' and inserting ``is amended by 
                adding''; and
                    (B) by redesignating the new subparagraph to be 
                added by such section to section 1903(a)(3) of the 
                Social Security Act as a new subparagraph (H).
    (b) ARRA.--Effective as if included in the enactment of section 
5006(a) of division B of the American Recovery and Reinvestment Act of 
2009 (Public Law 111-5), the second sentence of section 1916A(a)(1) of 
the Social Security Act (42 U.S.C. 1396o-1(a)(1)) is amended by 
striking ``or (i)'' and inserting ``, (i), or (j)''.

        Subtitle C--Medicaid and CHIP Enrollment Simplification

SEC. 2201. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE HEALTH 
              INSURANCE EXCHANGES.

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

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

    ``(a) Condition for Participation in Medicaid.--As a condition of 
the State plan under this title and receipt of any Federal financial 
assistance under section 1903(a) for calendar quarters beginning after 
January 1, 2014, a State shall ensure that the requirements of 
subsection (b) is met.
    ``(b) Enrollment Simplification and Coordination With State Health 
Insurance Exchanges and Chip.--
            ``(1) In general.--A State shall establish procedures for--
                    ``(A) enabling individuals, through an Internet 
                website that meets the requirements of paragraph (4), 
                to apply for medical assistance under the State plan or 
                under a waiver of the plan, to be enrolled in the State 
                plan or waiver, to renew their enrollment in the plan 
                or waiver, and to consent to enrollment or reenrollment 
                in the State plan through electronic signature;
                    ``(B) enrolling, without any further determination 
                by the State and through such website, individuals who 
                are identified by an Exchange established by the State 
                under section 1311 of the Patient Protection and 
                Affordable Care Act as being eligible for--
                            ``(i) medical assistance under the State 
                        plan or under a waiver of the plan; or
                            ``(ii) child health assistance under the 
                        State child health plan under title XXI;
                    ``(C) ensuring that individuals who apply for but 
                are determined to be ineligible for medical assistance 
                under the State plan or a waiver or ineligible for 
                child health assistance under the State child health 
                plan under title XXI, are screened for eligibility for 
                enrollment in qualified health plans offered through 
                such an Exchange and, if applicable, premium assistance 
                for the purchase of a qualified health plan under 
                section 36B of the Internal Revenue Code of 1986 (and, 
                if applicable, advance payment of such assistance under 
                section 1412 of the Patient Protection and Affordable 
                Care Act), and, if eligible, enrolled in such a plan 
                without having to submit an additional or separate 
                application, and that such individuals receive 
                information regarding reduced cost-sharing for eligible 
                individuals under section 1402 of the Patient 
                Protection and Affordable Care Act, and any other 
                assistance or subsidies available for coverage obtained 
                through the Exchange;
                    ``(D) ensuring that the State agency responsible 
                for administering the State plan under this title (in 
                this section referred to as the `State Medicaid 
                agency'), the State agency responsible for 
                administering the State child health plan under title 
                XXI (in this section referred to as the `State CHIP 
                agency') and an Exchange established by the State under 
                section 1311 of the Patient Protection and Affordable 
                Care Act utilize a secure electronic interface 
                sufficient to allow for a determination of an 
                individual's eligibility for such medical assistance, 
                child health assistance, or premium assistance, and 
                enrollment in the State plan under this title, title 
                XXI, or a qualified health plan, as appropriate;
                    ``(E) coordinating, for individuals who are 
                enrolled in the State plan or under a waiver of the 
                plan and who are also enrolled in a qualified health 
                plan offered through such an Exchange, and for 
                individuals who are enrolled in the State child health 
                plan under title XXI and who are also enrolled in a 
                qualified health plan, the provision of medical 
                assistance or child health assistance to such 
                individuals with the coverage provided under the 
                qualified health plan in which they are enrolled, 
                including services described in section 1905(a)(4)(B) 
                (relating to early and periodic screening, diagnostic, 
                and treatment services defined in section 1905(r)) and 
                provided in accordance with the requirements of section 
                1902(a)(43); and
                    ``(F) conducting outreach to and enrolling 
                vulnerable and underserved populations eligible for 
                medical assistance under this title XIX or for child 
                health assistance under title XXI, including children, 
                unaccompanied homeless youth, children and youth with 
                special health care needs, pregnant women, racial and 
                ethnic minorities, rural populations, victims of abuse 
                or trauma, individuals with mental health or substance-
                related disorders, and individuals with HIV/AIDS.
            ``(2) Agreements with state health insurance exchanges.--
        The State Medicaid agency and the State CHIP agency may enter 
        into an agreement with an Exchange established by the State 
        under section 1311 of the Patient Protection and Affordable 
        Care Act under which the State Medicaid agency or State CHIP 
        agency may determine whether a State resident is eligible for 
        premium assistance for the purchase of a qualified health plan 
        under section 36B of the Internal Revenue Code of 1986 (and, if 
        applicable, advance payment of such assistance under section 
        1412 of the Patient Protection and Affordable Care Act), so 
        long as the agreement meets such conditions and requirements as 
        the Secretary of the Treasury may prescribe to reduce 
        administrative costs and the likelihood of eligibility errors 
        and disruptions in coverage.
            ``(3) Streamlined enrollment system.--The State Medicaid 
        agency and State CHIP agency shall participate in and comply 
        with the requirements for the system established under section 
        1413 of the Patient Protection and Affordable Care Act 
        (relating to streamlined procedures for enrollment through an 
        Exchange, Medicaid, and CHIP).
            ``(4) Enrollment website requirements.--The procedures 
        established by State under paragraph (1) shall include 
        establishing and having in operation, not later than January 1, 
        2014, an Internet website that is linked to any website of an 
        Exchange established by the State under section 1311 of the 
        Patient Protection and Affordable Care Act and to the State 
        CHIP agency (if different from the State Medicaid agency) and 
        allows an individual who is eligible for medical assistance 
        under the State plan or under a waiver of the plan and who is 
        eligible to receive premium credit assistance for the purchase 
        of a qualified health plan under section 36B of the Internal 
        Revenue Code of 1986 to compare the benefits, premiums, and 
        cost-sharing applicable to the individual under the State plan 
        or waiver with the benefits, premiums, and cost-sharing 
        available to the individual under a qualified health plan 
        offered through such an Exchange, including, in the case of a 
        child, the coverage that would be provided for the child 
        through the State plan or waiver with the coverage that would 
        be provided to the child through enrollment in family coverage 
        under that plan and as supplemental coverage by the State under 
        the State plan or waiver.
            ``(5) Continued need for assessment for home and community-
        based services.--Nothing in paragraph (1) shall limit or modify 
        the requirement that the State assess an individual for 
        purposes of providing home and community-based services under 
        the State plan or under any waiver of such plan for individuals 
        described in subsection (a)(10)(A)(ii)(VI).''.

SEC. 2202. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGIBILITY 
              DETERMINATIONS FOR ALL MEDICAID ELIGIBLE POPULATIONS.

    (a) In General.--Section 1902(a)(47) of the Social Security Act (42 
U.S.C. 1396a(a)(47)) is amended--
            (1) by striking ``at the option of the State, provide'' and 
        inserting ``provide--
                    ``(A) at the option of the State,'';
            (2) by inserting ``and'' after the semicolon; and
            (3) by adding at the end the following:
                    ``(B) that any hospital that is a participating 
                provider under the State plan may elect to be a 
                qualified entity for purposes of determining, on the 
                basis of preliminary information, whether any 
                individual is eligible for medical assistance under the 
                State plan or under a waiver of the plan for purposes 
                of providing the individual with medical assistance 
                during a presumptive eligibility period, in the same 
                manner, and subject to the same requirements, as apply 
                to the State options with respect to populations 
                described in section 1920, 1920A, or 1920B (but without 
                regard to whether the State has elected to provide for 
                a presumptive eligibility period under any such 
                sections), subject to such guidance as the Secretary 
                shall establish;''.
    (b) Conforming Amendment.--Section 1903(u)(1)(D)(v) of such Act (42 
U.S.C. 1396b(u)(1)(D)v)) is amended--
            (1) by striking ``or for'' and inserting ``for''; and
            (2) by inserting before the period at the end the 
        following: ``, or for medical assistance provided to an 
        individual during a presumptive eligibility period resulting 
        from a determination of presumptive eligibility made by a 
        hospital that elects under section 1902(a)(47)(B) to be a 
        qualified entity for such purpose''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2014, and apply to services furnished on or after 
that date.

             Subtitle D--Improvements to Medicaid Services

SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

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

SEC. 2302. CONCURRENT CARE FOR CHILDREN.

    (a) In General.--Section 1905(o)(1) of the Social Security Act (42 
U.S.C. 1396d(o)(1)) is amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (C)''; and
            (2) by adding at the end the following new subparagraph:
    ``(C) A voluntary election to have payment made for hospice care 
for a child (as defined by the State) shall not constitute a waiver of 
any rights of the child to be provided with, or to have payment made 
under this title for, services that are related to the treatment of the 
child's condition for which a diagnosis of terminal illness has been 
made.''.
    (b) Application to CHIP.--Section 2110(a)(23) of the Social 
Security Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting 
``(concurrent, in the case of an individual who is a child, with care 
related to the treatment of the child's condition with respect to which 
a diagnosis of terminal illness has been made'' after ``hospice care''.

SEC. 2303. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

    (a) Coverage as Optional Categorically Needy Group.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by 
        section 2001(e), is amended--
                    (A) in subclause (XIX), by striking ``or'' at the 
                end;
                    (B) in subclause (XX), by adding ``or'' at the end; 
                and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(XXI) who are described in 
                                subsection (ii) (relating to 
                                individuals who meet certain income 
                                standards);''.
            (2) Group described.--Section 1902 of such Act (42 U.S.C. 
        1396a), as amended by section 2001(d), is amended by adding at 
        the end the following new subsection:
    ``(ii)(1) Individuals described in this subsection are 
individuals--
                    ``(A) whose income does not exceed an income 
                eligibility level established by the State that does 
                not exceed the highest income eligibility level 
                established under the State plan under this title (or 
                under its State child health plan under title XXI) for 
                pregnant women; and
                    ``(B) who are not pregnant.
            ``(2) At the option of a State, individuals described in 
        this subsection may include individuals who, had individuals 
        applied on or before January 1, 2007, would have been made 
        eligible pursuant to the standards and processes imposed by 
        that State for benefits described in clause (XV) of the matter 
        following subparagraph (G) of section subsection (a)(10) 
        pursuant to a waiver granted under section 1115.
            ``(3) At the option of a State, for purposes of subsection 
        (a)(17)(B), in determining eligibility for services under this 
        subsection, the State may consider only the income of the 
        applicant or recipient.''.
            (3) Limitation on benefits.--Section 1902(a)(10) of the 
        Social Security Act (42 U.S.C. 1396a(a)(10)), as amended by 
        section 2001(a)(5)(A), is amended in the matter following 
        subparagraph (G)--
                    (A) by striking ``and (XV)'' and inserting 
                ``(XV)''; and
                    (B) by inserting ``, and (XVI) the medical 
                assistance made available to an individual described in 
                subsection (ii) shall be limited to family planning 
                services and supplies described in section 
                1905(a)(4)(C) including medical diagnosis and treatment 
                services that are provided pursuant to a family 
                planning service in a family planning setting'' before 
                the semicolon.
            (4) Conforming amendments.--
                    (A) Section 1905(a) of the Social Security Act (42 
                U.S.C. 1396d(a)), as amended by section 2001(e)(2)(A), 
                is amended in the matter preceding paragraph (1)--
                            (i) in clause (xiv), by striking ``or'' at 
                        the end;
                            (ii) in clause (xv), by adding ``or'' at 
                        the end; and
                            (iii) by inserting after clause (xv) the 
                        following:
                            ``(xvi) individuals described in section 
                        1902(ii),''.
                    (B) Section 1903(f)(4) of such Act (42 U.S.C. 
                1396b(f)(4)), as amended by section 2001(e)(2)(B), is 
                amended by inserting ``1902(a)(10)(A)(ii)(XXI),'' after 
                ``1902(a)(10)(A)(ii)(XX),''.
    (b) Presumptive Eligibility.--
            (1) In general.--Title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) is amended by inserting after section 
        1920B the following:

         ``presumptive eligibility for family planning services

    ``Sec. 1920C.  (a) State Option.--State plan approved under section 
1902 may provide for making medical assistance available to an 
individual described in section 1902(ii) (relating to individuals who 
meet certain income eligibility standard) during a presumptive 
eligibility period. In the case of an individual described in section 
1902(ii), such medical assistance shall be limited to family planning 
services and supplies described in 1905(a)(4)(C) and, at the State's 
option, medical diagnosis and treatment services that are provided in 
conjunction with a family planning service in a family planning 
setting.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Presumptive eligibility period.--The term 
        `presumptive eligibility period' means, with respect to an 
        individual described in subsection (a), the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the individual is described in 
                section 1902(ii); and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of such 
                        individual for services under the State plan; 
                        or
                            ``(ii) in the case of such an individual 
                        who does not file an application by the last 
                        day of the month following the month during 
                        which the entity makes the determination 
                        referred to in subparagraph (A), such last day.
            ``(2) Qualified entity.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `qualified entity' means any entity that--
                            ``(i) is eligible for payments under a 
                        State plan approved under this title; and
                            ``(ii) is determined by the State agency to 
                        be capable of making determinations of the type 
                        described in paragraph (1)(A).
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a State from 
                limiting the classes of entities that may become 
                qualified entities in order to prevent fraud and abuse.
    ``(c) Administration.--
            ``(1) In general.--The State agency shall provide qualified 
        entities with--
                    ``(A) such forms as are necessary for an 
                application to be made by an individual described in 
                subsection (a) for medical assistance under the State 
                plan; and
                    ``(B) information on how to assist such individuals 
                in completing and filing such forms.
            ``(2) Notification requirements.--A qualified entity that 
        determines under subsection (b)(1)(A) that an individual 
        described in subsection (a) is presumptively eligible for 
        medical assistance under a State plan shall--
                    ``(A) notify the State agency of the determination 
                within 5 working days after the date on which 
                determination is made; and
                    ``(B) inform such individual at the time the 
                determination is made that an application for medical 
                assistance is required to be made by not later than the 
                last day of the month following the month during which 
                the determination is made.
            ``(3) Application for medical assistance.--In the case of 
        an individual described in subsection (a) who is determined by 
        a qualified entity to be presumptively eligible for medical 
        assistance under a State plan, the individual shall apply for 
        medical assistance by not later than the last day of the month 
        following the month during which the determination is made.
    ``(d) Payment.--Notwithstanding any other provision of law, medical 
assistance that--
            ``(1) is furnished to an individual described in subsection 
        (a)--
                    ``(A) during a presumptive eligibility period; and
                    ``(B) by a entity that is eligible for payments 
                under the State plan; and
            ``(2) is included in the care and services covered by the 
        State plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
            (2) Conforming amendments.--
                    (A) Section 1902(a)(47) of the Social Security Act 
                (42 U.S.C. 1396a(a)(47)), as amended by section 
                2202(a), is amended--
                            (i) in subparagraph (A), by inserting 
                        before the semicolon at the end the following: 
                        ``and provide for making medical assistance 
                        available to individuals described in 
                        subsection (a) of section 1920C during a 
                        presumptive eligibility period in accordance 
                        with such section''; and
                            (ii) in subparagraph (B), by striking ``or 
                        1920B'' and inserting ``1920B, or 1920C''.
                    (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
                1396b(u)(1)(D)(v)), as amended by section 2202(b), is 
                amended by inserting ``or for medical assistance 
                provided to an individual described in subsection (a) 
                of section 1920C during a presumptive eligibility 
                period under such section,'' after ``1920B during a 
                presumptive eligibility period under such section,''.
    (c) Clarification of Coverage of Family Planning Services and 
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)), as amended by section 2001(c), is amended by adding at the end 
the following:
            ``(7) Coverage of family planning services and supplies.--
        Notwithstanding the previous provisions of this section, a 
        State may not provide for medical assistance through enrollment 
        of an individual with benchmark coverage or benchmark-
        equivalent coverage under this section unless such coverage 
        includes for any individual described in section 1905(a)(4)(C), 
        medical assistance for family planning services and supplies in 
        accordance with such section.''.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and shall apply to 
items and services furnished on or after such date.

SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

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

 Subtitle E--New Options for States to Provide Long-Term Services and 
                                Supports

SEC. 2401. COMMUNITY FIRST CHOICE OPTION.

    Section 1915 of the Social Security Act (42 U.S.C. 1396n) is 
amended by adding at the end the following:
    ``(k) State Plan Option to Provide Home and Community-based 
Attendant Services and Supports.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, beginning October 1, 2010, a State may provide 
        through a State plan amendment for the provision of medical 
        assistance for home and community-based attendant services and 
        supports for individuals who are eligible for medical 
        assistance under the State plan whose income does not exceed 
        150 percent of the poverty line (as defined in section 
        2110(c)(5)) or, if greater, the income level applicable for an 
        individual who has been determined to require an institutional 
        level of care to be eligible for nursing facility services 
        under the State plan and with respect to whom there has been a 
        determination that, but for the provision of such services, the 
        individuals would require the level of care provided in a 
        hospital, a nursing facility, an intermediate care facility for 
        the mentally retarded, or an institution for mental diseases, 
        the cost of which could be reimbursed under the State plan, but 
        only if the individual chooses to receive such home and 
        community-based attendant services and supports, and only if 
        the State meets the following requirements:
                    ``(A) Availability.--The State shall make available 
                home and community-based attendant services and 
                supports to eligible individuals, as needed, to assist 
                in accomplishing activities of daily living, 
                instrumental activities of daily living, and health-
                related tasks through hands-on assistance, supervision, 
                or cueing--
                            ``(i) under a person-centered plan of 
                        services and supports that is based on an 
                        assessment of functional need and that is 
                        agreed to in writing by the individual or, as 
                        appropriate, the individual's representative;
                            ``(ii) in a home or community setting, 
                        which does not include a nursing facility, 
                        institution for mental diseases, or an 
                        intermediate care facility for the mentally 
                        retarded;
                            ``(iii) under an agency-provider model or 
                        other model (as defined in paragraph (6)(C )); 
                        and
                            ``(iv) the furnishing of which--
                                    ``(I) is selected, managed, and 
                                dismissed by the individual, or, as 
                                appropriate, with assistance from the 
                                individual's representative;
                                    ``(II) is controlled, to the 
                                maximum extent possible, by the 
                                individual or where appropriate, the 
                                individual's representative, regardless 
                                of who may act as the employer of 
                                record; and
                                    ``(III) provided by an individual 
                                who is qualified to provide such 
                                services, including family members (as 
                                defined by the Secretary).
                    ``(B) Included services and supports.--In addition 
                to assistance in accomplishing activities of daily 
                living, instrumental activities of daily living, and 
                health related tasks, the home and community-based 
                attendant services and supports made available 
                include--
                            ``(i) the acquisition, maintenance, and 
                        enhancement of skills necessary for the 
                        individual to accomplish activities of daily 
                        living, instrumental activities of daily 
                        living, and health related tasks;
                            ``(ii) back-up systems or mechanisms (such 
                        as the use of beepers or other electronic 
                        devices) to ensure continuity of services and 
                        supports; and
                            ``(iii) voluntary training on how to 
                        select, manage, and dismiss attendants.
                    ``(C) Excluded services and supports.--Subject to 
                subparagraph (D), the home and community-based 
                attendant services and supports made available do not 
                include--
                            ``(i) room and board costs for the 
                        individual;
                            ``(ii) special education and related 
                        services provided under the Individuals with 
                        Disabilities Education Act and vocational 
                        rehabilitation services provided under the 
                        Rehabilitation Act of 1973;
                            ``(iii) assistive technology devices and 
                        assistive technology services other than those 
                        under (1)(B)(ii);
                            ``(iv) medical supplies and equipment; or
                            ``(v) home modifications.
                    ``(D) Permissible services and supports.--The home 
                and community-based attendant services and supports may 
                include--
                            ``(i) expenditures for transition costs 
                        such as rent and utility deposits, first 
                        month's rent and utilities, bedding, basic 
                        kitchen supplies, and other necessities 
                        required for an individual to make the 
                        transition from a nursing facility, institution 
                        for mental diseases, or intermediate care 
                        facility for the mentally retarded to a 
                        community-based home setting where the 
                        individual resides; and
                            ``(ii) expenditures relating to a need 
                        identified in an individual's person-centered 
                        plan of services that increase independence or 
                        substitute for human assistance, to the extent 
                        that expenditures would otherwise be made for 
                        the human assistance.
            ``(2) Increased federal financial participation.--For 
        purposes of payments to a State under section 1903(a)(1), with 
        respect to amounts expended by the State to provide medical 
        assistance under the State plan for home and community-based 
        attendant services and supports to eligible individuals in 
        accordance with this subsection during a fiscal year quarter 
        occurring during the period described in paragraph (1), the 
        Federal medical assistance percentage applicable to the State 
        (as determined under section 1905(b)) shall be increased by 6 
        percentage points.
            ``(3) State requirements.--In order for a State plan 
        amendment to be approved under this subsection, the State 
        shall--
                    ``(A) develop and implement such amendment in 
                collaboration with a Development and Implementation 
                Council established by the State that includes a 
                majority of members with disabilities, elderly 
                individuals, and their representatives and consults and 
                collaborates with such individuals;
                    ``(B) provide consumer controlled home and 
                community-based attendant services and supports to 
                individuals on a statewide basis, in a manner that 
                provides such services and supports in the most 
                integrated setting appropriate to the individual's 
                needs, and without regard to the individual's age, type 
                or nature of disability, severity of disability, or the 
                form of home and community-based attendant services and 
                supports that the individual requires in order to lead 
                an independent life;
                    ``(C) with respect to expenditures during the first 
                full fiscal year in which the State plan amendment is 
                implemented, maintain or exceed the level of State 
                expenditures for medical assistance that is provided 
                under section 1905(a), section 1915, section 1115, or 
                otherwise to individuals with disabilities or elderly 
                individuals attributable to the preceding fiscal year;
                    ``(D) establish and maintain a comprehensive, 
                continuous quality assurance system with respect to 
                community- based attendant services and supports that--
                            ``(i) includes standards for agency-based 
                        and other delivery models with respect to 
                        training, appeals for denials and 
                        reconsideration procedures of an individual 
                        plan, and other factors as determined by the 
                        Secretary;
                            ``(ii) incorporates feedback from consumers 
                        and their representatives, disability 
                        organizations, providers, families of disabled 
                        or elderly individuals, members of the 
                        community, and others and maximizes consumer 
                        independence and consumer control;
                            ``(iii) monitors the health and well-being 
                        of each individual who receives home and 
                        community-based attendant services and 
                        supports, including a process for the mandatory 
                        reporting, investigation, and resolution of 
                        allegations of neglect, abuse, or exploitation 
                        in connection with the provision of such 
                        services and supports; and
                            ``(iv) provides information about the 
                        provisions of the quality assurance required 
                        under clauses (i) through (iii) to each 
                        individual receiving such services; and
                    ``(E) collect and report information, as determined 
                necessary by the Secretary, for the purposes of 
                approving the State plan amendment, providing Federal 
                oversight, and conducting an evaluation under paragraph 
                (5)(A), including data regarding how the State provides 
                home and community-based attendant services and 
                supports and other home and community-based services, 
                the cost of such services and supports, and how the 
                State provides individuals with disabilities who 
                otherwise qualify for institutional care under the 
                State plan or under a waiver the choice to instead 
                receive home and community-based services in lieu of 
                institutional care.
            ``(4) Compliance with certain laws.--A State shall ensure 
        that, regardless of whether the State uses an agency-provider 
        model or other models to provide home and community-based 
        attendant services and supports under a State plan amendment 
        under this subsection, such services and supports are provided 
        in accordance with the requirements of the Fair Labor Standards 
        Act of 1938 and applicable Federal and State laws regarding--
                    ``(A) withholding and payment of Federal and State 
                income and payroll taxes;
                    ``(B) the provision of unemployment and workers 
                compensation insurance;
                    ``(C) maintenance of general liability insurance; 
                and
                    ``(D) occupational health and safety.
            ``(5) Evaluation, data collection, and report to 
        congress.--
                    ``(A) Evaluation.--The Secretary shall conduct an 
                evaluation of the provision of home and community-based 
                attendant services and supports under this subsection 
                in order to determine the effectiveness of the 
                provision of such services and supports in allowing the 
                individuals receiving such services and supports to 
                lead an independent life to the maximum extent 
                possible; the impact on the physical and emotional 
                health of the individuals who receive such services; 
                and an comparative analysis of the costs of services 
                provided under the State plan amendment under this 
                subsection and those provided under institutional care 
                in a nursing facility, institution for mental diseases, 
                or an intermediate care facility for the mentally 
                retarded.
                    ``(B) Data collection.--The State shall provide the 
                Secretary with the following information regarding the 
                provision of home and community-based attendant 
                services and supports under this subsection for each 
                fiscal year for which such services and supports are 
                provided:
                            ``(i) The number of individuals who are 
                        estimated to receive home and community-based 
                        attendant services and supports under this 
                        subsection during the fiscal year.
                            ``(ii) The number of individuals that 
                        received such services and supports during the 
                        preceding fiscal year.
                            ``(iii) The specific number of individuals 
                        served by type of disability, age, gender, 
                        education level, and employment status.
                            ``(iv) Whether the specific individuals 
                        have been previously served under any other 
                        home and community based services program under 
                        the State plan or under a waiver.
                    ``(C) Reports.--Not later than--
                            ``(i) December 31, 2013, the Secretary 
                        shall submit to Congress and make available to 
                        the public an interim report on the findings of 
                        the evaluation under subparagraph (A); and
                            ``(ii) December 31, 2015, the Secretary 
                        shall submit to Congress and make available to 
                        the public a final report on the findings of 
                        the evaluation under subparagraph (A).
            ``(6) Definitions.--In this subsection:
                    ``(A) Activities of daily living.--The term 
                `activities of daily living' includes tasks such as 
                eating, toileting, grooming, dressing, bathing, and 
                transferring.
                    ``(B) Consumer controlled.--The term `consumer 
                controlled' means a method of selecting and providing 
                services and supports that allow the individual, or 
                where appropriate, the individual's representative, 
                maximum control of the home and community-based 
                attendant services and supports, regardless of who acts 
                as the employer of record.
                    ``(C) Delivery models.--
                            ``(i) Agency-provider model.--The term 
                        `agency-provider model' means, with respect to 
                        the provision of home and community-based 
                        attendant services and supports for an 
                        individual, subject to paragraph (4), a method 
                        of providing consumer controlled services and 
                        supports under which entities contract for the 
                        provision of such services and supports.
                            ``(ii) Other models.--The term `other 
                        models' means, subject to paragraph (4), 
                        methods, other than an agency-provider model, 
                        for the provision of consumer controlled 
                        services and supports. Such models may include 
                        the provision of vouchers, direct cash 
                        payments, or use of a fiscal agent to assist in 
                        obtaining services.
                    ``(D) Health-related tasks.--The term `health-
                related tasks' means specific tasks related to the 
                needs of an individual, which can be delegated or 
                assigned by licensed health-care professionals under 
                State law to be performed by an attendant.
                    ``(E) Individual's representative.--The term 
                `individual's representative' means a parent, family 
                member, guardian, advocate, or other authorized 
                representative of an individual
                    ``(F) Instrumental activities of daily living.--The 
                term `instrumental activities of daily living' includes 
                (but is not limited to) meal planning and preparation, 
                managing finances, shopping for food, clothing, and 
                other essential items, performing essential household 
                chores, communicating by phone or other media, and 
                traveling around and participating in the community.''.

SEC. 2402. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMUNITY-BASED 
              SERVICES.

    (a) Oversight and Assessment of the Administration of Home and 
Community-based Services.--The Secretary of Health and Human Services 
shall promulgate regulations to ensure that all States develop service 
systems that are designed to--
            (1) allocate resources for services in a manner that is 
        responsive to the changing needs and choices of beneficiaries 
        receiving non-institutionally-based long-term services and 
        supports (including such services and supports that are 
        provided under programs other the State Medicaid program), and 
        that provides strategies for beneficiaries receiving such 
        services to maximize their independence, including through the 
        use of client-employed providers;
            (2) provide the support and coordination needed for a 
        beneficiary in need of such services (and their family 
        caregivers or representative, if applicable) to design an 
        individualized, self-directed, community-supported life; and
            (3) improve coordination among, and the regulation of, all 
        providers of such services under federally and State-funded 
        programs in order to--
                    (A) achieve a more consistent administration of 
                policies and procedures across programs in relation to 
                the provision of such services; and
                    (B) oversee and monitor all service system 
                functions to assure--
                            (i) coordination of, and effectiveness of, 
                        eligibility determinations and individual 
                        assessments;
                            (ii) development and service monitoring of 
                        a complaint system, a management system, a 
                        system to qualify and monitor providers, and 
                        systems for role-setting and individual budget 
                        determinations; and
                            (iii) an adequate number of qualified 
                        direct care workers to provide self-directed 
                        personal assistance services.
    (b) Additional State Options.--Section 1915(i) of the Social 
Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the 
following new paragraphs:
            ``(6) State option to provide home and community-based 
        services to individuals eligible for services under a waiver.--
                    ``(A) In general.--A State that provides home and 
                community-based services in accordance with this 
                subsection to individuals who satisfy the needs-based 
                criteria for the receipt of such services established 
                under paragraph (1)(A) may, in addition to continuing 
                to provide such services to such individuals, elect to 
                provide home and community-based services in accordance 
                with the requirements of this paragraph to individuals 
                who are eligible for home and community-based services 
                under a waiver approved for the State under subsection 
                (c), (d), or (e) or under section 1115 to provide such 
                services, but only for those individuals whose income 
                does not exceed 300 percent of the supplemental 
                security income benefit rate established by section 
                1611(b)(1).
                    ``(B) Application of same requirements for 
                individuals satisfying needs-based criteria.--Subject 
                to subparagraph (C), a State shall provide home and 
                community-based services to individuals under this 
                paragraph in the same manner and subject to the same 
                requirements as apply under the other paragraphs of 
                this subsection to the provision of home and community-
                based services to individuals who satisfy the needs-
                based criteria established under paragraph (1)(A).
                    ``(C) Authority to offer different type, amount, 
                duration, or scope of home and community-based 
                services.--A State may offer home and community-based 
                services to individuals under this paragraph that 
                differ in type, amount, duration, or scope from the 
                home and community-based services offered for 
                individuals who satisfy the needs-based criteria 
                established under paragraph (1)(A), so long as such 
                services are within the scope of services described in 
                paragraph (4)(B) of subsection (c) for which the 
                Secretary has the authority to approve a waiver and do 
                not include room or board.
            ``(7) State option to offer home and community-based 
        services to specific, targeted populations.--
                    ``(A) In general.--A State may elect in a State 
                plan amendment under this subsection to target the 
                provision of home and community-based services under 
                this subsection to specific populations and to differ 
                the type, amount, duration, or scope of such services 
                to such specific populations.
                    ``(B) 5-year term.--
                            ``(i) In general.--An election by a State 
                        under this paragraph shall be for a period of 5 
                        years.
                            ``(ii) Phase-in of services and eligibility 
                        permitted during initial 5-year period.--A 
                        State making an election under this paragraph 
                        may, during the first 5-year period for which 
                        the election is made, phase-in the enrollment 
                        of eligible individuals, or the provision of 
                        services to such individuals, or both, so long 
                        as all eligible individuals in the State for 
                        such services are enrolled, and all such 
                        services are provided, before the end of the 
                        initial 5-year period.
                    ``(C) Renewal.--An election by a State under this 
                paragraph may be renewed for additional 5-year terms if 
                the Secretary determines, prior to beginning of each 
                such renewal period, that the State has--
                            ``(i) adhered to the requirements of this 
                        subsection and paragraph in providing services 
                        under such an election; and
                            ``(ii) met the State's objectives with 
                        respect to quality improvement and beneficiary 
                        outcomes.''.
    (c) Removal of Limitation on Scope of Services.--Paragraph (1) of 
section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as 
amended by subsection (a), is amended by striking ``or such other 
services requested by the State as the Secretary may approve''.
    (d) Optional Eligibility Category To Provide Full Medicaid Benefits 
to Individuals Receiving Home and Community-based Services Under a 
State Plan Amendment.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by 
        section 2304(a)(1), is amended--
                    (A) in subclause (XX), by striking ``or'' at the 
                end;
                    (B) in subclause (XXI), by adding ``or'' at the 
                end; and
                    (C) by inserting after subclause (XXI), the 
                following new subclause:
                                    ``(XXII) who are eligible for home 
                                and community-based services under 
                                needs-based criteria established under 
                                paragraph (1)(A) of section 1915(i), or 
                                who are eligible for home and 
                                community-based services under 
                                paragraph (6) of such section, and who 
                                will receive home and community-based 
                                services pursuant to a State plan 
                                amendment under such subsection;''.
            (2) Conforming amendments.--
                    (A) Section 1903(f)(4) of the Social Security Act 
                (42 U.S.C. 1396b(f)(4)), as amended by section 
                2304(a)(4)(B), is amended in the matter preceding 
                subparagraph (A), by inserting 
                ``1902(a)(10)(A)(ii)(XXII),'' after 
                ``1902(a)(10)(A)(ii)(XXI),''.
                    (B) Section 1905(a) of the Social Security Act (42 
                U.S.C. 1396d(a)), as so amended, is amended in the 
                matter preceding paragraph (1)--
                            (i) in clause (xv), by striking ``or'' at 
                        the end;
                            (ii) in clause (xvi), by adding ``or'' at 
                        the end; and
                            (iii) by inserting after clause (xvi) the 
                        following new clause:
            ``(xvii) individuals who are eligible for home and 
        community-based services under needs-based criteria established 
        under paragraph (1)(A) of section 1915(i), or who are eligible 
        for home and community-based services under paragraph (6) of 
        such section, and who will receive home and community-based 
        services pursuant to a State plan amendment under such 
        subsection,''.
    (e) Elimination of Option To Limit Number of Eligible Individuals 
or Length of Period for Grandfathered Individuals if Eligibility 
Criteria Is Modified.--Paragraph (1) of section 1915(i) of such Act (42 
U.S.C. 1396n(i)) is amended--
            (1) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) Projection of number of individuals to be 
                provided home and community-based services.--The State 
                submits to the Secretary, in such form and manner, and 
                upon such frequency as the Secretary shall specify, the 
                projected number of individuals to be provided home and 
                community-based services.''; and
            (2) in subclause (II) of subparagraph (D)(ii), by striking 
        ``to be eligible for such services for a period of at least 12 
        months beginning on the date the individual first received 
        medical assistance for such services'' and inserting ``to 
        continue to be eligible for such services after the effective 
        date of the modification and until such time as the individual 
        no longer meets the standard for receipt of such services under 
        such pre-modified criteria''.
    (f) Elimination of Option To Waive Statewideness; Addition of 
Option To Waive Comparability.--Paragraph (3) of section 1915(i) of 
such Act (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1) 
(relating to statewideness)'' and inserting ``1902(a)(10)(B) (relating 
to comparability)''.
    (g) Effective Date.--The amendments made by subsections (b) through 
(f) take effect on the first day of the first fiscal year quarter that 
begins after the date of enactment of this Act.

SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

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

SEC. 2404. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY-BASED 
              SERVICES AGAINST SPOUSAL IMPOVERISHMENT.

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

SEC. 2405. FUNDING TO EXPAND STATE AGING AND DISABILITY RESOURCE 
              CENTERS.

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

SEC. 2406. SENSE OF THE SENATE REGARDING LONG-TERM CARE.

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

            Subtitle F--Medicaid Prescription Drug Coverage

SEC. 2501. PRESCRIPTION DRUG REBATES.

    (a) Increase in Minimum Rebate Percentage for Single Source Drugs 
and Innovator Multiple Source Drugs.--
            (1) In general.--Section 1927(c)(1)(B) of the Social 
        Security Act (42 U.S.C. 1396r-8(c)(1)(B)) is amended--
                    (A) in clause (i)--
                            (i) in subclause (IV), by striking ``and'' 
                        at the end;
                            (ii) in subclause (V)--
                                    (I) by inserting ``and before 
                                January 1, 2010'' after ``December 31, 
                                1995,''; and
                                    (II) by striking the period at the 
                                end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(VI) except as provided in clause 
                                (iii), after December 31, 2009, 23.1 
                                percent.''; and
                    (B) by adding at the end the following new clause:
                            ``(iii) Minimum rebate percentage for 
                        certain drugs.--
                                    ``(I) In general.--In the case of a 
                                single source drug or an innovator 
                                multiple source drug described in 
                                subclause (II), the minimum rebate 
                                percentage for rebate periods specified 
                                in clause (i)(VI) is 17.1 percent.
                                    ``(II) Drug described.--For 
                                purposes of subclause (I), a single 
                                source drug or an innovator multiple 
                                source drug described in this subclause 
                                is any of the following drugs:
                                            ``(aa) A clotting factor 
                                        for which a separate furnishing 
                                        payment is made under section 
                                        1842(o)(5) and which is 
                                        included on a list of such 
                                        factors specified and updated 
                                        regularly by the Secretary.
                                            ``(bb) A drug approved by 
                                        the Food and Drug 
                                        Administration exclusively for 
                                        pediatric indications.''.
            (2) Recapture of total savings due to increase.--Section 
        1927(b)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended by 
        adding at the end the following new subparagraph:
                    ``(C) Special rule for increased minimum rebate 
                percentage.--
                            ``(i) In general.--In addition to the 
                        amounts applied as a reduction under 
                        subparagraph (B), for rebate periods beginning 
                        on or after January 1, 2010, during a fiscal 
                        year, the Secretary shall reduce payments to a 
                        State under section 1903(a) in the manner 
                        specified in clause (ii), in an amount equal to 
                        the product of--
                                    ``(I) 100 percent minus the Federal 
                                medical assistance percentage 
                                applicable to the rebate period for the 
                                State; and
                                    ``(II) the amounts received by the 
                                State under such subparagraph that are 
                                attributable (as estimated by the 
                                Secretary based on utilization and 
                                other data) to the increase in the 
                                minimum rebate percentage effected by 
                                the amendments made by subsections 
                                (a)(1), (b), and (d) of section 2501 of 
                                the Patient Protection and Affordable 
                                Care Act, taking into account the 
                                additional drugs included under the 
                                amendments made by subsection (c) of 
                                section 2501 of such Act.
                        The Secretary shall adjust such payment 
                        reduction for a calendar quarter to the extent 
                        the Secretary determines, based upon subsequent 
                        utilization and other data, that the reduction 
                        for such quarter was greater or less than the 
                        amount of payment reduction that should have 
                        been made.
                            ``(ii) Manner of payment reduction.--The 
                        amount of the payment reduction under clause 
                        (i) for a State for a quarter shall be deemed 
                        an overpayment to the State under this title to 
                        be disallowed against the State's regular 
                        quarterly draw for all Medicaid spending under 
                        section 1903(d)(2). Such a disallowance is not 
                        subject to a reconsideration under section 
                        1116(d).''.
    (b) Increase in Rebate for Other Drugs.--Section 1927(c)(3)(B) of 
such Act (42 U.S.C. 1396r-8(c)(3)(B)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by inserting ``and before January 1, 2010,'' 
                after ``December 31, 1993,''; and
                    (B) by striking the period and inserting ``; and''; 
                and
            (3) by adding at the end the following new clause:
                            ``(iii) after December 31, 2009, is 13 
                        percent.''.
    (c) Extension of Prescription Drug Discounts to Enrollees of 
Medicaid Managed Care Organizations.--
            (1) In general.--Section 1903(m)(2)(A) of such Act (42 
        U.S.C. 1396b(m)(2)(A)) is amended--
                    (A) in clause (xi), by striking ``and'' at the end;
                    (B) in clause (xii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(xiii) such contract provides that (I) 
                        covered outpatient drugs dispensed to 
                        individuals eligible for medical assistance who 
                        are enrolled with the entity shall be subject 
                        to the same rebate required by the agreement 
                        entered into under section 1927 as the State is 
                        subject to and that the State shall collect 
                        such rebates from manufacturers, (II) 
                        capitation rates paid to the entity shall be 
                        based on actual cost experience related to 
                        rebates and subject to the Federal regulations 
                        requiring actuarially sound rates, and (III) 
                        the entity shall report to the State, on such 
                        timely and periodic basis as specified by the 
                        Secretary in order to include in the 
                        information submitted by the State to a 
                        manufacturer and the Secretary under section 
                        1927(b)(2)(A), information on the total number 
                        of units of each dosage form and strength and 
                        package size by National Drug Code of each 
                        covered outpatient drug dispensed to 
                        individuals eligible for medical assistance who 
                        are enrolled with the entity and for which the 
                        entity is responsible for coverage of such drug 
                        under this subsection (other than covered 
                        outpatient drugs that under subsection (j)(1) 
                        of section 1927 are not subject to the 
                        requirements of that section) and such other 
                        data as the Secretary determines necessary to 
                        carry out this subsection.''.
            (2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-
        8) is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (1)(A), in the first 
                        sentence, by inserting ``, including such drugs 
                        dispensed to individuals enrolled with a 
                        medicaid managed care organization if the 
                        organization is responsible for coverage of 
                        such drugs'' before the period; and
                            (ii) in paragraph (2)(A), by inserting 
                        ``including such information reported by each 
                        medicaid managed care organization,'' after 
                        ``for which payment was made under the plan 
                        during the period,''; and
                    (B) in subsection (j), by striking paragraph (1) 
                and inserting the following:
            ``(1) Covered outpatient drugs are not subject to the 
        requirements of this section if such drugs are--
                    ``(A) dispensed by health maintenance 
                organizations, including Medicaid managed care 
                organizations that contract under section 1903(m); and
                    ``(B) subject to discounts under section 340B of 
                the Public Health Service Act.''.
    (d) Additional Rebate for New Formulations of Existing Drugs.--
            (1) In general.--Section 1927(c)(2) of the Social Security 
        Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                    ``(C) Treatment of new formulations.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the case of a drug that is a 
                        new formulation, such as an extended-release 
                        formulation, of a single source drug or an 
                        innovator multiple source drug, the rebate 
                        obligation with respect to the drug under this 
                        section shall be the amount computed under this 
                        section for the new formulation of the drug or, 
                        if greater, the product of--
                                    ``(I) the average manufacturer 
                                price for each dosage form and strength 
                                of the new formulation of the single 
                                source drug or innovator multiple 
                                source drug;
                                    ``(II) the highest additional 
                                rebate (calculated as a percentage of 
                                average manufacturer price) under this 
                                section for any strength of the 
                                original single source drug or 
                                innovator multiple source drug; and
                                    ``(III) the total number of units 
                                of each dosage form and strength of the 
                                new formulation paid for under the 
                                State plan in the rebate period (as 
                                reported by the State).
                            ``(ii) No application to new formulations 
                        of orphan drugs.--Clause (i) shall not apply to 
                        a new formulation of a covered outpatient drug 
                        that is or has been designated under section 
                        526 of the Federal Food, Drug, and Cosmetic Act 
                        (21 U.S.C. 360bb) for a rare disease or 
                        condition, without regard to whether the period 
                        of market exclusivity for the drug under 
                        section 527 of such Act has expired or the 
                        specific indication for use of the drug.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to drugs that are paid for by a State after 
        December 31, 2009.
    (e) Maximum Rebate Amount.--Section 1927(c)(2) of such Act (42 
U.S.C. 1396r-8(c)(2)), as amended by subsection (d), is amended by 
adding at the end the following new subparagraph:
                    ``(D) Maximum rebate amount.--In no case shall the 
                sum of the amounts applied under paragraph (1)(A)(ii) 
                and this paragraph with respect to each dosage form and 
                strength of a single source drug or an innovator 
                multiple source drug for a rebate period beginning 
                after December 31, 2009, exceed 100 percent of the 
                average manufacturer price of the drug.''.
    (f) Conforming Amendments.--
            (1) In general.--Section 340B of the Public Health Service 
        Act (42 U.S.C. 256b) is amended--
                    (A) in subsection (a)(2)(B)(i), by striking 
                ``1927(c)(4)'' and inserting ``1927(c)(3)''; and
                    (B) by striking subsection (c); and
                    (C) redesignating subsection (d) as subsection (c).
            (2) Effective date.--The amendments made by this subsection 
        take effect on January 1, 2010.

SEC. 2502. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN DRUGS.

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

SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

    (a) Pharmacy Reimbursement Limits.--
            (1) In general.--Section 1927(e) of the Social Security Act 
        (42 U.S.C. 1396r-8(e)) is amended--
                    (A) in paragraph (4), by striking ``(or, effective 
                January 1, 2007, two or more)''; and
                    (B) by striking paragraph (5) and inserting the 
                following:
            ``(5) Use of amp in upper payment limits.--The Secretary 
        shall calculate the Federal upper reimbursement limit 
        established under paragraph (4) as no less than 175 percent of 
        the weighted average (determined on the basis of utilization) 
        of the most recently reported monthly average manufacturer 
        prices for pharmaceutically and therapeutically equivalent 
        multiple source drug products that are available for purchase 
        by retail community pharmacies on a nationwide basis. The 
        Secretary shall implement a smoothing process for average 
        manufacturer prices. Such process shall be similar to the 
        smoothing process used in determining the average sales price 
        of a drug or biological under section 1847A.''.
            (2) Definition of amp.--Section 1927(k)(1) of such Act (42 
        U.S.C. 1396r-8(k)(1)) is amended--
                    (A) in subparagraph (A), by striking ``by'' and all 
                that follows through the period and inserting ``by--
                            ``(i) wholesalers for drugs distributed to 
                        retail community pharmacies; and
                            ``(ii) retail community pharmacies that 
                        purchase drugs directly from the 
                        manufacturer.''; and
                    (B) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) Exclusion of customary prompt pay discounts 
                and other payments.--
                            ``(i) In general.--The average manufacturer 
                        price for a covered outpatient drug shall 
                        exclude--
                                    ``(I) customary prompt pay 
                                discounts extended to wholesalers;
                                    ``(II) bona fide service fees paid 
                                by manufacturers to wholesalers or 
                                retail community pharmacies, including 
                                (but not limited to) distribution 
                                service fees, inventory management 
                                fees, product stocking allowances, and 
                                fees associated with administrative 
                                services agreements and patient care 
                                programs (such as medication compliance 
                                programs and patient education 
                                programs);
                                    ``(III) reimbursement by 
                                manufacturers for recalled, damaged, 
                                expired, or otherwise unsalable 
                                returned goods, including (but not 
                                limited to) reimbursement for the cost 
                                of the goods and any reimbursement of 
                                costs associated with return goods 
                                handling and processing, reverse 
                                logistics, and drug destruction; and
                                    ``(IV) payments received from, and 
                                rebates or discounts provided to, 
                                pharmacy benefit managers, managed care 
                                organizations, health maintenance 
                                organizations, insurers, hospitals, 
                                clinics, mail order pharmacies, long 
                                term care providers, manufacturers, or 
                                any other entity that does not conduct 
                                business as a wholesaler or a retail 
                                community pharmacy.
                            ``(ii) Inclusion of other discounts and 
                        payments.--Notwithstanding clause (i), any 
                        other discounts, rebates, payments, or other 
                        financial transactions that are received by, 
                        paid by, or passed through to, retail community 
                        pharmacies shall be included in the average 
                        manufacturer price for a covered outpatient 
                        drug.''; and
                    (C) in subparagraph (C), by striking ``the retail 
                pharmacy class of trade'' and inserting ``retail 
                community pharmacies''.
            (3) Definition of multiple source drug.--Section 1927(k)(7) 
        of such Act (42 U.S.C. 1396r-8(k)(7)) is amended--
                    (A) in subparagraph (A)(i)(III), by striking ``the 
                State'' and inserting ``the United States''; and
                    (B) in subparagraph (C)--
                            (i) in clause (i), by inserting ``and'' 
                        after the semicolon;
                            (ii) in clause (ii), by striking ``; and'' 
                        and inserting a period; and
                            (iii) by striking clause (iii).
            (4) Definitions of retail community pharmacy; wholesaler.--
        Section 1927(k) of such Act (42 U.S.C. 1396r-8(k)) is amended 
        by adding at the end the following new paragraphs:
            ``(10) Retail community pharmacy.--The term `retail 
        community pharmacy' means an independent pharmacy, a chain 
        pharmacy, a supermarket pharmacy, or a mass merchandiser 
        pharmacy that is licensed as a pharmacy by the State and that 
        dispenses medications to the general public at retail prices. 
        Such term does not include a pharmacy that dispenses 
        prescription medications to patients primarily through the 
        mail, nursing home pharmacies, long-term care facility 
        pharmacies, hospital pharmacies, clinics, charitable or not-
        for-profit pharmacies, government pharmacies, or pharmacy 
        benefit managers.
            ``(11) Wholesaler.--The term `wholesaler' means a drug 
        wholesaler that is engaged in wholesale distribution of 
        prescription drugs to retail community pharmacies, including 
        (but not limited to) manufacturers, repackers, distributors, 
        own-label distributors, private-label distributors, jobbers, 
        brokers, warehouses (including manufacturer's and distributor's 
        warehouses, chain drug warehouses, and wholesale drug 
        warehouses) independent wholesale drug traders, and retail 
        community pharmacies that conduct wholesale distributions.''.
    (b) Disclosure of Price Information to the Public.--Section 
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) in the first sentence, by inserting after 
                clause (iii) the following:
                            ``(iv) not later than 30 days after the 
                        last day of each month of a rebate period under 
                        the agreement, on the manufacturer's total 
                        number of units that are used to calculate the 
                        monthly average manufacturer price for each 
                        covered outpatient drug;''; and
                    (B) in the second sentence, by inserting 
                ``(relating to the weighted average of the most 
                recently reported monthly average manufacturer 
                prices)'' after ``(D)(v)''; and
            (2) in subparagraph (D)(v), by striking ``average 
        manufacturer prices'' and inserting ``the weighted average of 
        the most recently reported monthly average manufacturer prices 
        and the average retail survey price determined for each 
        multiple source drug in accordance with subsection (f)''.
    (c) Clarification of Application of Survey of Retail Prices.--
Section 1927(f)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended--
            (1) in subparagraph (A)(i), by inserting ``with respect to 
        a retail community pharmacy,'' before ``the determination''; 
        and
            (2) in subparagraph (C)(ii), by striking ``retail 
        pharmacies'' and inserting ``retail community pharmacies''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the first day of the first calendar year quarter that begins 
at least 180 days after the date of enactment of this Act, without 
regard to whether or not final regulations to carry out such amendments 
have been promulgated by such date.

  Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments

SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

    (a) In General.--Section 1923(f) of the Social Security Act (42 
U.S.C. 1396r-4(f)) is amended--
            (1) in paragraph (1), by striking ``and (3)'' and inserting 
        ``, (3), and (7)'';
            (2) in paragraph (3)(A), by striking ``paragraph (6)'' and 
        inserting ``paragraphs (6) and (7)'';
            (3) by redesignating paragraph (7) as paragraph (8); and
            (4) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) Reduction of state dsh allotments once reduction in 
        uninsured threshold reached.--
                    ``(A) In general.--Subject to subparagraph (E), the 
                DSH allotment for a State for fiscal years beginning 
                with the fiscal year described in subparagraph (C) 
                (with respect to the State), is equal to--
                            ``(i) in the case of the first fiscal year 
                        described in subparagraph (C) with respect to a 
                        State, the DSH allotment that would be 
                        determined under this subsection for the State 
                        for the fiscal year without application of this 
                        paragraph (but after the application of 
                        subparagraph (D)), reduced by the applicable 
                        percentage determined for the State for the 
                        fiscal year under subparagraph (B)(i); and
                            ``(ii) in the case of any subsequent fiscal 
                        year with respect to the State, the DSH 
                        allotment determined under this paragraph for 
                        the State for the preceding fiscal year, 
                        reduced by the applicable percentage determined 
                        for the State for the fiscal year under 
                        subparagraph (B)(ii).
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage for a State 
                for a fiscal year is the following:
                            ``(i) Uninsured reduction threshold fiscal 
                        year.--In the case of the first fiscal year 
                        described in subparagraph (C) with respect to 
                        the State--
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B), 
                                the applicable percentage is equal to 
                                25 percent; and
                                    ``(II) if the State is any other 
                                State, the applicable percentage is 50 
                                percent.
                            ``(ii) Subsequent fiscal years in which the 
                        percentage of uninsured decreases.--In the case 
                        of any fiscal year after the first fiscal year 
                        described in subparagraph (C) with respect to a 
                        State, if the Secretary determines on the basis 
                        of the most recent American Community Survey of 
                        the Bureau of the Census, that the percentage 
                        of uncovered individuals residing in the State 
                        is less than the percentage of such individuals 
                        determined for the State for the preceding 
                        fiscal year--
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B), 
                                the applicable percentage is equal to 
                                the product of the percentage reduction 
                                in uncovered individuals for the fiscal 
                                year from the preceding fiscal year and 
                                25 percent; and
                                    ``(II) if the State is any other 
                                State, the applicable percentage is 
                                equal to the product of the percentage 
                                reduction in uncovered individuals for 
                                the fiscal year from the preceding 
                                fiscal year and 50 percent.
                    ``(C) Fiscal year described.--For purposes of 
                subparagraph (A), the fiscal year described in this 
                subparagraph with respect to a State is the first 
                fiscal year that occurs after fiscal year 2012 for 
                which the Secretary determines, on the basis of the 
                most recent American Community Survey of the Bureau of 
                the Census, that the percentage of uncovered 
                individuals residing in the State is at least 45 
                percent less than the percentage of such individuals 
                determined for the State for fiscal year 2009.
                    ``(D) Exclusion of portions diverted for coverage 
                expansions.--For purposes of applying the applicable 
                percentage reduction under subparagraph (A) to the DSH 
                allotment for a State for a fiscal year, the DSH 
                allotment for a State that would be determined under 
                this subsection for the State for the fiscal year 
                without the application of this paragraph (and prior to 
                any such reduction) shall not include any portion of 
                the allotment for which the Secretary has approved the 
                State's diversion to the costs of providing medical 
                assistance or other health benefits coverage under a 
                waiver that is in effect on July 2009.
                    ``(E) Minimum allotment.--In no event shall the DSH 
                allotment determined for a State in accordance with 
                this paragraph for fiscal year 2013 or any succeeding 
                fiscal year be less than the amount equal to 35 percent 
                of the DSH allotment determined for the State for 
                fiscal year 2012 under this subsection (and after the 
                application of this paragraph, if applicable), 
                increased by the percentage change in the consumer 
                price index for all urban consumers (all items, U.S. 
                city average) for each previous fiscal year occurring 
                before the fiscal year.
                    ``(F) Uncovered individuals.--In this paragraph, 
                the term `uncovered individuals' means individuals with 
                no health insurance coverage at any time during a year 
                (as determined by the Secretary based on the most 
                recent data available).''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2011.

   Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

SEC. 2601. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS.

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

SEC. 2602. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION FOR DUAL 
              ELIGIBLE BENEFICIARIES.

    (a) Establishment of Federal Coordinated Health Care Office.--
            (1) In general.--Not later than March 1, 2010, the 
        Secretary of Health and Human Services (in this section 
        referred to as the ``Secretary'') shall establish a Federal 
        Coordinated Health Care Office.
            (2) Establishment and reporting to cms administrator.--The 
        Federal Coordinated Health Care Office--
                    (A) shall be established within the Centers for 
                Medicare & Medicaid Services; and
                    (B) have as the Office a Director who shall be 
                appointed by, and be in direct line of authority to, 
                the Administrator of the Centers for Medicare & 
                Medicaid Services.
    (b) Purpose.--The purpose of the Federal Coordinated Health Care 
Office is to bring together officers and employees of the Medicare and 
Medicaid programs at the Centers for Medicare & Medicaid Services in 
order to--
            (1) more effectively integrate benefits under the Medicare 
        program under title XVIII of the Social Security Act and the 
        Medicaid program under title XIX of such Act; and
            (2) improve the coordination between the Federal Government 
        and States for individuals eligible for benefits under both 
        such programs in order to ensure that such individuals get full 
        access to the items and services to which they are entitled 
        under titles XVIII and XIX of the Social Security Act.
    (c) Goals.--The goals of the Federal Coordinated Health Care Office 
are as follows:
            (1) Providing dual eligible individuals full access to the 
        benefits to which such individuals are entitled under the 
        Medicare and Medicaid programs.
            (2) Simplifying the processes for dual eligible individuals 
        to access the items and services they are entitled to under the 
        Medicare and Medicaid programs.
            (3) Improving the quality of health care and long-term 
        services for dual eligible individuals.
            (4) Increasing dual eligible individuals' understanding of 
        and satisfaction with coverage under the Medicare and Medicaid 
        programs.
            (5) Eliminating regulatory conflicts between rules under 
        the Medicare and Medicaid programs.
            (6) Improving care continuity and ensuring safe and 
        effective care transitions for dual eligible individuals.
            (7) Eliminating cost-shifting between the Medicare and 
        Medicaid program and among related health care providers.
            (8) Improving the quality of performance of providers of 
        services and suppliers under the Medicare and Medicaid 
        programs.
    (d) Specific Responsibilities.--The specific responsibilities of 
the Federal Coordinated Health Care Office are as follows:
            (1) Providing States, specialized MA plans for special 
        needs individuals (as defined in section 1859(b)(6) of the 
        Social Security Act (42 U.S.C. 1395w-28(b)(6))), physicians and 
        other relevant entities or individuals with the education and 
        tools necessary for developing programs that align benefits 
        under the Medicare and Medicaid programs for dual eligible 
        individuals.
            (2) Supporting State efforts to coordinate and align acute 
        care and long-term care services for dual eligible individuals 
        with other items and services furnished under the Medicare 
        program.
            (3) Providing support for coordination of contracting and 
        oversight by States and the Centers for Medicare & Medicaid 
        Services with respect to the integration of the Medicare and 
        Medicaid programs in a manner that is supportive of the goals 
        described in paragraph (3).
            (4) To consult and coordinate with the Medicare Payment 
        Advisory Commission established under section 1805 of the 
        Social Security Act (42 U.S.C. 1395b-6) and the Medicaid and 
        CHIP Payment and Access Commission established under section 
        1900 of such Act (42 U.S.C. 1396) with respect to policies 
        relating to the enrollment in, and provision of, benefits to 
        dual eligible individuals under the Medicare program under 
        title XVIII of the Social Security Act and the Medicaid program 
        under title XIX of such Act.
            (5) To study the provision of drug coverage for new full-
        benefit dual eligible individuals (as defined in section 
        1935(c)(6) of the Social Security Act (42 U.S.C. 1396u-
        5(c)(6)), as well as to monitor and report annual total 
        expenditures, health outcomes, and access to benefits for all 
        dual eligible individuals.
    (e) Report.--The Secretary shall, as part of the budget transmitted 
under section 1105(a) of title 31, United States Code, submit to 
Congress an annual report containing recommendations for legislation 
that would improve care coordination and benefits for dual eligible 
individuals.
    (f) Dual Eligible Defined.--In this section, the term ``dual 
eligible individual'' means an individual who is entitled to, or 
enrolled for, benefits under part A of title XVIII of the Social 
Security Act, or enrolled for benefits under part B of title XVIII of 
such Act, and is eligible for medical assistance under a State plan 
under title XIX of such Act or under a waiver of such plan.

    Subtitle I--Improving the Quality of Medicaid for Patients and 
                               Providers

SEC. 2701. ADULT HEALTH QUALITY MEASURES.

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

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

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

SEC. 2702. PAYMENT ADJUSTMENT FOR HEALTH CARE-ACQUIRED CONDITIONS.

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

SEC. 2703. STATE OPTION TO PROVIDE HEALTH HOMES FOR ENROLLEES WITH 
              CHRONIC CONDITIONS.

    (a) State Plan Amendment.--Title XIX of the Social Security Act (42 
U.S.C. 1396a et seq.), as amended by sections 2201 and 2305, is amended 
by adding at the end the following new section:
    ``Sec. 1945. State Option to Provide Coordinated Care Through a 
Health Home for Individuals With Chronic Conditions.--
    ``(a) In General.--Notwithstanding section 1902(a)(1) (relating to 
statewideness), section 1902(a)(10)(B) (relating to comparability), and 
any other provision of this title for which the Secretary determines it 
is necessary to waive in order to implement this section, beginning 
January 1, 2011, a State, at its option as a State plan amendment, may 
provide for medical assistance under this title to eligible individuals 
with chronic conditions who select a designated provider (as described 
under subsection (h)(5)), a team of health care professionals (as 
described under subsection (h)(6)) operating with such a provider, or a 
health team (as described under subsection (h)(7)) as the individual's 
health home for purposes of providing the individual with health home 
services.
    ``(b) Health Home Qualification Standards.--The Secretary shall 
establish standards for qualification as a designated provider for the 
purpose of being eligible to be a health home for purposes of this 
section.
    ``(c) Payments.--
            ``(1) In general.--A State shall provide a designated 
        provider, a team of health care professionals operating with 
        such a provider, or a health team with payments for the 
        provision of health home services to each eligible individual 
        with chronic conditions that selects such provider, team of 
        health care professionals, or health team as the individual's 
        health home. Payments made to a designated provider, a team of 
        health care professionals operating with such a provider, or a 
        health team for such services shall be treated as medical 
        assistance for purposes of section 1903(a), except that, during 
        the first 8 fiscal year quarters that the State plan amendment 
        is in effect, the Federal medical assistance percentage 
        applicable to such payments shall be equal to 90 percent.
            ``(2) Methodology.--
                    ``(A) In general.--The State shall specify in the 
                State plan amendment the methodology the State will use 
                for determining payment for the provision of health 
                home services. Such methodology for determining 
                payment--
                            ``(i) may be tiered to reflect, with 
                        respect to each eligible individual with 
                        chronic conditions provided such services by a 
                        designated provider, a team of health care 
                        professionals operating with such a provider, 
                        or a health team, as well as the severity or 
                        number of each such individual's chronic 
                        conditions or the specific capabilities of the 
                        provider, team of health care professionals, or 
                        health team; and
                            ``(ii) shall be established consistent with 
                        section 1902(a)(30)(A).
                    ``(B) Alternate models of payment.--The methodology 
                for determining payment for provision of health home 
                services under this section shall not be limited to a 
                per-member per-month basis and may provide (as proposed 
                by the State and subject to approval by the Secretary) 
                for alternate models of payment.
            ``(3) Planning grants.--
                    ``(A) In general.--Beginning January 1, 2011, the 
                Secretary may award planning grants to States for 
                purposes of developing a State plan amendment under 
                this section. A planning grant awarded to a State under 
                this paragraph shall remain available until expended.
                    ``(B) State contribution.--A State awarded a 
                planning grant shall contribute an amount equal to the 
                State percentage determined under section 1905(b) 
                (without regard to section 5001 of Public Law 111-5) 
                for each fiscal year for which the grant is awarded.
                    ``(C) Limitation.--The total amount of payments 
                made to States under this paragraph shall not exceed 
                $25,000,000.
    ``(d) Hospital Referrals.--A State shall include in the State plan 
amendment a requirement for hospitals that are participating providers 
under the State plan or a waiver of such plan to establish procedures 
for referring any eligible individuals with chronic conditions who seek 
or need treatment in a hospital emergency department to designated 
providers.
    ``(e) Coordination.--A State shall consult and coordinate, as 
appropriate, with the Substance Abuse and Mental Health Services 
Administration in addressing issues regarding the prevention and 
treatment of mental illness and substance abuse among eligible 
individuals with chronic conditions.
    ``(f) Monitoring.--A State shall include in the State plan 
amendment--
            ``(1) a methodology for tracking avoidable hospital 
        readmissions and calculating savings that result from improved 
        chronic care coordination and management under this section; 
        and
            ``(2) a proposal for use of health information technology 
        in providing health home services under this section and 
        improving service delivery and coordination across the care 
        continuum (including the use of wireless patient technology to 
        improve coordination and management of care and patient 
        adherence to recommendations made by their provider).
    ``(g) Report on Quality Measures.--As a condition for receiving 
payment for health home services provided to an eligible individual 
with chronic conditions, a designated provider shall report to the 
State, in accordance with such requirements as the Secretary shall 
specify, on all applicable measures for determining the quality of such 
services. When appropriate and feasible, a designated provider shall 
use health information technology in providing the State with such 
information.
    ``(h) Definitions.--In this section:
            ``(1) Eligible individual with chronic conditions.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `eligible individual with chronic conditions' 
                means an individual who--
                            ``(i) is eligible for medical assistance 
                        under the State plan or under a waiver of such 
                        plan; and
                            ``(ii) has at least--
                                    ``(I) 2 chronic conditions;
                                    ``(II) 1 chronic condition and is 
                                at risk of having a second chronic 
                                condition; or
                                    ``(III) 1 serious and persistent 
                                mental health condition.
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall prevent the Secretary from establishing 
                higher levels as to the number or severity of chronic 
                or mental health conditions for purposes of determining 
                eligibility for receipt of health home services under 
                this section.
            ``(2) Chronic condition.--The term `chronic condition' has 
        the meaning given that term by the Secretary and shall include, 
        but is not limited to, the following:
                    ``(A) A mental health condition.
                    ``(B) Substance use disorder.
                    ``(C) Asthma.
                    ``(D) Diabetes.
                    ``(E) Heart disease.
                    ``(F) Being overweight, as evidenced by having a 
                Body Mass Index (BMI) over 25.
            ``(3) Health home.--The term `health home' means a 
        designated provider (including a provider that operates in 
        coordination with a team of health care professionals) or a 
        health team selected by an eligible individual with chronic 
        conditions to provide health home services.
            ``(4) Health home services.--
                    ``(A) In general.--The term `health home services' 
                means comprehensive and timely high-quality services 
                described in subparagraph (B) that are provided by a 
                designated provider, a team of health care 
                professionals operating with such a provider, or a 
                health team.
                    ``(B) Services described.--The services described 
                in this subparagraph are--
                            ``(i) comprehensive care management;
                            ``(ii) care coordination and health 
                        promotion;
                            ``(iii) comprehensive transitional care, 
                        including appropriate follow-up, from inpatient 
                        to other settings;
                            ``(iv) patient and family support 
                        (including authorized representatives);
                            ``(v) referral to community and social 
                        support services, if relevant; and
                            ``(vi) use of health information technology 
                        to link services, as feasible and appropriate.
            ``(5) Designated provider.--The term `designated provider' 
        means a physician, clinical practice or clinical group 
        practice, rural clinic, community health center, community 
        mental health center, home health agency, or any other entity 
        or provider (including pediatricians, gynecologists, and 
        obstetricians) that is determined by the State and approved by 
        the Secretary to be qualified to be a health home for eligible 
        individuals with chronic conditions on the basis of 
        documentation evidencing that the physician, practice, or 
        clinic--
                    ``(A) has the systems and infrastructure in place 
                to provide health home services; and
                    ``(B) satisfies the qualification standards 
                established by the Secretary under subsection (b).
            ``(6) Team of health care professionals.--The term `team of 
        health care professionals' means a team of health professionals 
        (as described in the State plan amendment) that may--
                    ``(A) include physicians and other professionals, 
                such as a nurse care coordinator, nutritionist, social 
                worker, behavioral health professional, or any 
                professionals deemed appropriate by the State; and
                    ``(B) be free standing, virtual, or based at a 
                hospital, community health center, community mental 
                health center, rural clinic, clinical practice or 
                clinical group practice, academic health center, or any 
                entity deemed appropriate by the State and approved by 
                the Secretary.
            ``(7) Health team.--The term `health team' has the meaning 
        given such term for purposes of section 3502 of the Patient 
        Protection and Affordable Care Act.''.
    (b) Evaluation.--
            (1) Independent evaluation.--
                    (A) In general.--The Secretary shall enter into a 
                contract with an independent entity or organization to 
                conduct an evaluation and assessment of the States that 
                have elected the option to provide coordinated care 
                through a health home for Medicaid beneficiaries with 
                chronic conditions under section 1945 of the Social 
                Security Act (as added by subsection (a)) for the 
                purpose of determining the effect of such option on 
                reducing hospital admissions, emergency room visits, 
                and admissions to skilled nursing facilities.
                    (B) Evaluation report.--Not later than January 1, 
                2017, the Secretary shall report to Congress on the 
                evaluation and assessment conducted under subparagraph 
                (A).
            (2) Survey and interim report.--
                    (A) In general.--Not later than January 1, 2014, 
                the Secretary of Health and Human Services shall survey 
                States that have elected the option under section 1945 
                of the Social Security Act (as added by subsection (a)) 
                and report to Congress on the nature, extent, and use 
                of such option, particularly as it pertains to--
                            (i) hospital admission rates;
                            (ii) chronic disease management;
                            (iii) coordination of care for individuals 
                        with chronic conditions;
                            (iv) assessment of program implementation;
                            (v) processes and lessons learned (as 
                        described in subparagraph (B));
                            (vi) assessment of quality improvements and 
                        clinical outcomes under such option; and
                            (vii) estimates of cost savings.
                    (B)  Implementation reporting.--A State that has 
                elected the option under section 1945 of the Social 
                Security Act (as added by subsection (a)) shall report 
                to the Secretary, as necessary, on processes that have 
                been developed and lessons learned regarding provision 
                of coordinated care through a health home for Medicaid 
                beneficiaries with chronic conditions under such 
                option.

SEC. 2704. DEMONSTRATION PROJECT TO EVALUATE INTEGRATED CARE AROUND A 
              HOSPITALIZATION.

    (a) Authority to Conduct Project.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish a demonstration project under title XIX of the Social 
        Security Act to evaluate the use of bundled payments for the 
        provision of integrated care for a Medicaid beneficiary--
                    (A) with respect to an episode of care that 
                includes a hospitalization; and
                    (B) for concurrent physicians services provided 
                during a hospitalization.
            (2) Duration.--The demonstration project shall begin on 
        January 1, 2012, and shall end on December 31, 2016.
    (b) Requirements.--The demonstration project shall be conducted in 
accordance with the following:
            (1) The demonstration project shall be conducted in up to 8 
        States, determined by the Secretary based on consideration of 
        the potential to lower costs under the Medicaid program while 
        improving care for Medicaid beneficiaries. A State selected to 
        participate in the demonstration project may target the 
        demonstration project to particular categories of 
        beneficiaries, beneficiaries with particular diagnoses, or 
        particular geographic regions of the State, but the Secretary 
        shall insure that, as a whole, the demonstration project is, to 
        the greatest extent possible, representative of the demographic 
        and geographic composition of Medicaid beneficiaries 
        nationally.
            (2) The demonstration project shall focus on conditions 
        where there is evidence of an opportunity for providers of 
        services and suppliers to improve the quality of care furnished 
        to Medicaid beneficiaries while reducing total expenditures 
        under the State Medicaid programs selected to participate, as 
        determined by the Secretary.
            (3) A State selected to participate in the demonstration 
        project shall specify the 1 or more episodes of care the State 
        proposes to address in the project, the services to be included 
        in the bundled payments, and the rationale for the selection of 
        such episodes of care and services. The Secretary may modify 
        the episodes of care as well as the services to be included in 
        the bundled payments prior to or after approving the project. 
        The Secretary may also vary such factors among the different 
        States participating in the demonstration project.
            (4) The Secretary shall ensure that payments made under the 
        demonstration project are adjusted for severity of illness and 
        other characteristics of Medicaid beneficiaries within a 
        category or having a diagnosis targeted as part of the 
        demonstration project. States shall ensure that Medicaid 
        beneficiaries are not liable for any additional cost sharing 
        than if their care had not been subject to payment under the 
        demonstration project.
            (5) Hospitals participating in the demonstration project 
        shall have or establish robust discharge planning programs to 
        ensure that Medicaid beneficiaries requiring post-acute care 
        are appropriately placed in, or have ready access to, post-
        acute care settings.
            (6) The Secretary and each State selected to participate in 
        the demonstration project shall ensure that the demonstration 
        project does not result in the Medicaid beneficiaries whose 
        care is subject to payment under the demonstration project 
        being provided with less items and services for which medical 
        assistance is provided under the State Medicaid program than 
        the items and services for which medical assistance would have 
        been provided to such beneficiaries under the State Medicaid 
        program in the absence of the demonstration project.
    (c) Waiver of Provisions.--Notwithstanding section 1115(a) of the 
Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such 
provisions of titles XIX, XVIII, and XI of that Act as may be necessary 
to accomplish the goals of the demonstration, ensure beneficiary access 
to acute and post-acute care, and maintain quality of care.
    (d) Evaluation and Report.--
            (1) Data.--Each State selected to participate in the 
        demonstration project under this section shall provide to the 
        Secretary, in such form and manner as the Secretary shall 
        specify, relevant data necessary to monitor outcomes, costs, 
        and quality, and evaluate the rationales for selection of the 
        episodes of care and services specified by States under 
        subsection (b)(3).
            (2) Report.--Not later than 1 year after the conclusion of 
        the demonstration project, the Secretary shall submit a report 
        to Congress on the results of the demonstration project.

SEC. 2705. MEDICAID GLOBAL PAYMENT SYSTEM DEMONSTRATION PROJECT.

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

SEC. 2706. PEDIATRIC ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION 
              PROJECT.

    (a) Authority to Conduct Demonstration.--
            (1) In general.--The Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary'') shall 
        establish the Pediatric Accountable Care Organization 
        Demonstration Project to authorize a participating State to 
        allow pediatric medical providers that meet specified 
        requirements to be recognized as an accountable care 
        organization for purposes of receiving incentive payments (as 
        described under subsection (d)), in the same manner as an 
        accountable care organization is recognized and provided with 
        incentive payments under section 1899 of the Social Security 
        Act (as added by section 3022).
            (2) Duration.--The demonstration project shall begin on 
        January 1, 2012, and shall end on December 31, 2016.
    (b) Application.--A State that desires to participate in the 
demonstration project under this section shall submit to the Secretary 
an application at such time, in such manner, and containing such 
information as the Secretary may require.
    (c) Requirements.--
            (1) Performance guidelines.--The Secretary, in consultation 
        with the States and pediatric providers, shall establish 
        guidelines to ensure that the quality of care delivered to 
        individuals by a provider recognized as an accountable care 
        organization under this section is not less than the quality of 
        care that would have otherwise been provided to such 
        individuals.
            (2) Savings requirement.--A participating State, in 
        consultation with the Secretary, shall establish an annual 
        minimal level of savings in expenditures for items and services 
        covered under the Medicaid program under title XIX of the 
        Social Security Act and the CHIP program under title XXI of 
        such Act that must be reached by an accountable care 
        organization in order for such organization to receive an 
        incentive payment under subsection (d).
            (3) Minimum participation period.--A provider desiring to 
        be recognized as an accountable care organization under the 
        demonstration project shall enter into an agreement with the 
        State to participate in the project for not less than a 3-year 
        period.
    (d) Incentive Payment.--An accountable care organization that meets 
the performance guidelines established by the Secretary under 
subsection (c)(1) and achieves savings greater than the annual minimal 
savings level established by the State under subsection (c)(2) shall 
receive an incentive payment for such year equal to a portion (as 
determined appropriate by the Secretary) of the amount of such excess 
savings. The Secretary may establish an annual cap on incentive 
payments for an accountable care organization.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 2707. MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration Project.--The Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') shall establish a demonstration project under which an 
eligible State (as described in subsection (c)) shall provide payment 
under the State Medicaid plan under title XIX of the Social Security 
Act to an institution for mental diseases that is not publicly owned or 
operated and that is subject to the requirements of section 1867 of the 
Social Security Act (42 U.S.C. 1395dd) for the provision of medical 
assistance available under such plan to individuals who--
            (1) have attained age 21, but have not attained age 65;
            (2) are eligible for medical assistance under such plan; 
        and
            (3) require such medical assistance to stabilize an 
        emergency medical condition.
    (b) Stabilization Review.--A State shall specify in its application 
described in subsection (c)(1) establish a mechanism for how it will 
ensure that institutions participating in the demonstration will 
determine whether or not such individuals have been stabilized (as 
defined in subsection (h)(5)) . This mechanism shall commence before 
the third day of the inpatient stay. States participating in the 
demonstration project may manage the provision of services for the 
stabilization of medical emergency conditions through utilization 
review, authorization, or management practices, or the application of 
medical necessity and appropriateness criteria applicable to behavioral 
health.
    (c) Eligible State Defined.--
            (1) In general.--An eligible State is a State that has made 
        an application and has been selected pursuant to paragraphs (2) 
        and (3).
            (2) Application.--A State seeking to participate in the 
        demonstration project under this section shall submit to the 
        Secretary, at such time and in such format as the Secretary 
        requires, an application that includes such information, 
        provisions, and assurances, as the Secretary may require.
            (3) Selection.--A State shall be determined eligible for 
        the demonstration by the Secretary on a competitive basis among 
        States with applications meeting the requirements of paragraph 
        (1). In selecting State applications for the demonstration 
        project, the Secretary shall seek to achieve an appropriate 
        national balance in the geographic distribution of such 
        projects.
    (d) Length of Demonstration Project.--The demonstration project 
established under this section shall be conducted for a period of 3 
consecutive years.
    (e) Limitations on Federal Funding.--
            (1) Appropriation.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there is appropriated to 
                carry out this section, $75,000,000 for fiscal year 
                2011.
                    (B) Budget authority.--Subparagraph (A) constitutes 
                budget authority in advance of appropriations Act and 
                represents the obligation of the Federal Government to 
                provide for the payment of the amounts appropriated 
                under that subparagraph.
            (2) 5-year availability.--Funds appropriated under 
        paragraph (1) shall remain available for obligation through 
        December 31, 2015.
            (3) Limitation on payments.--In no case may--
                    (A) the aggregate amount of payments made by the 
                Secretary to eligible States under this section exceed 
                $75,000,000; or
                    (B) payments be provided by the Secretary under 
                this section after December 31, 2015.
            (4) Funds allocated to states.--Funds shall be allocated to 
        eligible States on the basis of criteria, including a State's 
        application and the availability of funds, as determined by the 
        Secretary.
            (5) Payments to states.--The Secretary shall pay to each 
        eligible State, from its allocation under paragraph (4), an 
        amount each quarter equal to the Federal medical assistance 
        percentage of expenditures in the quarter for medical 
        assistance described in subsection (a). As a condition of 
        receiving payment, a State shall collect and report 
        information, as determined necessary by the Secretary, for the 
        purposes of providing Federal oversight and conducting an 
        evaluation under subsection (f)(1).
    (f) Evaluation and Report to Congress.--
            (1) Evaluation.--The Secretary shall conduct an evaluation 
        of the demonstration project in order to determine the impact 
        on the functioning of the health and mental health service 
        system and on individuals enrolled in the Medicaid program and 
        shall include the following:
                    (A) An assessment of access to inpatient mental 
                health services under the Medicaid program; average 
                lengths of inpatient stays; and emergency room visits.
                    (B) An assessment of discharge planning by 
                participating hospitals.
                    (C) An assessment of the impact of the 
                demonstration project on the costs of the full range of 
                mental health services (including inpatient, emergency 
                and ambulatory care).
                    (D) An analysis of the percentage of consumers with 
                Medicaid coverage who are admitted to inpatient 
                facilities as a result of the demonstration project as 
                compared to those admitted to these same facilities 
                through other means.
                    (E) A recommendation regarding whether the 
                demonstration project should be continued after 
                December 31, 2013, and expanded on a national basis.
            (2) Report.--Not later than December 31, 2013, the 
        Secretary shall submit to Congress and make available to the 
        public a report on the findings of the evaluation under 
        paragraph (1).
    (g) Waiver Authority.--
            (1) In general.--The Secretary shall waive the limitation 
        of subdivision (B) following paragraph (28) of section 1905(a) 
        of the Social Security Act (42 U.S.C. 1396d(a)) (relating to 
        limitations on payments for care or services for individuals 
        under 65 years of age who are patients in an institution for 
        mental diseases) for purposes of carrying out the demonstration 
        project under this section.
            (2) Limited other waiver authority.--The Secretary may 
        waive other requirements of titles XI and XIX of the Social 
        Security Act (including the requirements of sections 1902(a)(1) 
        (relating to statewideness) and 1902(1)(10)(B) (relating to 
        comparability)) only to extent necessary to carry out the 
        demonstration project under this section.
    (h) Definitions.--In this section:
            (1) Emergency medical condition.--The term ``emergency 
        medical condition'' means, with respect to an individual, an 
        individual who expresses suicidal or homicidal thoughts or 
        gestures, if determined dangerous to self or others.
            (2) Federal medical assistance percentage.--The term 
        ``Federal medical assistance percentage'' has the meaning given 
        that term with respect to a State under section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)).
            (3) Institution for mental diseases.--The term 
        ``institution for mental diseases'' has the meaning given to 
        that term in section 1905(i) of the Social Security Act (42 
        U.S.C. 1396d(i)).
            (4) Medical assistance.--The term ``medical assistance'' 
        has the meaning given that term in section 1905(a) of the 
        Social Security Act (42 U.S.C. 1396d(a)).
            (5) Stabilized.--The term ``stabilized'' means, with 
        respect to an individual, that the emergency medical condition 
        no longer exists with respect to the individual and the 
        individual is no longer dangerous to self or others.
            (6) State.--The term ``State'' has the meaning given that 
        term for purposes of title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).

 Subtitle J--Improvements to the Medicaid and CHIP Payment and Access 
                          Commission (MACPAC)

SEC. 2801. MACPAC ASSESSMENT OF POLICIES AFFECTING ALL MEDICAID 
              BENEFICIARIES.

    (a) In General.--Section 1900 of the Social Security Act (42 U.S.C. 
1396) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in the paragraph heading, by inserting 
                        ``for all states'' before ``and annual''; and
                            (ii) in subparagraph (A), by striking 
                        ``children's'';
                            (iii) in subparagraph (B), by inserting ``, 
                        the Secretary, and States'' after ``Congress'';
                            (iv) in subparagraph (C), by striking 
                        ``March 1'' and inserting ``March 15''; and
                            (v) in subparagraph (D), by striking ``June 
                        1'' and inserting ``June 15'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i)--
                                            (aa) by inserting ``the 
                                        efficient provision of'' after 
                                        ``expenditures for''; and
                                            (bb) by striking 
                                        ``hospital, skilled nursing 
                                        facility, physician, Federally-
                                        qualified health center, rural 
                                        health center, and other fees'' 
                                        and inserting ``payments to 
                                        medical, dental, and health 
                                        professionals, hospitals, 
                                        residential and long-term care 
                                        providers, providers of home 
                                        and community based services, 
                                        Federally-qualified health 
                                        centers and rural health 
                                        clinics, managed care entities, 
                                        and providers of other covered 
                                        items and services''; and
                                    (II) in clause (iii), by inserting 
                                ``(including how such factors and 
                                methodologies enable such beneficiaries 
                                to obtain the services for which they 
                                are eligible, affect provider supply, 
                                and affect providers that serve a 
                                disproportionate share of low-income 
                                and other vulnerable populations)'' 
                                after ``beneficiaries'';
                            (ii) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (F) and (H), respectively;
                            (iii) by inserting after subparagraph (A), 
                        the following:
                    ``(B) Eligibility policies.--Medicaid and CHIP 
                eligibility policies, including a determination of the 
                degree to which Federal and State policies provide 
                health care coverage to needy populations.
                    ``(C) Enrollment and retention processes.--Medicaid 
                and CHIP enrollment and retention processes, including 
                a determination of the degree to which Federal and 
                State policies encourage the enrollment of individuals 
                who are eligible for such programs and screen out 
                individuals who are ineligible, while minimizing the 
                share of program expenses devoted to such processes.
                    ``(D) Coverage policies.--Medicaid and CHIP benefit 
                and coverage policies, including a determination of the 
                degree to which Federal and State policies provide 
                access to the services enrollees require to improve and 
                maintain their health and functional status.
                    ``(E) Quality of care.--Medicaid and CHIP policies 
                as they relate to the quality of care provided under 
                those programs, including a determination of the degree 
                to which Federal and State policies achieve their 
                stated goals and interact with similar goals 
                established by other purchasers of health care 
                services.'';
                            (iv) by inserting after subparagraph (F) 
                        (as redesignated by clause (ii) of this 
                        subparagraph), the following:
                    ``(G) Interactions with medicare and medicaid.--
                Consistent with paragraph (11), the interaction of 
                policies under Medicaid and the Medicare program under 
                title XVIII, including with respect to how such 
                interactions affect access to services, payments, and 
                dual eligible individuals.'' and
                            (v) in subparagraph (H) (as so 
                        redesignated), by inserting ``and preventive, 
                        acute, and long-term services and supports'' 
                        after ``barriers'';
                    (C) by redesignating paragraphs (3) through (9) as 
                paragraphs (4) through (10), respectively;
                    (D) by inserting after paragraph (2), the following 
                new paragraph:
            ``(3) Recommendations and reports of state-specific data.--
        MACPAC shall--
                    ``(A) review national and State-specific Medicaid 
                and CHIP data; and
                    ``(B) submit reports and recommendations to 
                Congress, the Secretary, and States based on such 
                reviews.'';
                    (E) in paragraph (4), as redesignated by 
                subparagraph (C), by striking ``or any other problems'' 
                and all that follows through the period and inserting 
                ``, as well as other factors that adversely affect, or 
                have the potential to adversely affect, access to care 
                by, or the health care status of, Medicaid and CHIP 
                beneficiaries. MACPAC shall include in the annual 
                report required under paragraph (1)(D) a description of 
                all such areas or problems identified with respect to 
                the period addressed in the report.'';
                    (F) in paragraph (5), as so redesignated,--
                            (i) in the paragraph heading, by inserting 
                        ``and regulations'' after ``reports''; and
                            (ii) by striking ``If'' and inserting the 
                        following:
                    ``(A) Certain secretarial reports.--If''; and
                            (iii) in the second sentence, by inserting 
                        ``and the Secretary'' after ``appropriate 
                        committees of Congress''; and
                            (iv) by adding at the end the following:
                    ``(B) Regulations.--MACPAC shall review Medicaid 
                and CHIP regulations and may comment through submission 
                of a report to the appropriate committees of Congress 
                and the Secretary, on any such regulations that affect 
                access, quality, or efficiency of health care.'';
                    (G) in paragraph (10), as so redesignated, by 
                inserting ``, and shall submit with any 
                recommendations, a report on the Federal and State-
                specific budget consequences of the recommendations'' 
                before the period; and
                    (H) by adding at the end the following:
            ``(11) Consultation and coordination with medpac.--
                    ``(A) In general.--MACPAC shall consult with the 
                Medicare Payment Advisory Commission (in this paragraph 
                referred to as `MedPAC') established under section 1805 
                in carrying out its duties under this section, as 
                appropriate and particularly with respect to the issues 
                specified in paragraph (2) as they relate to those 
                Medicaid beneficiaries who are dually eligible for 
                Medicaid and the Medicare program under title XVIII, 
                adult Medicaid beneficiaries (who are not dually 
                eligible for Medicare), and beneficiaries under 
                Medicare. Responsibility for analysis of and 
                recommendations to change Medicare policy regarding 
                Medicare beneficiaries, including Medicare 
                beneficiaries who are dually eligible for Medicare and 
                Medicaid, shall rest with MedPAC.
                    ``(B) Information sharing.--MACPAC and MedPAC shall 
                have access to deliberations and records of the other 
                such entity, respectively, upon the request of the 
                other such entity.
            ``(12) Consultation with states.--MACPAC shall regularly 
        consult with States in carrying out its duties under this 
        section, including with respect to developing processes for 
        carrying out such duties, and shall ensure that input from 
        States is taken into account and represented in MACPAC's 
        recommendations and reports.
            ``(13) Coordinate and consult with the federal coordinated 
        health care office.--MACPAC shall coordinate and consult with 
        the Federal Coordinated Health Care Office established under 
        section 2081 of the Patient Protection and Affordable Care Act 
        before making any recommendations regarding dual eligible 
        individuals.
            ``(14) Programmatic oversight vested in the secretary.--
        MACPAC's authority to make recommendations in accordance with 
        this section shall not affect, or be considered to duplicate, 
        the Secretary's authority to carry out Federal responsibilities 
        with respect to Medicaid and CHIP.'';
            (2) in subsection (c)(2)--
                    (A) by striking subparagraphs (A) and (B) and 
                inserting the following:
                    ``(A) In general.--The membership of MACPAC shall 
                include individuals who have had direct experience as 
                enrollees or parents or caregivers of enrollees in 
                Medicaid or CHIP and individuals with national 
                recognition for their expertise in Federal safety net 
                health programs, health finance and economics, 
                actuarial science, health plans and integrated delivery 
                systems, reimbursement for health care, health 
                information technology, and other providers of health 
                services, public health, and other related fields, who 
                provide a mix of different professions, broad 
                geographic representation, and a balance between urban 
                and rural representation.
                    ``(B) Inclusion.--The membership of MACPAC shall 
                include (but not be limited to) physicians, dentists, 
                and other health professionals, employers, third-party 
                payers, and individuals with expertise in the delivery 
                of health services. Such membership shall also include 
                representatives of children, pregnant women, the 
                elderly, individuals with disabilities, caregivers, and 
                dual eligible individuals, current or former 
                representatives of State agencies responsible for 
                administering Medicaid, and current or former 
                representatives of State agencies responsible for 
                administering CHIP.''.
            (3) in subsection (d)(2), by inserting ``and State'' after 
        ``Federal'';
            (4) in subsection (e)(1), in the first sentence, by 
        inserting ``and, as a condition for receiving payments under 
        sections 1903(a) and 2105(a), from any State agency responsible 
        for administering Medicaid or CHIP,'' after ``United States''; 
        and
            (5) in subsection (f)--
                    (A) in the subsection heading, by striking 
                ``Authorization of Appropriations'' and inserting 
                ``Funding'';
                    (B) in paragraph (1), by inserting ``(other than 
                for fiscal year 2010)'' before ``in the same manner''; 
                and
                    (C) by adding at the end the following:
            ``(3) Funding for fiscal year 2010.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, there is appropriated to 
                MACPAC to carry out the provisions of this section for 
                fiscal year 2010, $9,000,000.
                    ``(B) Transfer of funds.--Notwithstanding section 
                2104(a)(13), from the amounts appropriated in such 
                section for fiscal year 2010, $2,000,000 is hereby 
                transferred and made available in such fiscal year to 
                MACPAC to carry out the provisions of this section.
            ``(4) Availability.--Amounts made available under 
        paragraphs (2) and (3) to MACPAC to carry out the provisions of 
        this section shall remain available until expended.''.
    (b) Conforming MedPAC Amendments.--Section 1805(b) of the Social 
Security Act (42 U.S.C. 1395b-6(b)), is amended--
            (1) in paragraph (1)(C), by striking ``March 1 of each year 
        (beginning with 1998)'' and inserting ``March 15'';
            (2) in paragraph (1)(D), by inserting ``, and (beginning 
        with 2012) containing an examination of the topics described in 
        paragraph (9), to the extent feasible'' before the period; and
            (3) by adding at the end the following:
            ``(9) Review and annual report on medicaid and commercial 
        trends.--The Commission shall review and report on aggregate 
        trends in spending, utilization, and financial performance 
        under the Medicaid program under title XIX and the private 
        market for health care services with respect to providers for 
        which, on an aggregate national basis, a significant portion of 
        revenue or services is associated with the Medicaid program. 
        Where appropriate, the Commission shall conduct such review in 
        consultation with the Medicaid and CHIP Payment and Access 
        Commission established under section 1900 (in this section 
        referred to as `MACPAC').
            ``(10) Coordinate and consult with the federal coordinated 
        health care office.--The Commission shall coordinate and 
        consult with the Federal Coordinated Health Care Office 
        established under section 2081 of the Patient Protection and 
        Affordable Care Act before making any recommendations regarding 
        dual eligible individuals.
            ``(11) Interaction of medicaid and medicare.--The 
        Commission shall consult with MACPAC in carrying out its duties 
        under this section, as appropriate. Responsibility for analysis 
        of and recommendations to change Medicare policy regarding 
        Medicare beneficiaries, including Medicare beneficiaries who 
        are dually eligible for Medicare and Medicaid, shall rest with 
        the Commission. Responsibility for analysis of and 
        recommendations to change Medicaid policy regarding Medicaid 
        beneficiaries, including Medicaid beneficiaries who are dually 
        eligible for Medicare and Medicaid, shall rest with MACPAC.''.

    Subtitle K--Protections for American Indians and Alaska Natives

SEC. 2901. SPECIAL RULES RELATING TO INDIANS.

    (a) No Cost-sharing for Indians With Income at or Below 300 Percent 
of Poverty Enrolled in Coverage Through a State Exchange.--For 
provisions prohibiting cost sharing for Indians enrolled in any 
qualified health plan in the individual market through an Exchange, see 
section 1402(d) of the Patient Protection and Affordable Care Act.
    (b) Payer of Last Resort.--Health programs operated by the Indian 
Health Service, Indian tribes, tribal organizations, and Urban Indian 
organizations (as those terms are defined in section 4 of the Indian 
Health Care Improvement Act (25 U.S.C. 1603)) shall be the payer of 
last resort for services provided by such Service, tribes, or 
organizations to individuals eligible for services through such 
programs, notwithstanding any Federal, State, or local law to the 
contrary.
    (c) Facilitating Enrollment of Indians Under the Express Lane 
Option.--Section 1902(e)(13)(F)(ii) of the Social Security Act (42 
U.S.C. 1396a(e)(13)(F)(ii)) is amended--
            (1) in the clause heading, by inserting ``and indian tribes 
        and tribal organizations'' after ``agencies''; and
            (2) by adding at the end the following:
                                    ``(IV) The Indian Health Service, 
                                an Indian Tribe, Tribal Organization, 
                                or Urban Indian Organization (as 
                                defined in section 1139(c)).''.
    (d) Technical Corrections.--Section 1139(c) of the Social Security 
Act (42 U.S.C. 1320b-9(c)) is amended by striking ``In this section'' 
and inserting ``For purposes of this section, title XIX, and title 
XXI''.

SEC. 2902. ELIMINATION OF SUNSET FOR REIMBURSEMENT FOR ALL MEDICARE 
              PART B SERVICES FURNISHED BY CERTAIN INDIAN HOSPITALS AND 
              CLINICS.

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

             Subtitle L--Maternal and Child Health Services

SEC. 2951. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING 
              PROGRAMS.

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

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

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

SEC. 2952. SUPPORT, EDUCATION, AND RESEARCH FOR POSTPARTUM DEPRESSION.

    (a) Research on Postpartum Conditions.--
            (1) Expansion and intensification of activities.--The 
        Secretary of Health and Human Services (in this subsection and 
        subsection (c) referred to as the ``Secretary'') is encouraged 
        to continue activities on postpartum depression or postpartum 
        psychosis (in this subsection and subsection (c) referred to as 
        ``postpartum conditions''), including research to expand the 
        understanding of the causes of, and treatments for, postpartum 
        conditions. Activities under this paragraph shall include 
        conducting and supporting the following:
                    (A) Basic research concerning the etiology and 
                causes of the conditions.
                    (B) Epidemiological studies to address the 
                frequency and natural history of the conditions and the 
                differences among racial and ethnic groups with respect 
                to the conditions.
                    (C) The development of improved screening and 
                diagnostic techniques.
                    (D) Clinical research for the development and 
                evaluation of new treatments.
                    (E) Information and education programs for health 
                care professionals and the public, which may include a 
                coordinated national campaign to increase the awareness 
                and knowledge of postpartum conditions. Activities 
                under such a national campaign may--
                            (i) include public service announcements 
                        through television, radio, and other means; and
                            (ii) focus on--
                                    (I) raising awareness about 
                                screening;
                                    (II) educating new mothers and 
                                their families about postpartum 
                                conditions to promote earlier diagnosis 
                                and treatment; and
                                    (III) ensuring that such education 
                                includes complete information 
                                concerning postpartum conditions, 
                                including its symptoms, methods of 
                                coping with the illness, and treatment 
                                resources.
            (2) Sense of congress regarding longitudinal study of 
        relative mental health consequences for women of resolving a 
        pregnancy.--
                    (A) Sense of congress.--It is the sense of Congress 
                that the Director of the National Institute of Mental 
                Health may conduct a nationally representative 
                longitudinal study (during the period of fiscal years 
                2010 through 2019) of the relative mental health 
                consequences for women of resolving a pregnancy 
                (intended and unintended) in various ways, including 
                carrying the pregnancy to term and parenting the child, 
                carrying the pregnancy to term and placing the child 
                for adoption, miscarriage, and having an abortion. This 
                study may assess the incidence, timing, magnitude, and 
                duration of the immediate and long-term mental health 
                consequences (positive or negative) of these pregnancy 
                outcomes.
                    (B) Report.--Subject to the completion of the study 
                under subsection (a), beginning not later than 5 years 
                after the date of the enactment of this Act, and 
                periodically thereafter for the duration of the study, 
                such Director may prepare and submit to the Congress 
                reports on the findings of the study.
    (b) Grants to Provide Services to Individuals With a Postpartum 
Condition and Their Families.--Title V of the Social Security Act (42 
U.S.C. 701 et seq.), as amended by section 2951, is amended by adding 
at the end the following new section:

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

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

SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.), as 
amended by sections 2951 and 2952(c), is amended by adding at the end 
the following:

``SEC. 513. PERSONAL RESPONSIBILITY EDUCATION.

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

SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION.

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

SEC. 2955. INCLUSION OF INFORMATION ABOUT THE IMPORTANCE OF HAVING A 
              HEALTH CARE POWER OF ATTORNEY IN TRANSITION PLANNING FOR 
              CHILDREN AGING OUT OF FOSTER CARE AND INDEPENDENT LIVING 
              PROGRAMS.

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

     TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE

        Subtitle A--Transforming the Health Care Delivery System

 PART I--LINKING PAYMENT TO QUALITY OUTCOMES UNDER THE MEDICARE PROGRAM

SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PROGRAM.

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

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

    (a) Extension.--Section 1848(m) of the Social Security Act (42 
U.S.C. 1395w-4(m)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by striking ``2010'' and inserting 
                ``2014''; and
                    (B) in subparagraph (B)--
                            (i) in clause (i), by striking ``and'' at 
                        the end;
                            (ii) in clause (ii), by striking the period 
                        at the end and inserting a semicolon; and
                            (iii) by adding at the end the following 
                        new clauses:
                            ``(iii) for 2011, 1.0 percent; and
                            ``(iv) for 2012, 2013, and 2014, 0.5 
                        percent.'';
            (2) in paragraph (3)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (i), by inserting ``(or, for purposes of 
                subsection (a)(8), for the quality reporting period for 
                the year)'' after ``reporting period''; and
                    (B) in subparagraph (C)(i), by inserting ``, or, 
                for purposes of subsection (a)(8), for a quality 
                reporting period for the year'' after ``(a)(5), for a 
                reporting period for a year'';
            (3) in paragraph (5)(E)(iv), by striking ``subsection 
        (a)(5)(A)'' and inserting ``paragraphs (5)(A) and (8)(A) of 
        subsection (a)''; and
            (4) in paragraph (6)(C)--
                    (A) in clause (i)(II), by striking ``, 2009, 2010, 
                and 2011'' and inserting ``and subsequent years''; and
                    (B) in clause (iii)--
                            (i) by inserting ``(a)(8)'' after 
                        ``(a)(5)''; and
                            (ii) by striking ``under subparagraph 
                        (D)(iii) of such subsection'' and inserting 
                        ``under subsection (a)(5)(D)(iii) or the 
                        quality reporting period under subsection 
                        (a)(8)(D)(iii), respectively''.
    (b) Incentive Payment Adjustment for Quality Reporting.--Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)) is amended by 
adding at the end the following new paragraph:
            ``(8) Incentives for quality reporting.--
                    ``(A) Adjustment.--
                            ``(i) In general.--With respect to covered 
                        professional services furnished by an eligible 
                        professional during 2015 or any subsequent 
                        year, if the eligible professional does not 
                        satisfactorily submit data on quality measures 
                        for covered professional services for the 
                        quality reporting period for the year (as 
                        determined under subsection (m)(3)(A)), the fee 
                        schedule amount for such services furnished by 
                        such professional during the year (including 
                        the fee schedule amount for purposes of 
                        determining a payment based on such amount) 
                        shall be equal to the applicable percent of the 
                        fee schedule amount that would otherwise apply 
                        to such services under this subsection 
                        (determined after application of paragraphs 
                        (3), (5), and (7), but without regard to this 
                        paragraph).
                            ``(ii) Applicable percent.--For purposes of 
                        clause (i), the term `applicable percent' 
                        means--
                                    ``(I) for 2015, 98.5 percent; and
                                    ``(II) for 2016 and each subsequent 
                                year, 98 percent.
                    ``(B) Application.--
                            ``(i) Physician reporting system rules.--
                        Paragraphs (5), (6), and (8) of subsection (k) 
                        shall apply for purposes of this paragraph in 
                        the same manner as they apply for purposes of 
                        such subsection.
                            ``(ii) Incentive payment validation 
                        rules.--Clauses (ii) and (iii) of subsection 
                        (m)(5)(D) shall apply for purposes of this 
                        paragraph in a similar manner as they apply for 
                        purposes of such subsection.
                    ``(C) Definitions.--For purposes of this paragraph:
                            ``(i) Eligible professional; covered 
                        professional services.--The terms `eligible 
                        professional' and `covered professional 
                        services' have the meanings given such terms in 
                        subsection (k)(3).
                            ``(ii) Physician reporting system.--The 
                        term `physician reporting system' means the 
                        system established under subsection (k).
                            ``(iii) Quality reporting period.--The term 
                        `quality reporting period' means, with respect 
                        to a year, a period specified by the 
                        Secretary.''.
    (c) Maintenance of Certification Programs.--
            (1) In general.--Section 1848(k)(4) of the Social Security 
        Act (42 U.S.C. 1395w-4(k)(4)) is amended by inserting ``or 
        through a Maintenance of Certification program operated by a 
        specialty body of the American Board of Medical Specialties 
        that meets the criteria for such a registry'' after 
        ``Database)''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply for years after 2010.
    (d) Integration of Physician Quality Reporting and EHR Reporting.--
Section 1848(m) of the Social Security Act (42 U.S.C. 1395w-4(m)) is 
amended by adding at the end the following new paragraph:
            ``(7) Integration of physician quality reporting and ehr 
        reporting.--Not later than January 1, 2012, the Secretary shall 
        develop a plan to integrate reporting on quality measures under 
        this subsection with reporting requirements under subsection 
        (o) relating to the meaningful use of electronic health 
        records. Such integration shall consist of the following:
                    ``(A) The selection of measures, the reporting of 
                which would both demonstrate--
                            ``(i) meaningful use of an electronic 
                        health record for purposes of subsection (o); 
                        and
                            ``(ii) quality of care furnished to an 
                        individual.
                    ``(B) Such other activities as specified by the 
                Secretary.''.
    (e) Feedback.--Section 1848(m)(5) of the Social Security Act (42 
U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Feedback.--The Secretary shall provide timely 
                feedback to eligible professionals on the performance 
                of the eligible professional with respect to 
                satisfactorily submitting data on quality measures 
                under this subsection.''.
    (f) Appeals.--Such section is further amended--
            (1) in subparagraph (E), by striking ``There shall'' and 
        inserting ``Except as provided in subparagraph (I), there 
        shall''; and
            (2) by adding at the end the following new subparagraph:
                    ``(I) Informal appeals process.--The Secretary 
                shall, by not later than January 1, 2011, establish and 
                have in place an informal process for eligible 
                professionals to seek a review of the determination 
                that an eligible professional did not satisfactorily 
                submit data on quality measures under this 
                subsection.''.

SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

    (a) In General.--Section 1848(n) of the Social Security Act (42 
U.S.C. 1395w-4(n)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by striking ``general.--The Secretary'' 
                        and inserting ``general.--
                            ``(i) Establishment.--The Secretary'';
                            (ii) in clause (i), as added by clause (i), 
                        by striking ``the `Program')'' and all that 
                        follows through the period at the end of the 
                        second sentence and inserting ``the 
                        `Program').''; and
                            (iii) by adding at the end the following 
                        new clauses:
                            ``(ii) Reports on resources.--The Secretary 
                        shall use claims data under this title (and may 
                        use other data) to provide confidential reports 
                        to physicians (and, as determined appropriate 
                        by the Secretary, to groups of physicians) that 
                        measure the resources involved in furnishing 
                        care to individuals under this title.
                            ``(iii) Inclusion of certain information.--
                        If determined appropriate by the Secretary, the 
                        Secretary may include information on the 
                        quality of care furnished to individuals under 
                        this title by the physician (or group of 
                        physicians) in such reports.''; and
                    (B) in subparagraph (B), by striking ``subparagraph 
                (A)'' and inserting ``subparagraph (A)(ii)'';
            (2) in paragraph (4)--
                    (A) in the heading, by inserting ``initial'' after 
                ``focus''; and
                    (B) in the matter preceding subparagraph (A), by 
                inserting ``initial'' after ``focus the'';
            (3) in paragraph (6), by adding at the end the following 
        new sentence: ``For adjustments for reports on utilization 
        under paragraph (9), see subparagraph (D) of such paragraph.''; 
        and
            (4) by adding at the end the following new paragraphs:
            ``(9) Reports on utilization.--
                    ``(A) Development of episode grouper.--
                            ``(i) In general.--The Secretary shall 
                        develop an episode grouper that combines 
                        separate but clinically related items and 
                        services into an episode of care for an 
                        individual, as appropriate.
                            ``(ii) Timeline for development.--The 
                        episode grouper described in subparagraph (A) 
                        shall be developed by not later than January 1, 
                        2012.
                            ``(iii) Public availability.--The Secretary 
                        shall make the details of the episode grouper 
                        described in subparagraph (A) available to the 
                        public.
                            ``(iv) Endorsement.--The Secretary shall 
                        seek endorsement of the episode grouper 
                        described in subparagraph (A) by the entity 
                        with a contract under section 1890(a).
                    ``(B) Reports on utilization.--Effective beginning 
                with 2012, the Secretary shall provide reports to 
                physicians that compare, as determined appropriate by 
                the Secretary, patterns of resource use of the 
                individual physician to such patterns of other 
                physicians.
                    ``(C) Analysis of data.--The Secretary shall, for 
                purposes of preparing reports under this paragraph, 
                establish methodologies as appropriate, such as to--
                            ``(i) attribute episodes of care, in whole 
                        or in part, to physicians;
                            ``(ii) identify appropriate physicians for 
                        purposes of comparison under subparagraph (B); 
                        and
                            ``(iii) aggregate episodes of care 
                        attributed to a physician under clause (i) into 
                        a composite measure per individual.
                    ``(D) Data adjustment.--In preparing reports under 
                this paragraph, the Secretary shall make appropriate 
                adjustments, including adjustments--
                            ``(i) to account for differences in 
                        socioeconomic and demographic characteristics, 
                        ethnicity, and health status of individuals 
                        (such as to recognize that less healthy 
                        individuals may require more intensive 
                        interventions); and
                            ``(ii) to eliminate the effect of 
                        geographic adjustments in payment rates (as 
                        described in subsection (e)).
                    ``(E) Public availability of methodology.--The 
                Secretary shall make available to the public--
                            ``(i) the methodologies established under 
                        subparagraph (C);
                            ``(ii) information regarding any 
                        adjustments made to data under subparagraph 
                        (D); and
                            ``(iii) aggregate reports with respect to 
                        physicians.
                    ``(F) Definition of physician.--In this paragraph:
                            ``(i) In general.--The term `physician' has 
                        the meaning given that term in section 
                        1861(r)(1).
                            ``(ii) Treatment of groups.--Such term 
                        includes, as the Secretary determines 
                        appropriate, a group of physicians.
                    ``(G) Limitations on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the establishment of the 
                methodology under subparagraph (C), including the 
                determination of an episode of care under such 
                methodology.
            ``(10) Coordination with other value-based purchasing 
        reforms.--The Secretary shall coordinate the Program with the 
        value-based payment modifier established under subsection (p) 
        and, as the Secretary determines appropriate, other similar 
        provisions of this title.''.
    (b) Conforming Amendment.--Section 1890(b) of the Social Security 
Act (42 U.S.C. 1395aaa(b)) is amended by adding at the end the 
following new paragraph:
            ``(6) Review and endorsement of episode grouper under the 
        physician feedback program.--The entity shall provide for the 
        review and, as appropriate, the endorsement of the episode 
        grouper developed by the Secretary under section 1848(n)(9)(A). 
        Such review shall be conducted on an expedited basis.''.

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

    (a) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)), as amended by section 3401(c), is 
amended by adding at the end the following new paragraph:
            ``(5) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                            ``(i) In general.--Under the system 
                        described in paragraph (1), for rate year 2014 
                        and each subsequent rate year, in the case of a 
                        long-term care hospital that does not submit 
                        data to the Secretary in accordance with 
                        subparagraph (C) with respect to such a rate 
                        year, any annual update to a standard Federal 
                        rate for discharges for the hospital during the 
                        rate year, and after application of paragraph 
                        (3), shall be reduced by 2 percentage points.
                            ``(ii) Special rule.--The application of 
                        this subparagraph may result in such annual 
                        update being less than 0.0 for a rate year, and 
                        may result in payment rates under the system 
                        described in paragraph (1) for a rate year 
                        being less than such payment rates for the 
                        preceding rate year.
                    ``(B) Noncumulative application.--Any reduction 
                under subparagraph (A) shall apply only with respect to 
                the rate year involved and the Secretary shall not take 
                into account such reduction in computing the payment 
                amount under the system described in paragraph (1) for 
                a subsequent rate year.
                    ``(C) Submission of quality data.--For rate year 
                2014 and each subsequent rate year, each long-term care 
                hospital shall submit to the Secretary data on quality 
                measures specified under subparagraph (D). Such data 
                shall be submitted in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                subparagraph.
                    ``(D) Quality measures.--
                            ``(i) In general.--Subject to clause (ii), 
                        any measure specified by the Secretary under 
                        this subparagraph must have been endorsed by 
                        the entity with a contract under section 
                        1890(a).
                            ``(ii) Exception.--In the case of a 
                        specified area or medical topic determined 
                        appropriate by the Secretary for which a 
                        feasible and practical measure has not been 
                        endorsed by the entity with a contract under 
                        section 1890(a), the Secretary may specify a 
                        measure that is not so endorsed as long as due 
                        consideration is given to measures that have 
                        been endorsed or adopted by a consensus 
                        organization identified by the Secretary.
                            ``(iii) Time frame.--Not later than October 
                        1, 2012, the Secretary shall publish the 
                        measures selected under this subparagraph that 
                        will be applicable with respect to rate year 
                        2014.
                    ``(E) Public availability of data submitted.--The 
                Secretary shall establish procedures for making data 
                submitted under subparagraph (C) available to the 
                public. Such procedures shall ensure that a long-term 
                care hospital has the opportunity to review the data 
                that is to be made public with respect to the hospital 
                prior to such data being made public. The Secretary 
                shall report quality measures that relate to services 
                furnished in inpatient settings in long-term care 
                hospitals on the Internet website of the Centers for 
                Medicare & Medicaid Services.''.
    (b) Inpatient Rehabilitation Hospitals.--Section 1886(j) of the 
Social Security Act (42 U.S.C. 1395ww(j)) is amended--
            (1) by redesignating paragraph (7) as paragraph (8); and
            (2) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                            ``(i) In general.--For purposes of fiscal 
                        year 2014 and each subsequent fiscal year, in 
                        the case of a rehabilitation facility that does 
                        not submit data to the Secretary in accordance 
                        with subparagraph (C) with respect to such a 
                        fiscal year, after determining the increase 
                        factor described in paragraph (3)(C), and after 
                        application of paragraph (3)(D), the Secretary 
                        shall reduce such increase factor for payments 
                        for discharges occurring during such fiscal 
                        year by 2 percentage points.
                            ``(ii) Special rule.--The application of 
                        this subparagraph may result in the increase 
                        factor described in paragraph (3)(C) being less 
                        than 0.0 for a fiscal year, and may result in 
                        payment rates under this subsection for a 
                        fiscal year being less than such payment rates 
                        for the preceding fiscal year.
                    ``(B) Noncumulative application.--Any reduction 
                under subparagraph (A) shall apply only with respect to 
                the fiscal year involved and the Secretary shall not 
                take into account such reduction in computing the 
                payment amount under this subsection for a subsequent 
                fiscal year.
                    ``(C) Submission of quality data.--For fiscal year 
                2014 and each subsequent rate year, each rehabilitation 
                facility shall submit to the Secretary data on quality 
                measures specified under subparagraph (D). Such data 
                shall be submitted in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                subparagraph.
                    ``(D) Quality measures.--
                            ``(i) In general.--Subject to clause (ii), 
                        any measure specified by the Secretary under 
                        this subparagraph must have been endorsed by 
                        the entity with a contract under section 
                        1890(a).
                            ``(ii) Exception.--In the case of a 
                        specified area or medical topic determined 
                        appropriate by the Secretary for which a 
                        feasible and practical measure has not been 
                        endorsed by the entity with a contract under 
                        section 1890(a), the Secretary may specify a 
                        measure that is not so endorsed as long as due 
                        consideration is given to measures that have 
                        been endorsed or adopted by a consensus 
                        organization identified by the Secretary.
                            ``(iii) Time frame.--Not later than October 
                        1, 2012, the Secretary shall publish the 
                        measures selected under this subparagraph that 
                        will be applicable with respect to fiscal year 
                        2014.
                    ``(E) Public availability of data submitted.--The 
                Secretary shall establish procedures for making data 
                submitted under subparagraph (C) available to the 
                public. Such procedures shall ensure that a 
                rehabilitation facility has the opportunity to review 
                the data that is to be made public with respect to the 
                facility prior to such data being made public. The 
                Secretary shall report quality measures that relate to 
                services furnished in inpatient settings in 
                rehabilitation facilities on the Internet website of 
                the Centers for Medicare & Medicaid Services.''.
    (c) Hospice Programs.--Section 1814(i) of the Social Security Act 
(42 U.S.C. 1395f(i)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                            ``(i) In general.--For purposes of fiscal 
                        year 2014 and each subsequent fiscal year, in 
                        the case of a hospice program that does not 
                        submit data to the Secretary in accordance with 
                        subparagraph (C) with respect to such a fiscal 
                        year, after determining the market basket 
                        percentage increase under paragraph 
                        (1)(C)(ii)(VII) or paragraph (1)(C)(iii), as 
                        applicable, and after application of paragraph 
                        (1)(C)(iv), with respect to the fiscal year, 
                        the Secretary shall reduce such market basket 
                        percentage increase by 2 percentage points.
                            ``(ii) Special rule.--The application of 
                        this subparagraph may result in the market 
                        basket percentage increase under paragraph 
                        (1)(C)(ii)(VII) or paragraph (1)(C)(iii), as 
                        applicable, being less than 0.0 for a fiscal 
                        year, and may result in payment rates under 
                        this subsection for a fiscal year being less 
                        than such payment rates for the preceding 
                        fiscal year.
                    ``(B) Noncumulative application.--Any reduction 
                under subparagraph (A) shall apply only with respect to 
                the fiscal year involved and the Secretary shall not 
                take into account such reduction in computing the 
                payment amount under this subsection for a subsequent 
                fiscal year.
                    ``(C) Submission of quality data.--For fiscal year 
                2014 and each subsequent fiscal year, each hospice 
                program shall submit to the Secretary data on quality 
                measures specified under subparagraph (D). Such data 
                shall be submitted in a form and manner, and at a time, 
                specified by the Secretary for purposes of this 
                subparagraph.
                    ``(D) Quality measures.--
                            ``(i) In general.--Subject to clause (ii), 
                        any measure specified by the Secretary under 
                        this subparagraph must have been endorsed by 
                        the entity with a contract under section 
                        1890(a).
                            ``(ii) Exception.--In the case of a 
                        specified area or medical topic determined 
                        appropriate by the Secretary for which a 
                        feasible and practical measure has not been 
                        endorsed by the entity with a contract under 
                        section 1890(a), the Secretary may specify a 
                        measure that is not so endorsed as long as due 
                        consideration is given to measures that have 
                        been endorsed or adopted by a consensus 
                        organization identified by the Secretary.
                            ``(iii) Time frame.--Not later than October 
                        1, 2012, the Secretary shall publish the 
                        measures selected under this subparagraph that 
                        will be applicable with respect to fiscal year 
                        2014.
                    ``(E) Public availability of data submitted.--The 
                Secretary shall establish procedures for making data 
                submitted under subparagraph (C) available to the 
                public. Such procedures shall ensure that a hospice 
                program has the opportunity to review the data that is 
                to be made public with respect to the hospice program 
                prior to such data being made public. The Secretary 
                shall report quality measures that relate to hospice 
                care provided by hospice programs on the Internet 
                website of the Centers for Medicare & Medicaid 
                Services.''.

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

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

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

    (a) Skilled Nursing Facilities.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a plan to implement a value-based purchasing program 
        for payments under the Medicare program under title XVIII of 
        the Social Security Act for skilled nursing facilities (as 
        defined in section 1819(a) of such Act (42 U.S.C. 1395i-3(a))).
            (2) Details.--In developing the plan under paragraph (1), 
        the Secretary shall consider the following issues:
                    (A) The ongoing development, selection, and 
                modification process for measures (including under 
                section 1890 of the Social Security Act (42 U.S.C. 
                1395aaa) and section 1890A such Act, as added by 
                section 3014), to the extent feasible and practicable, 
                of all dimensions of quality and efficiency in skilled 
                nursing facilities.
                            (i) In general.--Subject to clause (ii), 
                        any measure specified by the Secretary under 
                        subparagraph (A)(iii) must have been endorsed 
                        by the entity with a contract under section 
                        1890(a).
                            (ii) Exception.--In the case of a specified 
                        area or medical topic determined appropriate by 
                        the Secretary for which a feasible and 
                        practical measure has not been endorsed by the 
                        entity with a contract under section 1890(a), 
                        the Secretary may specify a measure that is not 
                        so endorsed as long as due consideration is 
                        given to measures that have been endorsed or 
                        adopted by a consensus organization identified 
                        by the Secretary.
                    (B) The reporting, collection, and validation of 
                quality data.
                    (C) The structure of value-based payment 
                adjustments, including the determination of thresholds 
                or improvements in quality that would substantiate a 
                payment adjustment, the size of such payments, and the 
                sources of funding for the value-based bonus payments.
                    (D) Methods for the public disclosure of 
                information on the performance of skilled nursing 
                facilities.
                    (E) Any other issues determined appropriate by the 
                Secretary.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall--
                    (A) consult with relevant affected parties; and
                    (B) consider experience with such demonstrations 
                that the Secretary determines are relevant to the 
                value-based purchasing program described in paragraph 
                (1).
            (4) Report to congress.--Not later than October 1, 2011, 
        the Secretary shall submit to Congress a report containing the 
        plan developed under paragraph (1).
    (b) Home Health Agencies.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a plan to implement a value-based purchasing program 
        for payments under the Medicare program under title XVIII of 
        the Social Security Act for home health agencies (as defined in 
        section 1861(o) of such Act (42 U.S.C. 1395x(o))).
            (2) Details.--In developing the plan under paragraph (1), 
        the Secretary shall consider the following issues:
                    (A) The ongoing development, selection, and 
                modification process for measures (including under 
                section 1890 of the Social Security Act (42 U.S.C. 
                1395aaa) and section 1890A such Act, as added by 
                section 3014), to the extent feasible and practicable, 
                of all dimensions of quality and efficiency in home 
                health agencies.
                    (B) The reporting, collection, and validation of 
                quality data.
                    (C) The structure of value-based payment 
                adjustments, including the determination of thresholds 
                or improvements in quality that would substantiate a 
                payment adjustment, the size of such payments, and the 
                sources of funding for the value-based bonus payments.
                    (D) Methods for the public disclosure of 
                information on the performance of home health agencies.
                    (E) Any other issues determined appropriate by the 
                Secretary.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall--
                    (A) consult with relevant affected parties; and
                    (B) consider experience with such demonstrations 
                that the Secretary determines are relevant to the 
                value-based purchasing program described in paragraph 
                (1).
            (4) Report to congress.--Not later than October 1, 2011, 
        the Secretary shall submit to Congress a report containing the 
        plan developed under paragraph (1).

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

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

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

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww), as amended by section 3001, is amended by adding at the end 
the following new subsection:
    ``(p) Adjustment to Hospital Payments for Hospital Acquired 
Conditions.--
            ``(1) In general.--In order to provide an incentive for 
        applicable hospitals to reduce hospital acquired conditions 
        under this title, with respect to discharges from an applicable 
        hospital occurring during fiscal year 2015 or a subsequent 
        fiscal year, the amount of payment under this section or 
        section 1814(b)(3), as applicable, for such discharges during 
        the fiscal year shall be equal to 99 percent of the amount of 
        payment that would otherwise apply to such discharges under 
        this section or section 1814(b)(3) (determined after the 
        application of subsections (o) and (q) and section 1814(l)(4) 
        but without regard to this subsection).
            ``(2) Applicable hospitals.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `applicable hospital' means a subsection (d) 
                hospital that meets the criteria described in 
                subparagraph (B).
                    ``(B) Criteria described.--
                            ``(i) In general.--The criteria described 
                        in this subparagraph, with respect to a 
                        subsection (d) hospital, is that the subsection 
                        (d) hospital is in the top quartile of all 
                        subsection (d) hospitals, relative to the 
                        national average, of hospital acquired 
                        conditions during the applicable period, as 
                        determined by the Secretary.
                            ``(ii) Risk adjustment.--In carrying out 
                        clause (i), the Secretary shall establish and 
                        apply an appropriate risk adjustment 
                        methodology.
                    ``(C) Exemption.--In the case of a hospital that is 
                paid under section 1814(b)(3), the Secretary may exempt 
                such hospital from the application of this subsection 
                if the State which is paid under such section submits 
                an annual report to the Secretary describing how a 
                similar program in the State for a participating 
                hospital or hospitals achieves or surpasses the 
                measured results in terms of patient health outcomes 
                and cost savings established under this subsection.
            ``(3) Hospital acquired conditions.--For purposes of this 
        subsection, the term `hospital acquired condition' means a 
        condition identified for purposes of subsection (d)(4)(D)(iv) 
        and any other condition determined appropriate by the Secretary 
        that an individual acquires during a stay in an applicable 
        hospital, as determined by the Secretary.
            ``(4) Applicable period.--In this subsection, the term 
        `applicable period' means, with respect to a fiscal year, a 
        period specified by the Secretary.
            ``(5) Reporting to hospitals.--Prior to fiscal year 2015 
        and each subsequent fiscal year, the Secretary shall provide 
        confidential reports to applicable hospitals with respect to 
        hospital acquired conditions of the applicable hospital during 
        the applicable period.
            ``(6) Reporting hospital specific information.--
                    ``(A) In general.--The Secretary shall make 
                information available to the public regarding hospital 
                acquired conditions of each applicable hospital.
                    ``(B) Opportunity to review and submit 
                corrections.--The Secretary shall ensure that an 
                applicable hospital has the opportunity to review, and 
                submit corrections for, the information to be made 
                public with respect to the hospital under subparagraph 
                (A) prior to such information being made public.
                    ``(C) Website.--Such information shall be posted on 
                the Hospital Compare Internet website in an easily 
                understandable format.
            ``(7) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The criteria described in paragraph (2)(A).
                    ``(B) The specification of hospital acquired 
                conditions under paragraph (3).
                    ``(C) The specification of the applicable period 
                under paragraph (4).
                    ``(D) The provision of reports to applicable 
                hospitals under paragraph (5) and the information made 
                available to the public under paragraph (6).''.
    (b) Study and Report on Expansion of Healthcare Acquired Conditions 
Policy to Other Providers.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study on expanding the healthcare acquired 
        conditions policy under subsection (d)(4)(D) of section 1886 of 
        the Social Security Act (42 U.S.C. 1395ww) to payments made to 
        other facilities under the Medicare program under title XVIII 
        of the Social Security Act, including such payments made to 
        inpatient rehabilitation facilities, long-term care hospitals 
        (as described in subsection(d)(1)(B)(iv) of such section), 
        hospital outpatient departments, and other hospitals excluded 
        from the inpatient prospective payment system under such 
        section, skilled nursing facilities, ambulatory surgical 
        centers, and health clinics. Such study shall include an 
        analysis of how such policies could impact quality of patient 
        care, patient safety, and spending under the Medicare program.
            (2) Report.--Not later than January 1, 2012, the Secretary 
        shall submit to Congress a report containing the results of the 
        study conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Secretary determines appropriate.

       PART II--NATIONAL STRATEGY TO IMPROVE HEALTH CARE QUALITY

SEC. 3011. NATIONAL STRATEGY.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) 
is amended by adding at the end the following:

                 ``PART S--HEALTH CARE QUALITY PROGRAMS

 ``Subpart I--National Strategy for Quality Improvement in Health Care

``SEC. 399HH. NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN HEALTH CARE.

    ``(a) Establishment of National Strategy and Priorities.--
            ``(1) National strategy.--The Secretary, through a 
        transparent collaborative process, shall establish a national 
        strategy to improve the delivery of health care services, 
        patient health outcomes, and population health.
            ``(2) Identification of priorities.--
                    ``(A) In general.--The Secretary shall identify 
                national priorities for improvement in developing the 
                strategy under paragraph (1).
                    ``(B) Requirements.--The Secretary shall ensure 
                that priorities identified under subparagraph (A) 
                will--
                            ``(i) have the greatest potential for 
                        improving the health outcomes, efficiency, and 
                        patient-centeredness of health care for all 
                        populations, including children and vulnerable 
                        populations;
                            ``(ii) identify areas in the delivery of 
                        health care services that have the potential 
                        for rapid improvement in the quality and 
                        efficiency of patient care;
                            ``(iii) address gaps in quality, 
                        efficiency, comparative effectiveness 
                        information, and health outcomes measures and 
                        data aggregation techniques;
                            ``(iv) improve Federal payment policy to 
                        emphasize quality and efficiency;
                            ``(v) enhance the use of health care data 
                        to improve quality, efficiency, transparency, 
                        and outcomes;
                            ``(vi) address the health care provided to 
                        patients with high-cost chronic diseases;
                            ``(vii) improve research and dissemination 
                        of strategies and best practices to improve 
                        patient safety and reduce medical errors, 
                        preventable admissions and readmissions, and 
                        health care-associated infections;
                            ``(viii) reduce health disparities across 
                        health disparity populations (as defined in 
                        section 485E) and geographic areas; and
                            ``(ix) address other areas as determined 
                        appropriate by the Secretary.
                    ``(C) Considerations.--In identifying priorities 
                under subparagraph (A), the Secretary shall take into 
                consideration the recommendations submitted by the 
                entity with a contract under section 1890(a) of the 
                Social Security Act and other stakeholders.
                    ``(D) Coordination with state agencies.--The 
                Secretary shall collaborate, coordinate, and consult 
                with State agencies responsible for administering the 
                Medicaid program under title XIX of the Social Security 
                Act and the Children's Health Insurance Program under 
                title XXI of such Act with respect to developing and 
                disseminating strategies, goals, models, and timetables 
                that are consistent with the national priorities 
                identified under subparagraph (A).
    ``(b) Strategic Plan.--
            ``(1) In general.--The national strategy shall include a 
        comprehensive strategic plan to achieve the priorities 
        described in subsection (a).
            ``(2) Requirements.--The strategic plan shall include 
        provisions for addressing, at a minimum, the following:
                    ``(A) Coordination among agencies within the 
                Department, which shall include steps to minimize 
                duplication of efforts and utilization of common 
                quality measures, where available. Such common quality 
                measures shall be measures identified by the Secretary 
                under section 1139A or 1139B of the Social Security Act 
                or endorsed under section 1890 of such Act.
                    ``(B) Agency-specific strategic plans to achieve 
                national priorities.
                    ``(C) Establishment of annual benchmarks for each 
                relevant agency to achieve national priorities.
                    ``(D) A process for regular reporting by the 
                agencies to the Secretary on the implementation of the 
                strategic plan.
                    ``(E) Strategies to align public and private payers 
                with regard to quality and patient safety efforts.
                    ``(F) Incorporating quality improvement and 
                measurement in the strategic plan for health 
                information technology required by the American 
                Recovery and Reinvestment Act of 2009 (Public Law 111-
                5).
    ``(c) Periodic Update of National Strategy.--The Secretary shall 
update the national strategy not less than annually. Any such update 
shall include a review of short- and long-term goals.
    ``(d) Submission and Availability of National Strategy and 
Updates.--
            ``(1) Deadline for initial submission of national 
        strategy.--Not later than January 1, 2011, the Secretary shall 
        submit to the relevant committees of Congress the national 
        strategy described in subsection (a).
            ``(2) Updates.--
                    ``(A) In general.--The Secretary shall submit to 
                the relevant committees of Congress an annual update to 
                the strategy described in paragraph (1).
                    ``(B) Information submitted.--Each update submitted 
                under subparagraph (A) shall include--
                            ``(i) a review of the short- and long-term 
                        goals of the national strategy and any gaps in 
                        such strategy;
                            ``(ii) an analysis of the progress, or lack 
                        of progress, in meeting such goals and any 
                        barriers to such progress;
                            ``(iii) the information reported under 
                        section 1139A of the Social Security Act, 
                        consistent with the reporting requirements of 
                        such section; and
                            ``(iv) in the case of an update required to 
                        be submitted on or after January 1, 2014, the 
                        information reported under section 1139B(b)(4) 
                        of the Social Security Act, consistent with the 
                        reporting requirements of such section.
                    ``(C) Satisfaction of other reporting 
                requirements.--Compliance with the requirements of 
                clauses (iii) and (iv) of subparagraph (B) shall 
                satisfy the reporting requirements under sections 
                1139A(a)(6) and 1139B(b)(4), respectively, of the 
                Social Security Act.
    ``(e) Health Care Quality Internet Website.--Not later than January 
1, 2011, the Secretary shall create an Internet website to make public 
information regarding--
            ``(1) the national priorities for health care quality 
        improvement established under subsection (a)(2);
            ``(2) the agency-specific strategic plans for health care 
        quality described in subsection (b)(2)(B); and
            ``(3) other information, as the Secretary determines to be 
        appropriate.''.

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

    (a) In General.--The President shall convene a working group to be 
known as the Interagency Working Group on Health Care Quality (referred 
to in this section as the ``Working Group'').
    (b) Goals.--The goals of the Working Group shall be to achieve the 
following:
            (1) Collaboration, cooperation, and consultation between 
        Federal departments and agencies with respect to developing and 
        disseminating strategies, goals, models, and timetables that 
        are consistent with the national priorities identified under 
        section 399HH(a)(2) of the Public Health Service Act (as added 
        by section 3011).
            (2) Avoidance of inefficient duplication of quality 
        improvement efforts and resources, where practicable, and a 
        streamlined process for quality reporting and compliance 
        requirements.
            (3) Assess alignment of quality efforts in the public 
        sector with private sector initiatives.
    (c) Composition.--
            (1) In general.--The Working Group shall be composed of 
        senior level representatives of--
                    (A) the Department of Health and Human Services;
                    (B) the Centers for Medicare & Medicaid Services;
                    (C) the National Institutes of Health;
                    (D) the Centers for Disease Control and Prevention;
                    (E) the Food and Drug Administration;
                    (F) the Health Resources and Services 
                Administration;
                    (G) the Agency for Healthcare Research and Quality;
                    (H) the Office of the National Coordinator for 
                Health Information Technology;
                    (I) the Substance Abuse and Mental Health Services 
                Administration;
                    (J) the Administration for Children and Families;
                    (K) the Department of Commerce;
                    (L) the Office of Management and Budget;
                    (M) the United States Coast Guard;
                    (N) the Federal Bureau of Prisons;
                    (O) the National Highway Traffic Safety 
                Administration;
                    (P) the Federal Trade Commission;
                    (Q) the Social Security Administration;
                    (R) the Department of Labor;
                    (S) the United States Office of Personnel 
                Management;
                    (T) the Department of Defense;
                    (U) the Department of Education;
                    (V) the Department of Veterans Affairs;
                    (W) the Veterans Health Administration; and
                    (X) any other Federal agencies and departments with 
                activities relating to improving health care quality 
                and safety, as determined by the President.
            (2) Chair and vice-chair.--
                    (A) Chair.--The Working Group shall be chaired by 
                the Secretary of Health and Human Services.
                    (B) Vice chair.--Members of the Working Group, 
                other than the Secretary of Health and Human Services, 
                shall serve as Vice Chair of the Group on a rotating 
                basis, as determined by the Group.
    (d) Report to Congress.--Not later than December 31, 2010, and 
annually thereafter, the Working Group shall submit to the relevant 
Committees of Congress, and make public on an Internet website, a 
report describing the progress and recommendations of the Working Group 
in meeting the goals described in subsection (b).

SEC. 3013. QUALITY MEASURE DEVELOPMENT.

    (a) Public Health Service Act.--Title IX of the Public Health 
Service Act (42 U.S.C. 299 et seq.) is amended--
            (1) by redesignating part D as part E;
            (2) by redesignating sections 931 through 938 as sections 
        941 through 948, respectively;
            (3) in section 948(1), as so redesignated, by striking 
        ``931'' and inserting ``941''; and
            (4) by inserting after section 926 the following:

               ``PART D--HEALTH CARE QUALITY IMPROVEMENT

                ``Subpart I--Quality Measure Development

``SEC. 931. QUALITY MEASURE DEVELOPMENT.

    ``(a) Quality Measure.--In this subpart, the term `quality measure' 
means a standard for measuring the performance and improvement of 
population health or of health plans, providers of services, and other 
clinicians in the delivery of health care services.
    ``(b) Identification of Quality Measures.--
            ``(1) Identification.--The Secretary, in consultation with 
        the Director of the Agency for Healthcare Research and Quality 
        and the Administrator of the Centers for Medicare & Medicaid 
        Services, shall identify, not less often than triennially, gaps 
        where no quality measures exist and existing quality measures 
        that need improvement, updating, or expansion, consistent with 
        the national strategy under section 399HH, to the extent 
        available, for use in Federal health programs. In identifying 
        such gaps and existing quality measures that need improvement, 
        the Secretary shall take into consideration--
                    ``(A) the gaps identified by the entity with a 
                contract under section 1890(a) of the Social Security 
                Act and other stakeholders;
                    ``(B) quality measures identified by the pediatric 
                quality measures program under section 1139A of the 
                Social Security Act; and
                    ``(C) quality measures identified through the 
                Medicaid Quality Measurement Program under section 
                1139B of the Social Security Act.
            ``(2) Publication.--The Secretary shall make available to 
        the public on an Internet website a report on any gaps 
        identified under paragraph (1) and the process used to make 
        such identification.
    ``(c) Grants or Contracts for Quality Measure Development.--
            ``(1) In general.--The Secretary shall award grants, 
        contracts, or intergovernmental agreements to eligible entities 
        for purposes of developing, improving, updating, or expanding 
        quality measures identified under subsection (b).
            ``(2) Prioritization in the development of quality 
        measures.--In awarding grants, contracts, or agreements under 
        this subsection, the Secretary shall give priority to the 
        development of quality measures that allow the assessment of--
                    ``(A) health outcomes and functional status of 
                patients;
                    ``(B) the management and coordination of health 
                care across episodes of care and care transitions for 
                patients across the continuum of providers, health care 
                settings, and health plans;
                    ``(C) the experience, quality, and use of 
                information provided to and used by patients, 
                caregivers, and authorized representatives to inform 
                decisionmaking about treatment options, including the 
                use of shared decisionmaking tools and preference 
                sensitive care (as defined in section 936);
                    ``(D) the meaningful use of health information 
                technology;
                    ``(E) the safety, effectiveness, patient-
                centeredness, appropriateness, and timeliness of care;
                    ``(F) the efficiency of care;
                    ``(G) the equity of health services and health 
                disparities across health disparity populations (as 
                defined in section 485E) and geographic areas;
                    ``(H) patient experience and satisfaction;
                    ``(I) the use of innovative strategies and 
                methodologies identified under section 933; and
                    ``(J) other areas determined appropriate by the 
                Secretary.
            ``(3) Eligible entities.--To be eligible for a grant or 
        contract under this subsection, an entity shall--
                    ``(A) have demonstrated expertise and capacity in 
                the development and evaluation of quality measures;
                    ``(B) have adopted procedures to include in the 
                quality measure development process--
                            ``(i) the views of those providers or 
                        payers whose performance will be assessed by 
                        the measure; and
                            ``(ii) the views of other parties who also 
                        will use the quality measures (such as 
                        patients, consumers, and health care 
                        purchasers);
                    ``(C) collaborate with the entity with a contract 
                under section 1890(a) of the Social Security Act and 
                other stakeholders, as practicable, and the Secretary 
                so that quality measures developed by the eligible 
                entity will meet the requirements to be considered for 
                endorsement by the entity with a contract under such 
                section 1890(a);
                    ``(D) have transparent policies regarding 
                governance and conflicts of interest; and
                    ``(E) submit an application to the Secretary at 
                such time and in such manner, as the Secretary may 
                require.
            ``(4) Use of funds.--An entity that receives a grant, 
        contract, or agreement under this subsection shall use such 
        award to develop quality measures that meet the following 
        requirements:
                    ``(A) Such measures support measures required to be 
                reported under the Social Security Act, where 
                applicable, and in support of gaps and existing quality 
                measures that need improvement, as described in 
                subsection (b)(1)(A).
                    ``(B) Such measures support measures developed 
                under section 1139A of the Social Security Act and the 
                Medicaid Quality Measurement Program under section 
                1139B of such Act, where applicable.
                    ``(C) To the extent practicable, data on such 
                quality measures is able to be collected using health 
                information technologies.
                    ``(D) Each quality measure is free of charge to 
                users of such measure.
                    ``(E) Each quality measure is publicly available on 
                an Internet website.
    ``(d) Other Activities by the Secretary.--The Secretary may use 
amounts available under this section to update and test, where 
applicable, quality measures endorsed by the entity with a contract 
under section 1890(a) of the Social Security Act or adopted by the 
Secretary.
    ``(e) Coordination of Grants.--The Secretary shall ensure that 
grants or contracts awarded under this section are coordinated with 
grants and contracts awarded under sections 1139A(5) and 1139B(4)(A) of 
the Social Security Act.''.
    (b) Social Security Act.--Section 1890A of the Social Security Act, 
as added by section 3014(b), is amended by adding at the end the 
following new subsection:
    ``(e) Development of Quality Measures.--The Administrator of the 
Center for Medicare & Medicaid Services shall through contracts develop 
quality measures (as determined appropriate by the Administrator) for 
use under this Act. In developing such measures, the Administrator 
shall consult with the Director of the Agency for Healthcare Research 
and Quality.''.
    (c) Funding.--There are authorized to be appropriated to the 
Secretary of Health and Human Services to carry out this section, 
$75,000,000 for each of fiscal years 2010 through 2014. Of the amounts 
appropriated under the preceding sentence in a fiscal year, not less 
than 50 percent of such amounts shall be used pursuant to subsection 
(e) of section 1890A of the Social Security Act, as added by subsection 
(b), with respect to programs under such Act. Amounts appropriated 
under this subsection for a fiscal year shall remain available until 
expended.

SEC. 3014. QUALITY MEASUREMENT.

    (a) New Duties for Consensus-based Entity.--
            (1) Multi-stakeholder group input.--Section 1890(b) of the 
        Social Security Act (42 U.S.C. 1395aaa(b)), as amended by 
        section 3003, is amended by adding at the end the following new 
        paragraphs:
            ``(7) Convening multi-stakeholder groups.--
                    ``(A) In general.--The entity shall convene multi-
                stakeholder groups to provide input on--
                            ``(i) the selection of quality measures 
                        described in subparagraph (B), from among--
                                    ``(I) such measures that have been 
                                endorsed by the entity; and
                                    ``(II) such measures that have not 
                                been considered for endorsement by such 
                                entity but are used or proposed to be 
                                used by the Secretary for the 
                                collection or reporting of quality 
                                measures; and
                            ``(ii) national priorities (as identified 
                        under section 399HH of the Public Health 
                        Service Act) for improvement in population 
                        health and in the delivery of health care 
                        services for consideration under the national 
                        strategy established under section 399HH of the 
                        Public Health Service Act.
                    ``(B) Quality measures.--
                            ``(i) In general.--Subject to clause (ii), 
                        the quality measures described in this 
                        subparagraph are quality measures--
                                    ``(I) for use pursuant to sections 
                                1814(i)(5)(D), 1833(i)(7), 1833(t)(17), 
                                1848(k)(2)(C), 1866(k)(3), 
                                1881(h)(2)(A)(iii), 
                                1886(b)(3)(B)(viii), 1886(j)(7)(D), 
                                1886(m)(5)(D), 1886(o)(2), and 
                                1895(b)(3)(B)(v);
                                    ``(II) for use in reporting 
                                performance information to the public; 
                                and
                                    ``(III) for use in health care 
                                programs other than for use under this 
                                Act.
                            ``(ii) Exclusion.--Data sets (such as the 
                        outcome and assessment information set for home 
                        health services and the minimum data set for 
                        skilled nursing facility services) that are 
                        used for purposes of classification systems 
                        used in establishing payment rates under this 
                        title shall not be quality measures described 
                        in this subparagraph.
                    ``(C) Requirement for transparency in process.--
                            ``(i) In general.--In convening multi-
                        stakeholder groups under subparagraph (A) with 
                        respect to the selection of quality measures, 
                        the entity shall provide for an open and 
                        transparent process for the activities 
                        conducted pursuant to such convening.
                            ``(ii) Selection of organizations 
                        participating in multi-stakeholder groups.--The 
                        process described in clause (i) shall ensure 
                        that the selection of representatives 
                        comprising such groups provides for public 
                        nominations for, and the opportunity for public 
                        comment on, such selection.
                    ``(D) Multi-stakeholder group defined.--In this 
                paragraph, the term `multi-stakeholder group' means, 
                with respect to a quality measure, a voluntary 
                collaborative of organizations representing a broad 
                group of stakeholders interested in or affected by the 
                use of such quality measure.
            ``(8) Transmission of multi-stakeholder input.--Not later 
        than February 1 of each year (beginning with 2012), the entity 
        shall transmit to the Secretary the input of multi-stakeholder 
        groups provided under paragraph (7).''.
            (2) Annual report.--Section 1890(b)(5)(A) of the Social 
        Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following new clauses:
                            ``(iv) gaps in endorsed quality measures, 
                        which shall include measures that are within 
                        priority areas identified by the Secretary 
                        under the national strategy established under 
                        section 399HH of the Public Health Service Act, 
                        and where quality measures are unavailable or 
                        inadequate to identify or address such gaps;
                            ``(v) areas in which evidence is 
                        insufficient to support endorsement of quality 
                        measures in priority areas identified by the 
                        Secretary under the national strategy 
                        established under section 399HH of the Public 
                        Health Service Act and where targeted research 
                        may address such gaps; and
                            ``(vi) the matters described in clauses (i) 
                        and (ii) of paragraph (7)(A).''.
    (b) Multi-stakeholder Group Input Into Selection of Quality 
Measures.--Title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.) is amended by inserting after section 1890 the following:

                         ``quality measurement

    ``Sec. 1890A.  (a) Multi-stakeholder Group Input Into Selection of 
Quality Measures.--The Secretary shall establish a pre-rulemaking 
process under which the following steps occur with respect to the 
selection of quality measures described in section 1890(b)(7)(B):
            ``(1) Input.--Pursuant to section 1890(b)(7), the entity 
        with a contract under section 1890 shall convene multi-
        stakeholder groups to provide input to the Secretary on the 
        selection of quality measures described in subparagraph (B) of 
        such paragraph.
            ``(2) Public availability of measures considered for 
        selection.--Not later than December 1 of each year (beginning 
        with 2011), the Secretary shall make available to the public a 
        list of quality measures described in section 1890(b)(7)(B) 
        that the Secretary is considering under this title.
            ``(3) Transmission of multi-stakeholder input.--Pursuant to 
        section 1890(b)(8), not later than February 1 of each year 
        (beginning with 2012), the entity shall transmit to the 
        Secretary the input of multi-stakeholder groups described in 
        paragraph (1).
            ``(4) Consideration of multi-stakeholder input.--The 
        Secretary shall take into consideration the input from multi-
        stakeholder groups described in paragraph (1) in selecting 
        quality measures described in section 1890(b)(7)(B) that have 
        been endorsed by the entity with a contract under section 1890 
        and measures that have not been endorsed by such entity.
            ``(5) Rationale for use of quality measures.--The Secretary 
        shall publish in the Federal Register the rationale for the use 
        of any quality measure described in section 1890(b)(7)(B) that 
        has not been endorsed by the entity with a contract under 
        section 1890.
            ``(6) Assessment of impact.--Not later than March 1, 2012, 
        and at least once every three years thereafter, the Secretary 
        shall--
                    ``(A) conduct an assessment of the quality impact 
                of the use of endorsed measures described in section 
                1890(b)(7)(B); and
                    ``(B) make such assessment available to the public.
    ``(b) Process for Dissemination of Measures Used by the 
Secretary.--
            ``(1) In general.--The Secretary shall establish a process 
        for disseminating quality measures used by the Secretary. Such 
        process shall include the following:
                    ``(A) The incorporation of such measures, where 
                applicable, in workforce programs, training curricula, 
                and any other means of dissemination determined 
                appropriate by the Secretary.
                    ``(B) The dissemination of such quality measures 
                through the national strategy developed under section 
                399HH of the Public Health Service Act.
            ``(2) Existing methods.--To the extent practicable, the 
        Secretary shall utilize and expand existing dissemination 
        methods in disseminating quality measures under the process 
        established under paragraph (1).
    ``(c) Review of Quality Measures Used by the Secretary.--
            ``(1) In general.--The Secretary shall--
                    ``(A) periodically (but in no case less often than 
                once every 3 years) review quality measures described 
                in section 1890(b)(7)(B); and
                    ``(B) with respect to each such measure, determine 
                whether to--
                            ``(i) maintain the use of such measure; or
                            ``(ii) phase out such measure.
            ``(2) Considerations.--In conducting the review under 
        paragraph (1), the Secretary shall take steps to--
                    ``(A) seek to avoid duplication of measures used; 
                and
                    ``(B) take into consideration current innovative 
                methodologies and strategies for quality improvement 
                practices in the delivery of health care services that 
                represent best practices for such quality improvement 
                and measures endorsed by the entity with a contract 
                under section 1890 since the previous review by the 
                Secretary.
    ``(d) Rule of Construction.--Nothing in this section shall preclude 
a State from using the quality measures identified under sections 1139A 
and 1139B.''.
    (c) Funding.--For purposes of carrying out the amendments made by 
this section, the Secretary shall provide for the transfer, from the 
Federal Hospital Insurance Trust Fund under section 1817 of the Social 
Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), 
in such proportion as the Secretary determines appropriate, of 
$20,000,000, to the Centers for Medicare & Medicaid Services Program 
Management Account for each of fiscal years 2010 through 2014. Amounts 
transferred under the preceding sentence shall remain available until 
expended.

SEC. 3015. DATA COLLECTION; PUBLIC REPORTING.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.), 
as amended by section 3011, is further amended by adding at the end the 
following:

``SEC. 399II. COLLECTION AND ANALYSIS OF DATA FOR QUALITY AND RESOURCE 
              USE MEASURES.

    ``(a) In General.--The Secretary shall collect and aggregate 
consistent data on quality and resource use measures from information 
systems used to support health care delivery to implement the public 
reporting of performance information, as described in section 399JJ, 
and may award grants or contracts for this purpose. The Secretary shall 
ensure that such collection, aggregation, and analysis systems span an 
increasingly broad range of patient populations, providers, and 
geographic areas over time.
    ``(b) Grants or Contracts for Data Collection.--
            ``(1) In general.--The Secretary may award grants or 
        contracts to eligible entities to support new, or improve 
        existing, efforts to collect and aggregate quality and resource 
        use measures described under subsection (c).
            ``(2) Eligible entities.--To be eligible for a grant or 
        contract under this subsection, an entity shall--
                    ``(A) be--
                            ``(i) a multi-stakeholder entity that 
                        coordinates the development of methods and 
                        implementation plans for the consistent 
                        reporting of summary quality and cost 
                        information;
                            ``(ii) an entity capable of submitting such 
                        summary data for a particular population and 
                        providers, such as a disease registry, regional 
                        collaboration, health plan collaboration, or 
                        other population-wide source; or
                            ``(iii) a Federal Indian Health Service 
                        program or a health program operated by an 
                        Indian tribe (as defined in section 4 of the 
                        Indian Health Care Improvement Act);
                    ``(B) promote the use of the systems that provide 
                data to improve and coordinate patient care;
                    ``(C) support the provision of timely, consistent 
                quality and resource use information to health care 
                providers, and other groups and organizations as 
                appropriate, with an opportunity for providers to 
                correct inaccurate measures; and
                    ``(D) agree to report, as determined by the 
                Secretary, measures on quality and resource use to the 
                public in accordance with the public reporting process 
                established under section 399JJ.
    ``(c) Consistent Data Aggregation.--The Secretary may award grants 
or contracts under this section only to entities that enable summary 
data that can be integrated and compared across multiple sources. The 
Secretary shall provide standards for the protection of the security 
and privacy of patient data.
    ``(d) Matching Funds.--The Secretary may not award a grant or 
contract under this section to an entity unless the entity agrees that 
it will make available (directly or through contributions from other 
public or private entities) non-Federal contributions toward the 
activities to be carried out under the grant or contract in an amount 
equal to $1 for each $5 of Federal funds provided under the grant or 
contract. Such non-Federal matching funds may be provided directly or 
through donations from public or private entities and may be in cash or 
in-kind, fairly evaluated, including plant, equipment, or services.
    ``(e) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated such sums as may be necessary 
for fiscal years 2010 through 2014.

``SEC. 399JJ. PUBLIC REPORTING OF PERFORMANCE INFORMATION.

    ``(a) Development of Performance Websites.--The Secretary shall 
make available to the public, through standardized Internet websites, 
performance information summarizing data on quality measures. Such 
information shall be tailored to respond to the differing needs of 
hospitals and other institutional health care providers, physicians and 
other clinicians, patients, consumers, researchers, policymakers, 
States, and other stakeholders, as the Secretary may specify.
    ``(b) Information on Conditions.--The performance information made 
publicly available on an Internet website, as described in subsection 
(a), shall include information regarding clinical conditions to the 
extent such information is available, and the information shall, where 
appropriate, be provider-specific and sufficiently disaggregated and 
specific to meet the needs of patients with different clinical 
conditions.
    ``(c) Consultation.--
            ``(1) In general.--In carrying out this section, the 
        Secretary shall consult with the entity with a contract under 
        section 1890(a) of the Social Security Act, and other entities, 
        as appropriate, to determine the type of information that is 
        useful to stakeholders and the format that best facilitates use 
        of the reports and of performance reporting Internet websites.
            ``(2) Consultation with stakeholders.--The entity with a 
        contract under section 1890(a) of the Social Security Act shall 
        convene multi-stakeholder groups, as described in such section, 
        to review the design and format of each Internet website made 
        available under subsection (a) and shall transmit to the 
        Secretary the views of such multi-stakeholder groups with 
        respect to each such design and format.
    ``(d) Coordination.--Where appropriate, the Secretary shall 
coordinate the manner in which data are presented through Internet 
websites described in subsection (a) and for public reporting of other 
quality measures by the Secretary, including such quality measures 
under title XVIII of the Social Security Act.
    ``(e) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated such sums as may be necessary 
for fiscal years 2010 through 2014.''.

      PART III--ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

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

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

             ``center for medicare and medicaid innovation

    ``Sec. 1115A.  (a) Center for Medicare and Medicaid Innovation 
Established.--
            ``(1) In general.--There is created within the Centers for 
        Medicare & Medicaid Services a Center for Medicare and Medicaid 
        Innovation (in this section referred to as the `CMI') to carry 
        out the duties described in this section. The purpose of the 
        CMI is to test innovative payment and service delivery models 
        to reduce program expenditures under the applicable titles 
        while preserving or enhancing the quality of care furnished to 
        individuals under such titles. In selecting such models, the 
        Secretary shall give preference to models that also improve the 
        coordination, quality, and efficiency of health care services 
        furnished to applicable individuals defined in paragraph 
        (4)(A).
            ``(2) Deadline.--The Secretary shall ensure that the CMI is 
        carrying out the duties described in this section by not later 
        than January 1, 2011.
            ``(3) Consultation.--In carrying out the duties under this 
        section, the CMI shall consult representatives of relevant 
        Federal agencies, and clinical and analytical experts with 
        expertise in medicine and health care management. The CMI shall 
        use open door forums or other mechanisms to seek input from 
        interested parties.
            ``(4) Definitions.--In this section:
                    ``(A) Applicable individual.--The term `applicable 
                individual' means--
                            ``(i) an individual who is entitled to, or 
                        enrolled for, benefits under part A of title 
                        XVIII or enrolled for benefits under part B of 
                        such title;
                            ``(ii) an individual who is eligible for 
                        medical assistance under title XIX, under a 
                        State plan or waiver; or
                            ``(iii) an individual who meets the 
                        criteria of both clauses (i) and (ii).
                    ``(B) Applicable title.--The term `applicable 
                title' means title XVIII, title XIX, or both.
    ``(b) Testing of Models (Phase I).--
            ``(1) In general.--The CMI shall test payment and service 
        delivery models in accordance with selection criteria under 
        paragraph (2) to determine the effect of applying such models 
        under the applicable title (as defined in subsection (a)(4)(B)) 
        on program expenditures under such titles and the quality of 
        care received by individuals receiving benefits under such 
        title.
            ``(2) Selection of models to be tested.--
                    ``(A) In general.--The Secretary shall select 
                models to be tested from models where the Secretary 
                determines that there is evidence that the model 
                addresses a defined population for which there are 
                deficits in care leading to poor clinical outcomes or 
                potentially avoidable expenditures. The models selected 
                under the preceding sentence may include the models 
                described in subparagraph (B).
                    ``(B) Opportunities.--The models described in this 
                subparagraph are the following models:
                            ``(i) Promoting broad payment and practice 
                        reform in primary care, including patient-
                        centered medical home models for high-need 
                        applicable individuals, medical homes that 
                        address women's unique health care needs, and 
                        models that transition primary care practices 
                        away from fee-for-service based reimbursement 
                        and toward comprehensive payment or salary-
                        based payment.
                            ``(ii) Contracting directly with groups of 
                        providers of services and suppliers to promote 
                        innovative care delivery models, such as 
                        through risk-based comprehensive payment or 
                        salary-based payment.
                            ``(iii) Utilizing geriatric assessments and 
                        comprehensive care plans to coordinate the care 
                        (including through interdisciplinary teams) of 
                        applicable individuals with multiple chronic 
                        conditions and at least one of the following:
                                    ``(I) An inability to perform 2 or 
                                more activities of daily living.
                                    ``(II) Cognitive impairment, 
                                including dementia.
                            ``(iv) Promote care coordination between 
                        providers of services and suppliers that 
                        transition health care providers away from fee-
                        for-service based reimbursement and toward 
                        salary-based payment.
                            ``(v) Supporting care coordination for 
                        chronically-ill applicable individuals at high 
                        risk of hospitalization through a health 
                        information technology-enabled provider network 
                        that includes care coordinators, a chronic 
                        disease registry, and home tele-health 
                        technology.
                            ``(vi) Varying payment to physicians who 
                        order advanced diagnostic imaging services (as 
                        defined in section 1834(e)(1)(B)) according to 
                        the physician's adherence to appropriateness 
                        criteria for the ordering of such services, as 
                        determined in consultation with physician 
                        specialty groups and other relevant 
                        stakeholders.
                            ``(vii) Utilizing medication therapy 
                        management services, such as those described in 
                        section 935 of the Public Health Service Act.
                            ``(viii) Establishing community-based 
                        health teams to support small-practice medical 
                        homes by assisting the primary care 
                        practitioner in chronic care management, 
                        including patient self-management, activities.
                            ``(ix) Assisting applicable individuals in 
                        making informed health care choices by paying 
                        providers of services and suppliers for using 
                        patient decision-support tools, including tools 
                        that meet the standards developed and 
                        identified under section 936(c)(2)(A) of the 
                        Public Health Service Act, that improve 
                        applicable individual and caregiver 
                        understanding of medical treatment options.
                            ``(x) Allowing States to test and evaluate 
                        fully integrating care for dual eligible 
                        individuals in the State, including the 
                        management and oversight of all funds under the 
                        applicable titles with respect to such 
                        individuals.
                            ``(xi) Allowing States to test and evaluate 
                        systems of all-payer payment reform for the 
                        medical care of residents of the State, 
                        including dual eligible individuals.
                            ``(xii) Aligning nationally recognized, 
                        evidence-based guidelines of cancer care with 
                        payment incentives under title XVIII in the 
                        areas of treatment planning and follow-up care 
                        planning for applicable individuals described 
                        in clause (i) or (iii) of subsection (a)(4)(A) 
                        with cancer, including the identification of 
                        gaps in applicable quality measures.
                            ``(xiii) Improving post-acute care through 
                        continuing care hospitals that offer inpatient 
                        rehabilitation, long-term care hospitals, and 
                        home health or skilled nursing care during an 
                        inpatient stay and the 30 days immediately 
                        following discharge.
                            ``(xiv) Funding home health providers who 
                        offer chronic care management services to 
                        applicable individuals in cooperation with 
                        interdisciplinary teams.
                            ``(xv) Promoting improved quality and 
                        reduced cost by developing a collaborative of 
                        high-quality, low-cost health care institutions 
                        that is responsible for--
                                    ``(I) developing, documenting, and 
                                disseminating best practices and proven 
                                care methods;
                                    ``(II) implementing such best 
                                practices and proven care methods 
                                within such institutions to demonstrate 
                                further improvements in quality and 
                                efficiency; and
                                    ``(III) providing assistance to 
                                other health care institutions on how 
                                best to employ such best practices and 
                                proven care methods to improve health 
                                care quality and lower costs.
                            ``(xvi) Facilitate inpatient care, 
                        including intensive care, of hospitalized 
                        applicable individuals at their local hospital 
                        through the use of electronic monitoring by 
                        specialists, including intensivists and 
                        critical care specialists, based at integrated 
                        health systems.
                            ``(xvii) Promoting greater efficiencies and 
                        timely access to outpatient services (such as 
                        outpatient physical therapy services) through 
                        models that do not require a physician or other 
                        health professional to refer the service or be 
                        involved in establishing the plan of care for 
                        the service, when such service is furnished by 
                        a health professional who has the authority to 
                        furnish the service under existing State law.
                            ``(xviii) Establishing comprehensive 
                        payments to Healthcare Innovation Zones, 
                        consisting of groups of providers that include 
                        a teaching hospital, physicians, and other 
                        clinical entities, that, through their 
                        structure, operations, and joint-activity 
                        deliver a full spectrum of integrated and 
                        comprehensive health care services to 
                        applicable individuals while also incorporating 
                        innovative methods for the clinical training of 
                        future health care professionals.
                    ``(C) Additional factors for consideration.--In 
                selecting models for testing under subparagraph (A), 
                the CMI may consider the following additional factors:
                            ``(i) Whether the model includes a regular 
                        process for monitoring and updating patient 
                        care plans in a manner that is consistent with 
                        the needs and preferences of applicable 
                        individuals.
                            ``(ii) Whether the model places the 
                        applicable individual, including family members 
                        and other informal caregivers of the applicable 
                        individual, at the center of the care team of 
                        the applicable individual.
                            ``(iii) Whether the model provides for in-
                        person contact with applicable individuals.
                            ``(iv) Whether the model utilizes 
                        technology, such as electronic health records 
                        and patient-based remote monitoring systems, to 
                        coordinate care over time and across settings.
                            ``(v) Whether the model provides for the 
                        maintenance of a close relationship between 
                        care coordinators, primary care practitioners, 
                        specialist physicians, community-based 
                        organizations, and other providers of services 
                        and suppliers.
                            ``(vi) Whether the model relies on a team-
                        based approach to interventions, such as 
                        comprehensive care assessments, care planning, 
                        and self-management coaching.
                            ``(vii) Whether, under the model, providers 
                        of services and suppliers are able to share 
                        information with patients, caregivers, and 
                        other providers of services and suppliers on a 
                        real time basis.
            ``(3) Budget neutrality.--
                    ``(A) Initial period.--The Secretary shall not 
                require, as a condition for testing a model under 
                paragraph (1), that the design of such model ensure 
                that such model is budget neutral initially with 
                respect to expenditures under the applicable title.
                    ``(B) Termination or modification.--The Secretary 
                shall terminate or modify the design and implementation 
                of a model unless the Secretary determines (and the 
                Chief Actuary of the Centers for Medicare & Medicaid 
                Services, with respect to program spending under the 
                applicable title, certifies), after testing has begun, 
                that the model is expected to--
                            ``(i) improve the quality of care (as 
                        determined by the Administrator of the Centers 
                        for Medicare & Medicaid Services) without 
                        increasing spending under the applicable title;
                            ``(ii) reduce spending under the applicable 
                        title without reducing the quality of care; or
                            ``(iii) improve the quality of care and 
                        reduce spending.
                Such termination may occur at any time after such 
                testing has begun and before completion of the testing.
            ``(4) Evaluation.--
                    ``(A) In general.--The Secretary shall conduct an 
                evaluation of each model tested under this subsection. 
                Such evaluation shall include an analysis of--
                            ``(i) the quality of care furnished under 
                        the model, including the measurement of 
                        patient-level outcomes and patient-centeredness 
                        criteria determined appropriate by the 
                        Secretary; and
                            ``(ii) the changes in spending under the 
                        applicable titles by reason of the model.
                    ``(B) Information.--The Secretary shall make the 
                results of each evaluation under this paragraph 
                available to the public in a timely fashion and may 
                establish requirements for States and other entities 
                participating in the testing of models under this 
                section to collect and report information that the 
                Secretary determines is necessary to monitor and 
                evaluate such models.
    ``(c) Expansion of Models (Phase II).--Taking into account the 
evaluation under subsection (b)(4), the Secretary may, through 
rulemaking, expand (including implementation on a nationwide basis) the 
duration and the scope of a model that is being tested under subsection 
(b) or a demonstration project under section 1866C, to the extent 
determined appropriate by the Secretary, if--
            ``(1) the Secretary determines that such expansion is 
        expected to--
                    ``(A) reduce spending under applicable title 
                without reducing the quality of care; or
                    ``(B) improve the quality of care and reduce 
                spending; and
            ``(2) the Chief Actuary of the Centers for Medicare & 
        Medicaid Services certifies that such expansion would reduce 
        program spending under applicable titles.
    ``(d) Implementation.--
            ``(1) Waiver authority.--The Secretary may waive such 
        requirements of titles XI and XVIII and of sections 1902(a)(1), 
        1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely 
        for purposes of carrying out this section with respect to 
        testing models described in subsection (b).
            ``(2) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the selection of models for testing or 
                expansion under this section;
                    ``(B) the selection of organizations, sites, or 
                participants to test those models selected;
                    ``(C) the elements, parameters, scope, and duration 
                of such models for testing or dissemination;
                    ``(D) determinations regarding budget neutrality 
                under subsection (b)(3);
                    ``(E) the termination or modification of the design 
                and implementation of a model under subsection 
                (b)(3)(B); and
                    ``(F) determinations about expansion of the 
                duration and scope of a model under subsection (c), 
                including the determination that a model is not 
                expected to meet criteria described in paragraph (1) or 
                (2) of such subsection.
            ``(3) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the testing and evaluation of 
        models or expansion of such models under this section.
    ``(e) Application to CHIP.--The Center may carry out activities 
under this section with respect to title XXI in the same manner as 
provided under this section with respect to the program under the 
applicable titles.
    ``(f) Funding.--
            ``(1) In general.--There are appropriated, from amounts in 
        the Treasury not otherwise appropriated--
                    ``(A) $5,000,000 for the design, implementation, 
                and evaluation of models under subsection (b) for 
                fiscal year 2010;
                    ``(B) $10,000,000,000 for the activities initiated 
                under this section for the period of fiscal years 2011 
                through 2019; and
                    ``(C) the amount described in subparagraph (B) for 
                the activities initiated under this section for each 
                subsequent 10-year fiscal period (beginning with the 
                10-year fiscal period beginning with fiscal year 2020).
        Amounts appropriated under the preceding sentence shall remain 
        available until expended.
            ``(2) Use of certain funds.--Out of amounts appropriated 
        under subparagraphs (B) and (C) of paragraph (1), not less than 
        $25,000,000 shall be made available each such fiscal year to 
        design, implement, and evaluate models under subsection (b).
    ``(g) Report to Congress.--Beginning in 2012, and not less than 
once every other year thereafter, the Secretary shall submit to 
Congress a report on activities under this section. Each such report 
shall describe the models tested under subsection (b), including the 
number of individuals described in subsection (a)(4)(A)(i) and of 
individuals described in subsection (a)(4)(A)(ii) participating in such 
models and payments made under applicable titles for services on behalf 
of such individuals, any models chosen for expansion under subsection 
(c), and the results from evaluations under subsection (b)(4). In 
addition, each such report shall provide such recommendations as the 
Secretary determines are appropriate for legislative action to 
facilitate the development and expansion of successful payment 
models.''.
    (b) Medicaid Conforming Amendment.--Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by section 8002(b), is 
amended--
            (1) in paragraph (81), by striking ``and'' at the end;
            (2) in paragraph (82), by striking the period at the end 
        and inserting ``; and''; and
            (3) by inserting after paragraph (82) the following new 
        paragraph:
            ``(83) provide for implementation of the payment models 
        specified by the Secretary under section 1115A(c) for 
        implementation on a nationwide basis unless the State 
        demonstrates to the satisfaction of the Secretary that 
        implementation would not be administratively feasible or 
        appropriate to the health care delivery system of the State.''.
    (c) Revisions to Health Care Quality Demonstration Program.--
Subsections (b) and (f) of section 1866C of the Social Security Act (42 
U.S.C. 1395cc-3) are amended by striking ``5-year'' each place it 
appears.

SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

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

                        ``shared savings program

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

SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

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

              ``national pilot program on payment bundling

    ``Sec. 1866D.  (a) Implementation.--
            ``(1) In general.--The Secretary shall establish a pilot 
        program for integrated care during an episode of care provided 
        to an applicable beneficiary around a hospitalization in order 
        to improve the coordination, quality, and efficiency of health 
        care services under this title.
            ``(2) Definitions.--In this section:
                    ``(A) Applicable beneficiary.--The term `applicable 
                beneficiary' means an individual who--
                            ``(i) is entitled to, or enrolled for, 
                        benefits under part A and enrolled for benefits 
                        under part B of such title, but not enrolled 
                        under part C or a PACE program under section 
                        1894; and
                            ``(ii) is admitted to a hospital for an 
                        applicable condition.
                    ``(B) Applicable condition.--The term `applicable 
                condition' means 1 or more of 8 conditions selected by 
                the Secretary. In selecting conditions under the 
                preceding sentence, the Secretary shall take into 
                consideration the following factors:
                            ``(i) Whether the conditions selected 
                        include a mix of chronic and acute conditions.
                            ``(ii) Whether the conditions selected 
                        include a mix of surgical and medical 
                        conditions.
                            ``(iii) Whether a condition is one for 
                        which there is evidence of an opportunity for 
                        providers of services and suppliers to improve 
                        the quality of care furnished while reducing 
                        total expenditures under this title.
                            ``(iv) Whether a condition has significant 
                        variation in--
                                    ``(I) the number of readmissions; 
                                and
                                    ``(II) the amount of expenditures 
                                for post-acute care spending under this 
                                title.
                            ``(v) Whether a condition is high-volume 
                        and has high post-acute care expenditures under 
                        this title.
                            ``(vi) Which conditions the Secretary 
                        determines are most amenable to bundling across 
                        the spectrum of care given practice patterns 
                        under this title.
                    ``(C) Applicable services.--The term `applicable 
                services' means the following:
                            ``(i) Acute care inpatient services.
                            ``(ii) Physicians' services delivered in 
                        and outside of an acute care hospital setting.
                            ``(iii) Outpatient hospital services, 
                        including emergency department services.
                            ``(iv) Post-acute care services, including 
                        home health services, skilled nursing services, 
                        inpatient rehabilitation services, and 
                        inpatient hospital services furnished by a 
                        long-term care hospital.
                            ``(v) Other services the Secretary 
                        determines appropriate.
                    ``(D) Episode of care.--
                            ``(i) In general.--Subject to clause (ii), 
                        the term `episode of care' means, with respect 
                        to an applicable condition and an applicable 
                        beneficiary, the period that includes--
                                    ``(I) the 3 days prior to the 
                                admission of the applicable beneficiary 
                                to a hospital for the applicable 
                                condition;
                                    ``(II) the length of stay of the 
                                applicable beneficiary in such 
                                hospital; and
                                    ``(III) the 30 days following the 
                                discharge of the applicable beneficiary 
                                from such hospital.
                            ``(ii) Establishment of period by the 
                        secretary.--The Secretary, as appropriate, may 
                        establish a period (other than the period 
                        described in clause (i)) for an episode of care 
                        under the pilot program.
                    ``(E) Physicians' services.--The term `physicians' 
                services' has the meaning given such term in section 
                1861(q).
                    ``(F) Pilot program.--The term `pilot program' 
                means the pilot program under this section.
                    ``(G) Provider of services.--The term `provider of 
                services' has the meaning given such term in section 
                1861(u).
                    ``(H) Readmission.--The term `readmission' has the 
                meaning given such term in section 1886(q)(5)(E).
                    ``(I) Supplier.--The term `supplier' has the 
                meaning given such term in section 1861(d).
            ``(3) Deadline for implementation.--The Secretary shall 
        establish the pilot program not later than January 1, 2013.
    ``(b) Developmental Phase.--
            ``(1) Determination of patient assessment instrument.--The 
        Secretary shall determine which patient assessment instrument 
        (such as the Continuity Assessment Record and Evaluation (CARE) 
        tool) shall be used under the pilot program to evaluate the 
        applicable condition of an applicable beneficiary for purposes 
        of determining the most clinically appropriate site for the 
        provision of post-acute care to the applicable beneficiary.
            ``(2) Development of quality measures for an episode of 
        care and for post-acute care.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Agency for Healthcare Research and Quality and 
                the entity with a contract under section 1890(a) of the 
                Social Security Act, shall develop quality measures for 
                use in the pilot program--
                            ``(i) for episodes of care; and
                            ``(ii) for post-acute care.
                    ``(B) Site-neutral post-acute care quality 
                measures.--Any quality measures developed under 
                subparagraph (A)(ii) shall be site-neutral.
                    ``(C) Coordination with quality measure development 
                and endorsement procedures.--The Secretary shall ensure 
                that the development of quality measures under 
                subparagraph (A) is done in a manner that is consistent 
                with the measures developed and endorsed under section 
                1890 and 1890A that are applicable to all post-acute 
                care settings.
    ``(c) Details.--
            ``(1) Duration.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                pilot program shall be conducted for a period of 5 
                years.
                    ``(B) Extension.--The Secretary may extend the 
                duration of the pilot program for providers of services 
                and suppliers participating in the pilot program as of 
                the day before the end of the 5-year period described 
                in subparagraph (A), for a period determined 
                appropriate by the Secretary, if the Secretary 
                determines that such extension will result in improving 
                or not reducing the quality of patient care and 
                reducing spending under this title.
            ``(2) Participating providers of services and suppliers.--
                    ``(A) In general.--An entity comprised of providers 
                of services and suppliers, including a hospital, a 
                physician group, a skilled nursing facility, and a home 
                health agency, who are otherwise participating under 
                this title, may submit an application to the Secretary 
                to provide applicable services to applicable 
                individuals under this section.
                    ``(B) Requirements.--The Secretary shall develop 
                requirements for entities to participate in the pilot 
                program under this section. Such requirements shall 
                ensure that applicable beneficiaries have an adequate 
                choice of providers of services and suppliers under the 
                pilot program.
            ``(3) Payment methodology.--
                    ``(A) In general.--
                            ``(i) Establishment of payment methods.--
                        The Secretary shall develop payment methods for 
                        the pilot program for entities participating in 
                        the pilot program. Such payment methods may 
                        include bundled payments and bids from entities 
                        for episodes of care. The Secretary shall make 
                        payments to the entity for services covered 
                        under this section.
                            ``(ii) No additional program 
                        expenditures.--Payments under this section for 
                        applicable items and services under this title 
                        (including payment for services described in 
                        subparagraph (B)) for applicable beneficiaries 
                        for a year shall be established in a manner 
                        that does not result in spending more for such 
                        entity for such beneficiaries than would 
                        otherwise be expended for such entity for such 
                        beneficiaries for such year if the pilot 
                        program were not implemented, as estimated by 
                        the Secretary.
                    ``(B) Inclusion of certain services.--A payment 
                methodology tested under the pilot program shall 
                include payment for the furnishing of applicable 
                services and other appropriate services, such as care 
                coordination, medication reconciliation, discharge 
                planning, transitional care services, and other 
                patient-centered activities as determined appropriate 
                by the Secretary.
                    ``(C) Bundled payments.--
                            ``(i) In general.--A bundled payment under 
                        the pilot program shall--
                                    ``(I) be comprehensive, covering 
                                the costs of applicable services and 
                                other appropriate services furnished to 
                                an individual during an episode of care 
                                (as determined by the Secretary); and
                                    ``(II) be made to the entity which 
                                is participating in the pilot program.
                            ``(ii) Requirement for provision of 
                        applicable services and other appropriate 
                        services.--Applicable services and other 
                        appropriate services for which payment is made 
                        under this subparagraph shall be furnished or 
                        directed by the entity which is participating 
                        in the pilot program.
                    ``(D) Payment for post-acute care services after 
                the episode of care.--The Secretary shall establish 
                procedures, in the case where an applicable beneficiary 
                requires continued post-acute care services after the 
                last day of the episode of care, under which payment 
                for such services shall be made.
            ``(4) Quality measures.--
                    ``(A) In general.--The Secretary shall establish 
                quality measures (including quality measures of 
                process, outcome, and structure) related to care 
                provided by entities participating in the pilot 
                program. Quality measures established under the 
                preceding sentence shall include measures of the 
                following:
                            ``(i) Functional status improvement.
                            ``(ii) Reducing rates of avoidable hospital 
                        readmissions.
                            ``(iii) Rates of discharge to the 
                        community.
                            ``(iv) Rates of admission to an emergency 
                        room after a hospitalization.
                            ``(v) Incidence of health care acquired 
                        infections.
                            ``(vi) Efficiency measures.
                            ``(vii) Measures of patient-centeredness of 
                        care.
                            ``(viii) Measures of patient perception of 
                        care.
                            ``(ix) Other measures, including measures 
                        of patient outcomes, determined appropriate by 
                        the Secretary.
                    ``(B) Reporting on quality measures.--
                            ``(i) In general.--A entity shall submit 
                        data to the Secretary on quality measures 
                        established under subparagraph (A) during each 
                        year of the pilot program (in a form and 
                        manner, subject to clause (iii), specified by 
                        the Secretary).
                            ``(ii) Submission of data through 
                        electronic health record.--To the extent 
                        practicable, the Secretary shall specify that 
                        data on measures be submitted under clause (i) 
                        through the use of an qualified electronic 
                        health record (as defined in section 3000(13) 
                        of the Public Health Service Act (42 U.S.C. 
                        300jj-11(13)) in a manner specified by the 
                        Secretary.
    ``(d) Waiver.--The Secretary may waive such provisions of this 
title and title XI as may be necessary to carry out the pilot program.
    ``(e) Independent Evaluation and Reports on Pilot Program.--
            ``(1) Independent evaluation.--The Secretary shall conduct 
        an independent evaluation of the pilot program, including the 
        extent to which the pilot program has--
                    ``(A) improved quality measures established under 
                subsection (c)(4)(A);
                    ``(B) improved health outcomes;
                    ``(C) improved applicable beneficiary access to 
                care; and
                    ``(D) reduced spending under this title.
            ``(2) Reports.--
                    ``(A) Interim report.--Not later than 2 years after 
                the implementation of the pilot program, the Secretary 
                shall submit to Congress a report on the initial 
                results of the independent evaluation conducted under 
                paragraph (1).
                    ``(B) Final report.--Not later than 3 years after 
                the implementation of the pilot program, the Secretary 
                shall submit to Congress a report on the final results 
                of the independent evaluation conducted under paragraph 
                (1).
    ``(f) Consultation.--The Secretary shall consult with 
representatives of small rural hospitals, including critical access 
hospitals (as defined in section 1861(mm)(1)), regarding their 
participation in the pilot program. Such consultation shall include 
consideration of innovative methods of implementing bundled payments in 
hospitals described in the preceding sentence, taking into 
consideration any difficulties in doing so as a result of the low 
volume of services provided by such hospitals.
    ``(g) Implementation Plan.--
            ``(1) In general.--Not later than January 1, 2016, the 
        Secretary shall submit a plan for the implementation of an 
        expansion of the pilot program if the Secretary determines that 
        such expansion will result in improving or not reducing the 
        quality of patient care and reducing spending under this title.
    ``(h) Administration.--Chapter 35 of title 44, United States Code, 
shall not apply to the selection, testing, and evaluation of models or 
the expansion of such models under this section.''.

SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM.

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

     ``independence at home medical practice demonstration program

    ``Sec. 1866D.  (a) Establishment.--
            ``(1) In general.--The Secretary shall conduct a 
        demonstration program (in this section referred to as the 
        `demonstration program') to test a payment incentive and 
        service delivery model that utilizes physician and nurse 
        practitioner directed home-based primary care teams designed to 
        reduce expenditures and improve health outcomes in the 
        provision of items and services under this title to applicable 
        beneficiaries (as defined in subsection (d)).
            ``(2) Requirement.--The demonstration program shall test 
        whether a model described in paragraph (1), which is 
        accountable for providing comprehensive, coordinated, 
        continuous, and accessible care to high-need populations at 
        home and coordinating health care across all treatment 
        settings, results in--
                    ``(A) reducing preventable hospitalizations;
                    ``(B) preventing hospital readmissions;
                    ``(C) reducing emergency room visits;
                    ``(D) improving health outcomes commensurate with 
                the beneficiaries' stage of chronic illness;
                    ``(E) improving the efficiency of care, such as by 
                reducing duplicative diagnostic and laboratory tests;
                    ``(F) reducing the cost of health care services 
                covered under this title; and
                    ``(G) achieving beneficiary and family caregiver 
                satisfaction.
    ``(b) Independence at Home Medical Practice.--
            ``(1) Independence at home medical practice defined.--In 
        this section:
                    ``(A) In general.--The term `independence at home 
                medical practice' means a legal entity that--
                            ``(i) is comprised of an individual 
                        physician or nurse practitioner or group of 
                        physicians and nurse practitioners that 
                        provides care as part of a team that includes 
                        physicians, nurses, physician assistants, 
                        pharmacists, and other health and social 
                        services staff as appropriate who have 
                        experience providing home-based primary care to 
                        applicable beneficiaries, make in-home visits, 
                        and are available 24 hours per day, 7 days per 
                        week to carry out plans of care that are 
                        tailored to the individual beneficiary's 
                        chronic conditions and designed to achieve the 
                        results in subsection (a);
                            ``(ii) is organized at least in part for 
                        the purpose of providing physicians' services;
                            ``(iii) has documented experience in 
                        providing home-based primary care services to 
                        high-cost chronically ill beneficiaries, as 
                        determined appropriate by the Secretary;
                            ``(iv) furnishes services to at least 200 
                        applicable beneficiaries (as defined in 
                        subsection (d)) during each year of the 
                        demonstration program;
                            ``(v) has entered into an agreement with 
                        the Secretary;
                            ``(vi) uses electronic health information 
                        systems, remote monitoring, and mobile 
                        diagnostic technology; and
                            ``(vii) meets such other criteria as the 
                        Secretary determines to be appropriate to 
                        participate in the demonstration program.
                The entity shall report on quality measures (in such 
                form, manner, and frequency as specified by the 
                Secretary, which may be for the group, for providers of 
                services and suppliers, or both) and report to the 
                Secretary (in a form, manner, and frequency as 
                specified by the Secretary) such data as the Secretary 
                determines appropriate to monitor and evaluate the 
                demonstration program.
                    ``(B) Physician.--The term `physician' includes, 
                except as the Secretary may otherwise provide, any 
                individual who furnishes services for which payment may 
                be made as physicians' services and has the medical 
                training or experience to fulfill the physician's role 
                described in subparagraph (A)(i).
            ``(2) Participation of nurse practitioners and physician 
        assistants.--Nothing in this section shall be construed to 
        prevent a nurse practitioner or physician assistant from 
        participating in, or leading, a home-based primary care team as 
        part of an independence at home medical practice if--
                    ``(A) all the requirements of this section are met;
                    ``(B) the nurse practitioner or physician 
                assistant, as the case may be, is acting consistent 
                with State law; and
                    ``(C) the nurse practitioner or physician assistant 
                has the medical training or experience to fulfill the 
                nurse practitioner or physician assistant role 
                described in paragraph (1)(A)(i).
            ``(3) Inclusion of providers and practitioners.--Nothing in 
        this subsection shall be construed as preventing an 
        independence at home medical practice from including a provider 
        of services or a participating practitioner described in 
        section 1842(b)(18)(C) that is affiliated with the practice 
        under an arrangement structured so that such provider of 
        services or practitioner participates in the demonstration 
        program and shares in any savings under the demonstration 
        program.
            ``(4) Quality and performance standards.--The Secretary 
        shall develop quality performance standards for independence at 
        home medical practices participating in the demonstration 
        program.
    ``(c) Payment Methodology.--
            ``(1) Establishment of target spending level.--The 
        Secretary shall establish an estimated annual spending target, 
        for the amount the Secretary estimates would have been spent in 
        the absence of the demonstration, for items and services 
        covered under parts A and B furnished to applicable 
        beneficiaries for each qualifying independence at home medical 
        practice under this section. Such spending targets shall be 
        determined on a per capita basis. Such spending targets shall 
        include a risk corridor that takes into account normal 
        variation in expenditures for items and services covered under 
        parts A and B furnished to such beneficiaries with the size of 
        the corridor being related to the number of applicable 
        beneficiaries furnished services by each independence at home 
        medical practice. The spending targets may also be adjusted for 
        other factors as the Secretary determines appropriate.
            ``(2) Incentive payments.--Subject to performance on 
        quality measures, a qualifying independence at home medical 
        practice is eligible to receive an incentive payment under this 
        section if actual expenditures for a year for the applicable 
        beneficiaries it enrolls are less than the estimated spending 
        target established under paragraph (1) for such year. An 
        incentive payment for such year shall be equal to a portion (as 
        determined by the Secretary) of the amount by which actual 
        expenditures (including incentive payments under this 
        paragraph) for applicable beneficiaries under parts A and B for 
        such year are estimated to be less than 5 percent less than the 
        estimated spending target for such year, as determined under 
        paragraph (1).
    ``(d) Applicable Beneficiaries.--
            ``(1) Definition.--In this section, the term `applicable 
        beneficiary' means, with respect to a qualifying independence 
        at home medical practice, an individual who the practice has 
        determined--
                    ``(A) is entitled to benefits under part A and 
                enrolled for benefits under part B;
                    ``(B) is not enrolled in a Medicare Advantage plan 
                under part C or a PACE program under section 1894;
                    ``(C) has 2 or more chronic illnesses, such as 
                congestive heart failure, diabetes, other dementias 
                designated by the Secretary, chronic obstructive 
                pulmonary disease, ischemic heart disease, stroke, 
                Alzheimer's Disease and neurodegenerative diseases, and 
                other diseases and conditions designated by the 
                Secretary which result in high costs under this title;
                    ``(D) within the past 12 months has had a 
                nonelective hospital admission;
                    ``(E) within the past 12 months has received acute 
                or subacute rehabilitation services;
                    ``(F) has 2 or more functional dependencies 
                requiring the assistance of another person (such as 
                bathing, dressing, toileting, walking, or feeding); and
                    ``(G) meets such other criteria as the Secretary 
                determines appropriate.
            ``(2) Patient election to participate.--The Secretary shall 
        determine an appropriate method of ensuring that applicable 
        beneficiaries have agreed to enroll in an independence at home 
        medical practice under the demonstration program. Enrollment in 
        the demonstration program shall be voluntary.
            ``(3) Beneficiary access to services.--Nothing in this 
        section shall be construed as encouraging physicians or nurse 
        practitioners to limit applicable beneficiary access to 
        services covered under this title and applicable beneficiaries 
        shall not be required to relinquish access to any benefit under 
        this title as a condition of receiving services from an 
        independence at home medical practice.
    ``(e) Implementation.--
            ``(1) Starting date.--The demonstration program shall begin 
        no later than January 1, 2012. An agreement with an 
        independence at home medical practice under the demonstration 
        program may cover not more than a 3-year period.
            ``(2) No physician duplication in demonstration 
        participation.--The Secretary shall not pay an independence at 
        home medical practice under this section that participates in 
        section 1899.
            ``(3) No beneficiary duplication in demonstration 
        participation.--The Secretary shall ensure that no applicable 
        beneficiary enrolled in an independence at home medical 
        practice under this section is participating in the programs 
        under section 1899.
            ``(4) Preference.--In approving an independence at home 
        medical practice, the Secretary shall give preference to 
        practices that are--
                    ``(A) located in high-cost areas of the country;
                    ``(B) have experience in furnishing health care 
                services to applicable beneficiaries in the home; and
                    ``(C) use electronic medical records, health 
                information technology, and individualized plans of 
                care.
            ``(5) Limitation on number of practices.--In selecting 
        qualified independence at home medical practices to participate 
        under the demonstration program, the Secretary shall limit the 
        number of such practices so that the number of applicable 
        beneficiaries that may participate in the demonstration program 
        does not exceed 10,000.
            ``(6) Waiver.--The Secretary may waive such provisions of 
        this title and title XI as the Secretary determines necessary 
        in order to implement the demonstration program.
            ``(7) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to this section.
    ``(f) Evaluation and Monitoring.--
            ``(1) In general.--The Secretary shall evaluate each 
        independence at home medical practice under the demonstration 
        program to assess whether the practice achieved the results 
        described in subsection (a).
            ``(2) Monitoring applicable beneficiaries.--The Secretary 
        may monitor data on expenditures and quality of services under 
        this title after an applicable beneficiary discontinues 
        receiving services under this title through a qualifying 
        independence at home medical practice.
    ``(g) Reports to Congress.--The Secretary shall conduct an 
independent evaluation of the demonstration program and submit to 
Congress a final report, including best practices under the 
demonstration program. Such report shall include an analysis of the 
demonstration program on coordination of care, expenditures under this 
title, applicable beneficiary access to services, and the quality of 
health care services provided to applicable beneficiaries.
    ``(h) Funding.--For purposes of administering and carrying out the 
demonstration program, other than for payments for items and services 
furnished under this title and incentive payments under subsection (c), 
in addition to funds otherwise appropriated, there shall be transferred 
to the Secretary for the Center for Medicare & Medicaid Services 
Program Management Account from the Federal Hospital Insurance Trust 
Fund under section 1817 and the Federal Supplementary Medical Insurance 
Trust Fund under section 1841 (in proportions determined appropriate by 
the Secretary) $5,000,000 for each of fiscal years 2010 through 2015. 
Amounts transferred under this subsection for a fiscal year shall be 
available until expended.
    ``(i) Termination.--
            ``(1) Mandatory termination.--The Secretary shall terminate 
        an agreement with an independence at home medical practice if--
                    ``(A) the Secretary estimates or determines that 
                such practice will not receive an incentive payment for 
                the second of 2 consecutive years under the 
                demonstration program; or
                    ``(B) such practice fails to meet quality standards 
                during any year of the demonstration program.
            ``(2) Permissive termination.--The Secretary may terminate 
        an agreement with an independence at home medical practice for 
        such other reasons determined appropriate by the Secretary.''.

SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww), as amended by sections 3001 and 3008, is amended by adding at 
the end the following new subsection:
    ``(q) Hospital Readmissions Reduction Program.--
            ``(1) In general.--With respect to payment for discharges 
        from an applicable hospital (as defined in paragraph (5)(C)) 
        occurring during a fiscal year beginning on or after October 1, 
        2012, in order to account for excess readmissions in the 
        hospital, the Secretary shall reduce the payments that would 
        otherwise be made to such hospital under subsection (d) (or 
        section 1814(b)(3), as the case may be) for such a discharge by 
        an amount equal to the product of--
                    ``(A) the base operating DRG payment amount (as 
                defined in paragraph (2)) for the discharge; and
                    ``(B) the adjustment factor (described in paragraph 
                (3)(A)) for the hospital for the fiscal year.
            ``(2) Base operating drg payment amount defined.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this subsection, the term `base 
                operating DRG payment amount' means, with respect to a 
                hospital for a fiscal year--
                            ``(i) the payment amount that would 
                        otherwise be made under subsection (d) 
                        (determined without regard to subsection (o)) 
                        for a discharge if this subsection did not 
                        apply; reduced by
                            ``(ii) any portion of such payment amount 
                        that is attributable to payments under 
                        paragraphs (5)(A), (5)(B), (5)(F), and (12) of 
                        subsection (d).
                    ``(B) Special rules for certain hospitals.--
                            ``(i) Sole community hospitals and 
                        medicare-dependent, small rural hospitals.--In 
                        the case of a medicare-dependent, small rural 
                        hospital (with respect to discharges occurring 
                        during fiscal years 2012 and 2013) or a sole 
                        community hospital, in applying subparagraph 
                        (A)(i), the payment amount that would otherwise 
                        be made under subsection (d) shall be 
                        determined without regard to subparagraphs (I) 
                        and (L) of subsection (b)(3) and subparagraphs 
                        (D) and (G) of subsection (d)(5).
                            ``(ii) Hospitals paid under section 1814.--
                        In the case of a hospital that is paid under 
                        section 1814(b)(3), the Secretary may exempt 
                        such hospitals provided that States paid under 
                        such section submit an annual report to the 
                        Secretary describing how a similar program in 
                        the State for a participating hospital or 
                        hospitals achieves or surpasses the measured 
                        results in terms of patient health outcomes and 
                        cost savings established herein with respect to 
                        this section.
            ``(3) Adjustment factor.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the adjustment factor under this paragraph for an 
                applicable hospital for a fiscal year is equal to the 
                greater of--
                            ``(i) the ratio described in subparagraph 
                        (B) for the hospital for the applicable period 
                        (as defined in paragraph (5)(D)) for such 
                        fiscal year; or
                            ``(ii) the floor adjustment factor 
                        specified in subparagraph (C).
                    ``(B) Ratio.--The ratio described in this 
                subparagraph for a hospital for an applicable period is 
                equal to 1 minus the ratio of--
                            ``(i) the aggregate payments for excess 
                        readmissions (as defined in paragraph (4)(A)) 
                        with respect to an applicable hospital for the 
                        applicable period; and
                            ``(ii) the aggregate payments for all 
                        discharges (as defined in paragraph (4)(B)) 
                        with respect to such applicable hospital for 
                        such applicable period.
                    ``(C) Floor adjustment factor.--For purposes of 
                subparagraph (A), the floor adjustment factor specified 
                in this subparagraph for--
                            ``(i) fiscal year 2013 is 0.99;
                            ``(ii) fiscal year 2014 is 0.98; or
                            ``(iii) fiscal year 2015 and subsequent 
                        fiscal years is 0.97.
            ``(4) Aggregate payments, excess readmission ratio 
        defined.--For purposes of this subsection:
                    ``(A) Aggregate payments for excess readmissions.--
                The term `aggregate payments for excess readmissions' 
                means, for a hospital for an applicable period, the 
                sum, for applicable conditions (as defined in paragraph 
                (5)(A)), of the product, for each applicable condition, 
                of--
                            ``(i) the base operating DRG payment amount 
                        for such hospital for such applicable period 
                        for such condition;
                            ``(ii) the number of admissions for such 
                        condition for such hospital for such applicable 
                        period; and
                            ``(iii) the excess readmissions ratio (as 
                        defined in subparagraph (C)) for such hospital 
                        for such applicable period minus 1.
                    ``(B) Aggregate payments for all discharges.--The 
                term `aggregate payments for all discharges' means, for 
                a hospital for an applicable period, the sum of the 
                base operating DRG payment amounts for all discharges 
                for all conditions from such hospital for such 
                applicable period.
                    ``(C) Excess readmission ratio.--
                            ``(i) In general.--Subject to clause (ii), 
                        the term `excess readmissions ratio' means, 
                        with respect to an applicable condition for a 
                        hospital for an applicable period, the ratio 
                        (but not less than 1.0) of--
                                    ``(I) the risk adjusted 
                                readmissions based on actual 
                                readmissions, as determined consistent 
                                with a readmission measure methodology 
                                that has been endorsed under paragraph 
                                (5)(A)(ii)(I), for an applicable 
                                hospital for such condition with 
                                respect to such applicable period; to
                                    ``(II) the risk adjusted expected 
                                readmissions (as determined consistent 
                                with such a methodology) for such 
                                hospital for such condition with 
                                respect to such applicable period.
                            ``(ii) Exclusion of certain readmissions.--
                        For purposes of clause (i), with respect to a 
                        hospital, excess readmissions shall not include 
                        readmissions for an applicable condition for 
                        which there are fewer than a minimum number (as 
                        determined by the Secretary) of discharges for 
                        such applicable condition for the applicable 
                        period and such hospital.
            ``(5) Definitions.--For purposes of this subsection:
                    ``(A) Applicable condition.--The term `applicable 
                condition' means, subject to subparagraph (B), a 
                condition or procedure selected by the Secretary among 
                conditions and procedures for which--
                            ``(i) readmissions (as defined in 
                        subparagraph (E)) that represent conditions or 
                        procedures that are high volume or high 
                        expenditures under this title (or other 
                        criteria specified by the Secretary); and
                            ``(ii) measures of such readmissions--
                                    ``(I) have been endorsed by the 
                                entity with a contract under section 
                                1890(a); and
                                    ``(II) such endorsed measures have 
                                exclusions for readmissions that are 
                                unrelated to the prior discharge (such 
                                as a planned readmission or transfer to 
                                another applicable hospital).
                    ``(B) Expansion of applicable conditions.--
                Beginning with fiscal year 2015, the Secretary shall, 
                to the extent practicable, expand the applicable 
                conditions beyond the 3 conditions for which measures 
                have been endorsed as described in subparagraph 
                (A)(ii)(I) as of the date of the enactment of this 
                subsection to the additional 4 conditions that have 
                been identified by the Medicare Payment Advisory 
                Commission in its report to Congress in June 2007 and 
                to other conditions and procedures as determined 
                appropriate by the Secretary. In expanding such 
                applicable conditions, the Secretary shall seek the 
                endorsement described in subparagraph (A)(ii)(I) but 
                may apply such measures without such an endorsement in 
                the case of a specified area or medical topic 
                determined appropriate by the Secretary for which a 
                feasible and practical measure has not been endorsed by 
                the entity with a contract under section 1890(a) as 
                long as due consideration is given to measures that 
                have been endorsed or adopted by a consensus 
                organization identified by the Secretary.
                    ``(C) Applicable hospital.--The term `applicable 
                hospital' means a subsection (d) hospital or a hospital 
                that is paid under section 1814(b)(3), as the case may 
                be.
                    ``(D) Applicable period.--The term `applicable 
                period' means, with respect to a fiscal year, such 
                period as the Secretary shall specify.
                    ``(E) Readmission.--The term `readmission' means, 
                in the case of an individual who is discharged from an 
                applicable hospital, the admission of the individual to 
                the same or another applicable hospital within a time 
                period specified by the Secretary from the date of such 
                discharge. Insofar as the discharge relates to an 
                applicable condition for which there is an endorsed 
                measure described in subparagraph (A)(ii)(I), such time 
                period (such as 30 days) shall be consistent with the 
                time period specified for such measure.
            ``(6) Reporting hospital specific information.--
                    ``(A) In general.--The Secretary shall make 
                information available to the public regarding 
                readmission rates of each subsection (d) hospital under 
                the program.
                    ``(B) Opportunity to review and submit 
                corrections.--The Secretary shall ensure that a 
                subsection (d) hospital has the opportunity to review, 
                and submit corrections for, the information to be made 
                public with respect to the hospital under subparagraph 
                (A) prior to such information being made public.
                    ``(C) Website.--Such information shall be posted on 
                the Hospital Compare Internet website in an easily 
                understandable format.
            ``(7) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The determination of base operating DRG 
                payment amounts.
                    ``(B) The methodology for determining the 
                adjustment factor under paragraph (3), including excess 
                readmissions ratio under paragraph (4)(C), aggregate 
                payments for excess readmissions under paragraph 
                (4)(A), and aggregate payments for all discharges under 
                paragraph (4)(B), and applicable periods and applicable 
                conditions under paragraph (5).
                    ``(C) The measures of readmissions as described in 
                paragraph (5)(A)(ii).
            ``(8) Readmission rates for all patients.--
                    ``(A) Calculation of readmission.--The Secretary 
                shall calculate readmission rates for all patients (as 
                defined in subparagraph (D)) for a specified hospital 
                (as defined in subparagraph (D)(ii)) for an applicable 
                condition (as defined in paragraph (5)(B)) and other 
                conditions deemed appropriate by the Secretary for an 
                applicable period (as defined in paragraph (5)(D)) in 
                the same manner as used to calculate such readmission 
                rates for hospitals with respect to this title and 
                posted on the CMS Hospital Compare website.
                    ``(B) Posting of hospital specific all patient 
                readmission rates.--The Secretary shall make 
                information on all patient readmission rates calculated 
                under subparagraph (A) available on the CMS Hospital 
                Compare website in a form and manner determined 
                appropriate by the Secretary. The Secretary may also 
                make other information determined appropriate by the 
                Secretary available on such website.
                    ``(C) Hospital submission of all patient data.--
                            ``(i) Except as provided for in clause 
                        (ii), each specified hospital (as defined in 
                        subparagraph (D)(ii)) shall submit to the 
                        Secretary, in a form, manner and time specified 
                        by the Secretary, data and information 
                        determined necessary by the Secretary for the 
                        Secretary to calculate the all patient 
                        readmission rates described in subparagraph 
                        (A).
                            ``(ii) Instead of a specified hospital 
                        submitting to the Secretary the data and 
                        information described in clause (i), such data 
                        and information may be submitted to the 
                        Secretary, on behalf of such a specified 
                        hospital, by a state or an entity determined 
                        appropriate by the Secretary.
                    ``(D) Definitions.--For purposes of this paragraph:
                            ``(i) The term `all patients' means 
                        patients who are treated on an inpatient basis 
                        and discharged from a specified hospital (as 
                        defined in clause (ii)).
                            ``(ii) The term `specified hospital' means 
                        a subsection (d) hospital, hospitals described 
                        in clauses (i) through (v) of subsection 
                        (d)(1)(B) and, as determined feasible and 
                        appropriate by the Secretary, other hospitals 
                        not otherwise described in this 
                        subparagraph.''.
    (b) Quality Improvement.--Part S of title III of the Public Health 
Service Act, as amended by section 3015, is further amended by adding 
at the end the following:

``SEC. 399KK. QUALITY IMPROVEMENT PROGRAM FOR HOSPITALS WITH A HIGH 
              SEVERITY ADJUSTED READMISSION RATE.

    ``(a) Establishment.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of this section, the Secretary shall make available a 
        program for eligible hospitals to improve their readmission 
        rates through the use of patient safety organizations (as 
        defined in section 921(4)).
            ``(2) Eligible hospital defined.--In this subsection, the 
        term `eligible hospital' means a hospital that the Secretary 
        determines has a high rate of risk adjusted readmissions for 
        the conditions described in section 1886(q)(8)(A) of the Social 
        Security Act and has not taken appropriate steps to reduce such 
        readmissions and improve patient safety as evidenced through 
        historically high rates of readmissions, as determined by the 
        Secretary.
            ``(3) Risk adjustment.--The Secretary shall utilize 
        appropriate risk adjustment measures to determine eligible 
        hospitals.
    ``(b) Report to the Secretary.--As determined appropriate by the 
Secretary, eligible hospitals and patient safety organizations working 
with those hospitals shall report to the Secretary on the processes 
employed by the hospital to improve readmission rates and the impact of 
such processes on readmission rates.''.

SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PROGRAM.

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

SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION.

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

       Subtitle B--Improving Medicare for Patients and Providers

    PART I--ENSURING BENEFICIARY ACCESS TO PHYSICIAN CARE AND OTHER 
                                SERVICES

SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE.

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

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

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

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

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)) is amended by striking ``December 31, 2009'' and inserting 
``December 31, 2010''.

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

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

SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended--
            (1) in the matter preceding clause (i)--
                    (A) by striking ``2007, and for'' and inserting 
                ``2007, for''; and
                    (B) by striking ``2010'' and inserting ``2010, and 
                for such services furnished on or after April 1, 2010, 
                and before January 1, 2011,''; and
            (2) in each of clauses (i) and (ii), by inserting ``, and 
        on or after April 1, 2010, and before January 1, 2011'' after 
        ``January 1, 2010'' each place it appears.
    (b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275) is amended 
by striking ``December 31, 2009'' and inserting ``December 31, 2009, 
and during the period beginning on April 1, 2010, and ending on January 
1, 2011''.
    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking 
``2010'' and inserting ``2010, and on or after April 1, 2010, and 
before January 1, 2011''.

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

    (a) Extension of Certain Payment Rules.--Section 114(c) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww 
note), as amended by section 4302(a) of the American Recovery and 
Reinvestment Act (Public Law 111-5), is further amended by striking 
``3-year period'' each place it appears and inserting ``4-year 
period''.
    (b) Extension of Moratorium.--Section 114(d)(1) of such Act (42 
U.S.C. 1395ww note), in the matter preceding subparagraph (A), is 
amended by striking ``3-year period'' and inserting ``4-year period''.

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

    Section 138(a)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275) is amended by striking 
``December 31, 2009'' and inserting ``December 31, 2010''.

SEC. 3108. PERMITTING PHYSICIAN ASSISTANTS TO ORDER POST-HOSPITAL 
              EXTENDED CARE SERVICES.

    (a) Ordering Post-Hospital Extended Care Services.--
            (1) In general.--Section 1814(a)(2) of the Social Security 
        Act (42 U.S.C. 1395f(a)(2)), in the matter preceding 
        subparagraph (A), is amended by striking ``or clinical nurse 
        specialist'' and inserting ``, a clinical nurse specialist, or 
        a physician assistant (as those terms are defined in section 
        1861(aa)(5))'' after ``nurse practitioner''.
            (2) Conforming amendment.--Section 1814(a) of the Social 
        Security Act (42 U.S.C. 1395f(a)) is amended, in the second 
        sentence, by striking ``or clinical nurse specialist'' and 
        inserting ``clinical nurse specialist, or physician assistant'' 
        after ``nurse practitioner,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 3109. EXEMPTION OF CERTAIN PHARMACIES FROM ACCREDITATION 
              REQUIREMENTS.

    (a) In General.--Section 1834(a)(20) of the Social Security Act (42 
U.S.C. 1395m(a)(20)), as added by section 154(b)(1)(A) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 100-
275), is amended--
            (1) in subparagraph (F)(i)--
                    (A) by inserting ``and subparagraph (G)'' after 
                ``clause (ii)''; and
                    (B) by inserting ``, except that the Secretary 
                shall not require a pharmacy to have submitted to the 
                Secretary such evidence of accreditation prior to 
                January 1, 2011'' before the semicolon at the end; and
            (2) by adding at the end the following new subparagraph:
                    ``(G) Application of accreditation requirement to 
                certain pharmacies.--
                            ``(i) In general.--With respect to items 
                        and services furnished on or after January 1, 
                        2011, in implementing quality standards under 
                        this paragraph--
                                    ``(I) subject to subclause (II), in 
                                applying such standards and the 
                                accreditation requirement of 
                                subparagraph (F)(i) with respect to 
                                pharmacies described in clause (ii) 
                                furnishing such items and services, 
                                such standards and accreditation 
                                requirement shall not apply to such 
                                pharmacies; and
                                    ``(II) the Secretary may apply to 
                                such pharmacies an alternative 
                                accreditation requirement established 
                                by the Secretary if the Secretary 
                                determines such alternative 
                                accreditation requirement is more 
                                appropriate for such pharmacies.
                            ``(ii) Pharmacies described.--A pharmacy 
                        described in this clause is a pharmacy that 
                        meets each of the following criteria:
                                    ``(I) The total billings by the 
                                pharmacy for such items and services 
                                under this title are less than 5 
                                percent of total pharmacy sales, as 
                                determined based on the average total 
                                pharmacy sales for the previous 3 
                                calendar years, 3 fiscal years, or 
                                other yearly period specified by the 
                                Secretary.
                                    ``(II) The pharmacy has been 
                                enrolled under section 1866(j) as a 
                                supplier of durable medical equipment, 
                                prosthetics, orthotics, and supplies, 
                                has been issued (which may include the 
                                renewal of) a provider number for at 
                                least 5 years, and for which a final 
                                adverse action (as defined in section 
                                424.57(a) of title 42, Code of Federal 
                                Regulations) has not been imposed in 
                                the past 5 years.
                                    ``(III) The pharmacy submits to the 
                                Secretary an attestation, in a form and 
                                manner, and at a time, specified by the 
                                Secretary, that the pharmacy meets the 
                                criteria described in subclauses (I) 
                                and (II). Such attestation shall be 
                                subject to section 1001 of title 18, 
                                United States Code.
                                    ``(IV) The pharmacy agrees to 
                                submit materials as requested by the 
                                Secretary, or during the course of an 
                                audit conducted on a random sample of 
                                pharmacies selected annually, to verify 
                                that the pharmacy meets the criteria 
                                described in subclauses (I) and (II). 
                                Materials submitted under the preceding 
                                sentence shall include a certification 
                                by an accountant on behalf of the 
                                pharmacy or the submission of tax 
                                returns filed by the pharmacy during 
                                the relevant periods, as requested by 
                                the Secretary.''.
    (b) Administration.--Notwithstanding any other provision of law, 
the Secretary may implement the amendments made by subsection (a) by 
program instruction or otherwise.
    (c) Rule of Construction.--Nothing in the provisions of or 
amendments made by this section shall be construed as affecting the 
application of an accreditation requirement for pharmacies to qualify 
for bidding in a competitive acquisition area under section 1847 of the 
Social Security Act (42 U.S.C. 1395w-3).

SEC. 3110. PART B SPECIAL ENROLLMENT PERIOD FOR DISABLED TRICARE 
              BENEFICIARIES.

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

SEC. 3111. PAYMENT FOR BONE DENSITY TESTS.

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

SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT FUND.

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

SEC. 3113. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC LABORATORY TESTS.

    (a) Demonstration Project.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a demonstration project under part B title XVIII of the 
        Social Security Act under which separate payments are made 
        under such part for complex diagnostic laboratory tests 
        provided to individuals under such part. Under the 
        demonstration project, the Secretary shall establish 
        appropriate payment rates for such tests.
            (2) Covered complex diagnostic laboratory test defined.--In 
        this section, the term ``complex diagnostic laboratory test'' 
        means a diagnostic laboratory test--
                    (A) that is an analysis of gene protein expression, 
                topographic genotyping, or a cancer chemotherapy 
                sensitivity assay;
                    (B) that is determined by the Secretary to be a 
                laboratory test for which there is not an alternative 
                test having equivalent performance characteristics;
                    (C) which is billed using a Health Care Procedure 
                Coding System (HCPCS) code other than a not otherwise 
                classified code under such Coding System;
                    (D) which is approved or cleared by the Food and 
                Drug Administration or is covered under title XVIII of 
                the Social Security Act; and
                    (E) is described in section 1861(s)(3) of the 
                Social Security Act (42 U.S.C. 1395x(s)(3)).
            (3) Separate payment defined.--In this section, the term 
        ``separate payment'' means direct payment to a laboratory 
        (including a hospital-based or independent laboratory) that 
        performs a complex diagnostic laboratory test with respect to a 
        specimen collected from an individual during a period in which 
        the individual is a patient of a hospital if the test is 
        performed after such period of hospitalization and if separate 
        payment would not otherwise be made under title XVIII of the 
        Social Security Act by reason of sections 1862(a)(14) and 
        1866(a)(1)(H)(i) of the such Act (42 U.S.C. 1395y(a)(14); 42 
        U.S.C. 1395cc(a)(1)(H)(i)).
    (b) Duration.--Subject to subsection (c)(2), the Secretary shall 
conduct the demonstration project under this section for the 2-year 
period beginning on July 1, 2011.
    (c) Payments and Limitation.--Payments under the demonstration 
project under this section shall--
            (1) be made from the Federal Supplemental Medical Insurance 
        Trust Fund under section 1841 of the Social Security Act (42 
        U.S.C. 1395t); and
            (2) may not exceed $100,000,000.
    (d) Report.--Not later than 2 years after the completion of the 
demonstration project under this section, the Secretary shall submit to 
Congress a report on the project. Such report shall include--
            (1) an assessment of the impact of the demonstration 
        project on access to care, quality of care, health outcomes, 
        and expenditures under title XVIII of the Social Security Act 
        (including any savings under such title); and
            (2) such recommendations as the Secretary determines 
        appropriate.
    (e) Implementation Funding.--For purposes of administering this 
section (including preparing and submitting the report under subsection 
(d)), the Secretary shall provide for the transfer, from the Federal 
Supplemental Medical Insurance Trust Fund under section 1841 of the 
Social Security Act (42 U.S.C. 1395t), to the Centers for Medicare & 
Medicaid Services Program Management Account, of $5,000,000. Amounts 
transferred under the preceding sentence shall remain available until 
expended.

SEC. 3114. IMPROVED ACCESS FOR CERTIFIED NURSE-MIDWIFE SERVICES.

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

                       PART II--RURAL PROTECTIONS

SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

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

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

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

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

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

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

    (a) Extension of Payment Methodology.--Section 1886(d)(5)(G) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended--
            (1) in clause (i), by striking ``October 1, 2011'' and 
        inserting ``October 1, 2012''; and
            (2) in clause (ii)(II), by striking ``October 1, 2011'' and 
        inserting ``October 1, 2012''.
    (b) Conforming Amendments.--
            (1) Extension of target amount.--Section 1886(b)(3)(D) of 
        the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is 
        amended--
                    (A) in the matter preceding clause (i), by striking 
                ``October 1, 2011'' and inserting ``October 1, 2012''; 
                and
                    (B) in clause (iv), by striking ``through fiscal 
                year 2011'' and inserting ``through fiscal year 2012''.
            (2) Permitting hospitals to decline reclassification.--
        Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 
        1993 (42 U.S.C. 1395ww note) is amended by striking ``through 
        fiscal year 2011'' and inserting ``through fiscal year 2012''.

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

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

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

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

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

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

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

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

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

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

                  PART III--IMPROVING PAYMENT ACCURACY

SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

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

SEC. 3132. HOSPICE REFORM.

    (a) Hospice Care Payment Reforms.--
            (1) In general.--Section 1814(i) of the Social Security Act 
        (42 U.S.C. 1395f(i)), as amended by section 3004(c), is 
        amended--
                    (A) by redesignating paragraph (6) as paragraph 
                (7); and
                    (B) by inserting after paragraph (5) the following 
                new paragraph:
            ``(6)(A) The Secretary shall collect additional data and 
        information as the Secretary determines appropriate to revise 
        payments for hospice care under this subsection pursuant to 
        subparagraph (D) and for other purposes as determined 
        appropriate by the Secretary. The Secretary shall begin to 
        collect such data by not later than January 1, 2011.
            ``(B) The additional data and information to be collected 
        under subparagraph (A) may include data and information on--
                    ``(i) charges and payments;
                    ``(ii) the number of days of hospice care which are 
                attributable to individuals who are entitled to, or 
                enrolled for, benefits under part A; and
                    ``(iii) with respect to each type of service 
                included in hospice care--
                            ``(I) the number of days of hospice care 
                        attributable to the type of service;
                            ``(II) the cost of the type of service; and
                            ``(III) the amount of payment for the type 
                        of service;
                    ``(iv) charitable contributions and other revenue 
                of the hospice program;
                    ``(v) the number of hospice visits;
                    ``(vi) the type of practitioner providing the 
                visit; and
                    ``(vii) the length of the visit and other basic 
                information with respect to the visit.
            ``(C) The Secretary may collect the additional data and 
        information under subparagraph (A) on cost reports, claims, or 
        other mechanisms as the Secretary determines to be appropriate.
            ``(D)(i) Notwithstanding the preceding paragraphs of this 
        subsection, not earlier than October 1, 2013, the Secretary 
        shall, by regulation, implement revisions to the methodology 
        for determining the payment rates for routine home care and 
        other services included in hospice care under this part, as the 
        Secretary determines to be appropriate. Such revisions may be 
        based on an analysis of data and information collected under 
        subparagraph (A). Such revisions may include adjustments to per 
        diem payments that reflect changes in resource intensity in 
        providing such care and services during the course of the 
        entire episode of hospice care.
            ``(ii) Revisions in payment implemented pursuant to clause 
        (i) shall result in the same estimated amount of aggregate 
        expenditures under this title for hospice care furnished in the 
        fiscal year in which such revisions in payment are implemented 
        as would have been made under this title for such care in such 
        fiscal year if such revisions had not been implemented.
            ``(E) The Secretary shall consult with hospice programs and 
        the Medicare Payment Advisory Commission regarding the 
        additional data and information to be collected under 
        subparagraph (A) and the payment revisions under subparagraph 
        (D).''.
            (2) Conforming amendments.--Section 1814(i)(1)(C) of the 
        Social Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
                    (A) in clause (ii)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``(before the first fiscal year in 
                        which the payment revisions described in 
                        paragraph (6)(D) are implemented)'' after 
                        ``subsequent fiscal year''; and
                            (ii) in subclause (VII), by inserting 
                        ``(before the first fiscal year in which the 
                        payment revisions described in paragraph (6)(D) 
                        are implemented), subject to clause (iv),'' 
                        after ``subsequent fiscal year''; and
                    (B) by adding at the end the following new clause:
                            ``(iii) With respect to routine home care 
                        and other services included in hospice care 
                        furnished during fiscal years subsequent to the 
                        first fiscal year in which payment revisions 
                        described in paragraph (6)(D) are implemented, 
                        the payment rates for such care and services 
                        shall be the payment rates in effect under this 
                        clause during the preceding fiscal year 
                        increased by, subject to clause (iv), the 
                        market basket percentage increase (as defined 
                        in section 1886(b)(3)(B)(iii)) for the fiscal 
                        year.''.
    (b) Adoption of MedPAC Hospice Program Eligibility Recertification 
Recommendations.--Section 1814(a)(7) of the Social Security Act (42 
U.S.C. 1395f(a)(7)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end; 
        and
            (2) by adding at the end the following new subparagraph:
                    ``(D) on and after January 1, 2011--
                            ``(i) a hospice physician or nurse 
                        practitioner has a face-to-face encounter with 
                        the individual to determine continued 
                        eligibility of the individual for hospice care 
                        prior to the 180th-day recertification and each 
                        subsequent recertification under subparagraph 
                        (A)(ii) and attests that such visit took place 
                        (in accordance with procedures established by 
                        the Secretary); and
                            ``(ii) in the case of hospice care provided 
                        an individual for more than 180 days by a 
                        hospice program for which the number of such 
                        cases for such program comprises more than a 
                        percent (specified by the Secretary) of the 
                        total number of such cases for all programs 
                        under this title, the hospice care provided to 
                        such individual is medically reviewed (in 
                        accordance with procedures established by the 
                        Secretary); and''.

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

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

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

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

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

    (a) Adjustment in Practice Expense to Reflect Higher Presumed 
Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w-
4) is amended--
            (1) in subsection (b)(4)--
                    (A) in subparagraph (B), by striking ``subparagraph 
                (A)'' and inserting ``this paragraph''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Adjustment in practice expense to reflect 
                higher presumed utilization.--Consistent with the 
                methodology for computing the number of practice 
                expense relative value units under subsection 
                (c)(2)(C)(ii) with respect to advanced diagnostic 
                imaging services (as defined in section 1834(e)(1)(B)) 
                furnished on or after January 1, 2010, the Secretary 
                shall adjust such number of units so it reflects--
                            ``(i) in the case of services furnished on 
                        or after January 1, 2010, and before January 1, 
                        2013, a 65 percent (rather than 50 percent) 
                        presumed rate of utilization of imaging 
                        equipment;
                            ``(ii) in the case of services furnished on 
                        or after January 1, 2013, and before January 1, 
                        2014, a 70 percent (rather than 50 percent) 
                        presumed rate of utilization of imaging 
                        equipment; and
                            ``(iii) in the case of services furnished 
                        on or after January 1, 2014, a 75 percent 
                        (rather than 50 percent) presumed rate of 
                        utilization of imaging equipment.''; and
            (2) in subsection (c)(2)(B)(v), by adding at the end the 
        following new subclauses:
                                    ``(III) Change in presumed 
                                utilization level of certain advanced 
                                diagnostic imaging services for 2010 
                                through 2012.--Effective for fee 
                                schedules established beginning with 
                                2010 and ending with 2012, reduced 
                                expenditures attributable to the 
                                presumed rate of utilization of imaging 
                                equipment of 65 percent under 
                                subsection (b)(4)(C)(i) instead of a 
                                presumed rate of utilization of such 
                                equipment of 50 percent.
                                    ``(IV) Change in presumed 
                                utilization level of certain advanced 
                                diagnostic imaging services for 2013.--
                                Effective for fee schedules established 
                                for 2013, reduced expenditures 
                                attributable to the presumed rate of 
                                utilization of imaging equipment of 70 
                                percent under subsection (b)(4)(C)(ii) 
                                instead of a presumed rate of 
                                utilization of such equipment of 50 
                                percent.
                                    ``(V) Change in presumed 
                                utilization level of certain advanced 
                                diagnostic imaging services for 2014 
                                and subsequent years.--Effective for 
                                fee schedules established beginning 
                                with 2014, reduced expenditures 
                                attributable to the presumed rate of 
                                utilization of imaging equipment of 75 
                                percent under subsection (b)(4)(C)(iii) 
                                instead of a presumed rate of 
                                utilization of such equipment of 50 
                                percent.''.
    (b) Adjustment in Technical Component ``discount'' on Single-
session Imaging to Consecutive Body Parts.--Section 1848 of the Social 
Security Act (42 U.S.C. 1395w-4), as amended by subsection (a), is 
amended--
            (1) in subsection (b)(4), by adding at the end the 
        following new subparagraph:
                    ``(D) Adjustment in technical component discount on 
                single-session imaging involving consecutive body 
                parts.--For services furnished on or after July 1, 
                2010, the Secretary shall increase the reduction in 
                payments attributable to the multiple procedure payment 
                reduction applicable to the technical component for 
                imaging under the final rule published by the Secretary 
                in the Federal Register on November 21, 2005 (part 405 
                of title 42, Code of Federal Regulations) from 25 
                percent to 50 percent.''; and
            (2) in subsection (c)(2)(B)(v), by adding at the end the 
        following new subclause:
                                    ``(VI) Additional reduced payment 
                                for multiple imaging procedures.--
                                Effective for fee schedules established 
                                beginning with 2010 (but not applied 
                                for services furnished prior to July 1, 
                                2010), reduced expenditures 
                                attributable to the increase in the 
                                multiple procedure payment reduction 
                                from 25 to 50 percent (as described in 
                                subsection (b)(4)(D)).''.
    (c) Analysis by the Chief Actuary of the Centers for Medicare & 
Medicaid Services.--Not later than January 1, 2013, the Chief Actuary 
of the Centers for Medicare & Medicaid Services shall make publicly 
available an analysis of whether, for the period of 2010 through 2019, 
the cumulative expenditure reductions under title XVIII of the Social 
Security Act that are attributable to the adjustments under the 
amendments made by this section are projected to exceed $3,000,000,000.

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

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

SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

    (a) Extension of Section 508 Hospital Reclassifications.--
            (1) In general.--Subsection (a) of section 106 of division 
        B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 
        note), as amended by section 117 of the Medicare, Medicaid, and 
        SCHIP Extension Act of 2007 (Public Law 110-173) and section 
        124 of the Medicare Improvements for Patients and Providers Act 
        of 2008 (Public Law 110-275), is amended by striking 
        ``September 30, 2009'' and inserting ``September 30, 2010''.
            (2) Use of particular wage index in fiscal year 2010.--For 
        purposes of implementation of the amendment made by this 
        subsection during fiscal year 2010, the Secretary shall use the 
        hospital wage index that was promulgated by the Secretary in 
        the Federal Register on August 27, 2009 (74 Fed. Reg. 43754), 
        and any subsequent corrections.
    (b) Plan for Reforming the Medicare Hospital Wage Index System.--
            (1) In general.--Not later than December 31, 2011, the 
        Secretary of Health and Human Services (in this section 
        referred to as the ``Secretary'') shall submit to Congress a 
        report that includes a plan to reform the hospital wage index 
        system under section 1886 of the Social Security Act.
            (2) Details.--In developing the plan under paragraph (1), 
        the Secretary shall take into account the goals for reforming 
        such system set forth in the Medicare Payment Advisory 
        Commission June 2007 report entitled ``Report to Congress: 
        Promoting Greater Efficiency in Medicare'', including 
        establishing a new hospital compensation index system that--
                    (A) uses Bureau of Labor Statistics data, or other 
                data or methodologies, to calculate relative wages for 
                each geographic area involved;
                    (B) minimizes wage index adjustments between and 
                within metropolitan statistical areas and statewide 
                rural areas;
                    (C) includes methods to minimize the volatility of 
                wage index adjustments that result from implementation 
                of policy, while maintaining budget neutrality in 
                applying such adjustments;
                    (D) takes into account the effect that 
                implementation of the system would have on health care 
                providers and on each region of the country;
                    (E) addresses issues related to occupational mix, 
                such as staffing practices and ratios, and any evidence 
                on the effect on quality of care or patient safety as a 
                result of the implementation of the system; and
                    (F) provides for a transition.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall consult with relevant affected 
        parties.
    (c) Use of Particular Criteria for Determining Reclassifications.--
Notwithstanding any other provision of law, in making decisions on 
applications for reclassification of a subsection (d) hospital (as 
defined in paragraph (1)(B) of section 1886(d) of the Social Security 
Act (42 U.S.C. 1395ww(d)) for the purposes described in paragraph 
(10)(D)(v) of such section for fiscal year 2011 and each subsequent 
fiscal year (until the first fiscal year beginning on or after the date 
that is 1 year after the Secretary of Health and Human Services submits 
the report to Congress under subsection (b)), the Geographic 
Classification Review Board established under paragraph (10) of such 
section shall use the average hourly wage comparison criteria used in 
making such decisions as of September 30, 2008. The preceding sentence 
shall be effected in a budget neutral manner.

SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS.

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

SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

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

SEC. 3140. MEDICARE HOSPICE CONCURRENT CARE DEMONSTRATION PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish a Medicare Hospice Concurrent Care demonstration 
        program at participating hospice programs under which Medicare 
        beneficiaries are furnished, during the same period, hospice 
        care and any other items or services covered under title XVIII 
        of the Social Security Act (42 U.S.C. 1395 et seq.) from funds 
        otherwise paid under such title to such hospice programs.
            (2) Duration.--The demonstration program under this section 
        shall be conducted for a 3-year period.
            (3) Sites.--The Secretary shall select not more than 15 
        hospice programs at which the demonstration program under this 
        section shall be conducted. Such hospice programs shall be 
        located in urban and rural areas.
    (b) Independent Evaluation and Reports.--
            (1) Independent evaluation.--The Secretary shall provide 
        for the conduct of an independent evaluation of the 
        demonstration program under this section. Such independent 
        evaluation shall determine whether the demonstration program 
        has improved patient care, quality of life, and cost-
        effectiveness for Medicare beneficiaries participating in the 
        demonstration program.
            (2) Reports.--The Secretary shall submit to Congress a 
        report containing the results of the evaluation conducted under 
        paragraph (1), together with such recommendations as the 
        Secretary determines appropriate.
    (c) Budget Neutrality.--With respect to the 3-year period of the 
demonstration program under this section, the Secretary shall ensure 
that the aggregate expenditures under title XVIII for such period shall 
not exceed the aggregate expenditures that would have been expended 
under such title if the demonstration program under this section had 
not been implemented.

SEC. 3141. APPLICATION OF BUDGET NEUTRALITY ON A NATIONAL BASIS IN THE 
              CALCULATION OF THE MEDICARE HOSPITAL WAGE INDEX FLOOR.

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

SEC. 3142. HHS STUDY ON URBAN MEDICARE-DEPENDENT HOSPITALS.

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

               Subtitle C--Provisions Relating to Part C

SEC. 3201. MEDICARE ADVANTAGE PAYMENT.

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

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

                                                    ``(BB) 12; and

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

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

                                                    ``(BB) 12; and

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

SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION.

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

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

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

SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) Annual 45-day Period for Disenrollment From MA Plans to Elect 
to Receive Benefits Under the Original Medicare Fee-for-service 
Program.--
            (1) In general.--Section 1851(e)(2)(C) of the Social 
        Security Act (42 U.S.C. 1395w-1(e)(2)(C)) is amended to read as 
        follows:
                    ``(C) Annual 45-day period for disenrollment from 
                ma plans to elect to receive benefits under the 
                original medicare fee-for-service program.--Subject to 
                subparagraph (D), at any time during the first 45 days 
                of a year (beginning with 2011), an individual who is 
                enrolled in a Medicare Advantage plan may change the 
                election under subsection (a)(1), but only with respect 
                to coverage under the original medicare fee-for-service 
                program under parts A and B, and may elect qualified 
                prescription drug coverage in accordance with section 
                1860D-1.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to 2011 and succeeding years.
    (b) Timing of the Annual, Coordinated Election Period Under Parts C 
and D.--Section 1851(e)(3)(B) of the Social Security Act (42 U.S.C. 
1395w-1(e)(3)(B)) is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) in clause (iv)--
                    (A) by striking ``and succeeding years'' and 
                inserting ``, 2008, 2009, and 2010''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(v) with respect to 2012 and succeeding 
                        years, the period beginning on October 15 and 
                        ending on December 7 of the year before such 
                        year.''.

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

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

SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS.

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

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

    For plan year 2011 and subsequent plan years, to the extent that 
the Secretary of Health and Human Services is applying the 2008 service 
area extension waiver policy (as modified in the April 11, 2008, 
Centers for Medicare & Medicaid Services' memorandum with the subject 
``2009 Employer Group Waiver-Modification of the 2008 Service Area 
Extension Waiver Granted to Certain MA Local Coordinated Care Plans'') 
to Medicare Advantage coordinated care plans, the Secretary shall 
extend the application of such waiver policy to employers who contract 
directly with the Secretary as a Medicare Advantage private fee-for-
service plan under section 1857(i)(2) of the Social Security Act (42 
U.S.C. 1395w-27(i)(2)) and that had enrollment as of October 1, 2009.

SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION PERMANENT.

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

SEC. 3209. AUTHORITY TO DENY PLAN BIDS.

    (a) In General.--Section 1854(a)(5) of the Social Security Act (42 
U.S.C. 1395w-24(a)(5)) is amended by adding at the end the following 
new subparagraph:
                    ``(C) Rejection of bids.--
                            ``(i) In general.--Nothing in this section 
                        shall be construed as requiring the Secretary 
                        to accept any or every bid submitted by an MA 
                        organization under this subsection.
                            ``(ii) Authority to deny bids that propose 
                        significant increases in cost sharing or 
                        decreases in benefits.--The Secretary may deny 
                        a bid submitted by an MA organization for an MA 
                        plan if it proposes significant increases in 
                        cost sharing or decreases in benefits offered 
                        under the plan.''.
    (b) Application Under Part D.--Section 1860D-11(d) of such Act (42 
U.S.C. 1395w-111(d)) is amended by adding at the end the following new 
paragraph:
            ``(3) Rejection of bids.--Paragraph (5)(C) of section 
        1854(a) shall apply with respect to bids submitted by a PDP 
        sponsor under subsection (b) in the same manner as such 
        paragraph applies to bids submitted by an MA organization under 
        such section 1854(a).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bids submitted for contract years beginning on or after 
January 1, 2011.

SEC. 3210. DEVELOPMENT OF NEW STANDARDS FOR CERTAIN MEDIGAP PLANS.

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

 Subtitle D--Medicare Part D Improvements for Prescription Drug Plans 
                            and MA-PD Plans

SEC. 3301. MEDICARE COVERAGE GAP DISCOUNT PROGRAM.

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

           ``condition for coverage of drugs under this part

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

                ``medicare coverage gap discount program

    ``Sec. 1860D-14A.  (a) Establishment.--The Secretary shall 
establish a Medicare coverage gap discount program (in this section 
referred to as the `program') by not later than July 1, 2010. Under the 
program, the Secretary shall enter into agreements described in 
subsection (b) with manufacturers and provide for the performance of 
the duties described in subsection (c)(1). The Secretary shall 
establish a model agreement for use under the program by not later than 
April 1, 2010, in consultation with manufacturers, and allow for 
comment on such model agreement.
    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide applicable 
                beneficiaries access to discounted prices for 
                applicable drugs of the manufacturer.
                    ``(B) Provision of discounted prices at the point-
                of-sale.--Except as provided in subsection 
                (c)(1)(A)(iii), such discounted prices shall be 
                provided to the applicable beneficiary at the pharmacy 
                or by the mail order service at the point-of-sale of an 
                applicable drug.
                    ``(C) Timing of agreement.--
                            ``(i) Special rule for 2010 and 2011.--In 
                        order for an agreement with a manufacturer to 
                        be in effect under this section with respect to 
                        the period beginning on July 1, 2010, and 
                        ending on December 31, 2011, the manufacturer 
                        shall enter into such agreement not later than 
                        May 1, 2010.
                            ``(ii) 2012 and subsequent years.--In order 
                        for an agreement with a manufacturer to be in 
                        effect under this section with respect to plan 
                        year 2012 or a subsequent plan year, the 
                        manufacturer shall enter into such agreement 
                        (or such agreement shall be renewed under 
                        paragraph (4)(A)) not later than January 30 of 
                        the preceding year.
            ``(2) Provision of appropriate data.--Each manufacturer 
        with an agreement in effect under this section shall collect 
        and have available appropriate data, as determined by the 
        Secretary, to ensure that it can demonstrate to the Secretary 
        compliance with the requirements under the program.
            ``(3) Compliance with requirements for administration of 
        program.--Each manufacturer with an agreement in effect under 
        this section shall comply with requirements imposed by the 
        Secretary or a third party with a contract under subsection 
        (d)(3), as applicable, for purposes of administering the 
        program, including any determination under clause (i) of 
        subsection (c)(1)(A) or procedures established under such 
        subsection (c)(1)(A).
            ``(4) Length of agreement.--
                    ``(A) In general.--An agreement under this section 
                shall be effective for an initial period of not less 
                than 18 months and shall be automatically renewed for a 
                period of not less than 1 year unless terminated under 
                subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By the secretary.--The Secretary may 
                        provide for termination of an agreement under 
                        this section for a knowing and willful 
                        violation of the requirements of the agreement 
                        or other good cause shown. Such termination 
                        shall not be effective earlier than 30 days 
                        after the date of notice to the manufacturer of 
                        such termination. The Secretary shall provide, 
                        upon request, a manufacturer with a hearing 
                        concerning such a termination, and such hearing 
                        shall take place prior to the effective date of 
                        the termination with sufficient time for such 
                        effective date to be repealed if the Secretary 
                        determines appropriate.
                            ``(ii) By a manufacturer.--A manufacturer 
                        may terminate an agreement under this section 
                        for any reason. Any such termination shall be 
                        effective, with respect to a plan year--
                                    ``(I) if the termination occurs 
                                before January 30 of a plan year, as of 
                                the day after the end of the plan year; 
                                and
                                    ``(II) if the termination occurs on 
                                or after January 30 of a plan year, as 
                                of the day after the end of the 
                                succeeding plan year.
                            ``(iii) Effectiveness of termination.--Any 
                        termination under this subparagraph shall not 
                        affect discounts for applicable drugs of the 
                        manufacturer that are due under the agreement 
                        before the effective date of its termination.
                            ``(iv) Notice to third party.--The 
                        Secretary shall provide notice of such 
                        termination to a third party with a contract 
                        under subsection (d)(3) within not less than 30 
                        days before the effective date of such 
                        termination.
    ``(c) Duties Described and Special Rule for Supplemental 
Benefits.--
            ``(1) Duties described.--The duties described in this 
        subsection are the following:
                    ``(A) Administration of program.--Administering the 
                program, including--
                            ``(i) the determination of the amount of 
                        the discounted price of an applicable drug of a 
                        manufacturer;
                            ``(ii) except as provided in clause (iii), 
                        the establishment of procedures under which 
                        discounted prices are provided to applicable 
                        beneficiaries at pharmacies or by mail order 
                        service at the point-of-sale of an applicable 
                        drug;
                            ``(iii) in the case where, during the 
                        period beginning on July 1, 2010, and ending on 
                        December 31, 2011, it is not practicable to 
                        provide such discounted prices at the point-of-
                        sale (as described in clause (ii)), the 
                        establishment of procedures to provide such 
                        discounted prices as soon as practicable after 
                        the point-of-sale;
                            ``(iv) the establishment of procedures to 
                        ensure that, not later than the applicable 
                        number of calendar days after the dispensing of 
                        an applicable drug by a pharmacy or mail order 
                        service, the pharmacy or mail order service is 
                        reimbursed for an amount equal to the 
                        difference between--
                                    ``(I) the negotiated price of the 
                                applicable drug; and
                                    ``(II) the discounted price of the 
                                applicable drug;
                            ``(v) the establishment of procedures to 
                        ensure that the discounted price for an 
                        applicable drug under this section is applied 
                        before any coverage or financial assistance 
                        under other health benefit plans or programs 
                        that provide coverage or financial assistance 
                        for the purchase or provision of prescription 
                        drug coverage on behalf of applicable 
                        beneficiaries as the Secretary may specify;
                            ``(vi) the establishment of procedures to 
                        implement the special rule for supplemental 
                        benefits under paragraph (2); and
                            ``(vii) providing a reasonable dispute 
                        resolution mechanism to resolve disagreements 
                        between manufacturers, applicable 
                        beneficiaries, and the third party with a 
                        contract under subsection (d)(3).
                    ``(B) Monitoring compliance.--
                            ``(i) In general.--The Secretary shall 
                        monitor compliance by a manufacturer with the 
                        terms of an agreement under this section.
                            ``(ii) Notification.--If a third party with 
                        a contract under subsection (d)(3) determines 
                        that the manufacturer is not in compliance with 
                        such agreement, the third party shall notify 
                        the Secretary of such noncompliance for 
                        appropriate enforcement under subsection (e).
                    ``(C) Collection of data from prescription drug 
                plans and ma-pd plans.--The Secretary may collect 
                appropriate data from prescription drug plans and MA-PD 
                plans in a timeframe that allows for discounted prices 
                to be provided for applicable drugs under this section.
            ``(2) Special rule for supplemental benefits.--For plan 
        year 2010 and each subsequent plan year, in the case where an 
        applicable beneficiary has supplemental benefits with respect 
        to applicable drugs under the prescription drug plan or MA-PD 
        plan that the applicable beneficiary is enrolled in, the 
        applicable beneficiary shall not be provided a discounted price 
        for an applicable drug under this section until after such 
        supplemental benefits have been applied with respect to the 
        applicable drug.
    ``(d) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall provide for the implementation of this section, including 
        the performance of the duties described in subsection (c)(1).
            ``(2) Limitation.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                providing for such implementation, the Secretary shall 
                not receive or distribute any funds of a manufacturer 
                under the program.
                    ``(B) Exception.--The limitation under subparagraph 
                (A) shall not apply to the Secretary with respect to 
                drugs dispensed during the period beginning on July 1, 
                2010, and ending on December 31, 2010, but only if the 
                Secretary determines that the exception to such 
                limitation under this subparagraph is necessary in 
                order for the Secretary to begin implementation of this 
                section and provide applicable beneficiaries timely 
                access to discounted prices during such period.
            ``(3) Contract with third parties.--The Secretary shall 
        enter into a contract with 1 or more third parties to 
        administer the requirements established by the Secretary in 
        order to carry out this section. At a minimum, the contract 
        with a third party under the preceding sentence shall require 
        that the third party--
                    ``(A) receive and transmit information between the 
                Secretary, manufacturers, and other individuals or 
                entities the Secretary determines appropriate;
                    ``(B) receive, distribute, or facilitate the 
                distribution of funds of manufacturers to appropriate 
                individuals or entities in order to meet the 
                obligations of manufacturers under agreements under 
                this section;
                    ``(C) provide adequate and timely information to 
                manufacturers, consistent with the agreement with the 
                manufacturer under this section, as necessary for the 
                manufacturer to fulfill its obligations under this 
                section; and
                    ``(D) permit manufacturers to conduct periodic 
                audits, directly or through contracts, of the data and 
                information used by the third party to determine 
                discounts for applicable drugs of the manufacturer 
                under the program.
            ``(4) Performance requirements.--The Secretary shall 
        establish performance requirements for a third party with a 
        contract under paragraph (3) and safeguards to protect the 
        independence and integrity of the activities carried out by the 
        third party under the program under this section.
            ``(5) Implementation.--The Secretary may implement the 
        program under this section by program instruction or otherwise.
            ``(6) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the program under this section.
    ``(e) Enforcement.--
            ``(1) Audits.--Each manufacturer with an agreement in 
        effect under this section shall be subject to periodic audit by 
        the Secretary.
            ``(2) Civil money penalty.--
                    ``(A) In general.--The Secretary shall impose a 
                civil money penalty on a manufacturer that fails to 
                provide applicable beneficiaries discounts for 
                applicable drugs of the manufacturer in accordance with 
                such agreement for each such failure in an amount the 
                Secretary determines is commensurate with the sum of--
                            ``(i) the amount that the manufacturer 
                        would have paid with respect to such discounts 
                        under the agreement, which will then be used to 
                        pay the discounts which the manufacturer had 
                        failed to provide; and
                            ``(ii) 25 percent of such amount.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).
    ``(f) Clarification Regarding Availability of Other Covered Part D 
Drugs.--Nothing in this section shall prevent an applicable beneficiary 
from purchasing a covered part D drug that is not an applicable drug 
(including a generic drug or a drug that is not on the formulary of the 
prescription drug plan or MA-PD plan that the applicable beneficiary is 
enrolled in).
    ``(g) Definitions.--In this section:
            ``(1) Applicable beneficiary.--The term `applicable 
        beneficiary' means an individual who, on the date of dispensing 
        an applicable drug--
                    ``(A) is enrolled in a prescription drug plan or an 
                MA-PD plan;
                    ``(B) is not enrolled in a qualified retiree 
                prescription drug plan;
                    ``(C) is not entitled to an income-related subsidy 
                under section 1860D-14(a);
                    ``(D) is not subject to a reduction in premium 
                subsidy under section 1839(i); and
                    ``(E) who--
                            ``(i) has reached or exceeded the initial 
                        coverage limit under section 1860D-2(b)(3) 
                        during the year; and
                            ``(ii) has not incurred costs for covered 
                        part D drugs in the year equal to the annual 
                        out-of-pocket threshold specified in section 
                        1860D-2(b)(4)(B).
            ``(2) Applicable drug.--The term `applicable drug' means, 
        with respect to an applicable beneficiary, a covered part D 
        drug--
                    ``(A) approved under a new drug application under 
                section 505(b) of the Federal Food, Drug, and Cosmetic 
                Act or, in the case of a biologic product, licensed 
                under section 351 of the Public Health Service Act 
                (other than a product licensed under subsection (k) of 
                such section 351); and
                    ``(B)(i) if the PDP sponsor of the prescription 
                drug plan or the MA organization offering the MA-PD 
                plan uses a formulary, which is on the formulary of the 
                prescription drug plan or MA-PD plan that the 
                applicable beneficiary is enrolled in;
                    ``(ii) if the PDP sponsor of the prescription drug 
                plan or the MA organization offering the MA-PD plan 
                does not use a formulary, for which benefits are 
                available under the prescription drug plan or MA-PD 
                plan that the applicable beneficiary is enrolled in; or
                    ``(iii) is provided through an exception or appeal.
            ``(3) Applicable number of calendar days.--The term 
        `applicable number of calendar days' means--
                    ``(A) with respect to claims for reimbursement 
                submitted electronically, 14 days; and
                    ``(B) with respect to claims for reimbursement 
                submitted otherwise, 30 days.
            ``(4) Discounted price.--
                    ``(A) In general.--The term `discounted price' 
                means 50 percent of the negotiated price of the 
                applicable drug of a manufacturer.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting the responsibility of an 
                applicable beneficiary for payment of a dispensing fee 
                for an applicable drug.
                    ``(C) Special case for certain claims.--In the case 
                where the entire amount of the negotiated price of an 
                individual claim for an applicable drug with respect to 
                an applicable beneficiary does not fall at or above the 
                initial coverage limit under section 1860D-2(b)(3) and 
                below the annual out-of-pocket threshold specified in 
                section 1860D-2(b)(4)(B) for the year, the manufacturer 
                of the applicable drug shall provide the discounted 
                price under this section on only the portion of the 
                negotiated price of the applicable drug that falls at 
                or above such initial coverage limit and below such 
                annual out-of-pocket threshold.
            ``(5) Manufacturer.--The term `manufacturer' means any 
        entity which is engaged in the production, preparation, 
        propagation, compounding, conversion, or processing of 
        prescription drug products, either directly or indirectly by 
        extraction from substances of natural origin, or independently 
        by means of chemical synthesis, or by a combination of 
        extraction and chemical synthesis. Such term does not include a 
        wholesale distributor of drugs or a retail pharmacy licensed 
        under State law.
            ``(6) Negotiated price.--The term `negotiated price' has 
        the meaning given such term in section 423.100 of title 42, 
        Code of Federal Regulations (as in effect on the date of 
        enactment of this section), except that such negotiated price 
        shall not include any dispensing fee for the applicable drug.
            ``(7) Qualified retiree prescription drug plan.--The term 
        `qualified retiree prescription drug plan' has the meaning 
        given such term in section 1860D-22(a)(2).''.
    (c) Inclusion in Incurred Costs.--
            (1) In general.--Section 1860D-2(b)(4) of the Social 
        Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
                    (A) in subparagraph (C), in the matter preceding 
                clause (i), by striking ``In applying'' and inserting 
                ``Except as provided in subparagraph (E), in 
                applying''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(E) Inclusion of costs of applicable drugs under 
                medicare coverage gap discount program.--In applying 
                subparagraph (A), incurred costs shall include the 
                negotiated price (as defined in paragraph (6) of 
                section 1860D-14A(g)) of an applicable drug (as defined 
                in paragraph (2) of such section) of a manufacturer 
                that is furnished to an applicable beneficiary (as 
                defined in paragraph (1) of such section) under the 
                Medicare coverage gap discount program under section 
                1860D-14A, regardless of whether part of such costs 
                were paid by a manufacturer under such program.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to costs incurred on or after July 1, 2010.
    (d) Conforming Amendment Permitting Prescription Drug Discounts.--
            (1) In general.--Section 1128B(b)(3) of the Social Security 
        Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (G);
                    (B) in the subparagraph (H) added by section 237(d) 
                of the Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003 (Public Law 108-173; 117 
                Stat. 2213)--
                            (i) by moving such subparagraph 2 ems to 
                        the left; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon;
                    (C) in the subparagraph (H) added by section 431(a) 
                of such Act (117 Stat. 2287)--
                            (i) by redesignating such subparagraph as 
                        subparagraph (I);
                            (ii) by moving such subparagraph 2 ems to 
                        the left; and
                            (iii) by striking the period at the end and 
                        inserting ``; and''; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(J) a discount in the price of an applicable drug 
                (as defined in paragraph (2) of section 1860D-14A(g)) 
                of a manufacturer that is furnished to an applicable 
                beneficiary (as defined in paragraph (1) of such 
                section) under the Medicare coverage gap discount 
                program under section 1860D-14A.''.
            (2) Conforming amendment to definition of best price under 
        medicaid.--Section 1927(c)(1)(C)(i)(VI) of the Social Security 
        Act (42 U.S.C. 1396r-8(c)(1)(C)(i)(VI)) is amended by inserting 
        ``, or any discounts provided by manufacturers under the 
        Medicare coverage gap discount program under section 1860D-
        14A'' before the period at the end.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to drugs dispensed on or after July 1, 2010.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 3309. ELIMINATION OF COST SHARING FOR CERTAIN DUAL ELIGIBLE 
              INDIVIDUALS.

    Section 1860D-14(a)(1)(D)(i) of the Social Security Act (42 U.S.C. 
1395w-114(a)(1)(D)(i)) is amended by inserting ``or, effective on a 
date specified by the Secretary (but in no case earlier than January 1, 
2012), who would be such an institutionalized individual or couple, if 
the full-benefit dual eligible individual were not receiving services 
under a home and community-based waiver authorized for a State under 
section 1115 or subsection (c) or (d) of section 1915 or under a State 
plan amendment under subsection (i) of such section or services 
provided through enrollment in a medicaid managed care organization 
with a contract under section 1903(m) or under section 1932'' after 
``1902(q)(1)(B))''.

SEC. 3310. REDUCING WASTEFUL DISPENSING OF OUTPATIENT PRESCRIPTION 
              DRUGS IN LONG-TERM CARE FACILITIES UNDER PRESCRIPTION 
              DRUG PLANS AND MA-PD PLANS.

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

SEC. 3311. IMPROVED MEDICARE PRESCRIPTION DRUG PLAN AND MA-PD PLAN 
              COMPLAINT SYSTEM.

    (a) In General.--The Secretary shall develop and maintain a 
complaint system, that is widely known and easy to use, to collect and 
maintain information on MA-PD plan and prescription drug plan 
complaints that are received (including by telephone, letter, e-mail, 
or any other means) by the Secretary (including by a regional office of 
the Department of Health and Human Services, the Medicare Beneficiary 
Ombudsman, a subcontractor, a carrier, a fiscal intermediary, and a 
Medicare administrative contractor under section 1874A of the Social 
Security Act (42 U.S.C. 1395kk)) through the date on which the 
complaint is resolved. The system shall be able to report and initiate 
appropriate interventions and monitoring based on substantial 
complaints and to guide quality improvement.
    (b) Model Electronic Complaint Form.--The Secretary shall develop a 
model electronic complaint form to be used for reporting plan 
complaints under the system. Such form shall be prominently displayed 
on the front page of the Medicare.gov Internet website and on the 
Internet website of the Medicare Beneficiary Ombudsman.
    (c) Annual Reports by the Secretary.--The Secretary shall submit to 
Congress annual reports on the system. Such reports shall include an 
analysis of the number and types of complaints reported in the system, 
geographic variations in such complaints, the timeliness of agency or 
plan responses to such complaints, and the resolution of such 
complaints.
    (d) Definitions.--In this section:
            (1) MA-PD plan.--The term ``MA-PD plan'' has the meaning 
        given such term in section 1860D-41(a)(9) of such Act (42 
        U.S.C. 1395w-151(a)(9)).
            (2) Prescription drug plan.--The term ``prescription drug 
        plan'' has the meaning given such term in section 1860D-
        41(a)(14) of such Act (42 U.S.C. 1395w-151(a)(14)).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) System.--The term ``system'' means the plan complaint 
        system developed and maintained under subsection (a).

SEC. 3312. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR PRESCRIPTION DRUG 
              PLANS AND MA-PD PLANS.

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

SEC. 3313. OFFICE OF THE INSPECTOR GENERAL STUDIES AND REPORTS.

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

SEC. 3314. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE PROGRAMS 
              AND INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS 
              TOWARD THE ANNUAL OUT-OF-POCKET THRESHOLD UNDER PART D.

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

SEC. 3315. IMMEDIATE REDUCTION IN COVERAGE GAP IN 2010.

    Section 1860D-2(b) of the Social Security Act (42 U.S.C. 1395w-
102(b)) is amended--
            (1) in paragraph (3)(A), by striking ``paragraph (4)'' and 
        inserting ``paragraphs (4) and (7)''; and
            (2) by adding at the end the following new paragraph:
            ``(7) Increase in initial coverage limit in 2010.--
                    ``(A) In general.--For the plan year beginning on 
                January 1, 2010, the initial coverage limit described 
                in paragraph (3)(B) otherwise applicable shall be 
                increased by $500.
                    ``(B) Application.--In applying subparagraph (A)--
                            ``(i) except as otherwise provided in this 
                        subparagraph, there shall be no change in the 
                        premiums, bids, or any other parameters under 
                        this part or part C;
                            ``(ii) costs that would be treated as 
                        incurred costs for purposes of applying 
                        paragraph (4) but for the application of 
                        subparagraph (A) shall continue to be treated 
                        as incurred costs;
                            ``(iii) the Secretary shall establish 
                        procedures, which may include a reconciliation 
                        process, to fully reimburse PDP sponsors with 
                        respect to prescription drug plans and MA 
                        organizations with respect to MA-PD plans for 
                        the reduction in beneficiary cost sharing 
                        associated with the application of subparagraph 
                        (A);
                            ``(iv) the Secretary shall develop an 
                        estimate of the additional increased costs 
                        attributable to the application of this 
                        paragraph for increased drug utilization and 
                        financing and administrative costs and shall 
                        use such estimate to adjust payments to PDP 
                        sponsors with respect to prescription drug 
                        plans under this part and MA organizations with 
                        respect to MA-PD plans under part C; and
                            ``(v) the Secretary shall establish 
                        procedures for retroactive reimbursement of 
                        part D eligible individuals who are covered 
                        under such a plan for costs which are incurred 
                        before the date of initial implementation of 
                        subparagraph (A) and which would be reimbursed 
                        under such a plan if such implementation 
                        occurred as of January 1, 2010.
                    ``(C) No effect on subsequent years.--The increase 
                under subparagraph (A) shall only apply with respect to 
                the plan year beginning on January 1, 2010, and the 
                initial coverage limit for plan years beginning on or 
                after January 1, 2011, shall be determined as if 
                subparagraph (A) had never applied.''.

              Subtitle E--Ensuring Medicare Sustainability

SEC. 3401. REVISION OF CERTAIN MARKET BASKET UPDATES AND INCORPORATION 
              OF PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATES 
              THAT DO NOT ALREADY INCORPORATE SUCH IMPROVEMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 
3001(a)(3), is further amended--
            (1) in clause (i)(XX), by striking ``clause (viii)'' and 
        inserting ``clauses (viii), (ix), (xi), and (xii)'';
            (2) in the first sentence of clause (viii), by inserting 
        ``of such applicable percentage increase (determined without 
        regard to clause (ix), (xi), or (xii))'' after ``one-quarter'';
            (3) in the first sentence of clause (ix)(I), by inserting 
        ``(determined without regard to clause (viii), (xi), or 
        (xii))'' after ``clause (i)'' the second time it appears; and
            (4) by adding at the end the following new clauses:
    ``(xi)(I) For 2012 and each subsequent fiscal year, after 
determining the applicable percentage increase described in clause (i) 
and after application of clauses (viii) and (ix), such percentage 
increase shall be reduced by the productivity adjustment described in 
subclause (II).
    ``(II) The productivity adjustment described in this subclause, 
with respect to a percentage, factor, or update for a fiscal year, 
year, cost reporting period, or other annual period, is a productivity 
adjustment equal to the 10-year moving average of changes in annual 
economy-wide private nonfarm business multi-factor productivity (as 
projected by the Secretary for the 10-year period ending with the 
applicable fiscal year, year, cost reporting period, or other annual 
period).
    ``(III) The application of subclause (I) may result in the 
applicable percentage increase described in clause (i) being less than 
0.0 for a fiscal year, and may result in payment rates under this 
section for a fiscal year being less than such payment rates for the 
preceding fiscal year.
    ``(xii) After determining the applicable percentage increase 
described in clause (i), and after application of clauses (viii), (ix), 
and (xi), the Secretary shall reduce such applicable percentage 
increase--
            ``(I) for each of fiscal years 2010 and 2011, by 0.25 
        percentage point; and
            ``(II) subject to clause (xiii), for each of fiscal years 
        2012 through 2019, by 0.2 percentage point.
The application of this clause may result in the applicable percentage 
increase described in clause (i) being less than 0.0 for a fiscal year, 
and may result in payment rates under this section for a fiscal year 
being less than such payment rates for the preceding fiscal year.
    ``(xiii) Clause (xii) shall be applied with respect to any of 
fiscal years 2014 through 2019 by substituting `0.0 percentage points' 
for `0.2 percentage point', if for such fiscal year--
            ``(I) the excess (if any) of--
                    ``(aa) the total percentage of the non-elderly 
                insured population for the preceding fiscal year (based 
                on the most recent estimates available from the 
                Director of the Congressional Budget Office before a 
                vote in either House on the Patient Protection and 
                Affordable Care Act that, if determined in the 
                affirmative, would clear such Act for enrollment); over
                    ``(bb) the total percentage of the non-elderly 
                insured population for such preceding fiscal year (as 
                estimated by the Secretary); exceeds
            ``(II) 5 percentage points.''.
    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of the 
Social Security Act (42 U.S.C. 1395yy(e)(5)(B)) is amended--
            (1) by striking ``percentage.--The term'' and inserting 
        ``percentage.--
                            ``(i) In general.--Subject to clause (ii), 
                        the term''; and
            (2) by adding at the end the following new clause:
                            ``(ii) Adjustment.--For fiscal year 2012 
                        and each subsequent fiscal year, after 
                        determining the percentage described in clause 
                        (i), the Secretary shall reduce such percentage 
                        by the productivity adjustment described in 
                        section 1886(b)(3)(B)(xi)(II). The application 
                        of the preceding sentence may result in such 
                        percentage being less than 0.0 for a fiscal 
                        year, and may result in payment rates under 
                        this subsection for a fiscal year being less 
                        than such payment rates for the preceding 
                        fiscal year.''.
    (c) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the 
following new paragraphs:
            ``(3) Implementation for rate year 2010 and subsequent 
        years.--
                    ``(A) In general.--In implementing the system 
                described in paragraph (1) for rate year 2010 and each 
                subsequent rate year, any annual update to a standard 
                Federal rate for discharges for the hospital during the 
                rate year, shall be reduced--
                            ``(i) for rate year 2012 and each 
                        subsequent rate year, by the productivity 
                        adjustment described in section 
                        1886(b)(3)(B)(xi)(II); and
                            ``(ii) for each of rate years 2010 through 
                        2019, by the other adjustment described in 
                        paragraph (4).
                    ``(B) Special rule.--The application of this 
                paragraph may result in such annual update being less 
                than 0.0 for a rate year, and may result in payment 
                rates under the system described in paragraph (1) for a 
                rate year being less than such payment rates for the 
                preceding rate year.
            ``(4) Other adjustment.--
                    ``(A) In general.--For purposes of paragraph 
                (3)(A)(ii), the other adjustment described in this 
                paragraph is--
                            ``(i) for each of rate years 2010 and 2011, 
                        0.25 percentage point; and
                            ``(ii) subject to subparagraph (B), for 
                        each of rate years 2012 through 2019, 0.2 
                        percentage point.
                    ``(B) Reduction of other adjustment.--Subparagraph 
                (A)(ii) shall be applied with respect to any of rate 
                years 2014 through 2019 by substituting `0.0 percentage 
                points' for `0.2 percentage point', if for such rate 
                year--
                            ``(i) the excess (if any) of--
                                    ``(I) the total percentage of the 
                                non-elderly insured population for the 
                                preceding rate year (based on the most 
                                recent estimates available from the 
                                Director of the Congressional Budget 
                                Office before a vote in either House on 
                                the Patient Protection and Affordable 
                                Care Act that, if determined in the 
                                affirmative, would clear such Act for 
                                enrollment); over
                                    ``(II) the total percentage of the 
                                non-elderly insured population for such 
                                preceding rate year (as estimated by 
                                the Secretary); exceeds
                            ``(ii) 5 percentage points.''.
    (d) Inpatient Rehabilitation Facilities.--Section 1886(j)(3) of the 
Social Security Act (42 U.S.C. 1395ww(j)(3)) is amended--
            (1) in subparagraph (C)--
                    (A) by striking ``factor.--For purposes'' and 
                inserting ``factor.--
                            ``(i) In general.--For purposes'';
                    (B) by inserting ``subject to clause (ii)'' before 
                the period at the end of the first sentence of clause 
                (i), as added by paragraph (1); and
                    (C) by adding at the end the following new clause:
                            ``(ii) Productivity and other adjustment.--
                        After establishing the increase factor 
                        described in clause (i) for a fiscal year, the 
                        Secretary shall reduce such increase factor--
                                    ``(I) for fiscal year 2012 and each 
                                subsequent fiscal year, by the 
                                productivity adjustment described in 
                                section 1886(b)(3)(B)(xi)(II); and
                                    ``(II) for each of fiscal years 
                                2010 through 2019, by the other 
                                adjustment described in subparagraph 
                                (D).
                        The application of this clause may result in 
                        the increase factor under this subparagraph 
                        being less than 0.0 for a fiscal year, and may 
                        result in payment rates under this subsection 
                        for a fiscal year being less than such payment 
                        rates for the preceding fiscal year.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Other adjustment.--
                            ``(i) In general.--For purposes of 
                        subparagraph (C)(ii)(II), the other adjustment 
                        described in this subparagraph is--
                                    ``(I) for each of fiscal years 2010 
                                and 2011, 0.25 percentage point; and
                                    ``(II) subject to clause (ii), for 
                                each of fiscal years 2012 through 2019, 
                                0.2 percentage point.
                            ``(ii) Reduction of other adjustment.--
                        Clause (i)(II) shall be applied with respect to 
                        any of fiscal years 2014 through 2019 by 
                        substituting `0.0 percentage points' for `0.2 
                        percentage point', if for such fiscal year--
                                    ``(I) the excess (if any) of--
                                            ``(aa) the total percentage 
                                        of the non-elderly insured 
                                        population for the preceding 
                                        fiscal year (based on the most 
                                        recent estimates available from 
                                        the Director of the 
                                        Congressional Budget Office 
                                        before a vote in either House 
                                        on the Patient Protection and 
                                        Affordable Care Act that, if 
                                        determined in the affirmative, 
                                        would clear such Act for 
                                        enrollment); over
                                            ``(bb) the total percentage 
                                        of the non-elderly insured 
                                        population for such preceding 
                                        fiscal year (as estimated by 
                                        the Secretary); exceeds
                                    ``(II) 5 percentage points.''.
    (e) Home Health Agencies.--Section 1895(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended--
            (1) in clause (ii)(V), by striking ``clause (v)'' and 
        inserting ``clauses (v) and (vi)''; and
            (2) by adding at the end the following new clause:
                            ``(vi) Adjustments.--After determining the 
                        home health market basket percentage increase 
                        under clause (iii), and after application of 
                        clause (v), the Secretary shall reduce such 
                        percentage--
                                    ``(I) for 2015 and each subsequent 
                                year, by the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II); and
                                    ``(II) for each of 2011 and 2012, 
                                by 1 percentage point.
                        The application of this clause may result in 
                        the home health market basket percentage 
                        increase under clause (iii) being less than 0.0 
                        for a year, and may result in payment rates 
                        under the system under this subsection for a 
                        year being less than such payment rates for the 
                        preceding year.''.
    (f) Psychiatric Hospitals.--Section 1886 of the Social Security 
Act, as amended by sections 3001, 3008, 3025, and 3133, is amended by 
adding at the end the following new subsection:
    ``(s) Prospective Payment for Psychiatric Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by 
        psychiatric hospitals (as described in clause (i) of subsection 
        (d)(1)(B)) and psychiatric units (as described in the matter 
        following clause (v) of such subsection), see section 124 of 
        the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
        Act of 1999.
            ``(2) Implementation for rate year beginning in 2010 and 
        subsequent rate years.--
                    ``(A) In general.--In implementing the system 
                described in paragraph (1) for the rate year beginning 
                in 2010 and any subsequent rate year, any update to a 
                base rate for days during the rate year for a 
                psychiatric hospital or unit, respectively, shall be 
                reduced--
                            ``(i) for the rate year beginning in 2012 
                        and each subsequent rate year, by the 
                        productivity adjustment described in section 
                        1886(b)(3)(B)(xi)(II); and
                            ``(ii) for each of the rate years beginning 
                        in 2010 through 2019, by the other adjustment 
                        described in paragraph (3).
                    ``(B) Special rule.--The application of this 
                paragraph may result in such update being less than 0.0 
                for a rate year, and may result in payment rates under 
                the system described in paragraph (1) for a rate year 
                being less than such payment rates for the preceding 
                rate year.
            ``(3) Other adjustment.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(A)(ii), the other adjustment described in this 
                paragraph is--
                            ``(i) for each of the rate years beginning 
                        in 2010 and 2011, 0.25 percentage point; and
                            ``(ii) subject to subparagraph (B), for 
                        each of the rate years beginning in 2012 
                        through 2019, 0.2 percentage point.
                    ``(B) Reduction of other adjustment.--Subparagraph 
                (A)(ii) shall be applied with respect to any of rate 
                years 2014 through 2019 by substituting `0.0 percentage 
                points' for `0.2 percentage point', if for such rate 
                year--
                            ``(i) the excess (if any) of--
                                    ``(I) the total percentage of the 
                                non-elderly insured population for the 
                                preceding rate year (based on the most 
                                recent estimates available from the 
                                Director of the Congressional Budget 
                                Office before a vote in either House on 
                                the Patient Protection and Affordable 
                                Care Act that, if determined in the 
                                affirmative, would clear such Act for 
                                enrollment); over
                                    ``(II) the total percentage of the 
                                non-elderly insured population for such 
                                preceding rate year (as estimated by 
                                the Secretary); exceeds
                            ``(ii) 5 percentage points.''.
    (g) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act 
(42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is amended by 
adding at the end the following new clauses:
    ``(iv) After determining the market basket percentage increase 
under clause (ii)(VII) or (iii), as applicable, with respect to fiscal 
year 2013 and each subsequent fiscal year, the Secretary shall reduce 
such percentage--
            ``(I) for 2013 and each subsequent fiscal year, by the 
        productivity adjustment described in section 
        1886(b)(3)(B)(xi)(II); and
            ``(II) subject to clause (v), for each of fiscal years 2013 
        through 2019, by 0.5 percentage point.
The application of this clause may result in the market basket 
percentage increase under clause (ii)(VII) or (iii), as applicable, 
being less than 0.0 for a fiscal year, and may result in payment rates 
under this subsection for a fiscal year being less than such payment 
rates for the preceding fiscal year.
    ``(v) Clause (iv)(II) shall be applied with respect to any of 
fiscal years 2014 through 2019 by substituting `0.0 percentage points' 
for `0.5 percentage point', if for such fiscal year--
            ``(I) the excess (if any) of--
                    ``(aa) the total percentage of the non-elderly 
                insured population for the preceding fiscal year (based 
                on the most recent estimates available from the 
                Director of the Congressional Budget Office before a 
                vote in either House on the Patient Protection and 
                Affordable Care Act that, if determined in the 
                affirmative, would clear such Act for enrollment); over
                    ``(bb) the total percentage of the non-elderly 
                insured population for such preceding fiscal year (as 
                estimated by the Secretary); exceeds
            ``(II) 5 percentage points.''.
    (h) Dialysis.--Section 1881(b)(14)(F) of the Social Security Act 
(42 U.S.C. 1395rr(b)(14)(F)) is amended--
            (1) in clause (i)--
                    (A) by inserting ``(I)'' after ``(F)(i)''
                    (B) in subclause (I), as inserted by subparagraph 
                (A)--
                            (i) by striking ``clause (ii)'' and 
                        inserting ``subclause (II) and clause (ii)''; 
                        and
                            (ii) by striking ``minus 1.0 percentage 
                        point''; and
                    (C) by adding at the end the following new 
                subclause:
    ``(II) For 2012 and each subsequent year, after determining the 
increase factor described in subclause (I), the Secretary shall reduce 
such increase factor by the productivity adjustment described in 
section 1886(b)(3)(B)(xi)(II). The application of the preceding 
sentence may result in such increase factor being less than 0.0 for a 
year, and may result in payment rates under the payment system under 
this paragraph for a year being less than such payment rates for the 
preceding year.''; and
            (2) in clause (ii)(II)--
                    (A) by striking ``The'' and inserting ``Subject to 
                clause (i)(II), the''; and
                    (B) by striking ``clause (i) minus 1.0 percentage 
                point'' and inserting ``clause (i)(I)''.
    (i) Outpatient Hospitals.--Section 1833(t)(3) of the Social 
Security Act (42 U.S.C. 1395l(t)(3)) is amended--
            (1) in subparagraph (C)(iv), by inserting ``and 
        subparagraph (F) of this paragraph'' after ``(17)''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(F) Productivity and other adjustment.--After 
                determining the OPD fee schedule increase factor under 
                subparagraph (C)(iv), the Secretary shall reduce such 
                increase factor--
                            ``(i) for 2012 and subsequent years, by the 
                        productivity adjustment described in section 
                        1886(b)(3)(B)(xi)(II); and
                            ``(ii) for each of 2010 through 2019, by 
                        the adjustment described in subparagraph (G).
                The application of this subparagraph may result in the 
                increase factor under subparagraph (C)(iv) being less 
                than 0.0 for a year, and may result in payment rates 
                under the payment system under this subsection for a 
                year being less than such payment rates for the 
                preceding year.
                    ``(G) Other adjustment.--
                            ``(i) Adjustment.--For purposes of 
                        subparagraph (F)(ii), the adjustment described 
                        in this subparagraph is--
                                    ``(I) for each of 2010 and 2011, 
                                0.25 percentage point; and
                                    ``(II) subject to clause (ii), for 
                                each of 2012 through 2019, 0.2 
                                percentage point.
                            ``(ii) Reduction of other adjustment.--
                        Clause (i)(II) shall be applied with respect to 
                        any of 2014 through 2019 by substituting `0.0 
                        percentage points' for `0.2 percentage point', 
                        if for such year--
                                    ``(I) the excess (if any) of--
                                            ``(aa) the total percentage 
                                        of the non-elderly insured 
                                        population for the preceding 
                                        year (based on the most recent 
                                        estimates available from the 
                                        Director of the Congressional 
                                        Budget Office before a vote in 
                                        either House on the Patient 
                                        Protection and Affordable Care 
                                        Act that, if determined in the 
                                        affirmative, would clear such 
                                        Act for enrollment); over
                                            ``(bb) the total percentage 
                                        of the non-elderly insured 
                                        population for such preceding 
                                        year (as estimated by the 
                                        Secretary); exceeds
                                    ``(II) 5 percentage points.''.
    (j) Ambulance Services.--Section 1834(l)(3) of the Social Security 
Act (42 U.S.C. 1395m(l)(3)) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B)--
                    (A) by inserting ``, subject to subparagraph (C) 
                and the succeeding sentence of this paragraph,'' after 
                ``increased''; and
                    (B) by striking the period at the end and inserting 
                ``; and'';
            (3) by adding at the end the following new subparagraph:
                    ``(C) for 2011 and each subsequent year, after 
                determining the percentage increase under subparagraph 
                (B) for the year, reduce such percentage increase by 
                the productivity adjustment described in section 
                1886(b)(3)(B)(xi)(II).''; and
            (4) by adding at the end the following flush sentence:
        ``The application of subparagraph (C) may result in the 
        percentage increase under subparagraph (B) being less than 0.0 
        for a year, and may result in payment rates under the fee 
        schedule under this subsection for a year being less than such 
        payment rates for the preceding year.''.
    (k) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of 
the Social Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
            (1) by redesignating clause (v) as clause (vi); and
            (2) by inserting after clause (iv) the following new 
        clause:
                            ``(v) In implementing the system described 
                        in clause (i) for 2011 and each subsequent 
                        year, any annual update under such system for 
                        the year, after application of clause (iv), 
                        shall be reduced by the productivity adjustment 
                        described in section 1886(b)(3)(B)(xi)(II). The 
                        application of the preceding sentence may 
                        result in such update being less than 0.0 for a 
                        year, and may result in payment rates under the 
                        system described in clause (i) for a year being 
                        less than such payment rates for the preceding 
                        year.''.
    (l) Laboratory Services.--Section 1833(h)(2)(A) of the Social 
Security Act (42 U.S.C. 1395l(h)(2)(A)) is amended--
            (1) in clause (i)--
                    (A) by inserting ``, subject to clause (iv),'' 
                after ``year) by''; and
                    (B) by striking ``through 2013'' and inserting 
                ``and 2010''; and
            (2) by adding at the end the following new clause:
                            ``(iv) After determining the adjustment to 
                        the fee schedules under clause (i), the 
                        Secretary shall reduce such adjustment--
                                    ``(I) for 2011 and each subsequent 
                                year, by the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II); and
                                    ``(II) for each of 2011 through 
                                2015, by 1.75 percentage points.
                        Subclause (I) shall not apply in a year where 
                        the adjustment to the fee schedules determined 
                        under clause (i) is 0.0 or a percentage 
                        decrease for a year. The application of the 
                        productivity adjustment under subclause (I) 
                        shall not result in an adjustment to the fee 
                        schedules under clause (i) being less than 0.0 
                        for a year. The application of subclause (II) 
                        may result in an adjustment to the fee 
                        schedules under clause (i) being less than 0.0 
                        for a year, and may result in payment rates for 
                        a year being less than such payment rates for 
                        the preceding year.''.
    (m) Certain Durable Medical Equipment.--Section 1834(a)(14) of the 
Social Security Act (42 U.S.C. 1395m(a)(14)) is amended--
            (1) in subparagraph (K)--
                    (A) by striking ``2011, 2012, and 2013,''; and
                    (B) by inserting ``and'' after the semicolon at the 
                end;
            (2) by striking subparagraphs (L) and (M) and inserting the 
        following new subparagraph:
                    ``(L) for 2011 and each subsequent year--
                            ``(i) the percentage increase in the 
                        consumer price index for all urban consumers 
                        (United States city average) for the 12-month 
                        period ending with June of the previous year, 
                        reduced by--
                            ``(ii) the productivity adjustment 
                        described in section 1886(b)(3)(B)(xi)(II).''; 
                        and
            (3) by adding at the end the following flush sentence:
        ``The application of subparagraph (L)(ii) may result in the 
        covered item update under this paragraph being less than 0.0 
        for a year, and may result in payment rates under this 
        subsection for a year being less than such payment rates for 
        the preceding year.''.
    (n) Prosthetic Devices, Orthotics, and Prosthetics.--Section 
1834(h)(4) of the Social Security Act (42 U.S.C. 1395m(h)(4)) is 
amended--
            (1) in subparagraph (A)--
                    (A) in clause (ix), by striking ``and'' at the end;
                    (B) in clause (x)--
                            (i) by striking ``a subsequent year'' and 
                        inserting ``for each of 2007 through 2010''; 
                        and
                            (ii) by inserting ``and'' after the 
                        semicolon at the end;
                    (C) by adding at the end the following new clause:
                            ``(xi) for 2011 and each subsequent year--
                                    ``(I) the percentage increase in 
                                the consumer price index for all urban 
                                consumers (United States city average) 
                                for the 12-month period ending with 
                                June of the previous year, reduced by--
                                    ``(II) the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II).''; and
                    (D) by adding at the end the following flush 
                sentence:
        ``The application of subparagraph (A)(xi)(II) may result in the 
        applicable percentage increase under subparagraph (A) being 
        less than 0.0 for a year, and may result in payment rates under 
        this subsection for a year being less than such payment rates 
        for the preceding year.''.
    (o) Other Items.--Section 1842(s)(1) of the Social Security Act (42 
U.S.C. 1395u(s)(1)) is amended--
            (1) in the first sentence, by striking ``Subject to'' and 
        inserting ``(A) Subject to'';
            (2) by striking the second sentence and inserting the 
        following new subparagraph:
                    ``(B) Any fee schedule established under this 
                paragraph for such item or service shall be updated--
                            ``(i) for years before 2011--
                                    ``(I) subject to subclause (II), by 
                                the percentage increase in the consumer 
                                price index for all urban consumers 
                                (United States city average) for the 
                                12-month period ending with June of the 
                                preceding year; and
                                    ``(II) for items and services 
                                described in paragraph (2)(D) for 2009, 
                                section 1834(a)(14)(J) shall apply 
                                under this paragraph instead of the 
                                percentage increase otherwise 
                                applicable; and
                            ``(ii) for 2011 and subsequent years--
                                    ``(I) the percentage increase in 
                                the consumer price index for all urban 
                                consumers (United States city average) 
                                for the 12-month period ending with 
                                June of the previous year, reduced by--
                                    ``(II) the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II).''; and
            (3) by adding at the end the following flush sentence:
        ``The application of subparagraph (B)(ii)(II) may result in the 
        update under this paragraph being less than 0.0 for a year, and 
        may result in payment rates under any fee schedule established 
        under this paragraph for a year being less than such payment 
        rates for the preceding year.''.
    (p) No Application Prior to April 1, 2010.--Notwithstanding the 
preceding provisions of this section, the amendments made by 
subsections (a), (c), and (d) shall not apply to discharges occurring 
before April 1, 2010.

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

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

SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD.

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

                 ``independent medicare advisory board

    ``Sec. 1899A.  (a) Establishment.--There is established an 
independent board to be known as the `Independent Medicare Advisory 
Board'.
    ``(b) Purpose.--It is the purpose of this section to, in accordance 
with the following provisions of this section, reduce the per capita 
rate of growth in Medicare spending--
            ``(1) by requiring the Chief Actuary of the Centers for 
        Medicare & Medicaid Services to determine in each year to which 
        this section applies (in this section referred to as `a 
        determination year') the projected per capita growth rate under 
        Medicare for the second year following the determination year 
        (in this section referred to as `an implementation year');
            ``(2) if the projection for the implementation year exceeds 
        the target growth rate for that year, by requiring the Board to 
        develop and submit during the first year following the 
        determination year (in this section referred to as `a proposal 
        year') a proposal containing recommendations to reduce the 
        Medicare per capita growth rate to the extent required by this 
        section; and
            ``(3) by requiring the Secretary to implement such 
        proposals unless Congress enacts legislation pursuant to this 
        section.
    ``(c) Board Proposals.--
            ``(1) Development.--
                    ``(A) In general.--The Board shall develop detailed 
                and specific proposals related to the Medicare program 
                in accordance with the succeeding provisions of this 
                section.
                    ``(B) Advisory reports.--Beginning January 15, 
                2014, the Board may develop and submit to Congress 
                advisory reports on matters related to the Medicare 
                program, regardless of whether or not the Board 
                submitted a proposal for such year. Such a report may, 
                for years prior to 2020, include recommendations 
                regarding improvements to payment systems for providers 
                of services and suppliers who are not otherwise subject 
                to the scope of the Board's recommendations in a 
                proposal under this section. Any advisory report 
                submitted under this subparagraph shall not be subject 
                to the rules for congressional consideration under 
                subsection (d).
            ``(2) Proposals.--
                    ``(A) Requirements.--Each proposal submitted under 
                this section in a proposal year shall meet each of the 
                following requirements:
                            ``(i) If the Chief Actuary of the Centers 
                        for Medicare & Medicaid Services has made a 
                        determination under paragraph (7)(A) in the 
                        determination year, the proposal shall include 
                        recommendations so that the proposal as a whole 
                        (after taking into account recommendations 
                        under clause (v)) will result in a net 
                        reduction in total Medicare program spending in 
                        the implementation year that is at least equal 
                        to the applicable savings target established 
                        under paragraph (7)(B) for such implementation 
                        year. In determining whether a proposal meets 
                        the requirement of the preceding sentence, 
                        reductions in Medicare program spending during 
                        the 3-month period immediately preceding the 
                        implementation year shall be counted to the 
                        extent that such reductions are a result of the 
                        implementation of recommendations contained in 
                        the proposal for a change in the payment rate 
                        for an item or service that was effective 
                        during such period pursuant to subsection 
                        (e)(2)(A).
                            ``(ii) The proposal shall not include any 
                        recommendation to ration health care, raise 
                        revenues or Medicare beneficiary premiums under 
                        section 1818, 1818A, or 1839, increase Medicare 
                        beneficiary cost-sharing (including 
                        deductibles, coinsurance, and copayments), or 
                        otherwise restrict benefits or modify 
                        eligibility criteria.
                            ``(iii) In the case of proposals submitted 
                        prior to December 31, 2018, the proposal shall 
                        not include any recommendation that would 
                        reduce payment rates for items and services 
                        furnished, prior to December 31, 2019, by 
                        providers of services (as defined in section 
                        1861(u)) and suppliers (as defined in section 
                        1861(d)) scheduled, pursuant to the amendments 
                        made by section 3401 of the Patient Protection 
                        and Affordable Care Act, to receive a reduction 
                        to the inflationary payment updates of such 
                        providers of services and suppliers in excess 
                        of a reduction due to productivity in a year in 
                        which such recommendations would take effect.
                            ``(iv) As appropriate, the proposal shall 
                        include recommendations to reduce Medicare 
                        payments under parts C and D, such as 
                        reductions in direct subsidy payments to 
                        Medicare Advantage and prescription drug plans 
                        specified under paragraph (1) and (2) of 
                        section 1860D-15(a) that are related to 
                        administrative expenses (including profits) for 
                        basic coverage, denying high bids or removing 
                        high bids for prescription drug coverage from 
                        the calculation of the national average monthly 
                        bid amount under section 1860D-13(a)(4), and 
                        reductions in payments to Medicare Advantage 
                        plans under clauses (i) and (ii) of section 
                        1853(a)(1)(B) that are related to 
                        administrative expenses (including profits) and 
                        performance bonuses for Medicare Advantage 
                        plans under section 1853(n). Any such 
                        recommendation shall not affect the base 
                        beneficiary premium percentage specified under 
                        1860D-13(a).
                            ``(v) The proposal shall include 
                        recommendations with respect to administrative 
                        funding for the Secretary to carry out the 
                        recommendations contained in the proposal.
                            ``(vi) The proposal shall only include 
                        recommendations related to the Medicare 
                        program.
                    ``(B) Additional considerations.--In developing and 
                submitting each proposal under this section in a 
                proposal year, the Board shall, to the extent 
                feasible--
                            ``(i) give priority to recommendations that 
                        extend Medicare solvency;
                            ``(ii) include recommendations that--
                                    ``(I) improve the health care 
                                delivery system and health outcomes, 
                                including by promoting integrated care, 
                                care coordination, prevention and 
                                wellness, and quality and efficiency 
                                improvement; and
                                    ``(II) protect and improve Medicare 
                                beneficiaries' access to necessary and 
                                evidence-based items and services, 
                                including in rural and frontier areas;
                            ``(iii) include recommendations that target 
                        reductions in Medicare program spending to 
                        sources of excess cost growth;
                            ``(iv) consider the effects on Medicare 
                        beneficiaries of changes in payments to 
                        providers of services (as defined in section 
                        1861(u)) and suppliers (as defined in section 
                        1861(d));
                            ``(v) consider the effects of the 
                        recommendations on providers of services and 
                        suppliers with actual or projected negative 
                        cost margins or payment updates; and
                            ``(vi) consider the unique needs of 
                        Medicare beneficiaries who are dually eligible 
                        for Medicare and the Medicaid program under 
                        title XIX.
                    ``(C) No increase in total medicare program 
                spending.--Each proposal submitted under this section 
                shall be designed in such a manner that implementation 
                of the recommendations contained in the proposal would 
                not be expected to result, over the 10-year period 
                starting with the implementation year, in any increase 
                in the total amount of net Medicare program spending 
                relative to the total amount of net Medicare program 
                spending that would have occurred absent such 
                implementation.
                    ``(D) Consultation with medpac.--The Board shall 
                submit a draft copy of each proposal to be submitted 
                under this section to the Medicare Payment Advisory 
                Commission established under section 1805 for its 
                review. The Board shall submit such draft copy by not 
                later than September 1 of the determination year.
                    ``(E) Review and comment by the secretary.--The 
                Board shall submit a draft copy of each proposal to be 
                submitted to Congress under this section to the 
                Secretary for the Secretary's review and comment. The 
                Board shall submit such draft copy by not later than 
                September 1 of the determination year. Not later than 
                March 1 of the submission year, the Secretary shall 
                submit a report to Congress on the results of such 
                review, unless the Secretary submits a proposal under 
                paragraph (5)(A) in that year.
                    ``(F) Consultations.--In carrying out its duties 
                under this section, the Board shall engage in regular 
                consultations with the Medicaid and CHIP Payment and 
                Access Commission under section 1900.
            ``(3) Transmission of board proposal to president.--
                    ``(A) In general.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) and subsection (f)(3)(B), the Board 
                        shall transmit a proposal under this section to 
                        the President on January 15 of each year 
                        (beginning with 2014).
                            ``(ii) Exception.--The Board shall not 
                        submit a proposal under clause (i) in a 
                        proposal year if the year is--
                                    ``(I) a year for which the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services makes a determination 
                                in the determination year under 
                                paragraph (6)(A) that the growth rate 
                                described in clause (i) of such 
                                paragraph does not exceed the growth 
                                rate described in clause (ii) of such 
                                paragraph;
                                    ``(II) a year in which the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services makes a determination 
                                in the determination year that the 
                                projected percentage increase (if any) 
                                for the medical care expenditure 
                                category of the Consumer Price Index 
                                for All Urban Consumers (United States 
                                city average) for the implementation 
                                year is less than the projected 
                                percentage increase (if any) in the 
                                Consumer Price Index for All Urban 
                                Consumers (all items; United States 
                                city average) for such implementation 
                                year; or
                                    ``(III) for proposal year 2019 and 
                                subsequent proposal years, a year in 
                                which the Chief Actuary of the Centers 
                                for Medicare & Medicaid Services makes 
                                a determination in the determination 
                                year that the growth rate described in 
                                paragraph (8) exceeds the growth rate 
                                described in paragraph (6)(A)(i).
                            ``(iii) Start-up period.--The Board may not 
                        submit a proposal under clause (i) prior to 
                        January 15, 2014.
                    ``(B) Required information.--Each proposal 
                submitted by the Board under subparagraph (A)(i) shall 
                include--
                            ``(i) the recommendations described in 
                        paragraph (2)(A)(i);
                            ``(ii) an explanation of each 
                        recommendation contained in the proposal and 
                        the reasons for including such recommendation;
                            ``(iii) an actuarial opinion by the Chief 
                        Actuary of the Centers for Medicare & Medicaid 
                        Services certifying that the proposal meets the 
                        requirements of subparagraphs (A)(i) and (C) of 
                        paragraph (2);
                            ``(iv) a legislative proposal that 
                        implements the recommendations; and
                            ``(v) other information determined 
                        appropriate by the Board.
            ``(4) Presidential submission to congress.--Upon receiving 
        a proposal from the Board under paragraph (3)(A)(i) or the 
        Secretary under paragraph (5), the President shall immediately 
        submit such proposal to Congress.
            ``(5) Contingent secretarial development of proposal.--If, 
        with respect to a proposal year, the Board is required, to but 
        fails, to submit a proposal to the President by the deadline 
        applicable under paragraph (3)(A)(i), the Secretary shall 
        develop a detailed and specific proposal that satisfies the 
        requirements of subparagraphs (A) and (C) (and, to the extent 
        feasible, subparagraph (B)) of paragraph (2) and contains the 
        information required paragraph (3)(B)). By not later than 
        January 25 of the year, the Secretary shall transmit--
                    ``(A) such proposal to the President; and
                    ``(B) a copy of such proposal to the Medicare 
                Payment Advisory Commission for its review.
            ``(6) Per capita growth rate projections by chief 
        actuary.--
                    ``(A) In general.--Subject to subsection (f)(3)(A), 
                not later than April 30, 2013, and annually thereafter, 
                the Chief Actuary of the Centers for Medicare & 
                Medicaid Services shall determine in each such year 
                whether--
                            ``(i) the projected Medicare per capita 
                        growth rate for the implementation year (as 
                        determined under subparagraph (B)); exceeds
                            ``(ii) the projected Medicare per capita 
                        target growth rate for the implementation year 
                        (as determined under subparagraph (C)).
                    ``(B) Medicare per capita growth rate.--
                            ``(i) In general.--For purposes of this 
                        section, the Medicare per capita growth rate 
                        for an implementation year shall be calculated 
                        as the projected 5-year average (ending with 
                        such year) of the growth in Medicare program 
                        spending per unduplicated enrollee.
                            ``(ii) Requirement.--The projection under 
                        clause (i) shall--
                                    ``(I) to the extent that there is 
                                projected to be a negative update to 
                                the single conversion factor applicable 
                                to payments for physicians' services 
                                under section 1848(d) furnished in the 
                                proposal year or the implementation 
                                year, assume that such update for such 
                                services is 0 percent rather than the 
                                negative percent that would otherwise 
                                apply; and
                                    ``(II) take into account any 
                                delivery system reforms or other 
                                payment changes that have been enacted 
                                or published in final rules but not yet 
                                implemented as of the making of such 
                                calculation.
                    ``(C) Medicare per capita target growth rate.--For 
                purposes of this section, the Medicare per capita 
                target growth rate for an implementation year shall be 
                calculated as the projected 5-year average (ending with 
                such year) percentage increase in--
                            ``(i) with respect to a determination year 
                        that is prior to 2018, the average of the 
                        projected percentage increase (if any) in--
                                    ``(I) the Consumer Price Index for 
                                All Urban Consumers (all items; United 
                                States city average); and
                                    ``(II) the medical care expenditure 
                                category of the Consumer Price Index 
                                for All Urban Consumers (United States 
                                city average); and
                            ``(ii) with respect to a determination year 
                        that is after 2017, the nominal gross domestic 
                        product per capita plus 1.0 percentage point.
            ``(7) Savings requirement.--
                    ``(A) In general.--If, with respect to a 
                determination year, the Chief Actuary of the Centers 
                for Medicare & Medicaid Services makes a determination 
                under paragraph (6)(A) that the growth rate described 
                in clause (i) of such paragraph exceeds the growth rate 
                described in clause (ii) of such paragraph, the Chief 
                Actuary shall establish an applicable savings target 
                for the implementation year.
                    ``(B) Applicable savings target.--For purposes of 
                this section, the applicable savings target for an 
                implementation year shall be an amount equal to the 
                product of--
                            ``(i) the total amount of projected 
                        Medicare program spending for the proposal 
                        year; and
                            ``(ii) the applicable percent for the 
                        implementation year.
                    ``(C) Applicable percent.--For purposes of 
                subparagraph (B), the applicable percent for an 
                implementation year is the lesser of--
                            ``(i) in the case of--
                                    ``(I) implementation year 2015, 0.5 
                                percent;
                                    ``(II) implementation year 2016, 
                                1.0 percent;
                                    ``(III) implementation year 2017, 
                                1.25 percent; and
                                    ``(IV) implementation year 2018 or 
                                any subsequent implementation year, 1.5 
                                percent; and
                            ``(ii) the projected excess for the 
                        implementation year (expressed as a percent) 
                        determined under subparagraph (A).
            ``(8) Per capita rate of growth in national health 
        expenditures.--In each determination year (beginning in 2018), 
        the Chief Actuary of the Centers for Medicare & Medicaid 
        Services shall project the per capita rate of growth in 
        national health expenditures for the implementation year. Such 
        rate of growth for an implementation year shall be calculated 
        as the projected 5-year average (ending with such year) 
        percentage increase in national health care expenditures.
    ``(d) Congressional Consideration.--
            ``(1) Introduction.--
                    ``(A) In general.--On the day on which a proposal 
                is submitted by the President to the House of 
                Representatives and the Senate under subsection (c)(4), 
                the legislative proposal (described in subsection 
                (c)(3)(B)(iv)) contained in the proposal shall be 
                introduced (by request) in the Senate by the majority 
                leader of the Senate or by Members of the Senate 
                designated by the majority leader of the Senate and 
                shall be introduced (by request) in the House by the 
                majority leader of the House or by Members of the House 
                designated by the majority leader of the House.
                    ``(B) Not in session.--If either House is not in 
                session on the day on which such legislative proposal 
                is submitted, the legislative proposal shall be 
                introduced in that House, as provided in subparagraph 
                (A), on the first day thereafter on which that House is 
                in session.
                    ``(C) Any member.--If the legislative proposal is 
                not introduced in either House within 5 days on which 
                that House is in session after the day on which the 
                legislative proposal is submitted, then any Member of 
                that House may introduce the legislative proposal.
                    ``(D) Referral.--The legislation introduced under 
                this paragraph shall be referred by the Presiding 
                Officers of the respective Houses to the Committee on 
                Finance in the Senate and to the Committee on Energy 
                and Commerce and the Committee on Ways and Means in the 
                House of Representatives.
            ``(2) Committee consideration of proposal.--
                    ``(A) Reporting bill.--Not later than April 1 of 
                any proposal year in which a proposal is submitted by 
                the President to Congress under this section, the 
                Committee on Ways and Means and the Committee on Energy 
                and Commerce of the House of Representatives and the 
                Committee on Finance of the Senate may report the bill 
                referred to the Committee under paragraph (1)(D) with 
                committee amendments related to the Medicare program.
                    ``(B) Calculations.--In determining whether a 
                committee amendment meets the requirement of 
                subparagraph (A), the reductions in Medicare program 
                spending during the 3-month period immediately 
                preceding the implementation year shall be counted to 
                the extent that such reductions are a result of the 
                implementation provisions in the committee amendment 
                for a change in the payment rate for an item or service 
                that was effective during such period pursuant to such 
                amendment.
                    ``(C) Committee jurisdiction.--Notwithstanding rule 
                XV of the Standing Rules of the Senate, a committee 
                amendment described in subparagraph (A) may include 
                matter not within the jurisdiction of the Committee on 
                Finance if that matter is relevant to a proposal 
                contained in the bill submitted under subsection 
                (c)(3).
                    ``(D) Discharge.--If, with respect to the House 
                involved, the committee has not reported the bill by 
                the date required by subparagraph (A), the committee 
                shall be discharged from further consideration of the 
                proposal.
            ``(3) Limitation on changes to the board recommendations.--
                    ``(A) In general.--It shall not be in order in the 
                Senate or the House of Representatives to consider any 
                bill, resolution, or amendment, pursuant to this 
                subsection or conference report thereon, that fails to 
                satisfy the requirements of subparagraphs (A)(i) and 
                (C) of subsection (c)(2).
                    ``(B) Limitation on changes to the board 
                recommendations in other legislation.--It shall not be 
                in order in the Senate or the House of Representatives 
                to consider any bill, resolution, amendment, or 
                conference report (other than pursuant to this section) 
                that would repeal or otherwise change the 
                recommendations of the Board if that change would fail 
                to satisfy the requirements of subparagraphs (A)(i) and 
                (C) of subsection (c)(2).
                    ``(C) Limitation on changes to this subsection.--It 
                shall not be in order in the Senate or the House of 
                Representatives to consider any bill, resolution, 
                amendment, or conference report that would repeal or 
                otherwise change this subsection.
                    ``(D) Waiver.--This paragraph may be waived or 
                suspended in the Senate only by the affirmative vote of 
                three-fifths of the Members, duly chosen and sworn.
                    ``(E) Appeals.--An affirmative vote of three-fifths 
                of the Members of the Senate, duly chosen and sworn, 
                shall be required in the Senate to sustain an appeal of 
                the ruling of the Chair on a point of order raised 
                under this paragraph.
            ``(4) Expedited procedure.--
                    ``(A) Consideration.--A motion to proceed to the 
                consideration of the bill in the Senate is not 
                debatable.
                    ``(B) Amendment.--
                            ``(i) Time limitation.--Debate in the 
                        Senate on any amendment to a bill under this 
                        section shall be limited to 1 hour, to be 
                        equally divided between, and controlled by, the 
                        mover and the manager of the bill, and debate 
                        on any amendment to an amendment, debatable 
                        motion, or appeal shall be limited to 30 
                        minutes, to be equally divided between, and 
                        controlled by, the mover and the manager of the 
                        bill, except that in the event the manager of 
                        the bill is in favor of any such amendment, 
                        motion, or appeal, the time in opposition 
                        thereto shall be controlled by the minority 
                        leader or such leader's designee.
                            ``(ii) Germane.--No amendment that is not 
                        germane to the provisions of such bill shall be 
                        received.
                            ``(iii) Additional time.--The leaders, or 
                        either of them, may, from the time under their 
                        control on the passage of the bill, allot 
                        additional time to any Senator during the 
                        consideration of any amendment, debatable 
                        motion, or appeal.
                            ``(iv) Amendment not in order.--It shall 
                        not be in order to consider an amendment that 
                        would cause the bill to result in a net 
                        reduction in total Medicare program spending in 
                        the implementation year that is less than the 
                        applicable savings target established under 
                        subsection (c)(7)(B) for such implementation 
                        year.
                            ``(v) Waiver and appeals.--This paragraph 
                        may be waived or suspended in the Senate only 
                        by the affirmative vote of three-fifths of the 
                        Members, duly chosen and sworn. An affirmative 
                        vote of three-fifths of the Members of the 
                        Senate, duly chosen and sworn, shall be 
                        required in the Senate to sustain an appeal of 
                        the ruling of the Chair on a point of order 
                        raised under this section.
                    ``(C) Consideration by the other house.--
                            ``(i) In general.--The expedited procedures 
                        provided in this subsection for the 
                        consideration of a bill introduced pursuant to 
                        paragraph (1) shall not apply to such a bill 
                        that is received by one House from the other 
                        House if such a bill was not introduced in the 
                        receiving House.
                            ``(ii) Before passage.--If a bill that is 
                        introduced pursuant to paragraph (1) is 
                        received by one House from the other House, 
                        after introduction but before disposition of 
                        such a bill in the receiving House, then the 
                        following shall apply:
                                    ``(I) The receiving House shall 
                                consider the bill introduced in that 
                                House through all stages of 
                                consideration up to, but not including, 
                                passage.
                                    ``(II) The question on passage 
                                shall be put on the bill of the other 
                                House as amended by the language of the 
                                receiving House.
                            ``(iii) After passage.--If a bill 
                        introduced pursuant to paragraph (1) is 
                        received by one House from the other House, 
                        after such a bill is passed by the receiving 
                        House, then the vote on passage of the bill 
                        that originates in the receiving House shall be 
                        considered to be the vote on passage of the 
                        bill received from the other House as amended 
                        by the language of the receiving House.
                            ``(iv) Disposition.--Upon disposition of a 
                        bill introduced pursuant to paragraph (1) that 
                        is received by one House from the other House, 
                        it shall no longer be in order to consider the 
                        bill that originates in the receiving House.
                            ``(v) Limitation.--Clauses (ii), (iii), and 
                        (iv) shall apply only to a bill received by one 
                        House from the other House if the bill--
                                    ``(I) is related only to the 
                                program under this title; and
                                    ``(II) satisfies the requirements 
                                of subparagraphs (A)(i) and (C) of 
                                subsection (c)(2).
                    ``(D) Senate limits on debate.--
                            ``(i) In general.--In the Senate, 
                        consideration of the bill and on all debatable 
                        motions and appeals in connection therewith 
                        shall not exceed a total of 30 hours, which 
                        shall be divided equally between the majority 
                        and minority leaders or their designees.
                            ``(ii) Motion to further limit debate.--A 
                        motion to further limit debate on the bill is 
                        in order and is not debatable.
                            ``(iii) Motion or appeal.--Any debatable 
                        motion or appeal is debatable for not to exceed 
                        1 hour, to be divided equally between those 
                        favoring and those opposing the motion or 
                        appeal.
                            ``(iv) Final disposition.--After 30 hours 
                        of consideration, the Senate shall proceed, 
                        without any further debate on any question, to 
                        vote on the final disposition thereof to the 
                        exclusion of all amendments not then pending 
                        before the Senate at that time and to the 
                        exclusion of all motions, except a motion to 
                        table, or to reconsider and one quorum call on 
                        demand to establish the presence of a quorum 
                        (and motions required to establish a quorum) 
                        immediately before the final vote begins.
                    ``(E) Consideration in conference.--
                            ``(i) In general.--Consideration in the 
                        Senate and the House of Representatives on the 
                        conference report or any messages between 
                        Houses shall be limited to 10 hours, equally 
                        divided and controlled by the majority and 
                        minority leaders of the Senate or their 
                        designees and the Speaker of the House of 
                        Representatives and the minority leader of the 
                        House of Representatives or their designees.
                            ``(ii) Time limitation.--Debate in the 
                        Senate on any amendment under this subparagraph 
                        shall be limited to 1 hour, to be equally 
                        divided between, and controlled by, the mover 
                        and the manager of the bill, and debate on any 
                        amendment to an amendment, debatable motion, or 
                        appeal shall be limited to 30 minutes, to be 
                        equally divided between, and controlled by, the 
                        mover and the manager of the bill, except that 
                        in the event the manager of the bill is in 
                        favor of any such amendment, motion, or appeal, 
                        the time in opposition thereto shall be 
                        controlled by the minority leader or such 
                        leader's designee.
                            ``(iii) Final disposition.--After 10 hours 
                        of consideration, the Senate shall proceed, 
                        without any further debate on any question, to 
                        vote on the final disposition thereof to the 
                        exclusion of all motions not then pending 
                        before the Senate at that time or necessary to 
                        resolve the differences between the Houses and 
                        to the exclusion of all other motions, except a 
                        motion to table, or to reconsider and one 
                        quorum call on demand to establish the presence 
                        of a quorum (and motions required to establish 
                        a quorum) immediately before the final vote 
                        begins.
                            ``(iv) Limitation.--Clauses (i) through 
                        (iii) shall only apply to a conference report, 
                        message or the amendments thereto if the 
                        conference report, message, or an amendment 
                        thereto--
                                    ``(I) is related only to the 
                                program under this title; and
                                    ``(II) satisfies the requirements 
                                of subparagraphs (A)(i) and (C) of 
                                subsection (c)(2).
                    ``(F) Veto.--If the President vetoes the bill 
                debate on a veto message in the Senate under this 
                subsection shall be 1 hour equally divided between the 
                majority and minority leaders or their designees.
            ``(5) Rules of the senate and house of representatives.--
        This subsection and subsection (f)(2) are enacted by Congress--
                    ``(A) as an exercise of the rulemaking power of the 
                Senate and the House of Representatives, respectively, 
                and is deemed to be part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of 
                bill under this section, and it supersedes other rules 
                only to the extent that it is inconsistent with such 
                rules; and
                    ``(B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                they relate to the procedure of that House) at any 
                time, in the same manner, and to the same extent as in 
                the case of any other rule of that House.
    ``(e) Implementation of Proposal.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary shall, except as provided in paragraph (3), 
        implement the recommendations contained in a proposal submitted 
        by the President to Congress pursuant to this section on August 
        15 of the year in which the proposal is so submitted.
            ``(2) Application.--
                    ``(A) In general.--A recommendation described in 
                paragraph (1) shall apply as follows:
                            ``(i) In the case of a recommendation that 
                        is a change in the payment rate for an item or 
                        service under Medicare in which payment rates 
                        change on a fiscal year basis (or a cost 
                        reporting period basis that relates to a fiscal 
                        year), on a calendar year basis (or a cost 
                        reporting period basis that relates to a 
                        calendar year), or on a rate year basis (or a 
                        cost reporting period basis that relates to a 
                        rate year), such recommendation shall apply to 
                        items and services furnished on the first day 
                        of the first fiscal year, calendar year, or 
                        rate year (as the case may be) that begins 
                        after such August 15.
                            ``(ii) In the case of a recommendation 
                        relating to payments to plans under parts C and 
                        D, such recommendation shall apply to plan 
                        years beginning on the first day of the first 
                        calendar year that begins after such August 15.
                            ``(iii) In the case of any other 
                        recommendation, such recommendation shall be 
                        addressed in the regular regulatory process 
                        timeframe and shall apply as soon as 
                        practicable.
                    ``(B) Interim final rulemaking.--The Secretary may 
                use interim final rulemaking to implement any 
                recommendation described in paragraph (1).
            ``(3) Exception.--The Secretary shall not be required to 
        implement the recommendations contained in a proposal submitted 
        in a proposal year by the President to Congress pursuant to 
        this section if--
                    ``(A) prior to August 15 of the proposal year, 
                Federal legislation is enacted that includes the 
                following provision: `This Act supercedes the 
                recommendations of the Board contained in the proposal 
                submitted, in the year which includes the date of 
                enactment of this Act, to Congress under section 1899A 
                of the Social Security Act.'; and
                    ``(B) in the case of implementation year 2020 and 
                subsequent implementation years, a joint resolution 
                described in subsection (f)(1) is enacted not later 
                than August 15, 2017.
            ``(4) No affect on authority to implement certain 
        provisions.--Nothing in paragraph (3) shall be construed to 
        affect the authority of the Secretary to implement any 
        recommendation contained in a proposal or advisory report under 
        this section to the extent that the Secretary otherwise has the 
        authority to implement such recommendation administratively.
            ``(5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the implementation by the Secretary under 
        this subsection of the recommendations contained in a proposal.
    ``(f) Joint Resolution Required To Discontinue the Board.--
            ``(1) In general.--For purposes of subsection (e)(3)(B), a 
        joint resolution described in this paragraph means only a joint 
        resolution--
                    ``(A) that is introduced in 2017 by not later than 
                February 1 of such year;
                    ``(B) which does not have a preamble;
                    ``(C) the title of which is as follows: `Joint 
                resolution approving the discontinuation of the process 
                for consideration and automatic implementation of the 
                annual proposal of the Independent Medicare Advisory 
                Board under section 1899A of the Social Security Act'; 
                and
                    ``(D) the matter after the resolving clause of 
                which is as follows: `That Congress approves the 
                discontinuation of the process for consideration and 
                automatic implementation of the annual proposal of the 
                Independent Medicare Advisory Board under section 1899A 
                of the Social Security Act.'.
            ``(2) Procedure.--
                    ``(A) Referral.--A joint resolution described in 
                paragraph (1) shall be referred to the Committee on 
                Ways and Means and the Committee on Energy and Commerce 
                of the House of Representatives and the Committee on 
                Finance of the Senate.
                    ``(B) Discharge.--In the Senate, if the committee 
                to which is referred a joint resolution described in 
                paragraph (1) has not reported such joint resolution 
                (or an identical joint resolution) at the end of 20 
                days after the joint resolution described in paragraph 
                (1) is introduced, such committee may be discharged 
                from further consideration of such joint resolution 
                upon a petition supported in writing by 30 Members of 
                the Senate, and such joint resolution shall be placed 
                on the calendar.
                    ``(C) Consideration.--
                            ``(i) In general.--In the Senate, when the 
                        committee to which a joint resolution is 
                        referred has reported, or when a committee is 
                        discharged (under subparagraph (C)) from 
                        further consideration of a joint resolution 
                        described in paragraph (1), it is at any time 
                        thereafter in order (even though a previous 
                        motion to the same effect has been disagreed 
                        to) for a motion to proceed to the 
                        consideration of the joint resolution to be 
                        made, and all points of order against the joint 
                        resolution (and against consideration of the 
                        joint resolution) are waived, except for points 
                        of order under the Congressional Budget act of 
                        1974 or under budget resolutions pursuant to 
                        that Act. The motion is not debatable. A motion 
                        to reconsider the vote by which the motion is 
                        agreed to or disagreed to shall not be in 
                        order. If a motion to proceed to the 
                        consideration of the joint resolution is agreed 
                        to, the joint resolution shall remain the 
                        unfinished business of the Senate until 
                        disposed of.
                            ``(ii) Debate limitation.--In the Senate, 
                        consideration of the joint resolution, and on 
                        all debatable motions and appeals in connection 
                        therewith, shall be limited to not more than 10 
                        hours, which shall be divided equally between 
                        the majority leader and the minority leader, or 
                        their designees. A motion further to limit 
                        debate is in order and not debatable. An 
                        amendment to, or a motion to postpone, or a 
                        motion to proceed to the consideration of other 
                        business, or a motion to recommit the joint 
                        resolution is not in order.
                            ``(iii) Passage.--In the Senate, 
                        immediately following the conclusion of the 
                        debate on a joint resolution described in 
                        paragraph (1), and a single quorum call at the 
                        conclusion of the debate if requested in 
                        accordance with the rules of the Senate, the 
                        vote on passage of the joint resolution shall 
                        occur.
                            ``(iv) Appeals.--Appeals from the decisions 
                        of the Chair relating to the application of the 
                        rules of the Senate to the procedure relating 
                        to a joint resolution described in paragraph 
                        (1) shall be decided without debate.
                    ``(D) Other house acts first.--If, before the 
                passage by 1 House of a joint resolution of that House 
                described in paragraph (1), that House receives from 
                the other House a joint resolution described in 
                paragraph (1), then the following procedures shall 
                apply:
                            ``(i) The joint resolution of the other 
                        House shall not be referred to a committee.
                            ``(ii) With respect to a joint resolution 
                        described in paragraph (1) of the House 
                        receiving the joint resolution--
                                    ``(I) the procedure in that House 
                                shall be the same as if no joint 
                                resolution had been received from the 
                                other House; but
                                    ``(II) the vote on final passage 
                                shall be on the joint resolution of the 
                                other House.
                    ``(E) Excluded days.--For purposes of determining 
                the period specified in subparagraph (B), there shall 
                be excluded any days either House of Congress is 
                adjourned for more than 3 days during a session of 
                Congress.
                    ``(F) Majority required for adoption.--A joint 
                resolution considered under this subsection shall 
                require an affirmative vote of three-fifths of the 
                Members, duly chosen and sworn, for adoption.
            ``(3) Termination.--If a joint resolution described in 
        paragraph (1) is enacted not later than August 15, 2017--
                    ``(A) the Chief Actuary of the Medicare & Medicaid 
                Services shall not--
                            ``(i) make any determinations under 
                        subsection (c)(6) after May 1, 2017; or
                            ``(ii) provide any opinion pursuant to 
                        subsection (c)(3)(B)(iii) after January 16, 
                        2018;
                    ``(B) the Board shall not submit any proposals or 
                advisory reports to Congress under this section after 
                January 16, 2018; and
                    ``(C) the Board and the consumer advisory council 
                under subsection (k) shall terminate on August 16, 
                2018.
    ``(g) Board Membership; Terms of Office; Chairperson; Removal.--
            ``(1) Membership.--
                    ``(A) In general.--The Board shall be composed of--
                            ``(i) 15 members appointed by the 
                        President, by and with the advice and consent 
                        of the Senate; and
                            ``(ii) the Secretary, the Administrator of 
                        the Center for Medicare & Medicaid Services, 
                        and the Administrator of the Health Resources 
                        and Services Administration, all of whom shall 
                        serve ex officio as nonvoting members of the 
                        Board.
                    ``(B) Qualifications.--
                            ``(i) In general.--The appointed membership 
                        of the Board shall include individuals with 
                        national recognition for their expertise in 
                        health finance and economics, actuarial 
                        science, health facility management, health 
                        plans and integrated delivery systems, 
                        reimbursement of health facilities, allopathic 
                        and osteopathic physicians, and other providers 
                        of health services, and other related fields, 
                        who provide a mix of different professionals, 
                        broad geographic representation, and a balance 
                        between urban and rural representatives.
                            ``(ii) Inclusion.--The appointed membership 
                        of the Board shall include (but not be limited 
                        to) physicians and other health professionals, 
                        experts in the area of pharmaco-economics or 
                        prescription drug benefit programs, employers, 
                        third-party payers, individuals skilled in the 
                        conduct and interpretation of biomedical, 
                        health services, and health economics research 
                        and expertise in outcomes and effectiveness 
                        research and technology assessment. Such 
                        membership shall also include representatives 
                        of consumers and the elderly.
                            ``(iii) Majority nonproviders.--Individuals 
                        who are directly involved in the provision or 
                        management of the delivery of items and 
                        services covered under this title shall not 
                        constitute a majority of the appointed 
                        membership of the Board.
                    ``(C) Ethical disclosure.--The President shall 
                establish a system for public disclosure by appointed 
                members of the Board of financial and other potential 
                conflicts of interest relating to such members. 
                Appointed members of the Board shall be treated as 
                officers in the executive branch for purposes of 
                applying title I of the Ethics in Government Act of 
                1978 (Public Law 95-521).
                    ``(D) Conflicts of interest.--No individual may 
                serve as an appointed member if that individual engages 
                in any other business, vocation, or employment.
                    ``(E) Consultation with congress.--In selecting 
                individuals for nominations for appointments to the 
                Board, the President shall consult with--
                            ``(i) the majority leader of the Senate 
                        concerning the appointment of 3 members;
                            ``(ii) the Speaker of the House of 
                        Representatives concerning the appointment of 3 
                        members;
                            ``(iii) the minority leader of the Senate 
                        concerning the appointment of 3 members; and
                            ``(iv) the minority leader of the House of 
                        Representatives concerning the appointment of 3 
                        members.
            ``(2) Term of office.--Each appointed member shall hold 
        office for a term of 6 years except that--
                    ``(A) a member may not serve more than 2 full 
                consecutive terms (but may be reappointed to 2 full 
                consecutive terms after being appointed to fill a 
                vacancy on the Board);
                    ``(B) a member appointed to fill a vacancy 
                occurring prior to the expiration of the term for which 
                that member's predecessor was appointed shall be 
                appointed for the remainder of such term;
                    ``(C) a member may continue to serve after the 
                expiration of the member's term until a successor has 
                taken office; and
                    ``(D) of the members first appointed under this 
                section, 5 shall be appointed for a term of 1 year, 5 
                shall be appointed for a term of 3 years, and 5 shall 
                be appointed for a term of 6 years, the term of each to 
                be designated by the President at the time of 
                nomination.
            ``(3) Chairperson.--
                    ``(A) In general.--The Chairperson shall be 
                appointed by the President, by and with the advice and 
                consent of the Senate, from among the members of the 
                Board.
                    ``(B) Duties.--The Chairperson shall be the 
                principal executive officer of the Board, and shall 
                exercise all of the executive and administrative 
                functions of the Board, including functions of the 
                Board with respect to--
                            ``(i) the appointment and supervision of 
                        personnel employed by the Board;
                            ``(ii) the distribution of business among 
                        personnel appointed and supervised by the 
                        Chairperson and among administrative units of 
                        the Board; and
                            ``(iii) the use and expenditure of funds.
                    ``(C) Governance.--In carrying out any of the 
                functions under subparagraph (B), the Chairperson shall 
                be governed by the general policies established by the 
                Board and by the decisions, findings, and 
                determinations the Board shall by law be authorized to 
                make.
                    ``(D) Requests for appropriations.--Requests or 
                estimates for regular, supplemental, or deficiency 
                appropriations on behalf of the Board may not be 
                submitted by the Chairperson without the prior approval 
                of a majority vote of the Board.
            ``(4) Removal.--Any appointed member may be removed by the 
        President for neglect of duty or malfeasance in office, but for 
        no other cause.
    ``(h) Vacancies; Quorum; Seal; Vice Chairperson; Voting on 
Reports.--
            ``(1) Vacancies.--No vacancy on the Board shall impair the 
        right of the remaining members to exercise all the powers of 
        the Board.
            ``(2) Quorum.--A majority of the appointed members of the 
        Board shall constitute a quorum for the transaction of 
        business, but a lesser number of members may hold hearings.
            ``(3) Seal.--The Board shall have an official seal, of 
        which judicial notice shall be taken.
            ``(4) Vice chairperson.--The Board shall annually elect a 
        Vice Chairperson to act in the absence or disability of the 
        Chairperson or in case of a vacancy in the office of the 
        Chairperson.
            ``(5) Voting on proposals.--Any proposal of the Board must 
        be approved by the majority of appointed members present.
    ``(i) Powers of the Board.--
            ``(1) Hearings.--The Board may hold such hearings, sit and 
        act at such times and places, take such testimony, and receive 
        such evidence as the Board considers advisable to carry out 
        this section.
            ``(2) Authority to inform research priorities for data 
        collection.--The Board may advise the Secretary on priorities 
        for health services research, particularly as such priorities 
        pertain to necessary changes and issues regarding payment 
        reforms under Medicare.
            ``(3) Obtaining official data.--The Board may secure 
        directly from any department or agency of the United States 
        information necessary to enable it to carry out this section. 
        Upon request of the Chairperson, the head of that department or 
        agency shall furnish that information to the Board on an agreed 
        upon schedule.
            ``(4) Postal services.--The Board may use the United States 
        mails in the same manner and under the same conditions as other 
        departments and agencies of the Federal Government.
            ``(5) Gifts.--The Board may accept, use, and dispose of 
        gifts or donations of services or property.
            ``(6) Offices.--The Board shall maintain a principal office 
        and such field offices as it determines necessary, and may meet 
        and exercise any of its powers at any other place.
    ``(j) Personnel Matters.--
            ``(1) Compensation of members and chairperson.--Each 
        appointed member, other than the Chairperson, shall be 
        compensated at a rate equal to the annual rate of basic pay 
        prescribed for level III of the Executive Schedule under 
        section 5315 of title 5, United States Code. The Chairperson 
        shall be compensated at a rate equal to the daily equivalent of 
        the annual rate of basic pay prescribed for level II of the 
        Executive Schedule under section 5315 of title 5, United States 
        Code.
            ``(2) Travel expenses.--The appointed members shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Board.
            ``(3) Staff.--
                    ``(A) In general.--The Chairperson may, without 
                regard to the civil service laws and regulations, 
                appoint and terminate an executive director and such 
                other additional personnel as may be necessary to 
                enable the Board to perform its duties. The employment 
                of an executive director shall be subject to 
                confirmation by the Board.
                    ``(B) Compensation.--The Chairperson may fix the 
                compensation of the executive director and other 
                personnel without regard to chapter 51 and subchapter 
                III of chapter 53 of title 5, United States Code, 
                relating to classification of positions and General 
                Schedule pay rates, except that the rate of pay for the 
                executive director and other personnel may not exceed 
                the rate payable for level V of the Executive Schedule 
                under section 5316 of such title.
            ``(4) Detail of government employees.--Any Federal 
        Government employee may be detailed to the Board without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status or privilege.
            ``(5) Procurement of temporary and intermittent services.--
        The Chairperson may procure temporary and intermittent services 
        under section 3109(b) of title 5, United States Code, at rates 
        for individuals which do not exceed the daily equivalent of the 
        annual rate of basic pay prescribed for level V of the 
        Executive Schedule under section 5316 of such title.
    ``(k) Consumer Advisory Council.--
            ``(1) In general.--There is established a consumer advisory 
        council to advise the Board on the impact of payment policies 
        under this title on consumers.
            ``(2) Membership.--
                    ``(A) Number and appointment.--The consumer 
                advisory council shall be composed of 10 consumer 
                representatives appointed by the Comptroller General of 
                the United States, 1 from among each of the 10 regions 
                established by the Secretary as of the date of 
                enactment of this section.
                    ``(B) Qualifications.--The membership of the 
                council shall represent the interests of consumers and 
                particular communities.
            ``(3) Duties.--The consumer advisory council shall, subject 
        to the call of the Board, meet not less frequently than 2 times 
        each year in the District of Columbia.
            ``(4) Open meetings.--Meetings of the consumer advisory 
        council shall be open to the public.
            ``(5) Election of officers.--Members of the consumer 
        advisory council shall elect their own officers.
            ``(6) Application of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.) shall apply to the consumer advisory 
        council except that section 14 of such Act shall not apply.
    ``(l) Definitions.--In this section:
            ``(1) Board; chairperson; member.--The terms `Board', 
        `Chairperson', and `Member' mean the Independent Medicare 
        Advisory Board established under subsection (a) and the 
        Chairperson and any Member thereof, respectively.
            ``(2) Medicare.--The term `Medicare' means the program 
        established under this title, including parts A, B, C, and D.
            ``(3) Medicare beneficiary.--The term `Medicare 
        beneficiary' means an individual who is entitled to, or 
        enrolled for, benefits under part A or enrolled for benefits 
        under part B.
            ``(4) Medicare program spending.--The term `Medicare 
        program spending' means program spending under parts A, B, and 
        D net of premiums.
    ``(m) Funding.--
            ``(1) In general.--There are appropriated to the Board to 
        carry out its duties and functions--
                    ``(A) for fiscal year 2012, $15,000,000; and
                    ``(B) for each subsequent fiscal year, the amount 
                appropriated under this paragraph for the previous 
                fiscal year increased by the annual percentage increase 
                in the Consumer Price Index for All Urban Consumers 
                (all items; United States city average) as of June of 
                the previous fiscal year.
            ``(2) From trust funds.--Sixty percent of amounts 
        appropriated under paragraph (1) shall be derived by transfer 
        from the Federal Hospital Insurance Trust Fund under section 
        1817 and 40 percent of amounts appropriated under such 
        paragraph shall be derived by transfer from the Federal 
        Supplementary Medical Insurance Trust Fund under section 
        1841.''.
            (2) Lobbying cooling-off period for members of the 
        independent medicare advisory board.--Section 207(c) of title 
        18, United States Code, is amended by inserting at the end the 
        following:
            ``(3) Members of the independent medicare advisory board.--
                    ``(A) In general.--Paragraph (1) shall apply to a 
                member of the Independent Medicare Advisory Board under 
                section 1899A.
                    ``(B) Agencies and congress.--For purposes of 
                paragraph (1), the agency in which the individual 
                described in subparagraph (A) served shall be 
                considered to be the Independent Medicare Advisory 
                Board, the Department of Health and Human Services, and 
                the relevant committees of jurisdiction of Congress, 
                including the Committee on Ways and Means and the 
                Committee on Energy and Commerce of the House of 
                Representatives and the Committee on Finance of the 
                Senate.''.
    (b) GAO Study and Report on Determination and Implementation of 
Payment and Coverage Policies Under the Medicare Program.--
            (1) Initial study and report.--
                    (A) Study.--The Comptroller General of the United 
                States (in this section referred to as the 
                ``Comptroller General'') shall conduct a study on 
                changes to payment policies, methodologies, and rates 
                and coverage policies and methodologies under the 
                Medicare program under title XVIII of the Social 
                Security Act as a result of the recommendations 
                contained in the proposals made by the Independent 
                Medicare Advisory Board under section 1899A of such Act 
                (as added by subsection (a)), including an analysis of 
                the effect of such recommendations on--
                            (i) Medicare beneficiary access to 
                        providers and items and services;
                            (ii) the affordability of Medicare premiums 
                        and cost-sharing (including deductibles, 
                        coinsurance, and copayments);
                            (iii) the potential impact of changes on 
                        other government or private-sector purchasers 
                        and payers of care; and
                            (iv) quality of patient care, including 
                        patient experience, outcomes, and other 
                        measures of care.
                    (B) Report.--Not later than July 1, 2015, the 
                Comptroller General shall submit to Congress a report 
                containing the results of the study conducted under 
                subparagraph (A), together with recommendations for 
                such legislation and administrative action as the 
                Comptroller General determines appropriate.
            (2) Subsequent studies and reports.--The Comptroller 
        General shall periodically conduct such additional studies and 
        submit reports to Congress on changes to Medicare payments 
        policies, methodologies, and rates and coverage policies and 
        methodologies as the Comptroller General determines 
        appropriate, in consultation with the Committee on Ways and 
        Means and the Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate.
    (c) Conforming Amendments.--Section 1805(b) of the Social Security 
Act (42 U.S.C. 1395b-6(b)) is amended--
            (1) by redesignating paragraphs (4) through (8) as 
        paragraphs (5) through (9), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Review and comment on the independent medicare 
        advisory board or secretarial proposal.--If the Independent 
        Medicare Advisory Board (as established under subsection (a) of 
        section 1899A) or the Secretary submits a proposal to the 
        Commission under such section in a year, the Commission shall 
        review the proposal and, not later than March 1 of that year, 
        submit to the Committee on Ways and Means and the Committee on 
        Energy and Commerce of the House of Representatives and the 
        Committee on Finance of the Senate written comments on such 
        proposal. Such comments may include such recommendations as the 
        Commission deems appropriate.''.

              Subtitle F--Health Care Quality Improvements

SEC. 3501. HEALTH CARE DELIVERY SYSTEM RESEARCH; QUALITY IMPROVEMENT 
              TECHNICAL ASSISTANCE.

    Part D of title IX of the Public Health Service Act, as amended by 
section 3013, is further amended by adding at the end the following:

         ``Subpart II--Health Care Quality Improvement Programs

``SEC. 933. HEALTH CARE DELIVERY SYSTEM RESEARCH.

    ``(a) Purpose.--The purposes of this section are to--
            ``(1) enable the Director to identify, develop, evaluate, 
        disseminate, and provide training in innovative methodologies 
        and strategies for quality improvement practices in the 
        delivery of health care services that represent best practices 
        (referred to as `best practices') in health care quality, 
        safety, and value; and
            ``(2) ensure that the Director is accountable for 
        implementing a model to pursue such research in a collaborative 
        manner with other related Federal agencies.
    ``(b) General Functions of the Center.--The Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research 
and Quality (referred to in this section as the `Center'), or any other 
relevant agency or department designated by the Director, shall--
            ``(1) carry out its functions using research from a variety 
        of disciplines, which may include epidemiology, health 
        services, sociology, psychology, human factors engineering, 
        biostatistics, health economics, clinical research, and health 
        informatics;
            ``(2) conduct or support activities consistent with the 
        purposes described in subsection (a), and for--
                    ``(A) best practices for quality improvement 
                practices in the delivery of health care services; and
                    ``(B) that include changes in processes of care and 
                the redesign of systems used by providers that will 
                reliably result in intended health outcomes, improve 
                patient safety, and reduce medical errors (such as 
                skill development for health care providers in team-
                based health care delivery and rapid cycle process 
                improvement) and facilitate adoption of improved 
                workflow;
            ``(3) identify health care providers, including health care 
        systems, single institutions, and individual providers, that--
                    ``(A) deliver consistently high-quality, efficient 
                health care services (as determined by the Secretary); 
                and
                    ``(B) employ best practices that are adaptable and 
                scalable to diverse health care settings or effective 
                in improving care across diverse settings;
            ``(4) assess research, evidence, and knowledge about what 
        strategies and methodologies are most effective in improving 
        health care delivery;
            ``(5) find ways to translate such information rapidly and 
        effectively into practice, and document the sustainability of 
        those improvements;
            ``(6) create strategies for quality improvement through the 
        development of tools, methodologies, and interventions that can 
        successfully reduce variations in the delivery of health care;
            ``(7) identify, measure, and improve organizational, human, 
        or other causative factors, including those related to the 
        culture and system design of a health care organization, that 
        contribute to the success and sustainability of specific 
        quality improvement and patient safety strategies;
            ``(8) provide for the development of best practices in the 
        delivery of health care services that--
                    ``(A) have a high likelihood of success, based on 
                structured review of empirical evidence;
                    ``(B) are specified with sufficient detail of the 
                individual processes, steps, training, skills, and 
                knowledge required for implementation and incorporation 
                into workflow of health care practitioners in a variety 
                of settings;
                    ``(C) are designed to be readily adapted by health 
                care providers in a variety of settings; and
                    ``(D) where applicable, assist health care 
                providers in working with other health care providers 
                across the continuum of care and in engaging patients 
                and their families in improving the care and patient 
                health outcomes;
            ``(9) provide for the funding of the activities of 
        organizations with recognized expertise and excellence in 
        improving the delivery of health care services, including 
        children's health care, by involving multiple disciplines, 
        managers of health care entities, broad development and 
        training, patients, caregivers and families, and frontline 
        health care workers, including activities for the examination 
        of strategies to share best quality improvement practices and 
        to promote excellence in the delivery of health care services; 
        and
            ``(10) build capacity at the State and community level to 
        lead quality and safety efforts through education, training, 
        and mentoring programs to carry out the activities under 
        paragraphs (1) through (9).
    ``(c) Research Functions of Center.--
            ``(1) In general.--The Center shall support, such as 
        through a contract or other mechanism, research on health care 
        delivery system improvement and the development of tools to 
        facilitate adoption of best practices that improve the quality, 
        safety, and efficiency of health care delivery services. Such 
        support may include establishing a Quality Improvement Network 
        Research Program for the purpose of testing, scaling, and 
        disseminating of interventions to improve quality and 
        efficiency in health care. Recipients of funding under the 
        Program may include national, State, multi-State, or multi-site 
        quality improvement networks.
            ``(2) Research requirements.--The research conducted 
        pursuant to paragraph (1) shall--
                    ``(A) address the priorities identified by the 
                Secretary in the national strategic plan established 
                under section 399HH;
                    ``(B) identify areas in which evidence is 
                insufficient to identify strategies and methodologies, 
                taking into consideration areas of insufficient 
                evidence identified by the entity with a contract under 
                section 1890(a) of the Social Security Act in the 
                report required under section 399JJ;
                    ``(C) address concerns identified by health care 
                institutions and providers and communicated through the 
                Center pursuant to subsection (d);
                    ``(D) reduce preventable morbidity, mortality, and 
                associated costs of morbidity and mortality by building 
                capacity for patient safety research;
                    ``(E) support the discovery of processes for the 
                reliable, safe, efficient, and responsive delivery of 
                health care, taking into account discoveries from 
                clinical research and comparative effectiveness 
                research;
                    ``(F) allow communication of research findings and 
                translate evidence into practice recommendations that 
                are adaptable to a variety of settings, and which, as 
                soon as practicable after the establishment of the 
                Center, shall include--
                            ``(i) the implementation of a national 
                        application of Intensive Care Unit improvement 
                        projects relating to the adult (including 
                        geriatric), pediatric, and neonatal patient 
                        populations;
                            ``(ii) practical methods for addressing 
                        health care associated infections, including 
                        Methicillin-Resistant Staphylococcus Aureus and 
                        Vancomycin-Resistant Entercoccus infections and 
                        other emerging infections; and
                            ``(iii) practical methods for reducing 
                        preventable hospital admissions and 
                        readmissions;
                    ``(G) expand demonstration projects for improving 
                the quality of children's health care and the use of 
                health information technology, such as through 
                Pediatric Quality Improvement Collaboratives and 
                Learning Networks, consistent with provisions of 
                section 1139A of the Social Security Act for assessing 
                and improving quality, where applicable;
                    ``(H) identify and mitigate hazards by--
                            ``(i) analyzing events reported to patient 
                        safety reporting systems and patient safety 
                        organizations; and
                            ``(ii) using the results of such analyses 
                        to develop scientific methods of response to 
                        such events;
                    ``(I) include the conduct of systematic reviews of 
                existing practices that improve the quality, safety, 
                and efficiency of health care delivery, as well as new 
                research on improving such practices; and
                    ``(J) include the examination of how to measure and 
                evaluate the progress of quality and patient safety 
                activities.
    ``(d) Dissemination of Research Findings.--
            ``(1) Public availability.--The Director shall make the 
        research findings of the Center available to the public through 
        multiple media and appropriate formats to reflect the varying 
        needs of health care providers and consumers and diverse levels 
        of health literacy.
            ``(2) Linkage to health information technology.--The 
        Secretary shall ensure that research findings and results 
        generated by the Center are shared with the Office of the 
        National Coordinator of Health Information Technology and used 
        to inform the activities of the health information technology 
        extension program under section 3012, as well as any relevant 
        standards, certification criteria, or implementation 
        specifications.
    ``(e) Prioritization.--The Director shall identify and regularly 
update a list of processes or systems on which to focus research and 
dissemination activities of the Center, taking into account--
            ``(1) the cost to Federal health programs;
            ``(2) consumer assessment of health care experience;
            ``(3) provider assessment of such processes or systems and 
        opportunities to minimize distress and injury to the health 
        care workforce;
            ``(4) the potential impact of such processes or systems on 
        health status and function of patients, including vulnerable 
        populations including children;
            ``(5) the areas of insufficient evidence identified under 
        subsection (c)(2)(B); and
            ``(6) the evolution of meaningful use of health information 
        technology, as defined in section 3000.
    ``(f) Coordination.--The Center shall coordinate its activities 
with activities conducted by the Center for Medicare and Medicaid 
Innovation established under section 1115A of the Social Security Act.
    ``(g) Funding.--There is authorized to be appropriated to carry out 
this section $20,000,000 for fiscal years 2010 through 2014.

``SEC. 934. QUALITY IMPROVEMENT TECHNICAL ASSISTANCE AND 
              IMPLEMENTATION.

    ``(a) In General.--The Director, through the Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research 
and Quality (referred to in this section as the `Center'), shall 
award--
            ``(1) technical assistance grants or contracts to eligible 
        entities to provide technical support to institutions that 
        deliver health care and health care providers (including rural 
        and urban providers of services and suppliers with limited 
        infrastructure and financial resources to implement and support 
        quality improvement activities, providers of services and 
        suppliers with poor performance scores, and providers of 
        services and suppliers for which there are disparities in care 
        among subgroups of patients) so that such institutions and 
        providers understand, adapt, and implement the models and 
        practices identified in the research conducted by the Center, 
        including the Quality Improvement Networks Research Program; 
        and
            ``(2) implementation grants or contracts to eligible 
        entities to implement the models and practices described under 
        paragraph (1).
    ``(b) Eligible Entities.--
            ``(1) Technical assistance award.--To be eligible to 
        receive a technical assistance grant or contract under 
        subsection (a)(1), an entity--
                    ``(A) may be a health care provider, health care 
                provider association, professional society, health care 
                worker organization, Indian health organization, 
                quality improvement organization, patient safety 
                organization, local quality improvement collaborative, 
                the Joint Commission, academic health center, 
                university, physician-based research network, primary 
                care extension program established under section 399W, 
                a Federal Indian Health Service program or a health 
                program operated by an Indian tribe (as defined in 
                section 4 of the Indian Health Care Improvement Act), 
                or any other entity identified by the Secretary; and
                    ``(B) shall have demonstrated expertise in 
                providing information and technical support and 
                assistance to health care providers regarding quality 
                improvement.
            ``(2) Implementation award.--To be eligible to receive an 
        implementation grant or contract under subsection (a)(2), an 
        entity--
                    ``(A) may be a hospital or other health care 
                provider or consortium or providers, as determined by 
                the Secretary; and
                    ``(B) shall have demonstrated expertise in 
                providing information and technical support and 
                assistance to health care providers regarding quality 
                improvement.
    ``(c) Application.--
            ``(1) Technical assistance award.--To receive a technical 
        assistance grant or contract under subsection (a)(1), an 
        eligible entity shall submit an application to the Secretary at 
        such time, in such manner, and containing--
                    ``(A) a plan for a sustainable business model that 
                may include a system of--
                            ``(i) charging fees to institutions and 
                        providers that receive technical support from 
                        the entity; and
                            ``(ii) reducing or eliminating such fees 
                        for such institutions and providers that serve 
                        low-income populations; and
                    ``(B) such other information as the Director may 
                require.
            ``(2) Implementation award.--To receive a grant or contract 
        under subsection (a)(2), an eligible entity shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing--
                    ``(A) a plan for implementation of a model or 
                practice identified in the research conducted by the 
                Center including--
                            ``(i) financial cost, staffing 
                        requirements, and timeline for implementation; 
                        and
                            ``(ii) pre- and projected post-
                        implementation quality measure performance data 
                        in targeted improvement areas identified by the 
                        Secretary; and
                    ``(B) such other information as the Director may 
                require.
    ``(d) Matching Funds.--The Director may not award a grant or 
contract under this section to an entity unless the entity agrees that 
it will make available (directly or through contributions from other 
public or private entities) non-Federal contributions toward the 
activities to be carried out under the grant or contract in an amount 
equal to $1 for each $5 of Federal funds provided under the grant or 
contract. Such non-Federal matching funds may be provided directly or 
through donations from public or private entities and may be in cash or 
in-kind, fairly evaluated, including plant, equipment, or services.
    ``(e) Evaluation.--
            ``(1) In general.--The Director shall evaluate the 
        performance of each entity that receives a grant or contract 
        under this section. The evaluation of an entity shall include a 
        study of--
                    ``(A) the success of such entity in achieving the 
                implementation, by the health care institutions and 
                providers assisted by such entity, of the models and 
                practices identified in the research conducted by the 
                Center under section 933;
                    ``(B) the perception of the health care 
                institutions and providers assisted by such entity 
                regarding the value of the entity; and
                    ``(C) where practicable, better patient health 
                outcomes and lower cost resulting from the assistance 
                provided by such entity.
            ``(2) Effect of evaluation.--Based on the outcome of the 
        evaluation of the entity under paragraph (1), the Director 
        shall determine whether to renew a grant or contract with such 
        entity under this section.
    ``(f) Coordination.--The entities that receive a grant or contract 
under this section shall coordinate with health information technology 
regional extension centers under section 3012(c) and the primary care 
extension program established under section 399W regarding the 
dissemination of quality improvement, system delivery reform, and best 
practices information.''.

SEC. 3502. ESTABLISHING COMMUNITY HEALTH TEAMS TO SUPPORT THE PATIENT-
              CENTERED MEDICAL HOME.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall establish a 
program to provide grants to or enter into contracts with eligible 
entities to establish community-based interdisciplinary, 
interprofessional teams (referred to in this section as ``health 
teams'') to support primary care practices, including obstetrics and 
gynecology practices, within the hospital service areas served by the 
eligible entities. Grants or contracts shall be used to--
            (1) establish health teams to provide support services to 
        primary care providers; and
            (2) provide capitated payments to primary care providers as 
        determined by the Secretary.
    (b) Eligible Entities.--To be eligible to receive a grant or 
contract under subsection (a), an entity shall--
            (1)(A) be a State or State-designated entity; or
            (B) be an Indian tribe or tribal organization, as defined 
        in section 4 of the Indian Health Care Improvement Act;
            (2) submit a plan for achieving long-term financial 
        sustainability within 3 years;
            (3) submit a plan for incorporating prevention initiatives 
        and patient education and care management resources into the 
        delivery of health care that is integrated with community-based 
        prevention and treatment resources, where available;
            (4) ensure that the health team established by the entity 
        includes an interdisciplinary, interprofessional team of health 
        care providers, as determined by the Secretary; such team may 
        include medical specialists, nurses, pharmacists, 
        nutritionists, dieticians, social workers, behavioral and 
        mental health providers (including substance use disorder 
        prevention and treatment providers), doctors of chiropractic, 
        licensed complementary and alternative medicine practitioners, 
        and physicians' assistants;
            (5) agree to provide services to eligible individuals with 
        chronic conditions, as described in section 1945 of the Social 
        Security Act (as added by section 2703), in accordance with the 
        payment methodology established under subsection (c) of such 
        section; and
            (6) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require.
    (c) Requirements for Health Teams.--A health team established 
pursuant to a grant or contract under subsection (a) shall--
            (1) establish contractual agreements with primary care 
        providers to provide support services;
            (2) support patient-centered medical homes, defined as a 
        mode of care that includes--
                    (A) personal physicians;
                    (B) whole person orientation;
                    (C) coordinated and integrated care;
                    (D) safe and high-quality care through evidence-
                informed medicine, appropriate use of health 
                information technology, and continuous quality 
                improvements;
                    (E) expanded access to care; and
                    (F) payment that recognizes added value from 
                additional components of patient-centered care;
            (3) collaborate with local primary care providers and 
        existing State and community based resources to coordinate 
        disease prevention, chronic disease management, transitioning 
        between health care providers and settings and case management 
        for patients, including children, with priority given to those 
        amenable to prevention and with chronic diseases or conditions 
        identified by the Secretary;
            (4) in collaboration with local health care providers, 
        develop and implement interdisciplinary, interprofessional care 
        plans that integrate clinical and community preventive and 
        health promotion services for patients, including children, 
        with a priority given to those amenable to prevention and with 
        chronic diseases or conditions identified by the Secretary;
            (5) incorporate health care providers, patients, 
        caregivers, and authorized representatives in program design 
        and oversight;
            (6) provide support necessary for local primary care 
        providers to--
                    (A) coordinate and provide access to high-quality 
                health care services;
                    (B) coordinate and provide access to preventive and 
                health promotion services;
                    (C) provide access to appropriate specialty care 
                and inpatient services;
                    (D) provide quality-driven, cost-effective, 
                culturally appropriate, and patient- and family-
                centered health care;
                    (E) provide access to pharmacist-delivered 
                medication management services, including medication 
                reconciliation;
                    (F) provide coordination of the appropriate use of 
                complementary and alternative (CAM) services to those 
                who request such services;
                    (G) promote effective strategies for treatment 
                planning, monitoring health outcomes and resource use, 
                sharing information, treatment decision support, and 
                organizing care to avoid duplication of service and 
                other medical management approaches intended to improve 
                quality and value of health care services;
                    (H) provide local access to the continuum of health 
                care services in the most appropriate setting, 
                including access to individuals that implement the care 
                plans of patients and coordinate care, such as 
                integrative health care practitioners;
                    (I) collect and report data that permits evaluation 
                of the success of the collaborative effort on patient 
                outcomes, including collection of data on patient 
                experience of care, and identification of areas for 
                improvement; and
                    (J) establish a coordinated system of early 
                identification and referral for children at risk for 
                developmental or behavioral problems such as through 
                the use of infolines, health information technology, or 
                other means as determined by the Secretary;
            (7) provide 24-hour care management and support during 
        transitions in care settings including--
                    (A) a transitional care program that provides 
                onsite visits from the care coordinator, assists with 
                the development of discharge plans and medication 
                reconciliation upon admission to and discharge from the 
                hospitals, nursing home, or other institution setting;
                    (B) discharge planning and counseling support to 
                providers, patients, caregivers, and authorized 
                representatives;
                    (C) assuring that post-discharge care plans include 
                medication management, as appropriate;
                    (D) referrals for mental and behavioral health 
                services, which may include the use of infolines; and
                    (E) transitional health care needs from adolescence 
                to adulthood;
            (8) serve as a liaison to community prevention and 
        treatment programs;
            (9) demonstrate a capacity to implement and maintain health 
        information technology that meets the requirements of certified 
        EHR technology (as defined in section 3000 of the Public Health 
        Service Act (42 U.S.C. 300jj)) to facilitate coordination among 
        members of the applicable care team and affiliated primary care 
        practices; and
            (10) where applicable, report to the Secretary information 
        on quality measures used under section 399JJ of the Public 
        Health Service Act.
    (d) Requirement for Primary Care Providers.--A provider who 
contracts with a care team shall--
            (1) provide a care plan to the care team for each patient 
        participant;
            (2) provide access to participant health records; and
            (3) meet regularly with the care team to ensure integration 
        of care.
    (e) Reporting to Secretary.--An entity that receives a grant or 
contract under subsection (a) shall submit to the Secretary a report 
that describes and evaluates, as requested by the Secretary, the 
activities carried out by the entity under subsection (c).
    (f) Definition of Primary Care.--In this section, the term 
``primary care'' means the provision of integrated, accessible health 
care services by clinicians who are accountable for addressing a large 
majority of personal health care needs, developing a sustained 
partnership with patients, and practicing in the context of family and 
community.

SEC. 3503. MEDICATION MANAGEMENT SERVICES IN TREATMENT OF CHRONIC 
              DISEASE.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.), 
as amended by section 3501, is further amended by inserting after 
section 934 the following:

``SEC. 935. GRANTS OR CONTRACTS TO IMPLEMENT MEDICATION MANAGEMENT 
              SERVICES IN TREATMENT OF CHRONIC DISEASES.

    ``(a) In General.--The Secretary, acting through the Patient Safety 
Research Center established in section 933 (referred to in this section 
as the `Center'), shall establish a program to provide grants or 
contracts to eligible entities to implement medication management 
(referred to in this section as `MTM') services provided by licensed 
pharmacists, as a collaborative, multidisciplinary, inter-professional 
approach to the treatment of chronic diseases for targeted individuals, 
to improve the quality of care and reduce overall cost in the treatment 
of such diseases. The Secretary shall commence the program under this 
section not later than May 1, 2010.
    ``(b) Eligible Entities.--To be eligible to receive a grant or 
contract under subsection (a), an entity shall--
            ``(1) provide a setting appropriate for MTM services, as 
        recommended by the experts described in subsection (e);
            ``(2) submit to the Secretary a plan for achieving long-
        term financial sustainability;
            ``(3) where applicable, submit a plan for coordinating MTM 
        services through local community health teams established in 
        section 3502 of the Patient Protection and Affordable Care Act 
        or in collaboration with primary care extension programs 
        established in section 399W;
            ``(4) submit a plan for meeting the requirements under 
        subsection (c); and
            ``(5) submit to the Secretary such other information as the 
        Secretary may require.
    ``(c) MTM Services to Targeted Individuals.--The MTM services 
provided with the assistance of a grant or contract awarded under 
subsection (a) shall, as allowed by State law including applicable 
collaborative pharmacy practice agreements, include--
            ``(1) performing or obtaining necessary assessments of the 
        health and functional status of each patient receiving such MTM 
        services;
            ``(2) formulating a medication treatment plan according to 
        therapeutic goals agreed upon by the prescriber and the patient 
        or caregiver or authorized representative of the patient;
            ``(3) selecting, initiating, modifying, recommending 
        changes to, or administering medication therapy;
            ``(4) monitoring, which may include access to, ordering, or 
        performing laboratory assessments, and evaluating the response 
        of the patient to therapy, including safety and effectiveness;
            ``(5) performing an initial comprehensive medication review 
        to identify, resolve, and prevent medication-related problems, 
        including adverse drug events, quarterly targeted medication 
        reviews for ongoing monitoring, and additional followup 
        interventions on a schedule developed collaboratively with the 
        prescriber;
            ``(6) documenting the care delivered and communicating 
        essential information about such care, including a summary of 
        the medication review, and the recommendations of the 
        pharmacist to other appropriate health care providers of the 
        patient in a timely fashion;
            ``(7) providing education and training designed to enhance 
        the understanding and appropriate use of the medications by the 
        patient, caregiver, and other authorized representative;
            ``(8) providing information, support services, and 
        resources and strategies designed to enhance patient adherence 
        with therapeutic regimens;
            ``(9) coordinating and integrating MTM services within the 
        broader health care management services provided to the 
        patient; and
            ``(10) such other patient care services allowed under 
        pharmacist scopes of practice in use in other Federal programs 
        that have implemented MTM services.
    ``(d) Targeted Individuals.--MTM services provided by licensed 
pharmacists under a grant or contract awarded under subsection (a) 
shall be offered to targeted individuals who--
            ``(1) take 4 or more prescribed medications (including 
        over-the-counter medications and dietary supplements);
            ``(2) take any `high risk' medications;
            ``(3) have 2 or more chronic diseases, as identified by the 
        Secretary; or
            ``(4) have undergone a transition of care, or other 
        factors, as determined by the Secretary, that are likely to 
        create a high risk of medication-related problems.
    ``(e) Consultation With Experts.--In designing and implementing MTM 
services provided under grants or contracts awarded under subsection 
(a), the Secretary shall consult with Federal, State, private, public-
private, and academic entities, pharmacy and pharmacist organizations, 
health care organizations, consumer advocates, chronic disease groups, 
and other stakeholders involved with the research, dissemination, and 
implementation of pharmacist-delivered MTM services, as the Secretary 
determines appropriate. The Secretary, in collaboration with this 
group, shall determine whether it is possible to incorporate rapid 
cycle process improvement concepts in use in other Federal programs 
that have implemented MTM services.
    ``(f) Reporting to the Secretary.--An entity that receives a grant 
or contract under subsection (a) shall submit to the Secretary a report 
that describes and evaluates, as requested by the Secretary, the 
activities carried out under subsection (c), including quality measures 
endorsed by the entity with a contract under section 1890 of the Social 
Security Act, as determined by the Secretary.
    ``(g) Evaluation and Report.--The Secretary shall submit to the 
relevant committees of Congress a report which shall--
            ``(1) assess the clinical effectiveness of pharmacist-
        provided services under the MTM services program, as compared 
        to usual care, including an evaluation of whether enrollees 
        maintained better health with fewer hospitalizations and 
        emergency room visits than similar patients not enrolled in the 
        program;
            ``(2) assess changes in overall health care resource use by 
        targeted individuals;
            ``(3) assess patient and prescriber satisfaction with MTM 
        services;
            ``(4) assess the impact of patient-cost sharing 
        requirements on medication adherence and recommendations for 
        modifications;
            ``(5) identify and evaluate other factors that may impact 
        clinical and economic outcomes, including demographic 
        characteristics, clinical characteristics, and health services 
        use of the patient, as well as characteristics of the regimen, 
        pharmacy benefit, and MTM services provided; and
            ``(6) evaluate the extent to which participating 
        pharmacists who maintain a dispensing role have a conflict of 
        interest in the provision of MTM services, and if such conflict 
        is found, provide recommendations on how such a conflict might 
        be appropriately addressed.
    ``(h) Grants or Contracts to Fund Development of Performance 
Measures.--The Secretary may, through the quality measure development 
program under section 931 of the Public Health Service Act, award 
grants or contracts to eligible entities for the purpose of funding the 
development of performance measures that assess the use and 
effectiveness of medication therapy management services.''.

SEC. 3504. DESIGN AND IMPLEMENTATION OF REGIONALIZED SYSTEMS FOR 
              EMERGENCY CARE.

    (a) In General.--Title XII of the Public Health Service Act (42 
U.S.C. 300d et seq.) is amended--
            (1) in section 1203--
                    (A) in the section heading, by inserting ``for 
                trauma systems'' after ``grants''; and
                    (B) in subsection (a), by striking ``Administrator 
                of the Health Resources and Services Administration'' 
                and inserting ``Assistant Secretary for Preparedness 
                and Response'';
            (2) by inserting after section 1203 the following:

``SEC. 1204. COMPETITIVE GRANTS FOR REGIONALIZED SYSTEMS FOR EMERGENCY 
              CARE RESPONSE.

    ``(a) In General.--The Secretary, acting through the Assistant 
Secretary for Preparedness and Response, shall award not fewer than 4 
multiyear contracts or competitive grants to eligible entities to 
support pilot projects that design, implement, and evaluate innovative 
models of regionalized, comprehensive, and accountable emergency care 
and trauma systems.
    ``(b) Eligible Entity; Region.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) a State or a partnership of 1 or more States 
                and 1 or more local governments; or
                    ``(B) an Indian tribe (as defined in section 4 of 
                the Indian Health Care Improvement Act) or a 
                partnership of 1 or more Indian tribes.
            ``(2) Region.--The term `region' means an area within a 
        State, an area that lies within multiple States, or a similar 
        area (such as a multicounty area), as determined by the 
        Secretary.
            ``(3) Emergency services.--The term `emergency services' 
        includes acute, prehospital, and trauma care.
    ``(c) Pilot Projects.--The Secretary shall award a contract or 
grant under subsection (a) to an eligible entity that proposes a pilot 
project to design, implement, and evaluate an emergency medical and 
trauma system that--
            ``(1) coordinates with public health and safety services, 
        emergency medical services, medical facilities, trauma centers, 
        and other entities in a region to develop an approach to 
        emergency medical and trauma system access throughout the 
        region, including 9-1-1 Public Safety Answering Points and 
        emergency medical dispatch;
            ``(2) includes a mechanism, such as a regional medical 
        direction or transport communications system, that operates 
        throughout the region to ensure that the patient is taken to 
        the medically appropriate facility (whether an initial facility 
        or a higher-level facility) in a timely fashion;
            ``(3) allows for the tracking of prehospital and hospital 
        resources, including inpatient bed capacity, emergency 
        department capacity, trauma center capacity, on-call specialist 
        coverage, ambulance diversion status, and the coordination of 
        such tracking with regional communications and hospital 
        destination decisions; and
            ``(4) includes a consistent region-wide prehospital, 
        hospital, and interfacility data management system that--
                    ``(A) submits data to the National EMS Information 
                System, the National Trauma Data Bank, and others;
                    ``(B) reports data to appropriate Federal and State 
                databanks and registries; and
                    ``(C) contains information sufficient to evaluate 
                key elements of prehospital care, hospital destination 
                decisions, including initial hospital and interfacility 
                decisions, and relevant health outcomes of hospital 
                care.
    ``(d) Application.--
            ``(1) In general.--An eligible entity that seeks a contract 
        or grant described in subsection (a) shall submit to the 
        Secretary an application at such time and in such manner as the 
        Secretary may require.
            ``(2) Application information.--Each application shall 
        include--
                    ``(A) an assurance from the eligible entity that 
                the proposed system--
                            ``(i) has been coordinated with the 
                        applicable State Office of Emergency Medical 
                        Services (or equivalent State office);
                            ``(ii) includes consistent indirect and 
                        direct medical oversight of prehospital, 
                        hospital, and interfacility transport 
                        throughout the region;
                            ``(iii) coordinates prehospital treatment 
                        and triage, hospital destination, and 
                        interfacility transport throughout the region;
                            ``(iv) includes a categorization or 
                        designation system for special medical 
                        facilities throughout the region that is 
                        integrated with transport and destination 
                        protocols;
                            ``(v) includes a regional medical 
                        direction, patient tracking, and resource 
                        allocation system that supports day-to-day 
                        emergency care and surge capacity and is 
                        integrated with other components of the 
                        national and State emergency preparedness 
                        system; and
                            ``(vi) addresses pediatric concerns related 
                        to integration, planning, preparedness, and 
                        coordination of emergency medical services for 
                        infants, children and adolescents; and
                    ``(B) such other information as the Secretary may 
                require.
    ``(e) Requirement of Matching Funds.--
            ``(1) In general.--The Secretary may not make a grant under 
        this section unless the State (or consortia of States) involved 
        agrees, with respect to the costs to be incurred by the State 
        (or consortia) in carrying out the purpose for which such grant 
        was made, to make available non-Federal contributions (in cash 
        or in kind under paragraph (2)) toward such costs in an amount 
        equal to not less than $1 for each $3 of Federal funds provided 
        in the grant. Such contributions may be made directly or 
        through donations from public or private entities.
            ``(2) Non-federal contributions.--Non-Federal contributions 
        required in paragraph (1) may be in cash or in kind, fairly 
        evaluated, including equipment or services (and excluding 
        indirect or overhead costs). Amounts provided by the Federal 
        Government, or services assisted or subsidized to any 
        significant extent by the Federal Government, may not be 
        included in determining the amount of such non-Federal 
        contributions.
    ``(f) Priority.--The Secretary shall give priority for the award of 
the contracts or grants described in subsection (a) to any eligible 
entity that serves a population in a medically underserved area (as 
defined in section 330(b)(3)).
    ``(g) Report.--Not later than 90 days after the completion of a 
pilot project under subsection (a), the recipient of such contract or 
grant described in shall submit to the Secretary a report containing 
the results of an evaluation of the program, including an 
identification of--
            ``(1) the impact of the regional, accountable emergency 
        care and trauma system on patient health outcomes for various 
        critical care categories, such as trauma, stroke, cardiac 
        emergencies, neurological emergencies, and pediatric 
        emergencies;
            ``(2) the system characteristics that contribute to the 
        effectiveness and efficiency of the program (or lack thereof);
            ``(3) methods of assuring the long-term financial 
        sustainability of the emergency care and trauma system;
            ``(4) the State and local legislation necessary to 
        implement and to maintain the system;
            ``(5) the barriers to developing regionalized, accountable 
        emergency care and trauma systems, as well as the methods to 
        overcome such barriers; and
            ``(6) recommendations on the utilization of available 
        funding for future regionalization efforts.
    ``(h) Dissemination of Findings.--The Secretary shall, as 
appropriate, disseminate to the public and to the appropriate 
Committees of the Congress, the information contained in a report made 
under subsection (g).''; and
            (3) in section 1232--
                    (A) in subsection (a), by striking ``appropriated'' 
                and all that follows through the period at the end and 
                inserting ``appropriated $24,000,000 for each of fiscal 
                years 2010 through 2014.''; and
                    (B) by inserting after subsection (c) the 
                following:
    ``(d) Authority.--For the purpose of carrying out parts A through 
C, beginning on the date of enactment of the Patient Protection and 
Affordable Care Act, the Secretary shall transfer authority in 
administering grants and related authorities under such parts from the 
Administrator of the Health Resources and Services Administration to 
the Assistant Secretary for Preparedness and Response.''.
    (b) Support for Emergency Medicine Research.--Part H of title IV of 
the Public Health Service Act (42 U.S.C. 289 et seq.) is amended by 
inserting after the section 498C the following:

``SEC. 498D. SUPPORT FOR EMERGENCY MEDICINE RESEARCH.

    ``(a) Emergency Medical Research.--The Secretary shall support 
Federal programs administered by the National Institutes of Health, the 
Agency for Healthcare Research and Quality, the Health Resources and 
Services Administration, the Centers for Disease Control and 
Prevention, and other agencies involved in improving the emergency care 
system to expand and accelerate research in emergency medical care 
systems and emergency medicine, including--
            ``(1) the basic science of emergency medicine;
            ``(2) the model of service delivery and the components of 
        such models that contribute to enhanced patient health 
        outcomes;
            ``(3) the translation of basic scientific research into 
        improved practice; and
            ``(4) the development of timely and efficient delivery of 
        health services.
    ``(b) Pediatric Emergency Medical Research.--The Secretary shall 
support Federal programs administered by the National Institutes of 
Health, the Agency for Healthcare Research and Quality, the Health 
Resources and Services Administration, the Centers for Disease Control 
and Prevention, and other agencies to coordinate and expand research in 
pediatric emergency medical care systems and pediatric emergency 
medicine, including--
            ``(1) an examination of the gaps and opportunities in 
        pediatric emergency care research and a strategy for the 
        optimal organization and funding of such research;
            ``(2) the role of pediatric emergency services as an 
        integrated component of the overall health system;
            ``(3) system-wide pediatric emergency care planning, 
        preparedness, coordination, and funding;
            ``(4) pediatric training in professional education; and
            ``(5) research in pediatric emergency care, specifically on 
        the efficacy, safety, and health outcomes of medications used 
        for infants, children, and adolescents in emergency care 
        settings in order to improve patient safety.
    ``(c) Impact Research.--The Secretary shall support research to 
determine the estimated economic impact of, and savings that result 
from, the implementation of coordinated emergency care systems.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2014.''.

SEC. 3505. TRAUMA CARE CENTERS AND SERVICE AVAILABILITY.

    (a) Trauma Care Centers.--
            (1) Grants for trauma care centers.--Section 1241 of the 
        Public Health Service Act (42 U.S.C. 300d-41) is amended by 
        striking subsections (a) and (b) and inserting the following:
    ``(a) In General.--The Secretary shall establish 3 programs to 
award grants to qualified public, nonprofit Indian Health Service, 
Indian tribal, and urban Indian trauma centers--
            ``(1) to assist in defraying substantial uncompensated care 
        costs;
            ``(2) to further the core missions of such trauma centers, 
        including by addressing costs associated with patient 
        stabilization and transfer, trauma education and outreach, 
        coordination with local and regional trauma systems, essential 
        personnel and other fixed costs, and expenses associated with 
        employee and non-employee physician services; and
            ``(3) to provide emergency relief to ensure the continued 
        and future availability of trauma services.
    ``(b) Minimum Qualifications of Trauma Centers.--
            ``(1) Participation in trauma care system operating under 
        certain professional guidelines.--Except as provided in 
        paragraph (2), the Secretary may not award a grant to a trauma 
        center under subsection (a) unless the trauma center is a 
        participant in a trauma system that substantially complies with 
        section 1213.
            ``(2) Exemption.--Paragraph (1) shall not apply to trauma 
        centers that are located in States with no existing trauma care 
        system.
            ``(3) Qualification for substantial uncompensated care 
        costs.--The Secretary shall award substantial uncompensated 
        care grants under subsection (a)(1) only to trauma centers 
        meeting at least 1 of the criteria in 1 of the following 3 
        categories:
                    ``(A) Category a.--The criteria for category A are 
                as follows:
                            ``(i) At least 40 percent of the visits in 
                        the emergency department of the hospital in 
                        which the trauma center is located were charity 
                        or self-pay patients.
                            ``(ii) At least 50 percent of the visits in 
                        such emergency department were Medicaid (under 
                        title XIX of the Social Security Act (42 U.S.C. 
                        1396 et seq.)) and charity and self-pay 
                        patients combined.
                    ``(B) Category b.--The criteria for category B are 
                as follows:
                            ``(i) At least 35 percent of the visits in 
                        the emergency department were charity or self-
                        pay patients.
                            ``(ii) At least 50 percent of the visits in 
                        the emergency department were Medicaid and 
                        charity and self-pay patients combined.
                    ``(C) Category c.--The criteria for category C are 
                as follows:
                            ``(i) At least 20 percent of the visits in 
                        the emergency department were charity or self-
                        pay patients.
                            ``(ii) At least 30 percent of the visits in 
                        the emergency department were Medicaid and 
                        charity and self-pay patients combined.
            ``(4) Trauma centers in 1115 waiver states.--
        Notwithstanding paragraph (3), the Secretary may award a 
        substantial uncompensated care grant to a trauma center under 
        subsection (a)(1) if the trauma center qualifies for funds 
        under a Low Income Pool or Safety Net Care Pool established 
        through a waiver approved under section 1115 of the Social 
        Security Act (42 U.S.C. 1315).
            ``(5) Designation.--The Secretary may not award a grant to 
        a trauma center unless such trauma center is verified by the 
        American College of Surgeons or designated by an equivalent 
        State or local agency.
    ``(c) Additional Requirements.--The Secretary may not award a grant 
to a trauma center under subsection (a)(1) unless such trauma center--
            ``(1) submits to the Secretary a plan satisfactory to the 
        Secretary that demonstrates a continued commitment to serving 
        trauma patients regardless of their ability to pay; and
            ``(2) has policies in place to assist patients who cannot 
        pay for part or all of the care they receive, including a 
        sliding fee scale, and to ensure fair billing and collection 
        practices.''.
            (2) Considerations in making grants.--Section 1242 of the 
        Public Health Service Act (42 U.S.C. 300d-42) is amended by 
        striking subsections (a) and (b) and inserting the following:
    ``(a) Substantial Uncompensated Care Awards.--
            ``(1) In general.--The Secretary shall establish an award 
        basis for each eligible trauma center for grants under section 
        1241(a)(1) according to the percentage described in paragraph 
        (2), subject to the requirements of section 1241(b)(3).
            ``(2) Percentages.--The applicable percentages are as 
        follows:
                    ``(A) With respect to a category A trauma center, 
                100 percent of the uncompensated care costs.
                    ``(B) With respect to a category B trauma center, 
                not more than 75 percent of the uncompensated care 
                costs.
                    ``(C) With respect to a category C trauma center, 
                not more than 50 percent of the uncompensated care 
                costs.
    ``(b) Core Mission Awards.--
            ``(1) In general.--In awarding grants under section 
        1241(a)(2), the Secretary shall--
                    ``(A) reserve 25 percent of the amount allocated 
                for core mission awards for Level III and Level IV 
                trauma centers; and
                    ``(B) reserve 25 percent of the amount allocated 
                for core mission awards for large urban Level I and II 
                trauma centers--
                            ``(i) that have at least 1 graduate medical 
                        education fellowship in trauma or trauma 
                        related specialties for which demand is 
                        exceeding supply;
                            ``(ii) for which--
                                    ``(I) annual uncompensated care 
                                costs exceed $10,000,000; or
                                    ``(II) at least 20 percent of 
                                emergency department visits are charity 
                                or self-pay or Medicaid patients; and
                            ``(iii) that are not eligible for 
                        substantial uncompensated care awards under 
                        section 1241(a)(1).
    ``(c) Emergency Awards.--In awarding grants under section 
1241(a)(3), the Secretary shall--
            ``(1) give preference to any application submitted by a 
        trauma center that provides trauma care in a geographic area in 
        which the availability of trauma care has significantly 
        decreased or will significantly decrease if the center is 
        forced to close or downgrade service or growth in demand for 
        trauma services exceeds capacity; and
            ``(2) reallocate any emergency awards funds not obligated 
        due to insufficient, or a lack of qualified, applications to 
        the significant uncompensated care award program.''.
            (3) Certain agreements.--Section 1243 of the Public Health 
        Service Act (42 U.S.C. 300d-43) is amended by striking 
        subsections (a), (b), and (c) and inserting the following:
    ``(a) Maintenance of Financial Support.--The Secretary may require 
a trauma center receiving a grant under section 1241(a) to maintain 
access to trauma services at comparable levels to the prior year during 
the grant period.
    ``(b) Trauma Care Registry.--The Secretary may require the trauma 
center receiving a grant under section 1241(a) to provide data to a 
national and centralized registry of trauma cases, in accordance with 
guidelines developed by the American College of Surgeons, and as the 
Secretary may otherwise require.''.
            (4) General provisions.--Section 1244 of the Public Health 
        Service Act (42 U.S.C. 300d-44) is amended by striking 
        subsections (a), (b), and (c) and inserting the following:
    ``(a) Application.--The Secretary may not award a grant to a trauma 
center under section 1241(a) unless such center submits an application 
for the grant to the Secretary and the application is in such form, is 
made in such manner, and contains such agreements, assurances, and 
information as the Secretary determines to be necessary to carry out 
this part.
    ``(b) Limitation on Duration of Support.--The period during which a 
trauma center receives payments under a grant under section 1241(a)(3) 
shall be for 3 fiscal years, except that the Secretary may waive such 
requirement for a center and authorize such center to receive such 
payments for 1 additional fiscal year.
    ``(c) Limitation on Amount of Grant.--Notwithstanding section 
1242(a), a grant under section 1241 may not be made in an amount 
exceeding $2,000,000 for each fiscal year.
    ``(d) Eligibility.--Except as provided in section 
1242(b)(1)(B)(iii), acquisition of, or eligibility for, a grant under 
section 1241(a) shall not preclude a trauma center from being eligible 
for other grants described in such section.
    ``(e) Funding Distribution.--Of the total amount appropriated for a 
fiscal year under section 1245, 70 percent shall be used for 
substantial uncompensated care awards under section 1241(a)(1), 20 
percent shall be used for core mission awards under section 1241(a)(2), 
and 10 percent shall be used for emergency awards under section 
1241(a)(3).
    ``(f) Minimum Allowance.--Notwithstanding subsection (e), if the 
amount appropriated for a fiscal year under section 1245 is less than 
$25,000,000, all available funding for such fiscal year shall be used 
for substantial uncompensated care awards under section 1241(a)(1).
    ``(g) Substantial Uncompensated Care Award Distribution and 
Proportional Share.--Notwithstanding section 1242(a), of the amount 
appropriated for substantial uncompensated care grants for a fiscal 
year, the Secretary shall--
            ``(1) make available--
                    ``(A) 50 percent of such funds for category A 
                trauma center grantees;
                    ``(B) 35 percent of such funds for category B 
                trauma center grantees; and
                    ``(C) 15 percent of such funds for category C 
                trauma center grantees; and
            ``(2) provide available funds within each category in a 
        manner proportional to the award basis specified in section 
        1242(a)(2) to each eligible trauma center.
    ``(h) Report.--Beginning 2 years after the date of enactment of the 
Patient Protection and Affordable Care Act, and every 2 years 
thereafter, the Secretary shall biennially report to Congress regarding 
the status of the grants made under section 1241 and on the overall 
financial stability of trauma centers.''.
            (5) Authorization of appropriations.--Section 1245 of the 
        Public Health Service Act (42 U.S.C. 300d-45) is amended to 
        read as follows:

``SEC. 1245. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized 
to be appropriated $100,000,000 for fiscal year 2009, and such sums as 
may be necessary for each of fiscal years 2010 through 2015. Such 
authorization of appropriations is in addition to any other 
authorization of appropriations or amounts that are available for such 
purpose.''.
            (6) Definition.--Part D of title XII of the Public Health 
        Service Act (42 U.S.C. 300d-41 et seq.) is amended by adding at 
        the end the following:

``SEC. 1246. DEFINITION.

    ``In this part, the term `uncompensated care costs' means 
unreimbursed costs from serving self-pay, charity, or Medicaid 
patients, without regard to payment under section 1923 of the Social 
Security Act, all of which are attributable to emergency care and 
trauma care, including costs related to subsequent inpatient admissions 
to the hospital.''.
    (b) Trauma Service Availability.--Title XII of the Public Health 
Service Act (42 U.S.C. 300d et seq.) is amended by adding at the end 
the following:

                 ``PART H--TRAUMA SERVICE AVAILABILITY

``SEC. 1281. GRANTS TO STATES.

    ``(a) Establishment.--To promote universal access to trauma care 
services provided by trauma centers and trauma-related physician 
specialties, the Secretary shall provide funding to States to enable 
such States to award grants to eligible entities for the purposes 
described in this section.
    ``(b) Awarding of Grants by States.--Each State may award grants to 
eligible entities within the State for the purposes described in 
subparagraph (d).
    ``(c) Eligibility.--
            ``(1) In general.--To be eligible to receive a grant under 
        subsection (b) an entity shall--
                    ``(A) be--
                            ``(i) a public or nonprofit trauma center 
                        or consortium thereof that meets that 
                        requirements of paragraphs (1), (2), and (5) of 
                        section 1241(b);
                            ``(ii) a safety net public or nonprofit 
                        trauma center that meets the requirements of 
                        paragraphs (1) through (5) of section 1241(b); 
                        or
                            ``(iii) a hospital in an underserved area 
                        (as defined by the State) that seeks to 
                        establish new trauma services; and
                    ``(B) submit to the State an application at such 
                time, in such manner, and containing such information 
                as the State may require.
            ``(2) Limitation.--A State shall use at least 40 percent of 
        the amount available to the State under this part for a fiscal 
        year to award grants to safety net trauma centers described in 
        paragraph (1)(A)(ii).
    ``(d) Use of Funds.--The recipient of a grant under subsection (b) 
shall carry out 1 or more of the following activities consistent with 
subsection (b):
            ``(1) Providing trauma centers with funding to support 
        physician compensation in trauma-related physician specialties 
        where shortages exist in the region involved, with priority 
        provided to safety net trauma centers described in subsection 
        (c)(1)(A)(ii).
            ``(2) Providing for individual safety net trauma center 
        fiscal stability and costs related to having service that is 
        available 24 hours a day, 7 days a week, with priority provided 
        to safety net trauma centers described in subsection 
        (c)(1)(A)(ii) located in urban, border, and rural areas.
            ``(3) Reducing trauma center overcrowding at specific 
        trauma centers related to throughput of trauma patients.
            ``(4) Establishing new trauma services in underserved areas 
        as defined by the State.
            ``(5) Enhancing collaboration between trauma centers and 
        other hospitals and emergency medical services personnel 
        related to trauma service availability.
            ``(6) Making capital improvements to enhance access and 
        expedite trauma care, including providing helipads and 
        associated safety infrastructure.
            ``(7) Enhancing trauma surge capacity at specific trauma 
        centers.
            ``(8) Ensuring expedient receipt of trauma patients 
        transported by ground or air to the appropriate trauma center.
            ``(9) Enhancing interstate trauma center collaboration.
    ``(e) Limitation.--
            ``(1) In general.--A State may use not more than 20 percent 
        of the amount available to the State under this part for a 
        fiscal year for administrative costs associated with awarding 
        grants and related costs.
            ``(2) Maintenance of effort.--The Secretary may not provide 
        funding to a State under this part unless the State agrees that 
        such funds will be used to supplement and not supplant State 
        funding otherwise available for the activities and costs 
        described in this part.
    ``(f) Distribution of Funds.--The following shall apply with 
respect to grants provided in this part:
            ``(1) Less than $10,000,000.--If the amount of 
        appropriations for this part in a fiscal year is less than 
        $10,000,000, the Secretary shall divide such funding evenly 
        among only those States that have 1 or more trauma centers 
        eligible for funding under section 1241(b)(3)(A).
            ``(2) Less than $20,000,000.--If the amount of 
        appropriations in a fiscal year is less than $20,000,000, the 
        Secretary shall divide such funding evenly among only those 
        States that have 1 or more trauma centers eligible for funding 
        under subparagraphs (A) and (B) of section 1241(b)(3).
            ``(3) Less than $30,000,000.--If the amount of 
        appropriations for this part in a fiscal year is less than 
        $30,000,000, the Secretary shall divide such funding evenly 
        among only those States that have 1 or more trauma centers 
        eligible for funding under section 1241(b)(3).
            ``(4) $30,000,000 or more.--If the amount of appropriations 
        for this part in a fiscal year is $30,000,000 or more, the 
        Secretary shall divide such funding evenly among all States.

``SEC. 1282. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there is authorized to 
be appropriated $100,000,000 for each of fiscal years 2010 through 
2015.''.

SEC. 3506. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

    Part D of title IX of the Public Health Service Act, as amended by 
section 3503, is further amended by adding at the end the following:

``SEC. 936. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

    ``(a) Purpose.--The purpose of this section is to facilitate 
collaborative processes between patients, caregivers or authorized 
representatives, and clinicians that engages the patient, caregiver or 
authorized representative in decisionmaking, provides patients, 
caregivers or authorized representatives with information about trade-
offs among treatment options, and facilitates the incorporation of 
patient preferences and values into the medical plan.
    ``(b) Definitions.--In this section:
            ``(1) Patient decision aid.--The term `patient decision 
        aid' means an educational tool that helps patients, caregivers 
        or authorized representatives understand and communicate their 
        beliefs and preferences related to their treatment options, and 
        to decide with their health care provider what treatments are 
        best for them based on their treatment options, scientific 
        evidence, circumstances, beliefs, and preferences.
            ``(2) Preference sensitive care.--The term `preference 
        sensitive care' means medical care for which the clinical 
        evidence does not clearly support one treatment option such 
        that the appropriate course of treatment depends on the values 
        of the patient or the preferences of the patient, caregivers or 
        authorized representatives regarding the benefits, harms and 
        scientific evidence for each treatment option, the use of such 
        care should depend on the informed patient choice among 
        clinically appropriate treatment options.
    ``(c) Establishment of Independent Standards for Patient Decision 
Aids for Preference Sensitive Care.--
            ``(1) Contract with entity to establish standards and 
        certify patient decision aids.--
                    ``(A) In general.--For purposes of supporting 
                consensus-based standards for patient decision aids for 
                preference sensitive care and a certification process 
                for patient decision aids for use in the Federal health 
                programs and by other interested parties, the Secretary 
                shall have in effect a contract with the entity with a 
                contract under section 1890 of the Social Security Act. 
                Such contract shall provide that the entity perform the 
                duties described in paragraph (2).
                    ``(B) Timing for first contract.--As soon as 
                practicable after the date of the enactment of this 
                section, the Secretary shall enter into the first 
                contract under subparagraph (A).
                    ``(C) Period of contract.--A contract under 
                subparagraph (A) shall be for a period of 18 months 
                (except such contract may be renewed after a subsequent 
                bidding process).
            ``(2) Duties.--The following duties are described in this 
        paragraph:
                    ``(A) Develop and identify standards for patient 
                decision aids.--The entity shall synthesize evidence 
                and convene a broad range of experts and key 
                stakeholders to develop and identify consensus-based 
                standards to evaluate patient decision aids for 
                preference sensitive care.
                    ``(B) Endorse patient decision aids.--The entity 
                shall review patient decision aids and develop a 
                certification process whether patient decision aids 
                meet the standards developed and identified under 
                subparagraph (A). The entity shall give priority to the 
                review and certification of patient decision aids for 
                preference sensitive care.
    ``(d) Program to Develop, Update and Patient Decision Aids to 
Assist Health Care Providers and Patients.--
            ``(1) In general.--The Secretary, acting through the 
        Director, and in coordination with heads of other relevant 
        agencies, such as the Director of the Centers for Disease 
        Control and Prevention and the Director of the National 
        Institutes of Health, shall establish a program to award grants 
        or contracts--
                    ``(A) to develop, update, and produce patient 
                decision aids for preference sensitive care to assist 
                health care providers in educating patients, 
                caregivers, and authorized representatives concerning 
                the relative safety, relative effectiveness (including 
                possible health outcomes and impact on functional 
                status), and relative cost of treatment or, where 
                appropriate, palliative care options;
                    ``(B) to test such materials to ensure such 
                materials are balanced and evidence based in aiding 
                health care providers and patients, caregivers, and 
                authorized representatives to make informed decisions 
                about patient care and can be easily incorporated into 
                a broad array of practice settings; and
                    ``(C) to educate providers on the use of such 
                materials, including through academic curricula.
            ``(2) Requirements for patient decision aids.--Patient 
        decision aids developed and produced pursuant to a grant or 
        contract under paragraph (1)--
                    ``(A) shall be designed to engage patients, 
                caregivers, and authorized representatives in informed 
                decisionmaking with health care providers;
                    ``(B) shall present up-to-date clinical evidence 
                about the risks and benefits of treatment options in a 
                form and manner that is age-appropriate and can be 
                adapted for patients, caregivers, and authorized 
                representatives from a variety of cultural and 
                educational backgrounds to reflect the varying needs of 
                consumers and diverse levels of health literacy;
                    ``(C) shall, where appropriate, explain why there 
                is a lack of evidence to support one treatment option 
                over another; and
                    ``(D) shall address health care decisions across 
                the age span, including those affecting vulnerable 
                populations including children.
            ``(3) Distribution.--The Director shall ensure that patient 
        decision aids produced with grants or contracts under this 
        section are available to the public.
            ``(4) Nonduplication of efforts.--The Director shall ensure 
        that the activities under this section of the Agency and other 
        agencies, including the Centers for Disease Control and 
        Prevention and the National Institutes of Health, are free of 
        unnecessary duplication of effort.
    ``(e) Grants to Support Shared Decisionmaking Implementation.--
            ``(1) In general.--The Secretary shall establish a program 
        to provide for the phased-in development, implementation, and 
        evaluation of shared decisionmaking using patient decision aids 
        to meet the objective of improving the understanding of 
        patients of their medical treatment options.
            ``(2) Shared decisionmaking resource centers.--
                    ``(A) In general.--The Secretary shall provide 
                grants for the establishment and support of Shared 
                Decisionmaking Resource Centers (referred to in this 
                subsection as `Centers') to provide technical 
                assistance to providers and to develop and disseminate 
                best practices and other information to support and 
                accelerate adoption, implementation, and effective use 
                of patient decision aids and shared decisionmaking by 
                providers.
                    ``(B) Objectives.--The objective of a Center is to 
                enhance and promote the adoption of patient decision 
                aids and shared decisionmaking through--
                            ``(i) providing assistance to eligible 
                        providers with the implementation and effective 
                        use of, and training on, patient decision aids; 
                        and
                            ``(ii) the dissemination of best practices 
                        and research on the implementation and 
                        effective use of patient decision aids.
            ``(3) Shared decisionmaking participation grants.--
                    ``(A) In general.--The Secretary shall provide 
                grants to health care providers for the development and 
                implementation of shared decisionmaking techniques and 
                to assess the use of such techniques.
                    ``(B) Preference.--In order to facilitate the use 
                of best practices, the Secretary shall provide a 
                preference in making grants under this subsection to 
                health care providers who participate in training by 
                Shared Decisionmaking Resource Centers or comparable 
                training.
                    ``(C) Limitation.--Funds under this paragraph shall 
                not be used to purchase or implement use of patient 
                decision aids other than those certified under the 
                process identified in subsection (c).
            ``(4) Guidance.--The Secretary may issue guidance to 
        eligible grantees under this subsection on the use of patient 
        decision aids.
    ``(f) Funding.--For purposes of carrying out this section there are 
authorized to be appropriated such sums as may be necessary for fiscal 
year 2010 and each subsequent fiscal year.''.

SEC. 3507. PRESENTATION OF PRESCRIPTION DRUG BENEFIT AND RISK 
              INFORMATION.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Commissioner of Food and Drugs, shall determine whether the addition of 
quantitative summaries of the benefits and risks of prescription drugs 
in a standardized format (such as a table or drug facts box) to the 
promotional labeling or print advertising of such drugs would improve 
health care decisionmaking by clinicians and patients and consumers.
    (b) Review and Consultation.--In making the determination under 
subsection (a), the Secretary shall review all available scientific 
evidence and research on decisionmaking and social and cognitive 
psychology and consult with drug manufacturers, clinicians, patients 
and consumers, experts in health literacy, representatives of racial 
and ethnic minorities, and experts in women's and pediatric health.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that 
provides--
            (1) the determination by the Secretary under subsection 
        (a); and
            (2) the reasoning and analysis underlying that 
        determination.
    (d) Authority.--If the Secretary determines under subsection (a) 
that the addition of quantitative summaries of the benefits and risks 
of prescription drugs in a standardized format (such as a table or drug 
facts box) to the promotional labeling or print advertising of such 
drugs would improve health care decisionmaking by clinicians and 
patients and consumers, then the Secretary, not later than 3 years 
after the date of submission of the report under subsection (c), shall 
promulgate proposed regulations as necessary to implement such format.
    (e) Clarification.--Nothing in this section shall be construed to 
restrict the existing authorities of the Secretary with respect to 
benefit and risk information.

SEC. 3508. DEMONSTRATION PROGRAM TO INTEGRATE QUALITY IMPROVEMENT AND 
              PATIENT SAFETY TRAINING INTO CLINICAL EDUCATION OF HEALTH 
              PROFESSIONALS.

    (a) In General.--The Secretary may award grants to eligible 
entities or consortia under this section to carry out demonstration 
projects to develop and implement academic curricula that integrates 
quality improvement and patient safety in the clinical education of 
health professionals. Such awards shall be made on a competitive basis 
and pursuant to peer review.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity or consortium shall--
            (1) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require;
            (2) be or include--
                    (A) a health professions school;
                    (B) a school of public health;
                    (C) a school of social work;
                    (D) a school of nursing;
                    (E) a school of pharmacy;
                    (F) an institution with a graduate medical 
                education program; or
                    (G) a school of health care administration;
            (3) collaborate in the development of curricula described 
        in subsection (a) with an organization that accredits such 
        school or institution;
            (4) provide for the collection of data regarding the 
        effectiveness of the demonstration project; and
            (5) provide matching funds in accordance with subsection 
        (c).
    (c) Matching Funds.--
            (1) In general.--The Secretary may award a grant to an 
        entity or consortium under this section only if the entity or 
        consortium agrees to make available non-Federal contributions 
        toward the costs of the program to be funded under the grant in 
        an amount that is not less than $1 for each $5 of Federal funds 
        provided under the grant.
            (2) Determination of amount contributed.--Non-Federal 
        contributions under paragraph (1) may be in cash or in-kind, 
        fairly evaluated, including equipment or services. Amounts 
        provided by the Federal Government, or services assisted or 
        subsidized to any significant extent by the Federal Government, 
        may not be included in determining the amount of such 
        contributions.
    (d) Evaluation.--The Secretary shall take such action as may be 
necessary to evaluate the projects funded under this section and 
publish, make publicly available, and disseminate the results of such 
evaluations on as wide a basis as is practicable.
    (e) Reports.--Not later than 2 years after the date of enactment of 
this section, and annually thereafter, the Secretary shall submit to 
the Committee on Health, Education, Labor, and Pensions and the 
Committee on Finance of the Senate and the Committee on Energy and 
Commerce and the Committee on Ways and Means of the House of 
Representatives a report that--
            (1) describes the specific projects supported under this 
        section; and
            (2) contains recommendations for Congress based on the 
        evaluation conducted under subsection (d).

SEC. 3509. IMPROVING WOMEN'S HEALTH.

    (a) Health and Human Services Office on Women's Health.--
            (1) Establishment.--Part A of title II of the Public Health 
        Service Act (42 U.S.C. 202 et seq.) is amended by adding at the 
        end the following:

``SEC. 229. HEALTH AND HUMAN SERVICES OFFICE ON WOMEN'S HEALTH.

    ``(a) Establishment of Office.--There is established within the 
Office of the Secretary, an Office on Women's Health (referred to in 
this section as the `Office'). The Office shall be headed by a Deputy 
Assistant Secretary for Women's Health who may report to the Secretary.
    ``(b) Duties.--The Secretary, acting through the Office, with 
respect to the health concerns of women, shall--
            ``(1) establish short-range and long-range goals and 
        objectives within the Department of Health and Human Services 
        and, as relevant and appropriate, coordinate with other 
        appropriate offices on activities within the Department that 
        relate to disease prevention, health promotion, service 
        delivery, research, and public and health care professional 
        education, for issues of particular concern to women throughout 
        their lifespan;
            ``(2) provide expert advice and consultation to the 
        Secretary concerning scientific, legal, ethical, and policy 
        issues relating to women's health;
            ``(3) monitor the Department of Health and Human Services' 
        offices, agencies, and regional activities regarding women's 
        health and identify needs regarding the coordination of 
        activities, including intramural and extramural 
        multidisciplinary activities;
            ``(4) establish a Department of Health and Human Services 
        Coordinating Committee on Women's Health, which shall be 
        chaired by the Deputy Assistant Secretary for Women's Health 
        and composed of senior level representatives from each of the 
        agencies and offices of the Department of Health and Human 
        Services;
            ``(5) establish a National Women's Health Information 
        Center to--
                    ``(A) facilitate the exchange of information 
                regarding matters relating to health information, 
                health promotion, preventive health services, research 
                advances, and education in the appropriate use of 
                health care;
                    ``(B) facilitate access to such information;
                    ``(C) assist in the analysis of issues and problems 
                relating to the matters described in this paragraph; 
                and
                    ``(D) provide technical assistance with respect to 
                the exchange of information (including facilitating the 
                development of materials for such technical 
                assistance);
            ``(6) coordinate efforts to promote women's health programs 
        and policies with the private sector; and
            ``(7) through publications and any other means appropriate, 
        provide for the exchange of information between the Office and 
        recipients of grants, contracts, and agreements under 
        subsection (c), and between the Office and health professionals 
        and the general public.
    ``(c) Grants and Contracts Regarding Duties.--
            ``(1) Authority.--In carrying out subsection (b), the 
        Secretary may make grants to, and enter into cooperative 
        agreements, contracts, and interagency agreements with, public 
        and private entities, agencies, and organizations.
            ``(2) Evaluation and dissemination.--The Secretary shall 
        directly or through contracts with public and private entities, 
        agencies, and organizations, provide for evaluations of 
        projects carried out with financial assistance provided under 
        paragraph (1) and for the dissemination of information 
        developed as a result of such projects.
    ``(d) Reports.--Not later than 1 year after the date of enactment 
of this section, and every second year thereafter, the Secretary shall 
prepare and submit to the appropriate committees of Congress a report 
describing the activities carried out under this section during the 
period for which the report is being prepared.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
            (2) Transfer of functions.--There are transferred to the 
        Office on Women's Health (established under section 229 of the 
        Public Health Service Act, as added by this section), all 
        functions exercised by the Office on Women's Health of the 
        Public Health Service prior to the date of enactment of this 
        section, including all personnel and compensation authority, 
        all delegation and assignment authority, and all remaining 
        appropriations. All orders, determinations, rules, regulations, 
        permits, agreements, grants, contracts, certificates, licenses, 
        registrations, privileges, and other administrative actions 
        that--
                    (A) have been issued, made, granted, or allowed to 
                become effective by the President, any Federal agency 
                or official thereof, or by a court of competent 
                jurisdiction, in the performance of functions 
                transferred under this paragraph; and
                    (B) are in effect at the time this section takes 
                effect, or were final before the date of enactment of 
                this section and are to become effective on or after 
                such date,
        shall continue in effect according to their terms until 
        modified, terminated, superseded, set aside, or revoked in 
        accordance with law by the President, the Secretary, or other 
        authorized official, a court of competent jurisdiction, or by 
        operation of law.
    (b) Centers for Disease Control and Prevention Office of Women's 
Health.--Part A of title III of the Public Health Service Act (42 
U.S.C. 241 et seq.) is amended by adding at the end the following:

``SEC. 310A. CENTERS FOR DISEASE CONTROL AND PREVENTION OFFICE OF 
              WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Director of the Centers for Disease Control and Prevention, an office 
to be known as the Office of Women's Health (referred to in this 
section as the `Office'). The Office shall be headed by a director who 
shall be appointed by the Director of such Centers.
    ``(b) Purpose.--The Director of the Office shall--
            ``(1) report to the Director of the Centers for Disease 
        Control and Prevention on the current level of the Centers' 
        activity regarding women's health conditions across, where 
        appropriate, age, biological, and sociocultural contexts, in 
        all aspects of the Centers' work, including prevention 
        programs, public and professional education, services, and 
        treatment;
            ``(2) establish short-range and long-range goals and 
        objectives within the Centers for women's health and, as 
        relevant and appropriate, coordinate with other appropriate 
        offices on activities within the Centers that relate to 
        prevention, research, education and training, service delivery, 
        and policy development, for issues of particular concern to 
        women;
            ``(3) identify projects in women's health that should be 
        conducted or supported by the Centers;
            ``(4) consult with health professionals, nongovernmental 
        organizations, consumer organizations, women's health 
        professionals, and other individuals and groups, as 
        appropriate, on the policy of the Centers with regard to women; 
        and
            ``(5) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4)).
    ``(c) Definition.--As used in this section, the term `women's 
health conditions', with respect to women of all age, ethnic, and 
racial groups, means diseases, disorders, and conditions--
            ``(1) unique to, significantly more serious for, or 
        significantly more prevalent in women; and
            ``(2) for which the factors of medical risk or type of 
        medical intervention are different for women, or for which 
        there is reasonable evidence that indicates that such factors 
        or types may be different for women.
    ``(d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (c) Office of Women's Health Research.--Section 486(a) of the 
Public Health Service Act (42 U.S.C. 287d(a)) is amended by inserting 
``and who shall report directly to the Director'' before the period at 
the end thereof.
    (d) Substance Abuse and Mental Health Services Administration.--
Section 501(f) of the Public Health Service Act (42 U.S.C. 290aa(f)) is 
amended--
            (1) in paragraph (1), by inserting ``who shall report 
        directly to the Administrator'' before the period;
            (2) by redesignating paragraph (4) as paragraph (5); and
            (3) by inserting after paragraph (3), the following:
            ``(4) Office.--Nothing in this subsection shall be 
        construed to preclude the Secretary from establishing within 
        the Substance Abuse and Mental Health Administration an Office 
        of Women's Health.''.
    (e) Agency for Healthcare Research and Quality Activities Regarding 
Women's Health.--Part C of title IX of the Public Health Service Act 
(42 U.S.C. 299c et seq.) is amended--
            (1) by redesignating sections 925 and 926 as sections 926 
        and 927, respectively; and
            (2) by inserting after section 924 the following:

``SEC. 925. ACTIVITIES REGARDING WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Director, an Office of Women's Health and Gender-Based Research 
(referred to in this section as the `Office'). The Office shall be 
headed by a director who shall be appointed by the Director of 
Healthcare and Research Quality.
    ``(b) Purpose.--The official designated under subsection (a) 
shall--
            ``(1) report to the Director on the current Agency level of 
        activity regarding women's health, across, where appropriate, 
        age, biological, and sociocultural contexts, in all aspects of 
        Agency work, including the development of evidence reports and 
        clinical practice protocols and the conduct of research into 
        patient outcomes, delivery of health care services, quality of 
        care, and access to health care;
            ``(2) establish short-range and long-range goals and 
        objectives within the Agency for research important to women's 
        health and, as relevant and appropriate, coordinate with other 
        appropriate offices on activities within the Agency that relate 
        to health services and medical effectiveness research, for 
        issues of particular concern to women;
            ``(3) identify projects in women's health that should be 
        conducted or supported by the Agency;
            ``(4) consult with health professionals, nongovernmental 
        organizations, consumer organizations, women's health 
        professionals, and other individuals and groups, as 
        appropriate, on Agency policy with regard to women; and
            ``(5) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4)).''.
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (f) Health Resources and Services Administration Office of Women's 
Health.--Title VII of the Social Security Act (42 U.S.C. 901 et seq.) 
is amended by adding at the end the following:

``SEC. 713. OFFICE OF WOMEN'S HEALTH.

    ``(a) Establishment.--The Secretary shall establish within the 
Office of the Administrator of the Health Resources and Services 
Administration, an office to be known as the Office of Women's Health. 
The Office shall be headed by a director who shall be appointed by the 
Administrator.
    ``(b) Purpose.--The Director of the Office shall--
            ``(1) report to the Administrator on the current 
        Administration level of activity regarding women's health 
        across, where appropriate, age, biological, and sociocultural 
        contexts;
            ``(2) establish short-range and long-range goals and 
        objectives within the Health Resources and Services 
        Administration for women's health and, as relevant and 
        appropriate, coordinate with other appropriate offices on 
        activities within the Administration that relate to health care 
        provider training, health service delivery, research, and 
        demonstration projects, for issues of particular concern to 
        women;
            ``(3) identify projects in women's health that should be 
        conducted or supported by the bureaus of the Administration;
            ``(4) consult with health professionals, nongovernmental 
        organizations, consumer organizations, women's health 
        professionals, and other individuals and groups, as 
        appropriate, on Administration policy with regard to women; and
            ``(5) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4) of the Public Health 
        Service Act).
    ``(c) Continued Administration of Existing Programs.--The Director 
of the Office shall assume the authority for the development, 
implementation, administration, and evaluation of any projects carried 
out through the Health Resources and Services Administration relating 
to women's health on the date of enactment of this section.
    ``(d) Definitions.--For purposes of this section:
            ``(1) Administration.--The term `Administration' means the 
        Health Resources and Services Administration.
            ``(2) Administrator.--The term `Administrator' means the 
        Administrator of the Health Resources and Services 
        Administration.
            ``(3) Office.--The term `Office' means the Office of 
        Women's Health established under this section in the 
        Administration.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (g) Food and Drug Administration Office of Women's Health.--Chapter 
X of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 391 et seq.) 
is amended by adding at the end the following:

``SEC. 1011. OFFICE OF WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Commissioner, an office to be known as the Office of Women's Health 
(referred to in this section as the `Office'). The Office shall be 
headed by a director who shall be appointed by the Commissioner of Food 
and Drugs.
    ``(b) Purpose.--The Director of the Office shall--
            ``(1) report to the Commissioner of Food and Drugs on 
        current Food and Drug Administration (referred to in this 
        section as the `Administration') levels of activity regarding 
        women's participation in clinical trials and the analysis of 
        data by sex in the testing of drugs, medical devices, and 
        biological products across, where appropriate, age, biological, 
        and sociocultural contexts;
            ``(2) establish short-range and long-range goals and 
        objectives within the Administration for issues of particular 
        concern to women's health within the jurisdiction of the 
        Administration, including, where relevant and appropriate, 
        adequate inclusion of women and analysis of data by sex in 
        Administration protocols and policies;
            ``(3) provide information to women and health care 
        providers on those areas in which differences between men and 
        women exist;
            ``(4) consult with pharmaceutical, biologics, and device 
        manufacturers, health professionals with expertise in women's 
        issues, consumer organizations, and women's health 
        professionals on Administration policy with regard to women;
            ``(5) make annual estimates of funds needed to monitor 
        clinical trials and analysis of data by sex in accordance with 
        needs that are identified; and
            ``(6) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4) of the Public Health 
        Service Act).
    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (h) No New Regulatory Authority.--Nothing in this section and the 
amendments made by this section may be construed as establishing 
regulatory authority or modifying any existing regulatory authority.
    (i) Limitation on Termination.--Notwithstanding any other provision 
of law, a Federal office of women's health (including the Office of 
Research on Women's Health of the National Institutes of Health) or 
Federal appointive position with primary responsibility over women's 
health issues (including the Associate Administrator for Women's 
Services under the Substance Abuse and Mental Health Services 
Administration) that is in existence on the date of enactment of this 
section shall not be terminated, reorganized, or have any of it's 
powers or duties transferred unless such termination, reorganization, 
or transfer is approved by Congress through the adoption of a 
concurrent resolution of approval.
    (j) Rule of Construction.--Nothing in this section (or the 
amendments made by this section) shall be construed to limit the 
authority of the Secretary of Health and Human Services with respect to 
women's health, or with respect to activities carried out through the 
Department of Health and Human Services on the date of enactment of 
this section.

SEC. 3510. PATIENT NAVIGATOR PROGRAM.

    Section 340A of the Public Health Service Act (42 U.S.C. 256a) is 
amended--
            (1) by striking subsection (d)(3) and inserting the 
        following:
            ``(3) Limitations on grant period.--In carrying out this 
        section, the Secretary shall ensure that the total period of a 
        grant does not exceed 4 years.'';
            (2) in subsection (e), by adding at the end the following:
            ``(3) Minimum core proficiencies.--The Secretary shall not 
        award a grant to an entity under this section unless such 
        entity provides assurances that patient navigators recruited, 
        assigned, trained, or employed using grant funds meet minimum 
        core proficiencies, as defined by the entity that submits the 
        application, that are tailored for the main focus or 
        intervention of the navigator involved.''; and
            (3) in subsection (m)--
                    (A) in paragraph (1), by striking ``and $3,500,000 
                for fiscal year 2010.'' and inserting ``$3,500,000 for 
                fiscal year 2010, and such sums as may be necessary for 
                each of fiscal years 2011 through 2015.''; and
                    (B) in paragraph (2), by striking ``2010'' and 
                inserting ``2015''.

SEC. 3511. AUTHORIZATION OF APPROPRIATIONS.

    Except where otherwise provided in this subtitle (or an amendment 
made by this subtitle), there is authorized to be appropriated such 
sums as may be necessary to carry out this subtitle (and such 
amendments made by this subtitle).

  TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH

  Subtitle A--Modernizing Disease Prevention and Public Health Systems

SEC. 4001. NATIONAL PREVENTION, HEALTH PROMOTION AND PUBLIC HEALTH 
              COUNCIL.

    (a) Establishment.--The President shall establish, within the 
Department of Health and Human Services, a council to be known as the 
``National Prevention, Health Promotion and Public Health Council'' 
(referred to in this section as the ``Council'').
    (b) Chairperson.--The President shall appoint the Surgeon General 
to serve as the chairperson of the Council.
    (c) Composition.--The Council shall be composed of--
            (1) the Secretary of Health and Human Services;
            (2) the Secretary of Agriculture;
            (3) the Secretary of Education;
            (4) the Chairman of the Federal Trade Commission;
            (5) the Secretary of Transportation;
            (6) the Secretary of Labor;
            (7) the Secretary of Homeland Security;
            (8) the Administrator of the Environmental Protection 
        Agency;
            (9) the Director of the Office of National Drug Control 
        Policy;
            (10) the Director of the Domestic Policy Council;
            (11) the Assistant Secretary for Indian Affairs;
            (12) the Chairman of the Corporation for National and 
        Community Service; and
            (13) the head of any other Federal agency that the 
        chairperson determines is appropriate.
    (d) Purposes and Duties.--The Council shall--
            (1) provide coordination and leadership at the Federal 
        level, and among all Federal departments and agencies, with 
        respect to prevention, wellness and health promotion practices, 
        the public health system, and integrative health care in the 
        United States;
            (2) after obtaining input from relevant stakeholders, 
        develop a national prevention, health promotion, public health, 
        and integrative health care strategy that incorporates the most 
        effective and achievable means of improving the health status 
        of Americans and reducing the incidence of preventable illness 
        and disability in the United States;
            (3) provide recommendations to the President and Congress 
        concerning the most pressing health issues confronting the 
        United States and changes in Federal policy to achieve national 
        wellness, health promotion, and public health goals, including 
        the reduction of tobacco use, sedentary behavior, and poor 
        nutrition;
            (4) consider and propose evidence-based models, policies, 
        and innovative approaches for the promotion of transformative 
        models of prevention, integrative health, and public health on 
        individual and community levels across the United States;
            (5) establish processes for continual public input, 
        including input from State, regional, and local leadership 
        communities and other relevant stakeholders, including Indian 
        tribes and tribal organizations;
            (6) submit the reports required under subsection (g); and
            (7) carry out other activities determined appropriate by 
        the President.
    (e) Meetings.--The Council shall meet at the call of the 
Chairperson.
    (f) Advisory Group.--
            (1) In general.--The President shall establish an Advisory 
        Group to the Council to be known as the ``Advisory Group on 
        Prevention, Health Promotion, and Integrative and Public 
        Health'' (hereafter referred to in this section as the 
        ``Advisory Group''). The Advisory Group shall be within the 
        Department of Health and Human Services and report to the 
        Surgeon General.
            (2) Composition.--
                    (A) In general.--The Advisory Group shall be 
                composed of not more than 25 non-Federal members to be 
                appointed by the President.
                    (B) Representation.--In appointing members under 
                subparagraph (A), the President shall ensure that the 
                Advisory Group includes a diverse group of licensed 
                health professionals, including integrative health 
                practitioners who have expertise in--
                            (i) worksite health promotion;
                            (ii) community services, including 
                        community health centers;
                            (iii) preventive medicine;
                            (iv) health coaching;
                            (v) public health education;
                            (vi) geriatrics; and
                            (vii) rehabilitation medicine.
            (3) Purposes and duties.--The Advisory Group shall develop 
        policy and program recommendations and advise the Council on 
        lifestyle-based chronic disease prevention and management, 
        integrative health care practices, and health promotion.
    (g) National Prevention and Health Promotion Strategy.--Not later 
than 1 year after the date of enactment of this Act, the Chairperson, 
in consultation with the Council, shall develop and make public a 
national prevention, health promotion and public health strategy, and 
shall review and revise such strategy periodically. Such strategy 
shall--
            (1) set specific goals and objectives for improving the 
        health of the United States through federally-supported 
        prevention, health promotion, and public health programs, 
        consistent with ongoing goal setting efforts conducted by 
        specific agencies;
            (2) establish specific and measurable actions and timelines 
        to carry out the strategy, and determine accountability for 
        meeting those timelines, within and across Federal departments 
        and agencies; and
            (3) make recommendations to improve Federal efforts 
        relating to prevention, health promotion, public health, and 
        integrative health care practices to ensure Federal efforts are 
        consistent with available standards and evidence.
    (h) Report.--Not later than July 1, 2010, and annually thereafter 
through January 1, 2015, the Council shall submit to the President and 
the relevant committees of Congress, a report that--
            (1) describes the activities and efforts on prevention, 
        health promotion, and public health and activities to develop a 
        national strategy conducted by the Council during the period 
        for which the report is prepared;
            (2) describes the national progress in meeting specific 
        prevention, health promotion, and public health goals defined 
        in the strategy and further describes corrective actions 
        recommended by the Council and taken by relevant agencies and 
        organizations to meet these goals;
            (3) contains a list of national priorities on health 
        promotion and disease prevention to address lifestyle behavior 
        modification (smoking cessation, proper nutrition, appropriate 
        exercise, mental health, behavioral health, substance use 
        disorder, and domestic violence screenings) and the prevention 
        measures for the 5 leading disease killers in the United 
        States;
            (4) contains specific science-based initiatives to achieve 
        the measurable goals of Healthy People 2010 regarding 
        nutrition, exercise, and smoking cessation, and targeting the 5 
        leading disease killers in the United States;
            (5) contains specific plans for consolidating Federal 
        health programs and Centers that exist to promote healthy 
        behavior and reduce disease risk (including eliminating 
        programs and offices determined to be ineffective in meeting 
        the priority goals of Healthy People 2010);
            (6) contains specific plans to ensure that all Federal 
        health care programs are fully coordinated with science-based 
        prevention recommendations by the Director of the Centers for 
        Disease Control and Prevention; and
            (7) contains specific plans to ensure that all non-
        Department of Health and Human Services prevention programs are 
        based on the science-based guidelines developed by the Centers 
        for Disease Control and Prevention under paragraph (4).
    (i) Periodic Reviews.--The Secretary and the Comptroller General of 
the United States shall jointly conduct periodic reviews, not less than 
every 5 years, and evaluations of every Federal disease prevention and 
health promotion initiative, program, and agency. Such reviews shall be 
evaluated based on effectiveness in meeting metrics-based goals with an 
analysis posted on such agencies' public Internet websites.

SEC. 4002. PREVENTION AND PUBLIC HEALTH FUND.

    (a) Purpose.--It is the purpose of this section to establish a 
Prevention and Public Health Fund (referred to in this section as the 
``Fund''), to be administered through the Department of Health and 
Human Services, Office of the Secretary, to provide for expanded and 
sustained national investment in prevention and public health programs 
to improve health and help restrain the rate of growth in private and 
public sector health care costs.
    (b) Funding.--There are hereby authorized to be appropriated, and 
appropriated, to the Fund, out of any monies in the Treasury not 
otherwise appropriated--
            (1) for fiscal year 2010, $500,000,000;
            (2) for fiscal year 2011, $750,000,000;
            (3) for fiscal year 2012, $1,000,000,000;
            (4) for fiscal year 2013, $1,250,000,000;
            (5) for fiscal year 2014, $1,500,000,000; and
            (6) for fiscal year 2015, and each fiscal year thereafter, 
        $2,000,000,000.
    (c) Use of Fund.--The Secretary shall transfer amounts in the Fund 
to accounts within the Department of Health and Human Services to 
increase funding, over the fiscal year 2008 level, for programs 
authorized by the Public Health Service Act, for prevention, wellness, 
and public health activities including prevention research and health 
screenings, such as the Community Transformation grant program, the 
Education and Outreach Campaign for Preventive Benefits, and 
immunization programs.
    (d) Transfer Authority .--The Committee on Appropriations of the 
Senate and the Committee on Appropriations of the House of 
Representatives may provide for the transfer of funds in the Fund to 
eligible activities under this section, subject to subsection (c).

SEC. 4003. CLINICAL AND COMMUNITY PREVENTIVE SERVICES.

    (a) Preventive Services Task Force.--Section 915 of the Public 
Health Service Act (42 U.S.C. 299b-4) is amended by striking subsection 
(a) and inserting the following:
    ``(a) Preventive Services Task Force.--
            ``(1) Establishment and purpose.--The Director shall 
        convene an independent Preventive Services Task Force (referred 
        to in this subsection as the `Task Force') to be composed of 
        individuals with appropriate expertise. Such Task Force shall 
        review the scientific evidence related to the effectiveness, 
        appropriateness, and cost-effectiveness of clinical preventive 
        services for the purpose of developing recommendations for the 
        health care community, and updating previous clinical 
        preventive recommendations, to be published in the Guide to 
        Clinical Preventive Services (referred to in this section as 
        the `Guide'), for individuals and organizations delivering 
        clinical services, including primary care professionals, health 
        care systems, professional societies, employers, community 
        organizations, non-profit organizations, Congress and other 
        policy-makers, governmental public health agencies, health care 
        quality organizations, and organizations developing national 
        health objectives. Such recommendations shall consider clinical 
        preventive best practice recommendations from the Agency for 
        Healthcare Research and Quality, the National Institutes of 
        Health, the Centers for Disease Control and Prevention, the 
        Institute of Medicine, specialty medical associations, patient 
        groups, and scientific societies.
            ``(2) Duties.--The duties of the Task Force shall include--
                    ``(A) the development of additional topic areas for 
                new recommendations and interventions related to those 
                topic areas, including those related to specific sub-
                populations and age groups;
                    ``(B) at least once during every 5-year period, 
                review interventions and update recommendations related 
                to existing topic areas, including new or improved 
                techniques to assess the health effects of 
                interventions;
                    ``(C) improved integration with Federal Government 
                health objectives and related target setting for health 
                improvement;
                    ``(D) the enhanced dissemination of 
                recommendations;
                    ``(E) the provision of technical assistance to 
                those health care professionals, agencies and 
                organizations that request help in implementing the 
                Guide recommendations; and
                    ``(F) the submission of yearly reports to Congress 
                and related agencies identifying gaps in research, such 
                as preventive services that receive an insufficient 
                evidence statement, and recommending priority areas 
                that deserve further examination, including areas 
                related to populations and age groups not adequately 
                addressed by current recommendations.
            ``(3) Role of agency.--The Agency shall provide ongoing 
        administrative, research, and technical support for the 
        operations of the Task Force, including coordinating and 
        supporting the dissemination of the recommendations of the Task 
        Force, ensuring adequate staff resources, and assistance to 
        those organizations requesting it for implementation of the 
        Guide's recommendations.
            ``(4) Coordination with community preventive services task 
        force.--The Task Force shall take appropriate steps to 
        coordinate its work with the Community Preventive Services Task 
        Force and the Advisory Committee on Immunization Practices, 
        including the examination of how each task force's 
        recommendations interact at the nexus of clinic and community.
            ``(5) Operation.--Operation. In carrying out the duties 
        under paragraph (2), the Task Force is not subject to the 
        provisions of Appendix 2 of title 5, United States Code.
            ``(6) Independence.--All members of the Task Force convened 
        under this subsection, and any recommendations made by such 
        members, shall be independent and, to the extent practicable, 
        not subject to political pressure.
            ``(7) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as may be necessary for 
        each fiscal year to carry out the activities of the Task 
        Force.''.
    (b) Community Preventive Services Task Force.--
            (1) In general.--Part P of title III of the Public Health 
        Service Act, as amended by paragraph (2), is amended by adding 
        at the end the following:

``SEC. 399U. COMMUNITY PREVENTIVE SERVICES TASK FORCE.

    ``(a) Establishment and Purpose.--The Director of the Centers for 
Disease Control and Prevention shall convene an independent Community 
Preventive Services Task Force (referred to in this subsection as the 
`Task Force') to be composed of individuals with appropriate expertise. 
Such Task Force shall review the scientific evidence related to the 
effectiveness, appropriateness, and cost-effectiveness of community 
preventive interventions for the purpose of developing recommendations, 
to be published in the Guide to Community Preventive Services (referred 
to in this section as the `Guide'), for individuals and organizations 
delivering population-based services, including primary care 
professionals, health care systems, professional societies, employers, 
community organizations, non-profit organizations, schools, 
governmental public health agencies, Indian tribes, tribal 
organizations and urban Indian organizations, medical groups, Congress 
and other policy-makers. Community preventive services include any 
policies, programs, processes or activities designed to affect or 
otherwise affecting health at the population level.
    ``(b) Duties.--The duties of the Task Force shall include--
            ``(1) the development of additional topic areas for new 
        recommendations and interventions related to those topic areas, 
        including those related to specific populations and age groups, 
        as well as the social, economic and physical environments that 
        can have broad effects on the health and disease of populations 
        and health disparities among sub-populations and age groups;
            ``(2) at least once during every 5-year period, review 
        interventions and update recommendations related to existing 
        topic areas, including new or improved techniques to assess the 
        health effects of interventions, including health impact 
        assessment and population health modeling;
            ``(3) improved integration with Federal Government health 
        objectives and related target setting for health improvement;
            ``(4) the enhanced dissemination of recommendations;
            ``(5) the provision of technical assistance to those health 
        care professionals, agencies, and organizations that request 
        help in implementing the Guide recommendations; and
            ``(6) providing yearly reports to Congress and related 
        agencies identifying gaps in research and recommending priority 
        areas that deserve further examination, including areas related 
        to populations and age groups not adequately addressed by 
        current recommendations.
    ``(c) Role of Agency.--The Director shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force, ensuring adequate staff 
resources, and assistance to those organizations requesting it for 
implementation of Guide recommendations.
    ``(d) Coordination With Preventive Services Task Force.--The Task 
Force shall take appropriate steps to coordinate its work with the U.S. 
Preventive Services Task Force and the Advisory Committee on 
Immunization Practices, including the examination of how each task 
force's recommendations interact at the nexus of clinic and community.
    ``(e) Operation.--In carrying out the duties under subsection (b), 
the Task Force shall not be subject to the provisions of Appendix 2 of 
title 5, United States Code.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for each fiscal year to 
carry out the activities of the Task Force.''.
            (2) Technical amendments.--
                    (A) Section 399R of the Public Health Service Act 
                (as added by section 2 of the ALS Registry Act (Public 
                Law 110-373; 122 Stat. 4047)) is redesignated as 
                section 399S.
                    (B) Section 399R of such Act (as added by section 3 
                of the Prenatally and Postnatally Diagnosed Conditions 
                Awareness Act (Public Law 110-374; 122 Stat. 4051)) is 
                redesignated as section 399T.

SEC. 4004. EDUCATION AND OUTREACH CAMPAIGN REGARDING PREVENTIVE 
              BENEFITS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall provide for 
the planning and implementation of a national public-private 
partnership for a prevention and health promotion outreach and 
education campaign to raise public awareness of health improvement 
across the life span. Such campaign shall include the dissemination of 
information that--
            (1) describes the importance of utilizing preventive 
        services to promote wellness, reduce health disparities, and 
        mitigate chronic disease;
            (2) promotes the use of preventive services recommended by 
        the United States Preventive Services Task Force and the 
        Community Preventive Services Task Force;
            (3) encourages healthy behaviors linked to the prevention 
        of chronic diseases;
            (4) explains the preventive services covered under health 
        plans offered through a Gateway;
            (5) describes additional preventive care supported by the 
        Centers for Disease Control and Prevention, the Health 
        Resources and Services Administration, the Substance Abuse and 
        Mental Health Services Administration, the Advisory Committee 
        on Immunization Practices, and other appropriate agencies; and
            (6) includes general health promotion information.
    (b) Consultation.--In coordinating the campaign under subsection 
(a), the Secretary shall consult with the Institute of Medicine to 
provide ongoing advice on evidence-based scientific information for 
policy, program development, and evaluation.
    (c) Media Campaign.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall establish and implement a national science-based media 
        campaign on health promotion and disease prevention.
            (2) Requirement of campaign.--The campaign implemented 
        under paragraph (1)--
                    (A) shall be designed to address proper nutrition, 
                regular exercise, smoking cessation, obesity reduction, 
                the 5 leading disease killers in the United States, and 
                secondary prevention through disease screening 
                promotion;
                    (B) shall be carried out through competitively bid 
                contracts awarded to entities providing for the 
                professional production and design of such campaign;
                    (C) may include the use of television, radio, 
                Internet, and other commercial marketing venues and may 
                be targeted to specific age groups based on peer-
                reviewed social research;
                    (D) shall not be duplicative of any other Federal 
                efforts relating to health promotion and disease 
                prevention; and
                    (E) may include the use of humor and nationally 
                recognized positive role models.
            (3) Evaluation.--The Secretary shall ensure that the 
        campaign implemented under paragraph (1) is subject to an 
        independent evaluation every 2 years and shall report every 2 
        years to Congress on the effectiveness of such campaigns 
        towards meeting science-based metrics.
    (d) Website.--The Secretary, in consultation with private-sector 
experts, shall maintain or enter into a contract to maintain an 
Internet website to provide science-based information on guidelines for 
nutrition, regular exercise, obesity reduction, smoking cessation, and 
specific chronic disease prevention. Such website shall be designed to 
provide information to health care providers and consumers.
    (e) Dissemination of Information Through Providers.--The Secretary, 
acting through the Centers for Disease Control and Prevention, shall 
develop and implement a plan for the dissemination of health promotion 
and disease prevention information consistent with national priorities, 
to health care providers who participate in Federal programs, including 
programs administered by the Indian Health Service, the Department of 
Veterans Affairs, the Department of Defense, and the Health Resources 
and Services Administration, and Medicare and Medicaid.
    (f) Personalized Prevention Plans.--
            (1) Contract.--The Secretary, acting through the Director 
        of the Centers for Disease Control and Prevention, shall enter 
        into a contract with a qualified entity for the development and 
        operation of a Federal Internet website personalized prevention 
        plan tool.
            (2) Use.--The website developed under paragraph (1) shall 
        be designed to be used as a source of the most up-to-date 
        scientific evidence relating to disease prevention for use by 
        individuals. Such website shall contain a component that 
        enables an individual to determine their disease risk (based on 
        personal health and family history, BMI, and other relevant 
        information) relating to the 5 leading diseases in the United 
        States, and obtain personalized suggestions for preventing such 
        diseases.
    (g) Internet Portal.--The Secretary shall establish an Internet 
portal for accessing risk-assessment tools developed and maintained by 
private and academic entities.
    (h) Priority Funding.--Funding for the activities authorized under 
this section shall take priority over funding provided through the 
Centers for Disease Control and Prevention for grants to States and 
other entities for similar purposes and goals as provided for in this 
section. Not to exceed $500,000,000 shall be expended on the campaigns 
and activities required under this section.
    (i) Public Awareness of Preventive and Obesity-related Services.--
            (1) Information to states.--The Secretary of Health and 
        Human Services shall provide guidance and relevant information 
        to States and health care providers regarding preventive and 
        obesity-related services that are available to Medicaid 
        enrollees, including obesity screening and counseling for 
        children and adults.
            (2) Information to enrollees.--Each State shall design a 
        public awareness campaign to educate Medicaid enrollees 
        regarding availability and coverage of such services, with the 
        goal of reducing incidences of obesity.
            (3) Report.--Not later than January 1, 2011, and every 3 
        years thereafter through January 1, 2017, the Secretary of 
        Health and Human Services shall report to Congress on the 
        status and effectiveness of efforts under paragraphs (1) and 
        (2), including summaries of the States' efforts to increase 
        awareness of coverage of obesity-related services.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

     Subtitle B--Increasing Access to Clinical Preventive Services

SEC. 4101. SCHOOL-BASED HEALTH CENTERS.

    (a) Grants for the Establishment of School-based Health Centers.--
            (1) Program.--The Secretary of Health and Human Services 
        (in this subsection referred to as the ``Secretary'') shall 
        establish a program to award grants to eligible entities to 
        support the operation of school-based health centers.
            (2) Eligibility.--To be eligible for a grant under this 
        subsection, an entity shall--
                    (A) be a school-based health center or a sponsoring 
                facility of a school-based health center; and
                    (B) submit an application at such time, in such 
                manner, and containing such information as the 
                Secretary may require, including at a minimum an 
                assurance that funds awarded under the grant shall not 
                be used to provide any service that is not authorized 
                or allowed by Federal, State, or local law.
            (3) Preference.--In awarding grants under this section, the 
        Secretary shall give preference to awarding grants for school-
        based health centers that serve a large population of children 
        eligible for medical assistance under the State Medicaid plan 
        under title XIX of the Social Security Act or under a waiver of 
        such plan or children eligible for child health assistance 
        under the State child health plan under title XXI of that Act 
        (42 U.S.C. 1397aa et seq.).
            (4) Limitation on use of funds.--An eligible entity shall 
        use funds provided under a grant awarded under this subsection 
        only for expenditures for facilities (including the acquisition 
        or improvement of land, or the acquisition, construction, 
        expansion, replacement, or other improvement of any building or 
        other facility), equipment, or similar expenditures, as 
        specified by the Secretary. No funds provided under a grant 
        awarded under this section shall be used for expenditures for 
        personnel or to provide health services.
            (5) Appropriations.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated for each of 
        fiscal years 2010 through 2013, $50,000,000 for the purpose of 
        carrying out this subsection. Funds appropriated under this 
        paragraph shall remain available until expended.
            (6) Definitions.--In this subsection, the terms ``school-
        based health center'' and ``sponsoring facility'' have the 
        meanings given those terms in section 2110(c)(9) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(9)).
    (b) Grants for the Operation of School-based Health Centers.--Part 
Q of title III of the Public Health Service Act (42 U.S.C. 280h et 
seq.) is amended by adding at the end the following:

``SEC. 399Z-1. SCHOOL-BASED HEALTH CENTERS.

    ``(a) Definitions; Establishment of Criteria.--In this section:
            ``(1) Comprehensive primary health services.--The term 
        `comprehensive primary health services' means the core services 
        offered by school-based health centers, which shall include the 
        following:
                    ``(A) Physical.--Comprehensive health assessments, 
                diagnosis, and treatment of minor, acute, and chronic 
                medical conditions, and referrals to, and follow-up 
                for, specialty care and oral health services.
                    ``(B) Mental health.--Mental health and substance 
                use disorder assessments, crisis intervention, 
                counseling, treatment, and referral to a continuum of 
                services including emergency psychiatric care, 
                community support programs, inpatient care, and 
                outpatient programs.
            ``(2) Medically underserved children and adolescents.--
                    ``(A) In general.--The term `medically underserved 
                children and adolescents' means a population of 
                children and adolescents who are residents of an area 
                designated as a medically underserved area or a health 
                professional shortage area by the Secretary.
                    ``(B) Criteria.--The Secretary shall prescribe 
                criteria for determining the specific shortages of 
                personal health services for medically underserved 
                children and adolescents under subparagraph (A) that 
                shall--
                            ``(i) take into account any comments 
                        received by the Secretary from the chief 
                        executive officer of a State and local 
                        officials in a State; and
                            ``(ii) include factors indicative of the 
                        health status of such children and adolescents 
                        of an area, including the ability of the 
                        residents of such area to pay for health 
                        services, the accessibility of such services, 
                        the availability of health professionals to 
                        such children and adolescents, and other 
                        factors as determined appropriate by the 
                        Secretary.
            ``(3) School-based health center.--The term `school-based 
        health center' means a health clinic that--
                    ``(A) meets the definition of a school-based health 
                center under section 2110(c)(9)(A) of the Social 
                Security Act and is administered by a sponsoring 
                facility (as defined in section 2110(c)(9)(B) of the 
                Social Security Act);
                    ``(B) provides, at a minimum, comprehensive primary 
                health services during school hours to children and 
                adolescents by health professionals in accordance with 
                established standards, community practice, reporting 
                laws, and other State laws, including parental consent 
                and notification laws that are not inconsistent with 
                Federal law; and
                    ``(C) does not perform abortion services.
    ``(b) Authority to Award Grants.--The Secretary shall award grants 
for the costs of the operation of school-based health centers (referred 
to in this section as `SBHCs') that meet the requirements of this 
section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be an SBHC (as defined in subsection (a)(3)); and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing--
                    ``(A) evidence that the applicant meets all 
                criteria necessary to be designated an SBHC;
                    ``(B) evidence of local need for the services to be 
                provided by the SBHC;
                    ``(C) an assurance that--
                            ``(i) SBHC services will be provided to 
                        those children and adolescents for whom 
                        parental or guardian consent has been obtained 
                        in cooperation with Federal, State, and local 
                        laws governing health care service provision to 
                        children and adolescents;
                            ``(ii) the SBHC has made and will continue 
                        to make every reasonable effort to establish 
                        and maintain collaborative relationships with 
                        other health care providers in the catchment 
                        area of the SBHC;
                            ``(iii) the SBHC will provide on-site 
                        access during the academic day when school is 
                        in session and 24-hour coverage through an on-
                        call system and through its backup health 
                        providers to ensure access to services on a 
                        year-round basis when the school or the SBHC is 
                        closed;
                            ``(iv) the SBHC will be integrated into the 
                        school environment and will coordinate health 
                        services with school personnel, such as 
                        administrators, teachers, nurses, counselors, 
                        and support personnel, as well as with other 
                        community providers co-located at the school;
                            ``(v) the SBHC sponsoring facility assumes 
                        all responsibility for the SBHC administration, 
                        operations, and oversight; and
                            ``(vi) the SBHC will comply with Federal, 
                        State, and local laws concerning patient 
                        privacy and student records, including 
                        regulations promulgated under the Health 
                        Insurance Portability and Accountability Act of 
                        1996 and section 444 of the General Education 
                        Provisions Act; and
                    ``(D) such other information as the Secretary may 
                require.
    ``(d) Preferences and Consideration.--In reviewing applications:
            ``(1) The Secretary may give preference to applicants who 
        demonstrate an ability to serve the following:
                    ``(A) Communities that have evidenced barriers to 
                primary health care and mental health and substance use 
                disorder prevention services for children and 
                adolescents.
                    ``(B) Communities with high per capita numbers of 
                children and adolescents who are uninsured, 
                underinsured, or enrolled in public health insurance 
                programs.
                    ``(C) Populations of children and adolescents that 
                have historically demonstrated difficulty in accessing 
                health and mental health and substance use disorder 
                prevention services.
            ``(2) The Secretary may give consideration to whether an 
        applicant has received a grant under subsection (a) of section 
        4101 of the Patient Protection and Affordable Care Act.
    ``(e) Waiver of Requirements.--The Secretary may--
            ``(1) under appropriate circumstances, waive the 
        application of all or part of the requirements of this 
        subsection with respect to an SBHC for not to exceed 2 years; 
        and
            ``(2) upon a showing of good cause, waive the requirement 
        that the SBHC provide all required comprehensive primary health 
        services for a designated period of time to be determined by 
        the Secretary.
    ``(f) Use of Funds.--
            ``(1) Funds.--Funds awarded under a grant under this 
        section--
                    ``(A) may be used for--
                            ``(i) acquiring and leasing equipment 
                        (including the costs of amortizing the 
                        principle of, and paying interest on, loans for 
                        such equipment);
                            ``(ii) providing training related to the 
                        provision of required comprehensive primary 
                        health services and additional health services;
                            ``(iii) the management and operation of 
                        health center programs;
                            ``(iv) the payment of salaries for 
                        physicians, nurses, and other personnel of the 
                        SBHC; and
                    ``(B) may not be used to provide abortions.
            ``(2) Construction.--The Secretary may award grants which 
        may be used to pay the costs associated with expanding and 
        modernizing existing buildings for use as an SBHC, including 
        the purchase of trailers or manufactured buildings to install 
        on the school property.
            ``(3) Limitations.--
                    ``(A) In general.--Any provider of services that is 
                determined by a State to be in violation of a State law 
                described in subsection (a)(3)(B) with respect to 
                activities carried out at a SBHC shall not be eligible 
                to receive additional funding under this section.
                    ``(B) No overlapping grant period.--No entity that 
                has received funding under section 330 for a grant 
                period shall be eligible for a grant under this section 
                for with respect to the same grant period.
    ``(g) Matching Requirement.--
            ``(1) In general.--Each eligible entity that receives a 
        grant under this section shall provide, from non-Federal 
        sources, an amount equal to 20 percent of the amount of the 
        grant (which may be provided in cash or in-kind) to carry out 
        the activities supported by the grant.
            ``(2) Waiver.--The Secretary may waive all or part of the 
        matching requirement described in paragraph (1) for any fiscal 
        year for the SBHC if the Secretary determines that applying the 
        matching requirement to the SBHC would result in serious 
        hardship or an inability to carry out the purposes of this 
        section.
    ``(h) Supplement, Not Supplant.--Grant funds provided under this 
section shall be used to supplement, not supplant, other Federal or 
State funds.
    ``(i) Evaluation.--The Secretary shall develop and implement a plan 
for evaluating SBHCs and monitoring quality performance under the 
awards made under this section.
    ``(j) Age Appropriate Services.--An eligible entity receiving funds 
under this section shall only provide age appropriate services through 
a SBHC funded under this section to an individual.
    ``(k) Parental Consent.--An eligible entity receiving funds under 
this section shall not provide services through a SBHC funded under 
this section to an individual without the consent of the parent or 
guardian of such individual if such individual is considered a minor 
under applicable State law.
    ``(l) Authorization of Appropriations.--For purposes of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.

SEC. 4102. ORAL HEALTHCARE PREVENTION ACTIVITIES.

    (a) In General.--Title III of the Public Health Service Act (42 
U.S.C. 241 et seq.), as amended by section 3025, is amended by adding 
at the end the following:

            ``PART T--ORAL HEALTHCARE PREVENTION ACTIVITIES

``SEC. 399LL. ORAL HEALTHCARE PREVENTION EDUCATION CAMPAIGN.

    ``(a) Establishment.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention and in consultation with 
professional oral health organizations, shall, subject to the 
availability of appropriations, establish a 5-year national, public 
education campaign (referred to in this section as the `campaign') that 
is focused on oral healthcare prevention and education, including 
prevention of oral disease such as early childhood and other caries, 
periodontal disease, and oral cancer.
    ``(b) Requirements.--In establishing the campaign, the Secretary 
shall--
            ``(1) ensure that activities are targeted towards specific 
        populations such as children, pregnant women, parents, the 
        elderly, individuals with disabilities, and ethnic and racial 
        minority populations, including Indians, Alaska Natives and 
        Native Hawaiians (as defined in section 4(c) of the Indian 
        Health Care Improvement Act) in a culturally and linguistically 
        appropriate manner; and
            ``(2) utilize science-based strategies to convey oral 
        health prevention messages that include, but are not limited 
        to, community water fluoridation and dental sealants.
    ``(c) Planning and Implementation.--Not later than 2 years after 
the date of enactment of this section, the Secretary shall begin 
implementing the 5-year campaign. During the 2-year period referred to 
in the previous sentence, the Secretary shall conduct planning 
activities with respect to the campaign.

``SEC. 399LL-1. RESEARCH-BASED DENTAL CARIES DISEASE MANAGEMENT.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall award 
demonstration grants to eligible entities to demonstrate the 
effectiveness of research-based dental caries disease management 
activities.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall--
            ``(1) be a community-based provider of dental services (as 
        defined by the Secretary), including a Federally-qualified 
        health center, a clinic of a hospital owned or operated by a 
        State (or by an instrumentality or a unit of government within 
        a State), a State or local department of health, a dental 
        program of the Indian Health Service, an Indian tribe or tribal 
        organization, or an urban Indian organization (as such terms 
        are defined in section 4 of the Indian Health Care Improvement 
        Act), a health system provider, a private provider of dental 
        services, medical, dental, public health, nursing, nutrition 
        educational institutions, or national organizations involved in 
        improving children's oral health; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require.
    ``(c) Use of Funds.--A grantee shall use amounts received under a 
grant under this section to demonstrate the effectiveness of research-
based dental caries disease management activities.
    ``(d) Use of Information.--The Secretary shall utilize information 
generated from grantees under this section in planning and implementing 
the public education campaign under section 399LL.

``SEC. 399LL-2. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part, 
such sums as may be necessary.''.
    (b) School-based Sealant Programs.--Section 317M(c)(1) of the 
Public Health Service Act (42 U.S.C. 247b-14(c)(1)) is amended by 
striking ``may award grants to States and Indian tribes'' and inserting 
``shall award a grant to each of the 50 States and territories and to 
Indians, Indian tribes, tribal organizations and urban Indian 
organizations (as such terms are defined in section 4 of the Indian 
Health Care Improvement Act)''.
    (c) Oral Health Infrastructure.--Section 317M of the Public Health 
Service Act (42 U.S.C. 247b-14) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (2) by inserting after subsection (c), the following:
    ``(d) Oral Health Infrastructure.--
            ``(1) Cooperative agreements.--The Secretary, acting 
        through the Director of the Centers for Disease Control and 
        Prevention, shall enter into cooperative agreements with State, 
        territorial, and Indian tribes or tribal organizations (as 
        those terms are defined in section 4 of the Indian Health Care 
        Improvement Act) to establish oral health leadership and 
        program guidance, oral health data collection and 
        interpretation, (including determinants of poor oral health 
        among vulnerable populations), a multi-dimensional delivery 
        system for oral health, and to implement science-based programs 
        (including dental sealants and community water fluoridation) to 
        improve oral health.
            ``(2) Authorization of appropriations.--There is authorized 
        to be appropriated such sums as necessary to carry out this 
        subsection for fiscal years 2010 through 2014.''.
    (d) Updating National Oral Healthcare Surveillance Activities.--
            (1) PRAMS.--
                    (A) In general.--The Secretary of Health and Human 
                Services (referred to in this subsection as the 
                ``Secretary'') shall carry out activities to update and 
                improve the Pregnancy Risk Assessment Monitoring System 
                (referred to in this section as ``PRAMS'') as it 
                relates to oral healthcare.
                    (B) State reports and mandatory measurements.--
                            (i) In general.--Not later than 5 years 
                        after the date of enactment of this Act, and 
                        every 5 years thereafter, a State shall submit 
                        to the Secretary a report concerning activities 
                        conducted within the State under PRAMS.
                            (ii) Measurements.--The oral healthcare 
                        measurements developed by the Secretary for use 
                        under PRAMS shall be mandatory with respect to 
                        States for purposes of the State reports under 
                        clause (i).
                    (C) Funding.--There is authorized to be 
                appropriated to carry out this paragraph, such sums as 
                may be necessary.
            (2) National health and nutrition examination survey.--The 
        Secretary shall develop oral healthcare components that shall 
        include tooth-level surveillance for inclusion in the National 
        Health and Nutrition Examination Survey. Such components shall 
        be updated by the Secretary at least every 6 years. For 
        purposes of this paragraph, the term ``tooth-level 
        surveillance'' means a clinical examination where an examiner 
        looks at each dental surface, on each tooth in the mouth and as 
        expanded by the Division of Oral Health of the Centers for 
        Disease Control and Prevention.
            (3) Medical expenditures panel survey.--The Secretary shall 
        ensure that the Medical Expenditures Panel Survey by the Agency 
        for Healthcare Research and Quality includes the verification 
        of dental utilization, expenditure, and coverage findings 
        through conduct of a look-back analysis.
            (4) National oral health surveillance system.--
                    (A) Appropriations.--There is authorized to be 
                appropriated, such sums as may be necessary for each of 
                fiscal years 2010 through 2014 to increase the 
                participation of States in the National Oral Health 
                Surveillance System from 16 States to all 50 States, 
                territories, and District of Columbia.
                    (B) Requirements.--The Secretary shall ensure that 
                the National Oral Health Surveillance System include 
                the measurement of early childhood caries.

SEC. 4103. MEDICARE COVERAGE OF ANNUAL WELLNESS VISIT PROVIDING A 
              PERSONALIZED PREVENTION PLAN.

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

                        ``Annual Wellness Visit

    ``(hhh)(1) The term `personalized prevention plan services' means 
the creation of a plan for an individual--
            ``(A) that includes a health risk assessment (that meets 
        the guidelines established by the Secretary under paragraph 
        (4)(A)) of the individual that is completed prior to or as part 
        of the same visit with a health professional described in 
        paragraph (3); and
            ``(B) that--
                    ``(i) takes into account the results of the health 
                risk assessment; and
                    ``(ii) may contain the elements described in 
                paragraph (2).
    ``(2) Subject to paragraph (4)(H), the elements described in this 
paragraph are the following:
            ``(A) The establishment of, or an update to, the 
        individual's medical and family history.
            ``(B) A list of current providers and suppliers that are 
        regularly involved in providing medical care to the individual 
        (including a list of all prescribed medications).
            ``(C) A measurement of height, weight, body mass index (or 
        waist circumference, if appropriate), blood pressure, and other 
        routine measurements.
            ``(D) Detection of any cognitive impairment.
            ``(E) The establishment of, or an update to, the following:
                    ``(i) A screening schedule for the next 5 to 10 
                years, as appropriate, based on recommendations of the 
                United States Preventive Services Task Force and the 
                Advisory Committee on Immunization Practices, and the 
                individual's health status, screening history, and age-
                appropriate preventive services covered under this 
                title.
                    ``(ii) A list of risk factors and conditions for 
                which primary, secondary, or tertiary prevention 
                interventions are recommended or are underway, 
                including any mental health conditions or any such risk 
                factors or conditions that have been identified through 
                an initial preventive physical examination (as 
                described under subsection (ww)(1)), and a list of 
                treatment options and their associated risks and 
                benefits.
            ``(F) The furnishing of personalized health advice and a 
        referral, as appropriate, to health education or preventive 
        counseling services or programs aimed at reducing identified 
        risk factors and improving self-management, or community-based 
        lifestyle interventions to reduce health risks and promote 
        self-management and wellness, including weight loss, physical 
        activity, smoking cessation, fall prevention, and nutrition.
            ``(G) Any other element determined appropriate by the 
        Secretary.
    ``(3) A health professional described in this paragraph is--
            ``(A) a physician;
            ``(B) a practitioner described in clause (i) of section 
        1842(b)(18)(C); or
            ``(C) a medical professional (including a health educator, 
        registered dietitian, or nutrition professional) or a team of 
        medical professionals, as determined appropriate by the 
        Secretary, under the supervision of a physician.
    ``(4)(A) For purposes of paragraph (1)(A), the Secretary, not later 
than 1 year after the date of enactment of this subsection, shall 
establish publicly available guidelines for health risk assessments. 
Such guidelines shall be developed in consultation with relevant groups 
and entities and shall provide that a health risk assessment--
            ``(i) identify chronic diseases, injury risks, modifiable 
        risk factors, and urgent health needs of the individual; and
            ``(ii) may be furnished--
                    ``(I) through an interactive telephonic or web-
                based program that meets the standards established 
                under subparagraph (B);
                    ``(II) during an encounter with a health care 
                professional;
                    ``(III) through community-based prevention 
                programs; or
                    ``(IV) through any other means the Secretary 
                determines appropriate to maximize accessibility and 
                ease of use by beneficiaries, while ensuring the 
                privacy of such beneficiaries.
    ``(B) Not later than 1 year after the date of enactment of this 
subsection, the Secretary shall establish standards for interactive 
telephonic or web-based programs used to furnish health risk 
assessments under subparagraph (A)(ii)(I). The Secretary may utilize 
any health risk assessment developed under section 4004(f) of the 
Patient Protection and Affordable Care Act as part of the requirement 
to develop a personalized prevention plan to comply with this 
subparagraph.
    ``(C)(i) Not later than 18 months after the date of enactment of 
this subsection, the Secretary shall develop and make available to the 
public a health risk assessment model. Such model shall meet the 
guidelines under subparagraph (A) and may be used to meet the 
requirement under paragraph (1)(A).
    ``(ii) Any health risk assessment that meets the guidelines under 
subparagraph (A) and is approved by the Secretary may be used to meet 
the requirement under paragraph (1)(A).
    ``(D) The Secretary may coordinate with community-based entities 
(including State Health Insurance Programs, Area Agencies on Aging, 
Aging and Disability Resource Centers, and the Administration on Aging) 
to--
            ``(i) ensure that health risk assessments are accessible to 
        beneficiaries; and
            ``(ii) provide appropriate support for the completion of 
        health risk assessments by beneficiaries.
    ``(E) The Secretary shall establish procedures to make 
beneficiaries and providers aware of the requirement that a beneficiary 
complete a health risk assessment prior to or at the same time as 
receiving personalized prevention plan services.
    ``(F) To the extent practicable, the Secretary shall encourage the 
use of, integration with, and coordination of health information 
technology (including use of technology that is compatible with 
electronic medical records and personal health records) and may 
experiment with the use of personalized technology to aid in the 
development of self-management skills and management of and adherence 
to provider recommendations in order to improve the health status of 
beneficiaries.
    ``(G)(i) A beneficiary shall only be eligible to receive an initial 
preventive physical examination (as defined under subsection (ww)(1)) 
at any time during the 12-month period after the date that the 
beneficiary's coverage begins under part B and shall be eligible to 
receive personalized prevention plan services under this subsection 
provided that the beneficiary has not received such services within the 
preceding 12-month period.
    ``(ii) The Secretary shall establish procedures to make 
beneficiaries aware of the option to select an initial preventive 
physical examination or personalized prevention plan services during 
the period of 12 months after the date that a beneficiary's coverage 
begins under part B, which shall include information regarding any 
relevant differences between such services.
    ``(H) The Secretary shall issue guidance that--
            ``(i) identifies elements under paragraph (2) that are 
        required to be provided to a beneficiary as part of their first 
        visit for personalized prevention plan services; and
            ``(ii) establishes a yearly schedule for appropriate 
        provision of such elements thereafter.''.
    (c) Payment and Elimination of Cost-Sharing.--
            (1) Payment and elimination of coinsurance.--Section 
        1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) 
        is amended--
                    (A) in subparagraph (N), by inserting ``other than 
                personalized prevention plan services (as defined in 
                section 1861(hhh)(1))'' after ``(as defined in section 
                1848(j)(3))'';
                    (B) by striking ``and'' before ``(W)''; and
                    (C) by inserting before the semicolon at the end 
                the following: ``, and (X) with respect to personalized 
                prevention plan services (as defined in section 
                1861(hhh)(1)), the amount paid shall be 100 percent of 
                the lesser of the actual charge for the services or the 
                amount determined under the payment basis determined 
                under section 1848''.
            (2) Payment under physician fee schedule.--Section 
        1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-4(j)(3)) 
        is amended by inserting ``(2)(FF) (including administration of 
        the health risk assessment) ,'' after ``(2)(EE),''.
            (3) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)) is amended by striking ``and 
                diagnostic mammography'' and inserting ``, diagnostic 
                mammography, or personalized prevention plan services 
                (as defined in section 1861(hhh)(1))''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)) is 
                amended--
                            (i) in subparagraph (F), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (G)(ii), by striking 
                        the comma at the end and inserting ``; and''; 
                        and
                            (iii) by inserting after subparagraph 
                        (G)(ii) the following new subparagraph:
                    ``(H) with respect to personalized prevention plan 
                services (as defined in section 1861(hhh)(1)) furnished 
                by an outpatient department of a hospital, the amount 
                determined under paragraph (1)(X),''.
            (4) Waiver of application of deductible.--The first 
        sentence of section 1833(b) of the Social Security Act (42 
        U.S.C. 1395l(b)) is amended--
                    (A) by striking ``and'' before ``(9)''; and
                    (B) by inserting before the period the following: 
                ``, and (10) such deductible shall not apply with 
                respect to personalized prevention plan services (as 
                defined in section 1861(hhh)(1))''.
    (d) Frequency Limitation.--Section 1862(a) of the Social Security 
Act (42 U.S.C. 1395y(a)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (N), by striking ``and'' at the 
                end;
                    (B) in subparagraph (O), by striking the semicolon 
                at the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(P) in the case of personalized prevention plan services 
        (as defined in section 1861(hhh)(1)), which are performed more 
        frequently than is covered under such section;''; and
            (2) in paragraph (7), by striking ``or (K)'' and inserting 
        ``(K), or (P)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2011.

SEC. 4104. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES IN MEDICARE.

    (a) Definition of Preventive Services.--Section 1861(ddd) of the 
Social Security Act (42 U.S.C. 1395x(ddd)) is amended--
            (1) in the heading, by inserting ``; Preventive Services'' 
        after ``Services'';
            (2) in paragraph (1), by striking ``not otherwise described 
        in this title'' and inserting ``not described in subparagraph 
        (A) or (C) of paragraph (3)''; and
            (3) by adding at the end the following new paragraph:
    ``(3) The term `preventive services' means the following:
            ``(A) The screening and preventive services described in 
        subsection (ww)(2) (other than the service described in 
        subparagraph (M) of such subsection).
            ``(B) An initial preventive physical examination (as 
        defined in subsection (ww)).
            ``(C) Personalized prevention plan services (as defined in 
        subsection (hhh)(1)).''.
    (b) Coinsurance.--
            (1) General application.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)), as amended by 
                section 4103(c)(1), is amended--
                            (i) in subparagraph (T), by inserting ``(or 
                        100 percent if such services are recommended 
                        with a grade of A or B by the United States 
                        Preventive Services Task Force for any 
                        indication or population and are appropriate 
                        for the individual)'' after ``80 percent'';
                            (ii) in subparagraph (W)--
                                    (I) in clause (i), by inserting 
                                ``(if such subparagraph were applied, 
                                by substituting `100 percent' for `80 
                                percent')'' after ``subparagraph (D)''; 
                                and
                                    (II) in clause (ii), by striking 
                                ``80 percent'' and inserting ``100 
                                percent'';
                            (iii) by striking ``and'' before ``(X)''; 
                        and
                            (iv) by inserting before the semicolon at 
                        the end the following: ``, and (Y) with respect 
                        to preventive services described in 
                        subparagraphs (A) and (B) of section 
                        1861(ddd)(3) that are appropriate for the 
                        individual and, in the case of such services 
                        described in subparagraph (A), are recommended 
                        with a grade of A or B by the United States 
                        Preventive Services Task Force for any 
                        indication or population, the amount paid shall 
                        be 100 percent of the lesser of the actual 
                        charge for the services or the amount 
                        determined under the fee schedule that applies 
                        to such services under this part''.
            (2) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)), as amended by section 
                4103(c)(3)(A), is amended--
                            (i) by striking ``or'' before 
                        ``personalized prevention plan services''; and
                            (ii) by inserting before the period the 
                        following: ``, or preventive services described 
                        in subparagraphs (A) and (B) of section 
                        1861(ddd)(3) that are appropriate for the 
                        individual and, in the case of such services 
                        described in subparagraph (A), are recommended 
                        with a grade of A or B by the United States 
                        Preventive Services Task Force for any 
                        indication or population''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)), as 
                amended by section 4103(c)(3)(B), is amended--
                            (i) in subparagraph (G)(ii), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (H), by striking the 
                        comma at the end and inserting ``; and''; and
                            (iii) by inserting after subparagraph (H) 
                        the following new subparagraph:
                    ``(I) with respect to preventive services described 
                in subparagraphs (A) and (B) of section 1861(ddd)(3) 
                that are appropriate for the individual and are 
                furnished by an outpatient department of a hospital 
                and, in the case of such services described in 
                subparagraph (A), are recommended with a grade of A or 
                B by the United States Preventive Services Task Force 
                for any indication or population, the amount determined 
                under paragraph (1)(W) or (1)(Y),''.
    (c) Waiver of Application of Deductible for Preventive Services and 
Colorectal Cancer Screening Tests.--Section 1833(b) of the Social 
Security Act (42 U.S.C. 1395l(b)), as amended by section 4103(c)(4), is 
amended--
            (1) in paragraph (1), by striking ``items and services 
        described in section 1861(s)(10)(A)'' and inserting 
        ``preventive services described in subparagraph (A) of section 
        1861(ddd)(3) that are recommended with a grade of A or B by the 
        United States Preventive Services Task Force for any indication 
        or population and are appropriate for the individual.''; and
            (2) by adding at the end the following new sentence: 
        ``Paragraph (1) of the first sentence of this subsection shall 
        apply with respect to a colorectal cancer screening test 
        regardless of the code that is billed for the establishment of 
        a diagnosis as a result of the test, or for the removal of 
        tissue or other matter or other procedure that is furnished in 
        connection with, as a result of, and in the same clinical 
        encounter as the screening test.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 4105. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES IN MEDICARE.

    (a) Authority to Modify or Eliminate Coverage of Certain Preventive 
Services.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is 
amended by adding at the end the following new subsection:
    ``(n) Authority To Modify or Eliminate Coverage of Certain 
Preventive Services.--Notwithstanding any other provision of this 
title, effective beginning on January 1, 2010, if the Secretary 
determines appropriate, the Secretary may--
            ``(1) modify--
                    ``(A) the coverage of any preventive service 
                described in subparagraph (A) of section 1861(ddd)(3) 
                to the extent that such modification is consistent with 
                the recommendations of the United States Preventive 
                Services Task Force; and
                    ``(B) the services included in the initial 
                preventive physical examination described in 
                subparagraph (B) of such section; and
            ``(2) provide that no payment shall be made under this 
        title for a preventive service described in subparagraph (A) of 
        such section that has not received a grade of A, B, C, or I by 
        such Task Force.''.
    (b) Construction.--Nothing in the amendment made by paragraph (1) 
shall be construed to affect the coverage of diagnostic or treatment 
services under title XVIII of the Social Security Act.

SEC. 4106. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR ELIGIBLE ADULTS 
              IN MEDICAID.

    (a) Clarification of Inclusion of Services.--Section 1905(a)(13) of 
the Social Security Act (42 U.S.C. 1396d(a)(13)) is amended to read as 
follows:
            ``(13) other diagnostic, screening, preventive, and 
        rehabilitative services, including--
                    ``(A) any clinical preventive services that are 
                assigned a grade of A or B by the United States 
                Preventive Services Task Force;
                    ``(B) with respect to an adult individual, approved 
                vaccines recommended by the Advisory Committee on 
                Immunization Practices (an advisory committee 
                established by the Secretary, acting through the 
                Director of the Centers for Disease Control and 
                Prevention) and their administration; and
                    ``(C) any medical or remedial services (provided in 
                a facility, a home, or other setting) recommended by a 
                physician or other licensed practitioner of the healing 
                arts within the scope of their practice under State 
                law, for the maximum reduction of physical or mental 
                disability and restoration of an individual to the best 
                possible functional level;''.
    (b) Increased Fmap.--Section 1905(b) of the Social Security Act (42 
U.S.C. 1396d(b)), as amended by sections 2001(a)(3)(A) and 2004(c)(1), 
is amended in the first sentence--
            (1) by striking ``, and (4)'' and inserting ``, (4)''; and
            (2) by inserting before the period the following: ``, and 
        (5) in the case of a State that provides medical assistance for 
        services and vaccines described in subparagraphs (A) and (B) of 
        subsection (a)(13), and prohibits cost-sharing for such 
        services and vaccines, the Federal medical assistance 
        percentage, as determined under this subsection and subsection 
        (y) (without regard to paragraph (1)(C) of such subsection), 
        shall be increased by 1 percentage point with respect to 
        medical assistance for such services and vaccines and for items 
        and services described in subsection (a)(4)(D)''.
    (c) Effective Date.--The amendments made under this section shall 
take effect on January 1, 2013.

SEC. 4107. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION SERVICES FOR 
              PREGNANT WOMEN IN MEDICAID.

    (a) Requiring Coverage of Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--Section 1905 of the Social 
Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3)(B) 
and 2303, is further amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``and'' before ``(C)''; and
                    (B) by inserting before the semicolon at the end 
                the following new subparagraph: ``; and (D) counseling 
                and pharmacotherapy for cessation of tobacco use by 
                pregnant women (as defined in subsection (bb))''; and
            (2) by adding at the end the following:
    ``(bb)(1) For purposes of this title, the term `counseling and 
pharmacotherapy for cessation of tobacco use by pregnant women' means 
diagnostic, therapy, and counseling services and pharmacotherapy 
(including the coverage of prescription and nonprescription tobacco 
cessation agents approved by the Food and Drug Administration) for 
cessation of tobacco use by pregnant women who use tobacco products or 
who are being treated for tobacco use that is furnished--
            ``(A) by or under the supervision of a physician; or
            ``(B) by any other health care professional who--
                    ``(i) is legally authorized to furnish such 
                services under State law (or the State regulatory 
                mechanism provided by State law) of the State in which 
                the services are furnished; and
                    ``(ii) is authorized to receive payment for other 
                services under this title or is designated by the 
                Secretary for this purpose.
    ``(2) Subject to paragraph (3), such term is limited to--
            ``(A) services recommended with respect to pregnant women 
        in `Treating Tobacco Use and Dependence: 2008 Update: A 
        Clinical Practice Guideline', published by the Public Health 
        Service in May 2008, or any subsequent modification of such 
        Guideline; and
            ``(B) such other services that the Secretary recognizes to 
        be effective for cessation of tobacco use by pregnant women.
    ``(3) Such term shall not include coverage for drugs or biologicals 
that are not otherwise covered under this title.''.
    (b) Exception From Optional Restriction Under Medicaid Prescription 
Drug Coverage.--Section 1927(d)(2)(F) of the Social Security Act (42 
U.S.C. 1396r-8(d)(2)(F)), as redesignated by section 2502(a), is 
amended by inserting before the period at the end the following: ``, 
except, in the case of pregnant women when recommended in accordance 
with the Guideline referred to in section 1905(bb)(2)(A), agents 
approved by the Food and Drug Administration under the over-the-counter 
monograph process for purposes of promoting, and when used to promote, 
tobacco cessation''.
    (c) Removal of Cost-Sharing for Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--
            (1) General cost-sharing limitations.--Section 1916 of the 
        Social Security Act (42 U.S.C. 1396o) is amended in each of 
        subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
        counseling and pharmacotherapy for cessation of tobacco use by 
        pregnant women (as defined in section 1905(bb)) and covered 
        outpatient drugs (as defined in subsection (k)(2) of section 
        1927 and including nonprescription drugs described in 
        subsection (d)(2) of such section) that are prescribed for 
        purposes of promoting, and when used to promote, tobacco 
        cessation by pregnant women in accordance with the Guideline 
        referred to in section 1905(bb)(2)(A)'' after ``complicate the 
        pregnancy''.
            (2) Application to alternative cost-sharing.--Section 
        1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o-
        1(b)(3)(B)(iii)) is amended by inserting ``, and counseling and 
        pharmacotherapy for cessation of tobacco use by pregnant women 
        (as defined in section 1905(bb))'' after ``complicate the 
        pregnancy''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2010.

SEC. 4108. INCENTIVES FOR PREVENTION OF CHRONIC DISEASES IN MEDICAID.

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

               Subtitle C--Creating Healthier Communities

SEC. 4201. COMMUNITY TRANSFORMATION GRANTS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Director of the Centers for Disease Control and Prevention (referred to 
in this section as the ``Director''), shall award competitive grants to 
State and local governmental agencies and community-based organizations 
for the implementation, evaluation, and dissemination of evidence-based 
community preventive health activities in order to reduce chronic 
disease rates, prevent the development of secondary conditions, address 
health disparities, and develop a stronger evidence-base of effective 
prevention programming.
    (b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            (1) be--
                    (A) a State governmental agency;
                    (B) a local governmental agency;
                    (C) a national network of community-based 
                organizations;
                    (D) a State or local non-profit organization; or
                    (E) an Indian tribe; and
            (2) submit to the Director an application at such time, in 
        such a manner, and containing such information as the Director 
        may require, including a description of the program to be 
        carried out under the grant; and
            (3) demonstrate a history or capacity, if funded, to 
        develop relationships necessary to engage key stakeholders from 
        multiple sectors within and beyond health care and across a 
        community, such as healthy futures corps and health care 
        providers.
    (c) Use of Funds.--
            (1) In general.--An eligible entity shall use amounts 
        received under a grant under this section to carry out programs 
        described in this subsection.
            (2) Community transformation plan.--
                    (A) In general.--An eligible entity that receives a 
                grant under this section shall submit to the Director 
                (for approval) a detailed plan that includes the 
                policy, environmental, programmatic, and as appropriate 
                infrastructure changes needed to promote healthy living 
                and reduce disparities.
                    (B) Activities.--Activities within the plan may 
                focus on (but not be limited to)--
                            (i) creating healthier school environments, 
                        including increasing healthy food options, 
                        physical activity opportunities, promotion of 
                        healthy lifestyle, emotional wellness, and 
                        prevention curricula, and activities to prevent 
                        chronic diseases;
                            (ii) creating the infrastructure to support 
                        active living and access to nutritious foods in 
                        a safe environment;
                            (iii) developing and promoting programs 
                        targeting a variety of age levels to increase 
                        access to nutrition, physical activity and 
                        smoking cessation, improve social and emotional 
                        wellness, enhance safety in a community, or 
                        address any other chronic disease priority area 
                        identified by the grantee;
                            (iv) assessing and implementing worksite 
                        wellness programming and incentives;
                            (v) working to highlight healthy options at 
                        restaurants and other food venues;
                            (vi) prioritizing strategies to reduce 
                        racial and ethnic disparities, including 
                        social, economic, and geographic determinants 
                        of health; and
                            (vii) addressing special populations needs, 
                        including all age groups and individuals with 
                        disabilities, and individuals in both urban and 
                        rural areas.
            (3) Community-based prevention health activities.--
                    (A) In general.--An eligible entity shall use 
                amounts received under a grant under this section to 
                implement a variety of programs, policies, and 
                infrastructure improvements to promote healthier 
                lifestyles.
                    (B) Activities.--An eligible entity shall implement 
                activities detailed in the community transformation 
                plan under paragraph (2).
                    (C) In-kind support.--An eligible entity may 
                provide in-kind resources such as staff, equipment, or 
                office space in carrying out activities under this 
                section.
            (4) Evaluation.--
                    (A) In general.--An eligible entity shall use 
                amounts provided under a grant under this section to 
                conduct activities to measure changes in the prevalence 
                of chronic disease risk factors among community members 
                participating in preventive health activities
                    (B) Types of measures.--In carrying out 
                subparagraph (A), the eligible entity shall, with 
                respect to residents in the community, measure--
                            (i) changes in weight;
                            (ii) changes in proper nutrition;
                            (iii) changes in physical activity;
                            (iv) changes in tobacco use prevalence;
                            (v) changes in emotional well-being and 
                        overall mental health;
                            (vi) other factors using community-specific 
                        data from the Behavioral Risk Factor 
                        Surveillance Survey; and
                            (vii) other factors as determined by the 
                        Secretary.
                    (C) Reporting.--An eligible entity shall annually 
                submit to the Director a report containing an 
                evaluation of activities carried out under the grant.
            (5) Dissemination.--A grantee under this section shall--
                    (A) meet at least annually in regional or national 
                meetings to discuss challenges, best practices, and 
                lessons learned with respect to activities carried out 
                under the grant; and
                    (B) develop models for the replication of 
                successful programs and activities and the mentoring of 
                other eligible entities.
    (d) Training.--
            (1) In general.--The Director shall develop a program to 
        provide training for eligible entities on effective strategies 
        for the prevention and control of chronic disease and the link 
        between physical, emotional, and social well-being.
            (2) Community transformation plan.--The Director shall 
        provide appropriate feedback and technical assistance to 
        grantees to establish community transformation plans
            (3) Evaluation.--The Director shall provide a literature 
        review and framework for the evaluation of programs conducted 
        as part of the grant program under this section, in addition to 
        working with academic institutions or other entities with 
        expertise in outcome evaluation.
    (e) Prohibition.--A grantee shall not use funds provided under a 
grant under this section to create video games or to carry out any 
other activities that may lead to higher rates of obesity or 
inactivity.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each fiscal years 2010 through 2014.

SEC. 4202. HEALTHY AGING, LIVING WELL; EVALUATION OF COMMUNITY-BASED 
              PREVENTION AND WELLNESS PROGRAMS FOR MEDICARE 
              BENEFICIARIES.

    (a) Healthy Aging, Living Well.--
            (1) In general.--The Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary''), acting 
        through the Director of the Centers for Disease Control and 
        Prevention, shall award grants to State or local health 
        departments and Indian tribes to carry out 5-year pilot 
        programs to provide public health community interventions, 
        screenings, and where necessary, clinical referrals for 
        individuals who are between 55 and 64 years of age.
            (2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1), an entity shall--
                    (A) be--
                            (i) a State health department;
                            (ii) a local health department; or
                            (iii) an Indian tribe;
                    (B) submit to the Secretary an application at such 
                time, in such manner, and containing such information 
                as the Secretary may require including a description of 
                the program to be carried out under the grant;
                    (C) design a strategy for improving the health of 
                the 55-to-64 year-old population through community-
                based public health interventions; and
                    (D) demonstrate the capacity, if funded, to develop 
                the relationships necessary with relevant health 
                agencies, health care providers, community-based 
                organizations, and insurers to carry out the activities 
                described in paragraph (3), such relationships to 
                include the identification of a community-based 
                clinical partner, such as a community health center or 
                rural health clinic.
            (3) Use of funds.--
                    (A) In general.--A State or local health department 
                shall use amounts received under a grant under this 
                subsection to carry out a program to provide the 
                services described in this paragraph to individuals who 
                are between 55 and 64 years of age.
                    (B) Public health interventions.--
                            (i) In general.--In developing and 
                        implementing such activities, a grantee shall 
                        collaborate with the Centers for Disease 
                        Control and Prevention and the Administration 
                        on Aging, and relevant local agencies and 
                        organizations.
                            (ii) Types of intervention activities.--
                        Intervention activities conducted under this 
                        subparagraph may include efforts to improve 
                        nutrition, increase physical activity, reduce 
                        tobacco use and substance abuse, improve mental 
                        health, and promote healthy lifestyles among 
                        the target population.
                    (C) Community preventive screenings.--
                            (i) In general.--In addition to community-
                        wide public health interventions, a State or 
                        local health department shall use amounts 
                        received under a grant under this subsection to 
                        conduct ongoing health screening to identify 
                        risk factors for cardiovascular disease, 
                        cancer, stroke, and diabetes among individuals 
                        in both urban and rural areas who are between 
                        55 and 64 years of age.
                            (ii) Types of screening activities.--
                        Screening activities conducted under this 
                        subparagraph may include--
                                    (I) mental health/behavioral health 
                                and substance use disorders;
                                    (II) physical activity, smoking, 
                                and nutrition; and
                                    (III) any other measures deemed 
                                appropriate by the Secretary.
                            (iii) Monitoring.--Grantees under this 
                        section shall maintain records of screening 
                        results under this subparagraph to establish 
                        the baseline data for monitoring the targeted 
                        population
                    (D) Clinical referral/treatment for chronic 
                diseases.--
                            (i) In general.--A State or local health 
                        department shall use amounts received under a 
                        grant under this subsection to ensure that 
                        individuals between 55 and 64 years of age who 
                        are found to have chronic disease risk factors 
                        through the screening activities described in 
                        subparagraph (C)(ii), receive clinical 
                        referral/treatment for follow-up services to 
                        reduce such risk.
                            (ii) Mechanism.--
                                    (I) Identification and 
                                determination of status.--With respect 
                                to each individual with risk factors 
                                for or having heart disease, stroke, 
                                diabetes, or any other condition for 
                                which such individual was screened 
                                under subparagraph (C), a grantee under 
                                this section shall determine whether or 
                                not such individual is covered under 
                                any public or private health insurance 
                                program.
                                    (II) Insured individuals.--An 
                                individual determined to be covered 
                                under a health insurance program under 
                                subclause (I) shall be referred by the 
                                grantee to the existing providers under 
                                such program or, if such individual 
                                does not have a current provider, to a 
                                provider who is in-network with respect 
                                to the program involved.
                                    (III) Uninsured individuals.--With 
                                respect to an individual determined to 
                                be uninsured under subclause (I), the 
                                grantee's community-based clinical 
                                partner described in paragraph (4)(D) 
                                shall assist the individual in 
                                determining eligibility for available 
                                public coverage options and identify 
                                other appropriate community health care 
                                resources and assistance programs.
                            (iii) Public health intervention program.--
                        A State or local health department shall use 
                        amounts received under a grant under this 
                        subsection to enter into contracts with 
                        community health centers or rural health 
                        clinics and mental health and substance use 
                        disorder service providers to assist in the 
                        referral/treatment of at risk patients to 
                        community resources for clinical follow-up and 
                        help determine eligibility for other public 
                        programs.
                    (E) Grantee evaluation.--An eligible entity shall 
                use amounts provided under a grant under this 
                subsection to conduct activities to measure changes in 
                the prevalence of chronic disease risk factors among 
                participants.
            (4) Pilot program evaluation.--The Secretary shall conduct 
        an annual evaluation of the effectiveness of the pilot program 
        under this subsection. In determining such effectiveness, the 
        Secretary shall consider changes in the prevalence of 
        uncontrolled chronic disease risk factors among new Medicare 
        enrollees (or individuals nearing enrollment, including those 
        who are 63 and 64 years of age) who reside in States or 
        localities receiving grants under this section as compared with 
        national and historical data for those States and localities 
        for the same population.
            (5) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary for each of fiscal years 2010 through 2014.
    (b) Evaluation and Plan for Community-based Prevention and Wellness 
Programs for Medicare Beneficiaries.--
            (1) In general.--The Secretary shall conduct an evaluation 
        of community-based prevention and wellness programs and develop 
        a plan for promoting healthy lifestyles and chronic disease 
        self-management for Medicare beneficiaries.
            (2) Medicare evaluation of prevention and wellness 
        programs.--
                    (A) In general.--The Secretary shall evaluate 
                community prevention and wellness programs including 
                those that are sponsored by the Administration on 
                Aging, are evidence-based, and have demonstrated 
                potential to help Medicare beneficiaries (particularly 
                beneficiaries that have attained 65 years of age) 
                reduce their risk of disease, disability, and injury by 
                making healthy lifestyle choices, including exercise, 
                diet, and self-management of chronic diseases.
                    (B) Evaluation.--The evaluation under subparagraph 
                (A) shall consist of the following:
                            (i) Evidence review.--The Secretary shall 
                        review available evidence, literature, best 
                        practices, and resources that are relevant to 
                        programs that promote healthy lifestyles and 
                        reduce risk factors for the Medicare 
                        population. The Secretary may determine the 
                        scope of the evidence review and such issues to 
                        be considered, which shall include, at a 
                        minimum--
                                    (I) physical activity, nutrition, 
                                and obesity;
                                    (II) falls;
                                    (III) chronic disease self-
                                management; and
                                    (IV) mental health.
                            (ii) Independent evaluation of evidence-
                        based community prevention and wellness 
                        programs.--The Administrator of the Centers for 
                        Medicare & Medicaid Services, in consultation 
                        with the Assistant Secretary for Aging, shall, 
                        to the extent feasible and practicable, conduct 
                        an evaluation of existing community prevention 
                        and wellness programs that are sponsored by the 
                        Administration on Aging to assess the extent to 
                        which Medicare beneficiaries who participate in 
                        such programs--
                                    (I) reduce their health risks, 
                                improve their health outcomes, and 
                                adopt and maintain healthy behaviors;
                                    (II) improve their ability to 
                                manage their chronic conditions; and
                                    (III) reduce their utilization of 
                                health services and associated costs 
                                under the Medicare program for 
                                conditions that are amenable to 
                                improvement under such programs.
            (3) Report.--Not later than September 30, 2013, the 
        Secretary shall submit to Congress a report that includes--
                    (A) recommendations for such legislation and 
                administrative action as the Secretary determines 
                appropriate to promote healthy lifestyles and chronic 
                disease self-management for Medicare beneficiaries;
                    (B) any relevant findings relating to the evidence 
                review under paragraph (2)(B)(i); and
                    (C) the results of the evaluation under paragraph 
                (2)(B)(ii).
            (4) Funding.--For purposes of carrying out this subsection, 
        the Secretary shall provide for the transfer, from the Federal 
        Hospital Insurance Trust Fund under section 1817 of the Social 
        Security Act (42 U.S.C. 1395i) and the Federal Supplemental 
        Medical Insurance Trust Fund under section 1841 of such Act (42 
        U.S.C. 1395t), in such proportion as the Secretary determines 
        appropriate, of $50,000,000 to the Centers for Medicare & 
        Medicaid Services Program Management Account. Amounts 
        transferred under the preceding sentence shall remain available 
        until expended.
            (5) Administration.--Chapter 35 of title 44, United States 
        Code shall not apply to the this subsection.
            (6) Medicare beneficiary.--In this subsection, the term 
        ``Medicare beneficiary'' means an individual who is entitled to 
        benefits under part A of title XVIII of the Social Security Act 
        and enrolled under part B of such title.

SEC. 4203. REMOVING BARRIERS AND IMPROVING ACCESS TO WELLNESS FOR 
              INDIVIDUALS WITH DISABILITIES.

    Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.) 
is amended by adding at the end of the following:

``SEC. 510. ESTABLISHMENT OF STANDARDS FOR ACCESSIBLE MEDICAL 
              DIAGNOSTIC EQUIPMENT.

    ``(a) Standards.--Not later than 24 months after the date of 
enactment of the Affordable Health Choices Act, the Architectural and 
Transportation Barriers Compliance Board shall, in consultation with 
the Commissioner of the Food and Drug Administration, promulgate 
regulatory standards in accordance with the Administrative Procedure 
Act (2 U.S.C. 551 et seq.) setting forth the minimum technical criteria 
for medical diagnostic equipment used in (or in conjunction with) 
physician's offices, clinics, emergency rooms, hospitals, and other 
medical settings. The standards shall ensure that such equipment is 
accessible to, and usable by, individuals with accessibility needs, and 
shall allow independent entry to, use of, and exit from the equipment 
by such individuals to the maximum extent possible.
    ``(b) Medical Diagnostic Equipment Covered.--The standards issued 
under subsection (a) for medical diagnostic equipment shall apply to 
equipment that includes examination tables, examination chairs 
(including chairs used for eye examinations or procedures, and dental 
examinations or procedures), weight scales, mammography equipment, x-
ray machines, and other radiological equipment commonly used for 
diagnostic purposes by health professionals.
    ``(c) Review and Amendment.--The Architectural and Transportation 
Barriers Compliance Board, in consultation with the Commissioner of the 
Food and Drug Administration, shall periodically review and, as 
appropriate, amend the standards in accordance with the Administrative 
Procedure Act (2 U.S.C. 551 et seq.).''.

SEC. 4204. IMMUNIZATIONS.

    (a) State Authority to Purchase Recommended Vaccines for Adults.--
Section 317 of the Public Health Service Act (42 U.S.C. 247b) is 
amended by adding at the end the following:
    ``(l) Authority to Purchase Recommended Vaccines for Adults.--
            ``(1) In general.--The Secretary may negotiate and enter 
        into contracts with manufacturers of vaccines for the purchase 
        and delivery of vaccines for adults as provided for under 
        subsection (e).
            ``(2) State purchase.--A State may obtain additional 
        quantities of such adult vaccines (subject to amounts specified 
        to the Secretary by the State in advance of negotiations) 
        through the purchase of vaccines from manufacturers at the 
        applicable price negotiated by the Secretary under this 
        subsection.''.
    (b) Demonstration Program to Improve Immunization Coverage.--
Section 317 of the Public Health Service Act (42 U.S.C. 247b), as 
amended by subsection (a), is further amended by adding at the end the 
following:
    ``(m) Demonstration Program to Improve Immunization Coverage.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall establish a demonstration program to award grants to 
        States to improve the provision of recommended immunizations 
        for children, adolescents, and adults through the use of 
        evidence-based, population-based interventions for high-risk 
        populations.
            ``(2) State plan.--To be eligible for a grant under 
        paragraph (1), a State shall submit to the Secretary an 
        application at such time, in such manner, and containing such 
        information as the Secretary may require, including a State 
        plan that describes the interventions to be implemented under 
        the grant and how such interventions match with local needs and 
        capabilities, as determined through consultation with local 
        authorities.
            ``(3) Use of funds.--Funds received under a grant under 
        this subsection shall be used to implement interventions that 
        are recommended by the Task Force on Community Preventive 
        Services (as established by the Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention) or 
        other evidence-based interventions, including--
                    ``(A) providing immunization reminders or recalls 
                for target populations of clients, patients, and 
                consumers;
                    ``(B) educating targeted populations and health 
                care providers concerning immunizations in combination 
                with one or more other interventions;
                    ``(C) reducing out-of-pocket costs for families for 
                vaccines and their administration;
                    ``(D) carrying out immunization-promoting 
                strategies for participants or clients of public 
                programs, including assessments of immunization status, 
                referrals to health care providers, education, 
                provision of on-site immunizations, or incentives for 
                immunization;
                    ``(E) providing for home visits that promote 
                immunization through education, assessments of need, 
                referrals, provision of immunizations, or other 
                services;
                    ``(F) providing reminders or recalls for 
                immunization providers;
                    ``(G) conducting assessments of, and providing 
                feedback to, immunization providers;
                    ``(H) any combination of one or more interventions 
                described in this paragraph; or
                    ``(I) immunization information systems to allow all 
                States to have electronic databases for immunization 
                records.
            ``(4) Consideration.--In awarding grants under this 
        subsection, the Secretary shall consider any reviews or 
        recommendations of the Task Force on Community Preventive 
        Services.
            ``(5) Evaluation.--Not later than 3 years after the date on 
        which a State receives a grant under this subsection, the State 
        shall submit to the Secretary an evaluation of progress made 
        toward improving immunization coverage rates among high-risk 
        populations within the State.
            ``(6) Report to congress.--Not later than 4 years after the 
        date of enactment of the Affordable Health Choices Act, the 
        Secretary shall submit to Congress a report concerning the 
        effectiveness of the demonstration program established under 
        this subsection together with recommendations on whether to 
        continue and expand such program.
            ``(7) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary for each of fiscal years 2010 through 2014.''.
    (c) Reauthorization of Immunization Program.--Section 317(j) of the 
Public Health Service Act (42 U.S.C. 247b(j)) is amended--
            (1) in paragraph (1), by striking ``for each of the fiscal 
        years 1998 through 2005''; and
            (2) in paragraph (2), by striking ``after October 1, 
        1997,''.
    (d) Rule of Construction Regarding Access to Immunizations.--
Nothing in this section (including the amendments made by this 
section), or any other provision of this Act (including any amendments 
made by this Act) shall be construed to decrease children's access to 
immunizations.
    (e) GAO Study and Report on Medicare Beneficiary Access to 
Vaccines.--
            (1) Study.--The Comptroller General of the United States 
        (in this section referred to as the ``Comptroller General'') 
        shall conduct a study on the ability of Medicare beneficiaries 
        who were 65 years of age or older to access routinely 
        recommended vaccines covered under the prescription drug 
        program under part D of title XVIII of the Social Security Act 
        over the period since the establishment of such program. Such 
        study shall include the following:
                    (A) An analysis and determination of--
                            (i) the number of Medicare beneficiaries 
                        who were 65 years of age or older and were 
                        eligible for a routinely recommended 
                        vaccination that was covered under part D;
                            (ii) the number of such beneficiaries who 
                        actually received a routinely recommended 
                        vaccination that was covered under part D; and
                            (iii) any barriers to access by such 
                        beneficiaries to routinely recommended 
                        vaccinations that were covered under part D.
                    (B) A summary of the findings and recommendations 
                by government agencies, departments, and advisory 
                bodies (as well as relevant professional organizations) 
                on the impact of coverage under part D of routinely 
                recommended adult immunizations for access to such 
                immunizations by Medicare beneficiaries.
            (2) Report.--Not later than June 1, 2011, the Comptroller 
        General shall submit to the appropriate committees of 
        jurisdiction of the House of Representatives and the Senate a 
        report containing the results of the study conducted under 
        paragraph (1), together with recommendations for such 
        legislation and administrative action as the Comptroller 
        General determines appropriate.
            (3) Funding.--Out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated $1,000,000 for 
        fiscal year 2010 to carry out this subsection.

SEC. 4205. NUTRITION LABELING OF STANDARD MENU ITEMS AT CHAIN 
              RESTAURANTS.

    (a) Technical Amendments.--Section 403(q)(5)(A) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)(A)) is amended--
            (1) in subitem (i), by inserting at the beginning ``except 
        as provided in clause (H)(ii)(III),''; and
            (2) in subitem (ii), by inserting at the beginning ``except 
        as provided in clause (H)(ii)(III),''.
    (b) Labeling Requirements.--Section 403(q)(5) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)) is amended by adding at 
the end the following:
    ``(H) Restaurants, Retail Food Establishments, and Vending 
Machines.--
            ``(i) General requirements for restaurants and similar 
        retail food establishments.--Except for food described in 
        subclause (vii), in the case of food that is a standard menu 
        item that is offered for sale in a restaurant or similar retail 
        food establishment that is part of a chain with 20 or more 
        locations doing business under the same name (regardless of the 
        type of ownership of the locations) and offering for sale 
        substantially the same menu items, the restaurant or similar 
        retail food establishment shall disclose the information 
        described in subclauses (ii) and (iii).
            ``(ii) Information required to be disclosed by restaurants 
        and retail food establishments.--Except as provided in 
        subclause (vii), the restaurant or similar retail food 
        establishment shall disclose in a clear and conspicuous 
        manner--
                    ``(I)(aa) in a nutrient content disclosure 
                statement adjacent to the name of the standard menu 
                item, so as to be clearly associated with the standard 
                menu item, on the menu listing the item for sale, the 
                number of calories contained in the standard menu item, 
                as usually prepared and offered for sale; and
                    ``(bb) a succinct statement concerning suggested 
                daily caloric intake, as specified by the Secretary by 
                regulation and posted prominently on the menu and 
                designed to enable the public to understand, in the 
                context of a total daily diet, the significance of the 
                caloric information that is provided on the menu;
                    ``(II)(aa) in a nutrient content disclosure 
                statement adjacent to the name of the standard menu 
                item, so as to be clearly associated with the standard 
                menu item, on the menu board, including a drive-through 
                menu board, the number of calories contained in the 
                standard menu item, as usually prepared and offered for 
                sale; and
                    ``(bb) a succinct statement concerning suggested 
                daily caloric intake, as specified by the Secretary by 
                regulation and posted prominently on the menu board, 
                designed to enable the public to understand, in the 
                context of a total daily diet, the significance of the 
                nutrition information that is provided on the menu 
                board;
            ``(III) in a written form, available on the premises of the 
        restaurant or similar retail establishment and to the consumer 
        upon request, the nutrition information required under clauses 
        (C) and (D) of subparagraph (1); and
            ``(IV) on the menu or menu board, a prominent, clear, and 
        conspicuous statement regarding the availability of the 
        information described in item (III).
            ``(iii) Self-service food and food on display.--Except as 
        provided in subclause (vii), in the case of food sold at a 
        salad bar, buffet line, cafeteria line, or similar self-service 
        facility, and for self-service beverages or food that is on 
        display and that is visible to customers, a restaurant or 
        similar retail food establishment shall place adjacent to each 
        food offered a sign that lists calories per displayed food item 
        or per serving.
            ``(iv) Reasonable basis.--For the purposes of this clause, 
        a restaurant or similar retail food establishment shall have a 
        reasonable basis for its nutrient content disclosures, 
        including nutrient databases, cookbooks, laboratory analyses, 
        and other reasonable means, as described in section 101.10 of 
        title 21, Code of Federal Regulations (or any successor 
        regulation) or in a related guidance of the Food and Drug 
        Administration.
            ``(v) Menu variability and combination meals.--The 
        Secretary shall establish by regulation standards for 
        determining and disclosing the nutrient content for standard 
        menu items that come in different flavors, varieties, or 
        combinations, but which are listed as a single menu item, such 
        as soft drinks, ice cream, pizza, doughnuts, or children's 
        combination meals, through means determined by the Secretary, 
        including ranges, averages, or other methods.
            ``(vi) Additional information.--If the Secretary determines 
        that a nutrient, other than a nutrient required under subclause 
        (ii)(III), should be disclosed for the purpose of providing 
        information to assist consumers in maintaining healthy dietary 
        practices, the Secretary may require, by regulation, disclosure 
        of such nutrient in the written form required under subclause 
        (ii)(III).
            ``(vii) Nonapplicability to certain food.--
                    ``(I) In general.--Subclauses (i) through (vi) do 
                not apply to--
                            ``(aa) items that are not listed on a menu 
                        or menu board (such as condiments and other 
                        items placed on the table or counter for 
                        general use);
                            ``(bb) daily specials, temporary menu items 
                        appearing on the menu for less than 60 days per 
                        calendar year, or custom orders; or
                            ``(cc) such other food that is part of a 
                        customary market test appearing on the menu for 
                        less than 90 days, under terms and conditions 
                        established by the Secretary.
                    ``(II) Written forms.--Subparagraph (5)(C) shall 
                apply to any regulations promulgated under subclauses 
                (ii)(III) and (vi).
            ``(viii) Vending machines.--
                    ``(I) In general.--In the case of an article of 
                food sold from a vending machine that--
                            ``(aa) does not permit a prospective 
                        purchaser to examine the Nutrition Facts Panel 
                        before purchasing the article or does not 
                        otherwise provide visible nutrition information 
                        at the point of purchase; and
                            ``(bb) is operated by a person who is 
                        engaged in the business of owning or operating 
                        20 or more vending machines,
                the vending machine operator shall provide a sign in 
                close proximity to each article of food or the 
                selection button that includes a clear and conspicuous 
                statement disclosing the number of calories contained 
                in the article.
            ``(ix) Voluntary provision of nutrition information.--
                    ``(I) In general.--An authorized official of any 
                restaurant or similar retail food establishment or 
                vending machine operator not subject to the 
                requirements of this clause may elect to be subject to 
                the requirements of such clause, by registering 
                biannually the name and address of such restaurant or 
                similar retail food establishment or vending machine 
                operator with the Secretary, as specified by the 
                Secretary by regulation.
                    ``(II) Registration.--Within 120 days of enactment 
                of this clause, the Secretary shall publish a notice in 
                the Federal Register specifying the terms and 
                conditions for implementation of item (I), pending 
                promulgation of regulations.
                    ``(III) Rule of construction.--Nothing in this 
                subclause shall be construed to authorize the Secretary 
                to require an application, review, or licensing process 
                for any entity to register with the Secretary, as 
                described in such item.
            ``(x) Regulations.--
                    ``(I) Proposed regulation.--Not later than 1 year 
                after the date of enactment of this clause, the 
                Secretary shall promulgate proposed regulations to 
                carry out this clause.
                    ``(II) Contents.--In promulgating regulations, the 
                Secretary shall--
                            ``(aa) consider standardization of recipes 
                        and methods of preparation, reasonable 
                        variation in serving size and formulation of 
                        menu items, space on menus and menu boards, 
                        inadvertent human error, training of food 
                        service workers, variations in ingredients, and 
                        other factors, as the Secretary determines; and
                            ``(bb) specify the format and manner of the 
                        nutrient content disclosure requirements under 
                        this subclause.
                    ``(III) Reporting.--The Secretary shall submit to 
                the Committee on Health, Education, Labor, and Pensions 
                of the Senate and the Committee on Energy and Commerce 
                of the House of Representatives a quarterly report that 
                describes the Secretary's progress toward promulgating 
                final regulations under this subparagraph.
            ``(xi) Definition.--In this clause, the term `menu' or 
        `menu board' means the primary writing of the restaurant or 
        other similar retail food establishment from which a consumer 
        makes an order selection.''
    (c) National Uniformity.--Section 403A(a)(4) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343-1(a)(4)) is amended by striking 
``except a requirement for nutrition labeling of food which is exempt 
under subclause (i) or (ii) of section 403(q)(5)(A)'' and inserting 
``except that this paragraph does not apply to food that is offered for 
sale in a restaurant or similar retail food establishment that is not 
part of a chain with 20 or more locations doing business under the same 
name (regardless of the type of ownership of the locations) and 
offering for sale substantially the same menu items unless such 
restaurant or similar retail food establishment complies with the 
voluntary provision of nutrition information requirements under section 
403(q)(5)(H)(ix)''.
    (d) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed--
            (1) to preempt any provision of State or local law, unless 
        such provision establishes or continues into effect nutrient 
        content disclosures of the type required under section 
        403(q)(5)(H) of the Federal Food, Drug, and Cosmetic Act (as 
        added by subsection (b)) and is expressly preempted under 
        subsection (a)(4) of such section;
            (2) to apply to any State or local requirement respecting a 
        statement in the labeling of food that provides for a warning 
        concerning the safety of the food or component of the food; or
            (3) except as provided in section 403(q)(5)(H)(ix) of the 
        Federal Food, Drug, and Cosmetic Act (as added by subsection 
        (b)), to apply to any restaurant or similar retail food 
        establishment other than a restaurant or similar retail food 
        establishment described in section 403(q)(5)(H)(i) of such Act.

SEC. 4206. DEMONSTRATION PROJECT CONCERNING INDIVIDUALIZED WELLNESS 
              PLAN.

    Section 330 of the Public Health Service Act (42 U.S.C. 245b) is 
amended by adding at the end the following:
    ``(s) Demonstration Program for Individualized Wellness Plans.--
            ``(1) In general.--The Secretary shall establish a pilot 
        program to test the impact of providing at-risk populations who 
        utilize community health centers funded under this section an 
        individualized wellness plan that is designed to reduce risk 
        factors for preventable conditions as identified by a 
        comprehensive risk-factor assessment.
            ``(2) Agreements.--The Secretary shall enter into 
        agreements with not more than 10 community health centers 
        funded under this section to conduct activities under the pilot 
        program under paragraph (1).
            ``(3) Wellness plans.--
                    ``(A) In general.--An individualized wellness plan 
                prepared under the pilot program under this subsection 
                may include one or more of the following as appropriate 
                to the individual's identified risk factors:
                            ``(i) Nutritional counseling.
                            ``(ii) A physical activity plan.
                            ``(iii) Alcohol and smoking cessation 
                        counseling and services.
                            ``(iv) Stress management.
                            ``(v) Dietary supplements that have health 
                        claims approved by the Secretary.
                            ``(vi) Compliance assistance provided by a 
                        community health center employee.
                    ``(B) Risk factors.--Wellness plan risk factors 
                shall include--
                            ``(i) weight;
                            ``(ii) tobacco and alcohol use;
                            ``(iii) exercise rates;
                            ``(iv) nutritional status; and
                            ``(v) blood pressure.
                    ``(C) Comparisons.--Individualized wellness plans 
                shall make comparisons between the individual involved 
                and a control group of individuals with respect to the 
                risk factors described in subparagraph (B).
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary.''.

SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS.

    Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) 
is amended by adding at the end the following:
    ``(r)(1) An employer shall provide--
            ``(A) a reasonable break time for an employee to express 
        breast milk for her nursing child for 1 year after the child's 
        birth each time such employee has need to express the milk; and
            ``(B) a place, other than a bathroom, that is shielded from 
        view and free from intrusion from coworkers and the public, 
        which may be used by an employee to express breast milk.
    ``(2) An employer shall not be required to compensate an employee 
receiving reasonable break time under paragraph (1) for any work time 
spent for such purpose.
    ``(3) An employer that employs less than 50 employees shall not be 
subject to the requirements of this subsection, if such requirements 
would impose an undue hardship by causing the employer significant 
difficulty or expense when considered in relation to the size, 
financial resources, nature, or structure of the employer's business.
    ``(4) Nothing in this subsection shall preempt a State law that 
provides greater protections to employees than the protections provided 
for under this subsection.''.

    Subtitle D--Support for Prevention and Public Health Innovation

SEC. 4301. RESEARCH ON OPTIMIZING THE DELIVERY OF PUBLIC HEALTH 
              SERVICES.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Director of the Centers for Disease Control and Prevention, shall 
provide funding for research in the area of public health services and 
systems.
    (b) Requirements of Research.--Research supported under this 
section shall include--
            (1) examining evidence-based practices relating to 
        prevention, with a particular focus on high priority areas as 
        identified by the Secretary in the National Prevention Strategy 
        or Healthy People 2020, and including comparing community-based 
        public health interventions in terms of effectiveness and cost;
            (2) analyzing the translation of interventions from 
        academic settings to real world settings; and
            (3) identifying effective strategies for organizing, 
        financing, or delivering public health services in real world 
        community settings, including comparing State and local health 
        department structures and systems in terms of effectiveness and 
        cost.
    (c) Existing Partnerships.--Research supported under this section 
shall be coordinated with the Community Preventive Services Task Force 
and carried out by building on existing partnerships within the Federal 
Government while also considering initiatives at the State and local 
levels and in the private sector.
    (d) Annual Report.--The Secretary shall, on an annual basis, submit 
to Congress a report concerning the activities and findings with 
respect to research supported under this section.

SEC. 4302. UNDERSTANDING HEALTH DISPARITIES: DATA COLLECTION AND 
              ANALYSIS.

    (a) Uniform Categories and Collection Requirements.--The Public 
Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the 
end the following:

          ``TITLE XXXI--DATA COLLECTION, ANALYSIS, AND QUALITY

``SEC. 3101. DATA COLLECTION, ANALYSIS, AND QUALITY.

    ``(a) Data Collection.--
            ``(1) In general.--The Secretary shall ensure that, by not 
        later than 2 years after the date of enactment of this title, 
        any federally conducted or supported health care or public 
        health program, activity or survey (including Current 
        Population Surveys and American Community Surveys conducted by 
        the Bureau of Labor Statistics and the Bureau of the Census) 
        collects and reports, to the extent practicable--
                    ``(A) data on race, ethnicity, sex, primary 
                language, and disability status for applicants, 
                recipients, or participants;
                    ``(B) data at the smallest geographic level such as 
                State, local, or institutional levels if such data can 
                be aggregated;
                    ``(C) sufficient data to generate statistically 
                reliable estimates by racial, ethnic, sex, primary 
                language, and disability status subgroups for 
                applicants, recipients or participants using, if 
                needed, statistical oversamples of these 
                subpopulations; and
                    ``(D) any other demographic data as deemed 
                appropriate by the Secretary regarding health 
                disparities.
            ``(2) Collection standards.--In collecting data described 
        in paragraph (1), the Secretary or designee shall--
                    ``(A) use Office of Management and Budget 
                standards, at a minimum, for race and ethnicity 
                measures;
                    ``(B) develop standards for the measurement of sex, 
                primary language, and disability status;
                    ``(C) develop standards for the collection of data 
                described in paragraph (1) that, at a minimum--
                            ``(i) collects self-reported data by the 
                        applicant, recipient, or participant; and
                            ``(ii) collects data from a parent or legal 
                        guardian if the applicant, recipient, or 
                        participant is a minor or legally 
                        incapacitated;
                    ``(D) survey health care providers and establish 
                other procedures in order to assess access to care and 
                treatment for individuals with disabilities and to 
                identify--
                            ``(i) locations where individuals with 
                        disabilities access primary, acute (including 
                        intensive), and long-term care;
                            ``(ii) the number of providers with 
                        accessible facilities and equipment to meet the 
                        needs of the individuals with disabilities, 
                        including medical diagnostic equipment that 
                        meets the minimum technical criteria set forth 
                        in section 510 of the Rehabilitation Act of 
                        1973; and
                            ``(iii) the number of employees of health 
                        care providers trained in disability awareness 
                        and patient care of individuals with 
                        disabilities; and
                    ``(E) require that any reporting requirement 
                imposed for purposes of measuring quality under any 
                ongoing or federally conducted or supported health care 
                or public health program, activity, or survey includes 
                requirements for the collection of data on individuals 
                receiving health care items or services under such 
                programs activities by race, ethnicity, sex, primary 
                language, and disability status.
            ``(3) Data management.--In collecting data described in 
        paragraph (1), the Secretary, acting through the National 
        Coordinator for Health Information Technology shall--
                    ``(A) develop national standards for the management 
                of data collected; and
                    ``(B) develop interoperability and security systems 
                for data management.
    ``(b) Data Analysis.--
            ``(1) In general.--For each federally conducted or 
        supported health care or public health program or activity, the 
        Secretary shall analyze data collected under paragraph (a) to 
        detect and monitor trends in health disparities (as defined for 
        purposes of section 485E) at the Federal and State levels.
    ``(c) Data Reporting and Dissemination.--
            ``(1) In general.--The Secretary shall make the analyses 
        described in (b) available to--
                    ``(A) the Office of Minority Health;
                    ``(B) the National Center on Minority Health and 
                Health Disparities;
                    ``(C) the Agency for Healthcare Research and 
                Quality;
                    ``(D) the Centers for Disease Control and 
                Prevention;
                    ``(E) the Centers for Medicare & Medicaid Services;
                    ``(F) the Indian Health Service and epidemiology 
                centers funded under the Indian Health Care Improvement 
                Act;
                    ``(G) the Office of Rural health;
                    ``(H) other agencies within the Department of 
                Health and Human Services; and
                    ``(I) other entities as determined appropriate by 
                the Secretary.
            ``(2) Reporting of data.--The Secretary shall report data 
        and analyses described in (a) and (b) through--
                    ``(A) public postings on the Internet websites of 
                the Department of Health and Human Services; and
                    ``(B) any other reporting or dissemination 
                mechanisms determined appropriate by the Secretary.
            ``(3) Availability of data.--The Secretary may make data 
        described in (a) and (b) available for additional research, 
        analyses, and dissemination to other Federal agencies, non-
        governmental entities, and the public, in accordance with any 
        Federal agency's data user agreements.
    ``(d) Limitations on Use of Data.--Nothing in this section shall be 
construed to permit the use of information collected under this section 
in a manner that would adversely affect any individual.
    ``(e) Protection and Sharing of Data.--
            ``(1) Privacy and other safeguards.--The Secretary shall 
        ensure (through the promulgation of regulations or otherwise) 
        that--
                    ``(A) all data collected pursuant to subsection (a) 
                is protected--
                            ``(i) under privacy protections that are at 
                        least as broad as those that the Secretary 
                        applies to other health data under the 
                        regulations promulgated under section 264(c) of 
                        the Health Insurance Portability and 
                        Accountability Act of 1996 (Public Law 104-191; 
                        110 Stat. 2033); and
                            ``(ii) from all inappropriate internal use 
                        by any entity that collects, stores, or 
                        receives the data, including use of such data 
                        in determinations of eligibility (or continued 
                        eligibility) in health plans, and from other 
                        inappropriate uses, as defined by the 
                        Secretary; and
                    ``(B) all appropriate information security 
                safeguards are used in the collection, analysis, and 
                sharing of data collected pursuant to subsection (a).
            ``(2) Data sharing.--The Secretary shall establish 
        procedures for sharing data collected pursuant to subsection 
        (a), measures relating to such data, and analyses of such data, 
        with other relevant Federal and State agencies including the 
        agencies, centers, and entities within the Department of Health 
        and Human Services specified in subsection (c)(1)..
    ``(f) Data on Rural Underserved Populations.--The Secretary shall 
ensure that any data collected in accordance with this section 
regarding racial and ethnic minority groups are also collected 
regarding underserved rural and frontier populations.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2010 through 2014.
    ``(h) Requirement for Implementation.--Notwithstanding any other 
provision of this section, data may not be collected under this section 
unless funds are directly appropriated for such purpose in an 
appropriations Act.
    ``(i) Consultation.--The Secretary shall consult with the Director 
of the Office of Personnel Management, the Secretary of Defense, the 
Secretary of Veterans Affairs, the Director of the Bureau of the 
Census, the Commissioner of Social Security, and the head of other 
appropriate Federal agencies in carrying out this section.''.
    (b) Addressing Health Care Disparities in Medicaid and CHIP.--
            (1) Standardized collection requirements included in state 
        plans.--
                    (A) Medicaid.--Section 1902(a) of the Social 
                Security Act (42 U.S.C. 1396a(a)), as amended by 
                section 2001(d), is amended--
                            (i) in paragraph 4), by striking ``and'' at 
                        the end;
                            (ii) in paragraph (75), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by inserting after paragraph (75) the 
                        following new paragraph:
            ``(76) provide that any data collected under the State plan 
        meets the requirements of section 3101 of the Public Health 
        Service Act.''.
                    (B) CHIP.--Section 2108(e) of the Social Security 
                Act (42 U.S.C. 1397hh(e)) is amended by adding at the 
                end the following new paragraph:
            ``(7) Data collected and reported in accordance with 
        section 3101 of the Public Health Service Act, with respect to 
        individuals enrolled in the State child health plan (and, in 
        the case of enrollees under 19 years of age, their parents or 
        legal guardians), including data regarding the primary language 
        of such individuals, parents, and legal guardians.''.
            (2) Extending medicare requirement to address health 
        disparities data collection to medicaid and chip.--Title XIX of 
        the Social Security Act (42 U.S.C. 1396 et seq.), as amended by 
        section 2703 is amended by adding at the end the following new 
        section:

``SEC. 1946. ADDRESSING HEALTH CARE DISPARITIES.

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

SEC. 4303. CDC AND EMPLOYER-BASED WELLNESS PROGRAMS.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.), 
by section 4102, is further amended by adding at the end the following:

               ``PART U--EMPLOYER-BASED WELLNESS PROGRAM

``SEC. 399MM. TECHNICAL ASSISTANCE FOR EMPLOYER-BASED WELLNESS 
              PROGRAMS.

    ``In order to expand the utilization of evidence-based prevention 
and health promotion approaches in the workplace, the Director shall--
            ``(1) provide employers (including small, medium, and large 
        employers, as determined by the Director) with technical 
        assistance, consultation, tools, and other resources in 
        evaluating such employers' employer-based wellness programs, 
        including--
                    ``(A) measuring the participation and methods to 
                increase participation of employees in such programs;
                    ``(B) developing standardized measures that assess 
                policy, environmental and systems changes necessary to 
                have a positive health impact on employees' health 
                behaviors, health outcomes, and health care 
                expenditures; and
                    ``(C) evaluating such programs as they relate to 
                changes in the health status of employees, the 
                absenteeism of employees, the productivity of 
                employees, the rate of workplace injury, and the 
                medical costs incurred by employees; and
            ``(2) build evaluation capacity among workplace staff by 
        training employers on how to evaluate employer-based wellness 
        programs by ensuring evaluation resources, technical 
        assistance, and consultation are available to workplace staff 
        as needed through such mechanisms as web portals, call centers, 
        or other means.

``SEC. 399MM-1. NATIONAL WORKSITE HEALTH POLICIES AND PROGRAMS STUDY.

    ``(a) In General.--In order to assess, analyze, and monitor over 
time data about workplace policies and programs, and to develop 
instruments to assess and evaluate comprehensive workplace chronic 
disease prevention and health promotion programs, policies and 
practices, not later than 2 years after the date of enactment of this 
part, and at regular intervals (to be determined by the Director) 
thereafter, the Director shall conduct a national worksite health 
policies and programs survey to assess employer-based health policies 
and programs.
    ``(b) Report.--Upon the completion of each study under subsection 
(a), the Director shall submit to Congress a report that includes the 
recommendations of the Director for the implementation of effective 
employer-based health policies and programs.

``SEC. 399MM-2. PRIORITIZATION OF EVALUATION BY SECRETARY.

    ``The Secretary shall evaluate, in accordance with this part, all 
programs funded through the Centers for Disease Control and Prevention 
before conducting such an evaluation of privately funded programs 
unless an entity with a privately funded wellness program requests such 
an evaluation.

``SEC. 399MM-3. PROHIBITION OF FEDERAL WORKPLACE WELLNESS REQUIREMENTS.

    ``Notwithstanding any other provision of this part, any 
recommendations, data, or assessments carried out under this part shall 
not be used to mandate requirements for workplace wellness programs.''.

SEC. 4304. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

    Title XXVIII of the Public Health Service Act (42 U.S.C. 300hh et 
seq.) is amended by adding at the end the following:

     ``Subtitle C--Strengthening Public Health Surveillance Systems

``SEC. 2821. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

    ``(a) In General.--Subject to the availability of appropriations, 
the Secretary, acting through the Director of the Centers for Disease 
Control and Prevention, shall establish an Epidemiology and Laboratory 
Capacity Grant Program to award grants to State health departments as 
well as local health departments and tribal jurisdictions that meet 
such criteria as the Director determines appropriate. Academic centers 
that assist State and eligible local and tribal health departments may 
also be eligible for funding under this section as the Director 
determines appropriate. Grants shall be awarded under this section to 
assist public health agencies in improving surveillance for, and 
response to, infectious diseases and other conditions of public health 
importance by--
            ``(1) strengthening epidemiologic capacity to identify and 
        monitor the occurrence of infectious diseases and other 
        conditions of public health importance;
            ``(2) enhancing laboratory practice as well as systems to 
        report test orders and results electronically;
            ``(3) improving information systems including developing 
        and maintaining an information exchange using national 
        guidelines and complying with capacities and functions 
        determined by an advisory council established and appointed by 
        the Director; and
            ``(4) developing and implementing prevention and control 
        strategies.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $190,000,000 for each of fiscal 
years 2010 through 2013, of which--
            ``(1) not less than $95,000,000 shall be made available 
        each such fiscal year for activities under paragraphs (1) and 
        (4) of subsection (a);
            ``(2) not less than $60,000,000 shall be made available 
        each such fiscal year for activities under subsection (a)(3); 
        and
            ``(3) not less than $32,000,000 shall be made available 
        each such fiscal year for activities under subsection 
        (a)(2).''.

SEC. 4305. ADVANCING RESEARCH AND TREATMENT FOR PAIN CARE MANAGEMENT.

    (a) Institute of Medicine Conference on Pain.--
            (1) Convening.--Not later than 1 year after funds are 
        appropriated to carry out this subsection, the Secretary of 
        Health and Human Services shall seek to enter into an agreement 
        with the Institute of Medicine of the National Academies to 
        convene a Conference on Pain (in this subsection referred to as 
        ``the Conference'').
            (2) Purposes.--The purposes of the Conference shall be to--
                    (A) increase the recognition of pain as a 
                significant public health problem in the United States;
                    (B) evaluate the adequacy of assessment, diagnosis, 
                treatment, and management of acute and chronic pain in 
                the general population, and in identified racial, 
                ethnic, gender, age, and other demographic groups that 
                may be disproportionately affected by inadequacies in 
                the assessment, diagnosis, treatment, and management of 
                pain;
                    (C) identify barriers to appropriate pain care;
                    (D) establish an agenda for action in both the 
                public and private sectors that will reduce such 
                barriers and significantly improve the state of pain 
                care research, education, and clinical care in the 
                United States.
            (3) Other appropriate entity.--If the Institute of Medicine 
        declines to enter into an agreement under paragraph (1), the 
        Secretary of Health and Human Services may enter into such 
        agreement with another appropriate entity.
            (4) Report.--A report summarizing the Conference's findings 
        and recommendations shall be submitted to the Congress not 
        later than June 30, 2011.
            (5) Authorization of appropriations.--For the purpose of 
        carrying out this subsection, there is authorized to be 
        appropriated such sums as may be necessary for each of fiscal 
        years 2010 and 2011.
    (b) Pain Research at National Institutes of Health.--Part B of 
title IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is 
amended by adding at the end the following:

``SEC. 409J. PAIN RESEARCH.

    ``(a) Research Initiatives.--
            ``(1) In general.--The Director of NIH is encouraged to 
        continue and expand, through the Pain Consortium, an aggressive 
        program of basic and clinical research on the causes of and 
        potential treatments for pain.
            ``(2) Annual recommendations.--Not less than annually, the 
        Pain Consortium, in consultation with the Division of Program 
        Coordination, Planning, and Strategic Initiatives, shall 
        develop and submit to the Director of NIH recommendations on 
        appropriate pain research initiatives that could be undertaken 
        with funds reserved under section 402A(c)(1) for the Common 
        Fund or otherwise available for such initiatives.
            ``(3) Definition.--In this subsection, the term `Pain 
        Consortium' means the Pain Consortium of the National 
        Institutes of Health or a similar trans-National Institutes of 
        Health coordinating entity designated by the Secretary for 
        purposes of this subsection.
    ``(b) Interagency Pain Research Coordinating Committee.--
            ``(1) Establishment.--The Secretary shall establish not 
        later than 1 year after the date of the enactment of this 
        section and as necessary maintain a committee, to be known as 
        the Interagency Pain Research Coordinating Committee (in this 
        section referred to as the `Committee'), to coordinate all 
        efforts within the Department of Health and Human Services and 
        other Federal agencies that relate to pain research.
            ``(2) Membership.--
                    ``(A) In general.--The Committee shall be composed 
                of the following voting members:
                            ``(i) Not more than 7 voting Federal 
                        representatives appoint by the Secretary from 
                        agencies that conduct pain care research and 
                        treatment.
                            ``(ii) 12 additional voting members 
                        appointed under subparagraph (B).
                    ``(B) Additional members.--The Committee shall 
                include additional voting members appointed by the 
                Secretary as follows:
                            ``(i) 6 non-Federal members shall be 
                        appointed from among scientists, physicians, 
                        and other health professionals.
                            ``(ii) 6 members shall be appointed from 
                        members of the general public, who are 
                        representatives of leading research, advocacy, 
                        and service organizations for individuals with 
                        pain-related conditions.
                    ``(C) Nonvoting members.--The Committee shall 
                include such nonvoting members as the Secretary 
                determines to be appropriate.
            ``(3) Chairperson.--The voting members of the Committee 
        shall select a chairperson from among such members. The 
        selection of a chairperson shall be subject to the approval of 
        the Director of NIH.
            ``(4) Meetings.--The Committee shall meet at the call of 
        the chairperson of the Committee or upon the request of the 
        Director of NIH, but in no case less often than once each year.
            ``(5) Duties.--The Committee shall--
                    ``(A) develop a summary of advances in pain care 
                research supported or conducted by the Federal agencies 
                relevant to the diagnosis, prevention, and treatment of 
                pain and diseases and disorders associated with pain;
                    ``(B) identify critical gaps in basic and clinical 
                research on the symptoms and causes of pain;
                    ``(C) make recommendations to ensure that the 
                activities of the National Institutes of Health and 
                other Federal agencies are free of unnecessary 
                duplication of effort;
                    ``(D) make recommendations on how best to 
                disseminate information on pain care; and
                    ``(E) make recommendations on how to expand 
                partnerships between public entities and private 
                entities to expand collaborative, cross-cutting 
                research.
            ``(6) Review.--The Secretary shall review the necessity of 
        the Committee at least once every 2 years.''.
    (c) Pain Care Education and Training.--Part D of title VII of the 
Public Health Service Act (42 U.S.C. 294 et seq.) is amended by adding 
at the end the following new section:

``SEC. 759. PROGRAM FOR EDUCATION AND TRAINING IN PAIN CARE.

    ``(a) In General.--The Secretary may make awards of grants, 
cooperative agreements, and contracts to health professions schools, 
hospices, and other public and private entities for the development and 
implementation of programs to provide education and training to health 
care professionals in pain care.
    ``(b) Certain Topics.--An award may be made under subsection (a) 
only if the applicant for the award agrees that the program carried out 
with the award will include information and education on--
            ``(1) recognized means for assessing, diagnosing, treating, 
        and managing pain and related signs and symptoms, including the 
        medically appropriate use of controlled substances;
            ``(2) applicable laws, regulations, rules, and policies on 
        controlled substances, including the degree to which 
        misconceptions and concerns regarding such laws, regulations, 
        rules, and policies, or the enforcement thereof, may create 
        barriers to patient access to appropriate and effective pain 
        care;
            ``(3) interdisciplinary approaches to the delivery of pain 
        care, including delivery through specialized centers providing 
        comprehensive pain care treatment expertise;
            ``(4) cultural, linguistic, literacy, geographic, and other 
        barriers to care in underserved populations; and
            ``(5) recent findings, developments, and improvements in 
        the provision of pain care.
    ``(c) Evaluation of Programs.--The Secretary shall (directly or 
through grants or contracts) provide for the evaluation of programs 
implemented under subsection (a) in order to determine the effect of 
such programs on knowledge and practice of pain care.
    ``(d) Pain Care Defined.--For purposes of this section the term 
`pain care' means the assessment, diagnosis, treatment, or management 
of acute or chronic pain regardless of causation or body location.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of the fiscal years 2010 through 2012. Amounts appropriated 
under this subsection shall remain available until expended.''.

SEC. 4306. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION PROJECT.

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

                  Subtitle E--Miscellaneous Provisions

SEC. 4401. SENSE OF THE SENATE CONCERNING CBO SCORING.

    (a) Finding.--The Senate finds that the costs of prevention 
programs are difficult to estimate due in part because prevention 
initiatives are hard to measure and results may occur outside the 5 and 
10 year budget windows.
    (b) Sense of Congress.--It is the sense of the Senate that Congress 
should work with the Congressional Budget Office to develop better 
methodologies for scoring progress to be made in prevention and 
wellness programs.

SEC. 4402. EFFECTIVENESS OF FEDERAL HEALTH AND WELLNESS INITIATIVES.

    To determine whether existing Federal health and wellness 
initiatives are effective in achieving their stated goals, the 
Secretary of Health and Human Services shall--
            (1) conduct an evaluation of such programs as they relate 
        to changes in health status of the American public and 
        specifically on the health status of the Federal workforce, 
        including absenteeism of employees, the productivity of 
        employees, the rate of workplace injury, and the medical costs 
        incurred by employees, and health conditions, including 
        workplace fitness, healthy food and beverages, and incentives 
        in the Federal Employee Health Benefits Program; and
            (2) submit to Congress a report concerning such evaluation, 
        which shall include conclusions concerning the reasons that 
        such existing programs have proven successful or not successful 
        and what factors contributed to such conclusions.

                     TITLE V--HEALTH CARE WORKFORCE

                  Subtitle A--Purpose and Definitions

SEC. 5001. PURPOSE.

    The purpose of this title is to improve access to and the delivery 
of health care services for all individuals, particularly low income, 
underserved, uninsured, minority, health disparity, and rural 
populations by--
            (1) gathering and assessing comprehensive data in order for 
        the health care workforce to meet the health care needs of 
        individuals, including research on the supply, demand, 
        distribution, diversity, and skills needs of the health care 
        workforce;
            (2) increasing the supply of a qualified health care 
        workforce to improve access to and the delivery of health care 
        services for all individuals;
            (3) enhancing health care workforce education and training 
        to improve access to and the delivery of health care services 
        for all individuals; and
            (4) providing support to the existing health care workforce 
        to improve access to and the delivery of health care services 
        for all individuals.

SEC. 5002. DEFINITIONS.

    (a) This Title.--In this title:
            (1) Allied health professional.--The term ``allied health 
        professional'' means an allied health professional as defined 
        in section 799B(5) of the Public Heath Service Act (42 U.S.C. 
        295p(5)) who--
                    (A) has graduated and received an allied health 
                professions degree or certificate from an institution 
                of higher education; and
                    (B) is employed with a Federal, State, local or 
                tribal public health agency, or in a setting where 
                patients might require health care services, including 
                acute care facilities, ambulatory care facilities, 
                personal residences, and other settings located in 
                health professional shortage areas, medically 
                underserved areas, or medically underserved 
                populations, as recognized by the Secretary of Health 
                and Human Services.
            (2) Health care career pathway.--The term ``healthcare 
        career pathway'' means a rigorous, engaging, and high quality 
        set of courses and services that--
                    (A) includes an articulated sequence of academic 
                and career courses, including 21st century skills;
                    (B) is aligned with the needs of healthcare 
                industries in a region or State;
                    (C) prepares students for entry into the full range 
                of postsecondary education options, including 
                registered apprenticeships, and careers;
                    (D) provides academic and career counseling in 
                student-to-counselor ratios that allow students to make 
                informed decisions about academic and career options;
                    (E) meets State academic standards, State 
                requirements for secondary school graduation and is 
                aligned with requirements for entry into postsecondary 
                education, and applicable industry standards; and
                    (F) leads to 2 or more credentials, including--
                            (i) a secondary school diploma; and
                            (ii) a postsecondary degree, an 
                        apprenticeship or other occupational 
                        certification, a certificate, or a license.
            (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in sections 101 and 102 of the Higher Education Act of 
        1965 (20 U.S.C. 1001 and 1002).
            (4) Low income individual, state workforce investment 
        board, and local workforce investment board.--
                    (A) Low-income individual.--The term ``low-income 
                individual'' has the meaning given that term in section 
                101 of the Workforce investment Act of 1998 (29 U.S.C. 
                2801).
                    (B) State workforce investment board; local 
                workforce investment board.--The terms ``State 
                workforce investment board'' and ``local workforce 
                investment board'', refer to a State workforce 
                investment board established under section 111 of the 
                Workforce Investment Act of 1998 (29 U.S.C. 2821) and a 
                local workforce investment board established under 
                section 117 of such Act (29 U.S.C. 2832), respectively.
            (5) Postsecondary education.--The term ``postsecondary 
        education'' means--
                    (A) a 4-year program of instruction, or not less 
                than a 1-year program of instruction that is acceptable 
                for credit toward an associate or a baccalaureate 
                degree, offered by an institution of higher education; 
                or
                    (B) a certificate or registered apprenticeship 
                program at the postsecondary level offered by an 
                institution of higher education or a non-profit 
                educational institution.
            (6) Registered apprenticeship program.--The term 
        ``registered apprenticeship program'' means an industry skills 
        training program at the postsecondary level that combines 
        technical and theoretical training through structure on the job 
        learning with related instruction (in a classroom or through 
        distance learning) while an individual is employed, working 
        under the direction of qualified personnel or a mentor, and 
        earning incremental wage increases aligned to enhance job 
        proficiency, resulting in the acquisition of a nationally 
        recognized and portable certificate, under a plan approved by 
        the Office of Apprenticeship or a State agency recognized by 
        the Department of Labor.
    (b) Title VII of the Public Health Service Act.--Section 799B of 
the Public Health Service Act (42 U.S.C. 295p) is amended--
            (1) by striking paragraph (3) and inserting the following:
            ``(3) Physician assistant education program.--The term 
        `physician assistant education program' means an educational 
        program in a public or private institution in a State that--
                    ``(A) has as its objective the education of 
                individuals who, upon completion of their studies in 
                the program, be qualified to provide primary care 
                medical services with the supervision of a physician; 
                and
                    ``(B) is accredited by the Accreditation Review 
                Commission on Education for the Physician Assistant.''; 
                and
            (2) by adding at the end the following:
            ``(12) Area health education center.--The term `area health 
        education center' means a public or nonprofit private 
        organization that has a cooperative agreement or contract in 
        effect with an entity that has received an award under 
        subsection (a)(1) or (a)(2) of section 751, satisfies the 
        requirements in section 751(d)(1), and has as one of its 
        principal functions the operation of an area health education 
        center. Appropriate organizations may include hospitals, health 
        organizations with accredited primary care training programs, 
        accredited physician assistant educational programs associated 
        with a college or university, and universities or colleges not 
        operating a school of medicine or osteopathic medicine.
            ``(13) Area health education center program.--The term 
        `area health education center program' means cooperative 
        program consisting of an entity that has received an award 
        under subsection (a)(1) or (a)(2) of section 751 for the 
        purpose of planning, developing, operating, and evaluating an 
        area health education center program and one or more area 
        health education centers, which carries out the required 
        activities described in section 751(c), satisfies the program 
        requirements in such section, has as one of its principal 
        functions identifying and implementing strategies and 
        activities that address health care workforce needs in its 
        service area, in coordination with the local workforce 
        investment boards.
            ``(14) Clinical social worker.--The term `clinical social 
        worker' has the meaning given the term in section 1861(hh)(1) 
        of the Social Security Act (42 U.S.C. 1395x(hh)(1)).
            ``(15) Cultural competency.--The term `cultural competency' 
        shall be defined by the Secretary in a manner consistent with 
        section 1707(d)(3).
            ``(16) Direct care worker.--The term `direct care worker' 
        has the meaning given that term in the 2010 Standard 
        Occupational Classifications of the Department of Labor for 
        Home Health Aides [31-1011], Psychiatric Aides [31-1013], 
        Nursing Assistants [31-1014], and Personal Care Aides [39-
        9021].
            ``(17) Federally qualified health center.--The term 
        `Federally qualified health center' has the meaning given that 
        term in section 1861(aa) of the Social Security Act (42 U.S.C. 
        1395x(aa)).
            ``(18) Frontier health professional shortage area.--The 
        term `frontier health professional shortage area' means an 
        area--
                    ``(A) with a population density less than 6 persons 
                per square mile within the service area; and
                    ``(B) with respect to which the distance or time 
                for the population to access care is excessive.
            ``(19) Graduate psychology.--The term `graduate psychology' 
        means an accredited program in professional psychology.
            ``(20) Health disparity population.--The term `health 
        disparity population' has the meaning given such term in 
        section 903(d)(1).
            ``(21) Health literacy.--The term `health literacy' means 
        the degree to which an individual has the capacity to obtain, 
        communicate, process, and understand health information and 
        services in order to make appropriate health decisions.
            ``(22) Mental health service professional.--The term 
        `mental health service professional' means an individual with a 
        graduate or postgraduate degree from an accredited institution 
        of higher education in psychiatry, psychology, school 
        psychology, behavioral pediatrics, psychiatric nursing, social 
        work, school social work, substance abuse disorder prevention 
        and treatment, marriage and family counseling, school 
        counseling, or professional counseling.
            ``(23) One-stop delivery system center.--The term `one-stop 
        delivery system' means a one-stop delivery system described in 
        section 134(c) of the Workforce Investment Act of 1998 (29 
        U.S.C. 2864(c)).
            ``(24) Paraprofessional child and adolescent mental health 
        worker.--The term `paraprofessional child and adolescent mental 
        health worker' means an individual who is not a mental or 
        behavioral health service professional, but who works at the 
        first stage of contact with children and families who are 
        seeking mental or behavioral health services, including 
        substance abuse prevention and treatment services.
            ``(25) Racial and ethnic minority group; racial and ethnic 
        minority population.--The terms `racial and ethnic minority 
        group' and `racial and ethnic minority population' have the 
        meaning given the term `racial and ethnic minority group' in 
        section 1707.
            ``(26) Rural health clinic.--The term `rural health clinic' 
        has the meaning given that term in section 1861(aa) of the 
        Social Security Act (42 U.S.C. 1395x(aa)).''.
    (c) Title VIII of the Public Health Service Act.--Section 801 of 
the Public Health Service Act (42 U.S.C. 296) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``means a'' and inserting ``means 
                an accredited (as defined in paragraph 6)''; and
                    (B) by striking the period as inserting the 
                following: ``where graduates are--
                    ``(A) authorized to sit for the National Council 
                Licensure EXamination-Registered Nurse (NCLEX-RN); or
                    ``(B) licensed registered nurses who will receive a 
                graduate or equivalent degree or training to become an 
                advanced education nurse as defined by section 
                811(b).''; and
            (2) by adding at the end the following:
            ``(16) Accelerated nursing degree program.--The term 
        `accelerated nursing degree program' means a program of 
        education in professional nursing offered by an accredited 
        school of nursing in which an individual holding a bachelors 
        degree in another discipline receives a BSN or MSN degree in an 
        accelerated time frame as determined by the accredited school 
        of nursing.
            ``(17) Bridge or degree completion program.--The term 
        `bridge or degree completion program' means a program of 
        education in professional nursing offered by an accredited 
        school of nursing, as defined in paragraph (2), that leads to a 
        baccalaureate degree in nursing. Such programs may include, 
        Registered Nurse (RN) to Bachelor's of Science of Nursing (BSN) 
        programs, RN to MSN (Master of Science of Nursing) programs, or 
        BSN to Doctoral programs.''.

          Subtitle B--Innovations in the Health Care Workforce

SEC. 5101. NATIONAL HEALTH CARE WORKFORCE COMMISSION.

    (a) Purpose.--It is the purpose of this section to establish a 
National Health Care Workforce Commission that--
            (1) serves as a national resource for Congress, the 
        President, States, and localities;
            (2) communicates and coordinates with the Departments of 
        Health and Human Services, Labor, Veterans Affairs, Homeland 
        Security, and Education on related activities administered by 
        one or more of such Departments;
            (3) develops and commissions evaluations of education and 
        training activities to determine whether the demand for health 
        care workers is being met;
            (4) identifies barriers to improved coordination at the 
        Federal, State, and local levels and recommend ways to address 
        such barriers; and
            (5) encourages innovations to address population needs, 
        constant changes in technology, and other environmental 
        factors.
    (b) Establishment.--There is hereby established the National Health 
Care Workforce Commission (in this section referred to as the 
``Commission'').
    (c) Membership.--
            (1) Number and appointment.--The Commission shall be 
        composed of 15 members to be appointed by the Comptroller 
        General, without regard to section 5 of the Federal Advisory 
        Committee Act (5 U.S.C. App.).
            (2) Qualifications.--
                    (A) In general.--The membership of the Commission 
                shall include individuals--
                            (i) with national recognition for their 
                        expertise in health care labor market analysis, 
                        including health care workforce analysis; 
                        health care finance and economics; health care 
                        facility management; health care plans and 
                        integrated delivery systems; health care 
                        workforce education and training; health care 
                        philanthropy; providers of health care 
                        services; and other related fields; and
                            (ii) who will provide a combination of 
                        professional perspectives, broad geographic 
                        representation, and a balance between urban, 
                        suburban, rural, and frontier representatives.
                    (B) Inclusion.--
                            (i) In general.--The membership of the 
                        Commission shall include no less than one 
                        representative of--
                                    (I) the health care workforce and 
                                health professionals;
                                    (II) employers;
                                    (III) third-party payers;
                                    (IV) individuals skilled in the 
                                conduct and interpretation of health 
                                care services and health economics 
                                research;
                                    (V) representatives of consumers;
                                    (VI) labor unions;
                                    (VII) State or local workforce 
                                investment boards; and
                                    (VIII) educational institutions 
                                (which may include elementary and 
                                secondary institutions, institutions of 
                                higher education, including 2 and 4 
                                year institutions, or registered 
                                apprenticeship programs).
                            (ii) Additional members.--The remaining 
                        membership may include additional 
                        representatives from clause (i) and other 
                        individuals as determined appropriate by the 
                        Comptroller General of the United States.
                    (C) Majority non-providers.--Individuals who are 
                directly involved in health professions education or 
                practice shall not constitute a majority of the 
                membership of the Commission.
                    (D) Ethical disclosure.--The Comptroller General 
                shall establish a system for public disclosure by 
                members of the Commission of financial and other 
                potential conflicts of interest relating to such 
                members. Members of the Commission shall be treated as 
                employees of Congress for purposes of applying title I 
                of the Ethics in Government Act of 1978. Members of the 
                Commission shall not be treated as special government 
                employees under title 18, United States Code.
            (3) Terms.--
                    (A) In general.--The terms of members of the 
                Commission shall be for 3 years except that the 
                Comptroller General shall designate staggered terms for 
                the members first appointed.
                    (B) Vacancies.--Any member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be 
                appointed only for the remainder of that term. A member 
                may serve after the expiration of that member's term 
                until a successor has taken office. A vacancy in the 
                Commission shall be filled in the manner in which the 
                original appointment was made.
                    (C) Initial appointments.--The Comptroller General 
                shall make initial appointments of members to the 
                Commission not later than September 30, 2010.
            (4) Compensation.--While serving on the business of the 
        Commission (including travel time), a member of the Commission 
        shall be entitled to compensation at the per diem equivalent of 
        the rate provided for level IV of the Executive Schedule under 
        section 5315 of tile 5, United States Code, and while so 
        serving away from home and the member's regular place of 
        business, a member may be allowed travel expenses, as 
        authorized by the Chairman of the Commission. Physicians 
        serving as personnel of the Commission may be provided a 
        physician comparability allowance by the Commission in the same 
        manner as Government physicians may be provided such an 
        allowance by an agency under section 5948 of title 5, United 
        States Code, and for such purpose subsection (i) of such 
        section shall apply to the Commission in the same manner as it 
        applies to the Tennessee Valley Authority. For purposes of pay 
        (other than pay of members of the Commission) and employment 
        benefits, rights, and privileges, all personnel of the 
        Commission shall be treated as if they were employees of the 
        United States Senate. Personnel of the Commission shall not be 
        treated as employees of the Government Accountability Office 
        for any purpose.
            (5) Chairman, vice chairman.--The Comptroller General shall 
        designate a member of the Commission, at the time of 
        appointment of the member, as Chairman and a member as Vice 
        Chairman for that term of appointment, except that in the case 
        of vacancy of the chairmanship or vice chairmanship, the 
        Comptroller General may designate another member for the 
        remainder of that member's term.
            (6) Meetings.--The Commission shall meet at the call of the 
        chairman, but no less frequently than on a quarterly basis.
    (d) Duties.--
            (1) Recognition, dissemination, and communication.--The 
        Commission shall--
                    (A) recognize efforts of Federal, State, and local 
                partnerships to develop and offer health care career 
                pathways of proven effectiveness;
                    (B) disseminate information on promising retention 
                practices for health care professionals; and
                    (C) communicate information on important policies 
                and practices that affect the recruitment, education 
                and training, and retention of the health care 
                workforce.
            (2) Review of health care workforce and annual reports.--In 
        order to develop a fiscally sustainable integrated workforce 
        that supports a high-quality, readily accessible health care 
        delivery system that meets the needs of patients and 
        populations, the Commission, in consultation with relevant 
        Federal, State, and local agencies, shall--
                    (A) review current and projected health care 
                workforce supply and demand, including the topics 
                described in paragraph (3);
                    (B) make recommendations to Congress and the 
                Administration concerning national health care 
                workforce priorities, goals, and policies;
                    (C) by not later than October 1 of each year 
                (beginning with 2011), submit a report to Congress and 
                the Administration containing the results of such 
                reviews and recommendations concerning related 
                policies; and
                    (D) by not later than April 1 of each year 
                (beginning with 2011), submit a report to Congress and 
                the Administration containing a review of, and 
                recommendations on, at a minimum one high priority area 
                as described in paragraph (4).
            (3) Specific topics to be reviewed.--The topics described 
        in this paragraph include--
                    (A) current health care workforce supply and 
                distribution, including demographics, skill sets, and 
                demands, with projected demands during the subsequent 
                10 and 25 year periods;
                    (B) health care workforce education and training 
                capacity, including the number of students who have 
                completed education and training, including registered 
                apprenticeships; the number of qualified faculty; the 
                education and training infrastructure; and the 
                education and training demands, with projected demands 
                during the subsequent 10 and 25 year periods;
                    (C) the education loan and grant programs in titles 
                VII and VIII of the Public Health Service Act (42 
                U.S.C. 292 et seq. and 296 et seq.), with 
                recommendations on whether such programs should become 
                part of the Higher Education Act of 1965 (20 U.S.C. 
                1001 et seq);
                    (D) the implications of new and existing Federal 
                policies which affect the health care workforce, 
                including Medicare and Medicaid graduate medical 
                education policies, titles VII and VIII of the Public 
                Health Service Act (42 U.S.C. 292 et seq. and 296 et 
                seq.), the National Health Service Corps (with 
                recommendations for aligning such programs with 
                national health workforce priorities and goals), and 
                other health care workforce programs, including those 
                supported through the Workforce Investment Act of 1998 
                (29 U.S.C. 2801 et seq.), the Carl D. Perkins Career 
                and Technical Education Act of 2006 (20 U.S.C. 2301 et 
                seq.), the Higher Education Act of 1965 (20 U.S.C. 1001 
                et seq.), and any other Federal health care workforce 
                programs;
                    (E) the health care workforce needs of special 
                populations, such as minorities, rural populations, 
                medically underserved populations, gender specific 
                needs, individuals with disabilities, and geriatric and 
                pediatric populations with recommendations for new and 
                existing Federal policies to meet the needs of these 
                special populations; and
                    (F) recommendations creating or revising national 
                loan repayment programs and scholarship programs to 
                require low-income, minority medical students to serve 
                in their home communities, if designated as medical 
                underserved community.
            (4) High priority areas.--
                    (A) In general.--The initial high priority topics 
                described in this paragraph include each of the 
                following:
                            (i) Integrated health care workforce 
                        planning that identifies health care 
                        professional skills needed and maximizes the 
                        skill sets of health care professionals across 
                        disciplines.
                            (ii) An analysis of the nature, scopes of 
                        practice, and demands for health care workers 
                        in the enhanced information technology and 
                        management workplace.
                            (iii) An analysis of how to align Medicare 
                        and Medicaid graduate medical education 
                        policies with national workforce goals.
                            (iv) The education and training capacity, 
                        projected demands, and integration with the 
                        health care delivery system of each of the 
                        following:
                                    (I) Nursing workforce capacity at 
                                all levels.
                                    (II) Oral health care workforce 
                                capacity at all levels.
                                    (III) Mental and behavioral health 
                                care workforce capacity at all levels.
                                    (IV) Allied health and public 
                                health care workforce capacity at all 
                                levels.
                                    (V) Emergency medical service 
                                workforce capacity, including the 
                                retention and recruitment of the 
                                volunteer workforce, at all levels.
                                    (VI) The geographic distribution of 
                                health care providers as compared to 
                                the identified health care workforce 
                                needs of States and regions.
                    (B) Future determinations.--The Commission may 
                require that additional topics be included under 
                subparagraph (A). The appropriate committees of 
                Congress may recommend to the Commission the inclusion 
                of other topics for health care workforce development 
                areas that require special attention.
            (5) Grant program.--The Commission shall--
                    (A) review implementation progress reports on, and 
                report to Congress about, the State Health Care 
                Workforce Development Grant program established in 
                section 5102;
                    (B) in collaboration with the Department of Labor 
                and in coordination with the Department of Education 
                and other relevant Federal agencies, make 
                recommendations to the fiscal and administrative agent 
                under section 5102(b) for grant recipients under 
                section 5102;
                    (C) assess the implementation of the grants under 
                such section; and
                    (D) collect performance and report information, 
                including identified models and best practices, on 
                grants from the fiscal and administrative agent under 
                such section and distribute this information to 
                Congress, relevant Federal agencies, and to the public.
            (6) Study.--The Commission shall study effective mechanisms 
        for financing education and training for careers in health 
        care, including public health and allied health.
            (7) Recommendations.--The Commission shall submit 
        recommendations to Congress, the Department of Labor, and the 
        Department of Health and Human Services about improving safety, 
        health, and worker protections in the workplace for the health 
        care workforce.
            (8) Assessment.--The Commission shall assess and receive 
        reports from the National Center for Health Care Workforce 
        Analysis established under section 761(b) of the Public Service 
        Health Act (as amended by section 5103).
    (e) Consultation With Federal, State, and Local Agencies, Congress, 
and Other Organizations.--
            (1) In general.--The Commission shall consult with Federal 
        agencies (including the Departments of Health and Human 
        Services, Labor, Education, Commerce, Agriculture, Defense, and 
        Veterans Affairs and the Environmental Protection Agency), 
        Congress, the Medicare Payment Advisory Commission, the 
        Medicaid and CHIP Payment and Access Commission, and, to the 
        extent practicable, with State and local agencies, Indian 
        tribes, voluntary health care organizations, professional 
        societies, and other relevant public-private health care 
        partnerships.
            (2) Obtaining official data.--The Commission, consistent 
        with established privacy rules, may secure directly from any 
        department or agency of the Executive Branch information 
        necessary to enable the Commission to carry out this section.
            (3) Detail of federal government employees.--An employee of 
        the Federal Government may be detailed to the Commission 
        without reimbursement. The detail of such an employee shall be 
        without interruption or loss of civil service status.
    (f) Director and Staff; Experts and Consultants.--Subject to such 
review as the Comptroller General of the United States determines to be 
necessary to ensure the efficient administration of the Commission, the 
Commission may--
            (1) employ and fix the compensation of an executive 
        director that shall not exceed the rate of basic pay payable 
        for level V of the Executive Schedule and such other personnel 
        as may be necessary to carry out its duties (without regard to 
        the provisions of title 5, United States Code, governing 
        appointments in the competitive service);
            (2) seek such assistance and support as may be required in 
        the performance of its duties from appropriate Federal 
        departments and agencies;
            (3) enter into contracts or make other arrangements, as may 
        be necessary for the conduct of the work of the Commission 
        (without regard to section 3709 of the Revised Statutes (41 
        U.S.C. 5));
            (4) make advance, progress, and other payments which relate 
        to the work of the Commission;
            (5) provide transportation and subsistence for persons 
        serving without compensation; and
            (6) prescribe such rules and regulations as the Commission 
        determines to be necessary with respect to the internal 
        organization and operation of the Commission.
    (g) Powers.--
            (1) Data collection.--In order to carry out its functions 
        under this section, the Commission shall--
                    (A) utilize existing information, both published 
                and unpublished, where possible, collected and assessed 
                either by its own staff or under other arrangements 
                made in accordance with this section, including 
                coordination with the Bureau of Labor Statistics;
                    (B) carry out, or award grants or contracts for the 
                carrying out of, original research and development, 
                where existing information is inadequate, and
                    (C) adopt procedures allowing interested parties to 
                submit information for the Commission's use in making 
                reports and recommendations.
            (2) Access of the government accountability office to 
        information.--The Comptroller General of the United States 
        shall have unrestricted access to all deliberations, records, 
        and data of the Commission, immediately upon request.
            (3) Periodic audit.--The Commission shall be subject to 
        periodic audit by an independent public accountant under 
        contract to the Commission.
    (h) Authorization of Appropriations.--
            (1) Request for appropriations.--The Commission shall 
        submit requests for appropriations in the same manner as the 
        Comptroller General of the United States submits requests for 
        appropriations. Amounts so appropriated for the Commission 
        shall be separate from amounts appropriated for the Comptroller 
        General.
            (2) Authorization.--There are authorized to be appropriated 
        such sums as may be necessary to carry out this section.
            (3) Gifts and services.--The Commission may not accept 
        gifts, bequeaths, or donations of property, but may accept and 
        use donations of services for purposes of carrying out this 
        section.
    (i) Definitions.--In this section:
            (1) Health care workforce.--The term ``health care 
        workforce'' includes all health care providers with direct 
        patient care and support responsibilities, such as physicians, 
        nurses, nurse practitioners, primary care providers, preventive 
        medicine physicians, optometrists, ophthalmologists, physician 
        assistants, pharmacists, dentists, dental hygienists, and other 
        oral healthcare professionals, allied health professionals, 
        doctors of chiropractic, community health workers, health care 
        paraprofessionals, direct care workers, psychologists and other 
        behavioral and mental health professionals (including substance 
        abuse prevention and treatment providers), social workers, 
        physical and occupational therapists, certified nurse midwives, 
        podiatrists, the EMS workforce (including professional and 
        volunteer ambulance personnel and firefighters who perform 
        emergency medical services), licensed complementary and 
        alternative medicine providers, integrative health 
        practitioners, public health professionals, and any other 
        health professional that the Comptroller General of the United 
        States determines appropriate.
            (2) Health professionals.--The term ``health 
        professionals'' includes--
                    (A) dentists, dental hygienists, primary care 
                providers, specialty physicians, nurses, nurse 
                practitioners, physician assistants, psychologists and 
                other behavioral and mental health professionals 
                (including substance abuse prevention and treatment 
                providers), social workers, physical and occupational 
                therapists, public health professionals, clinical 
                pharmacists, allied health professionals, doctors of 
                chiropractic, community health workers, school nurses, 
                certified nurse midwives, podiatrists, licensed 
                complementary and alternative medicine providers, the 
                EMS workforce (including professional and volunteer 
                ambulance personnel and firefighters who perform 
                emergency medical services), and integrative health 
                practitioners;
                    (B) national representatives of health 
                professionals;
                    (C) representatives of schools of medicine, 
                osteopathy, nursing, dentistry, optometry, pharmacy, 
                chiropractic, allied health, educational programs for 
                public health professionals, behavioral and mental 
                health professionals (as so defined), social workers, 
                pharmacists, physical and occupational therapists, oral 
                health care industry dentistry and dental hygiene, and 
                physician assistants;
                    (D) representatives of public and private teaching 
                hospitals, and ambulatory health facilities, including 
                Federal medical facilities; and
                    (E) any other health professional the Comptroller 
                General of the United States determines appropriate.

SEC. 5102. STATE HEALTH CARE WORKFORCE DEVELOPMENT GRANTS.

    (a) Establishment.--There is established a competitive health care 
workforce development grant program (referred to in this section as the 
``program'') for the purpose of enabling State partnerships to complete 
comprehensive planning and to carry out activities leading to coherent 
and comprehensive health care workforce development strategies at the 
State and local levels.
    (b) Fiscal and Administrative Agent.--The Health Resources and 
Services Administration of the Department of Health and Human Services 
(referred to in this section as the ``Administration'') shall be the 
fiscal and administrative agent for the grants awarded under this 
section. The Administration is authorized to carry out the program, in 
consultation with the National Health Care Workforce Commission 
(referred to in this section as the ``Commission''), which shall review 
reports on the development, implementation, and evaluation activities 
of the grant program, including--
            (1) administering the grants;
            (2) providing technical assistance to grantees; and
            (3) reporting performance information to the Commission.
    (c) Planning Grants.--
            (1) Amount and duration.--A planning grant shall be awarded 
        under this subsection for a period of not more than one year 
        and the maximum award may not be more than $150,000.
            (2) Eligibility.--To be eligible to receive a planning 
        grant, an entity shall be an eligible partnership. An eligible 
        partnership shall be a State workforce investment board, if it 
        includes or modifies the members to include at least one 
        representative from each of the following: health care 
        employer, labor organization, a public 2-year institution of 
        higher education, a public 4-year institution of higher 
        education, the recognized State federation of labor, the State 
        public secondary education agency, the State P-16 or P-20 
        Council if such a council exists, and a philanthropic 
        organization that is actively engaged in providing learning, 
        mentoring, and work opportunities to recruit, educate, and 
        train individuals for, and retain individuals in, careers in 
        health care and related industries.
            (3) Fiscal and administrative agent.--The Governor of the 
        State receiving a planning grant has the authority to appoint a 
        fiscal and an administrative agency for the partnership.
            (4) Application.--Each State partnership desiring a 
        planning grant shall submit an application to the Administrator 
        of the Administration at such time and in such manner, and 
        accompanied by such information as the Administrator may 
        reasonable require. Each application submitted for a planning 
        grant shall describe the members of the State partnership, the 
        activities for which assistance is sought, the proposed 
        performance benchmarks to be used to measure progress under the 
        planning grant, a budget for use of the funds to complete the 
        required activities described in paragraph (5), and such 
        additional assurance and information as the Administrator 
        determines to be essential to ensure compliance with the grant 
        program requirements.
            (5) Required activities.--A State partnership receiving a 
        planning grant shall carry out the following:
                    (A) Analyze State labor market information in order 
                to create health care career pathways for students and 
                adults, including dislocated workers.
                    (B) Identify current and projected high demand 
                State or regional health care sectors for purposes of 
                planning career pathways.
                    (C) Identify existing Federal, State, and private 
                resources to recruit, educate or train, and retain a 
                skilled health care workforce and strengthen 
                partnerships.
                    (D) Describe the academic and health care industry 
                skill standards for high school graduation, for entry 
                into postsecondary education, and for various 
                credentials and licensure.
                    (E) Describe State secondary and postsecondary 
                education and training policies, models, or practices 
                for the health care sector, including career 
                information and guidance counseling.
                    (F) Identify Federal or State policies or rules to 
                developing a coherent and comprehensive health care 
                workforce development strategy and barriers and a plan 
                to resolve these barriers.
                    (G) Participate in the Administration's evaluation 
                and reporting activities.
            (6) Performance and evaluation.--Before the State 
        partnership receives a planning grant, such partnership and the 
        Administrator of the Administration shall jointly determine the 
        performance benchmarks that will be established for the 
        purposes of the planning grant.
            (7) Match.--Each State partnership receiving a planning 
        grant shall provide an amount, in cash or in kind, that is not 
        less that 15 percent of the amount of the grant, to carry out 
        the activities supported by the grant. The matching requirement 
        may be provided from funds available under other Federal, 
        State, local or private sources to carry out the activities.
            (8) Report.--
                    (A) Report to administration.--Not later than 1 
                year after a State partnership receives a planning 
                grant, the partnership shall submit a report to the 
                Administration on the State's performance of the 
                activities under the grant, including the use of funds, 
                including matching funds, to carry out required 
                activities, and a description of the progress of the 
                State workforce investment board in meeting the 
                performance benchmarks.
                    (B) Report to congress.--The Administration shall 
                submit a report to Congress analyzing the planning 
                activities, performance, and fund utilization of each 
                State grant recipient, including an identification of 
                promising practices and a profile of the activities of 
                each State grant recipient.
    (d) Implementation Grants.--
            (1) In general.--The Administration shall--
                    (A) competitively award implementation grants to 
                State partnerships to enable such partnerships to 
                implement activities that will result in a coherent and 
                comprehensive plan for health workforce development 
                that will address current and projected workforce 
                demands within the State; and
                    (B) inform the Commission and Congress about the 
                awards made.
            (2) Duration.--An implementation grant shall be awarded for 
        a period of no more than 2 years, except in those cases where 
        the Administration determines that the grantee is high 
        performing and the activities supported by the grant warrant up 
        to 1 additional year of funding.
            (3) Eligibility.--To be eligible for an implementation 
        grant, a State partnership shall have--
                    (A) received a planning grant under subsection (c) 
                and completed all requirements of such grant; or
                    (B) completed a satisfactory application, including 
                a plan to coordinate with required partners and 
                complete the required activities during the 2 year 
                period of the implementation grant.
            (4) Fiscal and administrative agent.--A State partnership 
        receiving an implementation grant shall appoint a fiscal and an 
        administration agent for the implementation of such grant.
            (5) Application.--Each eligible State partnership desiring 
        an implementation grant shall submit an application to the 
        Administration at such time, in such manner, and accompanied by 
        such information as the Administration may reasonably require. 
        Each application submitted shall include--
                    (A) a description of the members of the State 
                partnership;
                    (B) a description of how the State partnership 
                completed the required activities under the planning 
                grant, if applicable;
                    (C) a description of the activities for which 
                implementation grant funds are sought, including grants 
                to regions by the State partnership to advance coherent 
                and comprehensive regional health care workforce 
                planning activities;
                    (D) a description of how the State partnership will 
                coordinate with required partners and complete the 
                required partnership activities during the duration of 
                an implementation grant;
                    (E) a budget proposal of the cost of the activities 
                supported by the implementation grant and a timeline 
                for the provision of matching funds required;
                    (F) proposed performance benchmarks to be used to 
                assess and evaluate the progress of the partnership 
                activities;
                    (G) a description of how the State partnership will 
                collect data to report progress in grant activities; 
                and
                    (H) such additional assurances as the 
                Administration determines to be essential to ensure 
                compliance with grant requirements.
            (6) Required activities.--
                    (A) In general.--A State partnership that receives 
                an implementation grant may reserve not less than 60 
                percent of the grant funds to make grants to be 
                competitively awarded by the State partnership, 
                consistent with State procurement rules, to encourage 
                regional partnerships to address health care workforce 
                development needs and to promote innovative health care 
                workforce career pathway activities, including career 
                counseling, learning, and employment.
                    (B) Eligible partnership duties.--An eligible State 
                partnership receiving an implementation grant shall--
                            (i) identify and convene regional 
                        leadership to discuss opportunities to engage 
                        in statewide health care workforce development 
                        planning, including the potential use of 
                        competitive grants to improve the development, 
                        distribution, and diversity of the regional 
                        health care workforce; the alignment of 
                        curricula for health care careers; and the 
                        access to quality career information and 
                        guidance and education and training 
                        opportunities;
                            (ii) in consultation with key stakeholders 
                        and regional leaders, take appropriate steps to 
                        reduce Federal, State, or local barriers to a 
                        comprehensive and coherent strategy, including 
                        changes in State or local policies to foster 
                        coherent and comprehensive health care 
                        workforce development activities, including 
                        health care career pathways at the regional and 
                        State levels, career planning information, 
                        retraining for dislocated workers, and as 
                        appropriate, requests for Federal program or 
                        administrative waivers;
                            (iii) develop, disseminate, and review with 
                        key stakeholders a preliminary statewide 
                        strategy that addresses short- and long-term 
                        health care workforce development supply versus 
                        demand;
                            (iv) convene State partnership members on a 
                        regular basis, and at least on a semiannual 
                        basis;
                            (v) assist leaders at the regional level to 
                        form partnerships, including technical 
                        assistance and capacity building activities;
                            (vi) collect and assess data on and report 
                        on the performance benchmarks selected by the 
                        State partnership and the Administration for 
                        implementation activities carried out by 
                        regional and State partnerships; and
                            (vii) participate in the Administration's 
                        evaluation and reporting activities.
            (7) Performance and evaluation.--Before the State 
        partnership receives an implementation grant, it and the 
        Administrator shall jointly determine the performance 
        benchmarks that shall be established for the purposes of the 
        implementation grant.
            (8) Match.--Each State partnership receiving an 
        implementation grant shall provide an amount, in cash or in 
        kind that is not less than 25 percent of the amount of the 
        grant, to carry out the activities supported by the grant. The 
        matching funds may be provided from funds available from other 
        Federal, State, local, or private sources to carry out such 
        activities.
            (9) Reports.--
                    (A) Report to administration.--For each year of the 
                implementation grant, the State partnership receiving 
                the implementation grant shall submit a report to the 
                Administration on the performance of the State of the 
                grant activities, including a description of the use of 
                the funds, including matched funds, to complete 
                activities, and a description of the performance of the 
                State partnership in meeting the performance 
                benchmarks.
                    (B) Report to congress.--The Administration shall 
                submit a report to Congress analyzing implementation 
                activities, performance, and fund utilization of the 
                State grantees, including an identification of 
                promising practices and a profile of the activities of 
                each State grantee.
    (e) Authorization for Appropriations.--
            (1) Planning grants.--There are authorized to be 
        appropriated to award planning grants under subsection (c) 
        $8,000,000 for fiscal year 2010, and such sums as may be 
        necessary for each subsequent fiscal year.
            (2) Implementation grants.--There are authorized to be 
        appropriated to award implementation grants under subsection 
        (d), $150,000,000 for fiscal year 2010, and such sums as may be 
        necessary for each subsequent fiscal year.

SEC. 5103. HEALTH CARE WORKFORCE ASSESSMENT.

    (a) In General.--Section 761 of the Public Health Service Act (42 
U.S.C. 294m) is amended--
            (1) by redesignating subsection (c) as subsection (e);
            (2) by striking subsection (b) and inserting the following:
    ``(b) National Center for Health Care Workforce Analysis.--
            ``(1) Establishment.--The Secretary shall establish the 
        National Center for Health Workforce Analysis (referred to in 
        this section as the `National Center').
            ``(2) Purposes.--The National Center, in coordination to 
        the extent practicable with the National Health Care Workforce 
        Commission (established in section 5101 of the Patient 
        Protection and Affordable Care Act), and relevant regional and 
        State centers and agencies, shall--
                    ``(A) provide for the development of information 
                describing and analyzing the health care workforce and 
                workforce related issues;
                    ``(B) carry out the activities under section 
                792(a);
                    ``(C) annually evaluate programs under this title;
                    ``(D) develop and publish performance measures and 
                benchmarks for programs under this title; and
                    ``(E) establish, maintain, and publicize a national 
                Internet registry of each grant awarded under this 
                title and a database to collect data from longitudinal 
                evaluations (as described in subsection (d)(2)) on 
                performance measures (as developed under sections 
                749(d)(3), 757(d)(3), and 762(a)(3)).
            ``(3) Collaboration and data sharing.--
                    ``(A) In general.--The National Center shall 
                collaborate with Federal agencies and relevant 
                professional and educational organizations or societies 
                for the purpose of linking data regarding grants 
                awarded under this title.
                    ``(B) Contracts for health workforce analysis.--For 
                the purpose of carrying out the activities described in 
                subparagraph (A), the National Center may enter into 
                contracts with relevant professional and educational 
                organizations or societies.
    ``(c) State and Regional Centers for Health Workforce Analysis.--
            ``(1) In general.--The Secretary shall award grants to, or 
        enter into contracts with, eligible entities for purposes of--
                    ``(A) collecting, analyzing, and reporting data 
                regarding programs under this title to the National 
                Center and to the public; and
                    ``(B) providing technical assistance to local and 
                regional entities on the collection, analysis, and 
                reporting of data.
            ``(2) Eligible entities.--To be eligible for a grant or 
        contract under this subsection, an entity shall--
                    ``(A) be a State, a State workforce investment 
                board, a public health or health professions school, an 
                academic health center, or an appropriate public or 
                private nonprofit entity; and
                    ``(B) submit to the Secretary an application at 
                such time, in such manner, and containing such 
                information as the Secretary may require.
    ``(d) Increase in Grants for Longitudinal Evaluations.--
            ``(1) In general.--The Secretary shall increase the amount 
        awarded to an eligible entity under this title for a 
        longitudinal evaluation of individuals who have received 
        education, training, or financial assistance from programs 
        under this title.
            ``(2) Capability.--A longitudinal evaluation shall be 
        capable of--
                    ``(A) studying practice patterns; and
                    ``(B) collecting and reporting data on performance 
                measures developed under sections 749(d)(3), 757(d)(3), 
                and 762(a)(3).
            ``(3) Guidelines.--A longitudinal evaluation shall comply 
        with guidelines issued under sections 749(d)(4), 757(d)(4), and 
        762(a)(4).
            ``(4) Eligible entities.--To be eligible to obtain an 
        increase under this section, an entity shall be a recipient of 
        a grant or contract under this title.''; and
            (3) in subsection (e), as so redesignated--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--
                    ``(A) National center.--To carry out subsection 
                (b), there are authorized to be appropriated $7,500,000 
                for each of fiscal years 2010 through 2014.
                    ``(B) State and regional centers.--To carry out 
                subsection (c), there are authorized to be appropriated 
                $4,500,000 for each of fiscal years 2010 through 2014.
                    ``(C) Grants for longitudinal evaluations.--To 
                carry out subsection (d), there are authorized to be 
                appropriated such sums as may be necessary for fiscal 
                years 2010 through 2014.''; and
            (4) in paragraph (2), by striking ``subsection (a)'' and 
        inserting ``paragraph (1)''.
    (b) Transfers.--Not later than 180 days after the date of enactment 
of this Act, the responsibilities and resources of the National Center 
for Health Workforce Analysis, as in effect on the date before the date 
of enactment of this Act, shall be transferred to the National Center 
for Health Care Workforce Analysis established under section 761 of the 
Public Health Service Act, as amended by subsection (a).
    (c) Use of Longitudinal Evaluations.--Section 791(a)(1) of the 
Public Health Service Act (42 U.S.C. 295j(a)(1)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(C) utilizes a longitudinal evaluation (as 
                described in section 761(d)(2)) and reports data from 
                such system to the national workforce database (as 
                established under section 761(b)(2)(E)).''.
    (d) Performance Measures; Guidelines for Longitudinal 
Evaluations.--
            (1) Advisory committee on training in primary care medicine 
        and dentistry.--Section 748(d) of the Public Health Service Act 
        is amended--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) develop, publish, and implement performance measures 
        for programs under this part;
            ``(4) develop and publish guidelines for longitudinal 
        evaluations (as described in section 761(d)(2)) for programs 
        under this part; and
            ``(5) recommend appropriation levels for programs under 
        this part.''.
            (2) Advisory committee on interdisciplinary, community-
        based linkages.--Section 756(d) of the Public Health Service 
        Act is amended--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) develop, publish, and implement performance measures 
        for programs under this part;
            ``(4) develop and publish guidelines for longitudinal 
        evaluations (as described in section 761(d)(2)) for programs 
        under this part; and
            ``(5) recommend appropriation levels for programs under 
        this part.''.
            (3) Advisory council on graduate medical education.--
        Section 762(a) of the Public Health Service Act (42 U.S.C. 
        294o(a)) is amended--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) develop, publish, and implement performance measures 
        for programs under this title, except for programs under part C 
        or D;
            ``(4) develop and publish guidelines for longitudinal 
        evaluations (as described in section 761(d)(2)) for programs 
        under this title, except for programs under part C or D; and
            ``(5) recommend appropriation levels for programs under 
        this title, except for programs under part C or D.''.

     Subtitle C--Increasing the Supply of the Health Care Workforce

SEC. 5201. FEDERALLY SUPPORTED STUDENT LOAN FUNDS.

    (a) Medical Schools and Primary Health Care.--Section 723 of the 
Public Health Service Act (42 U.S.C. 292s) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking subparagraph (B) 
                and inserting the following:
                    ``(B) to practice in such care for 10 years 
                (including residency training in primary health care) 
                or through the date on which the loan is repaid in 
                full, whichever occurs first.''; and
                    (B) by striking paragraph (3) and inserting the 
                following:
            ``(3) Noncompliance by student.--Each agreement entered 
        into with a student pursuant to paragraph (1) shall provide 
        that, if the student fails to comply with such agreement, the 
        loan involved will begin to accrue interest at a rate of 2 
        percent per year greater than the rate at which the student 
        would pay if compliant in such year.''; and
            (2) by adding at the end the following:
    ``(d) Sense of Congress.--It is the sense of Congress that funds 
repaid under the loan program under this section should not be 
transferred to the Treasury of the United States or otherwise used for 
any other purpose other than to carry out this section.''.
    (b) Student Loan Guidelines.--The Secretary of Health and Human 
Services shall not require parental financial information for an 
independent student to determine financial need under section 723 of 
the Public Health Service Act (42 U.S.C. 292s) and the determination of 
need for such information shall be at the discretion of applicable 
school loan officer. The Secretary shall amend guidelines issued by the 
Health Resources and Services Administration in accordance with the 
preceding sentence.

SEC. 5202. NURSING STUDENT LOAN PROGRAM.

    (a) Loan Agreements.--Section 836(a) of the Public Health Service 
Act (42 U.S.C. 297b(a)) is amended--
            (1) by striking ``$2,500'' and inserting ``$3,300'';
            (2) by striking ``$4,000'' and inserting ``$5,200''; and
            (3) by striking ``$13,000'' and all that follows through 
        the period and inserting ``$17,000 in the case of any student 
        during fiscal years 2010 and 2011. After fiscal year 2011, such 
        amounts shall be adjusted to provide for a cost-of-attendance 
        increase for the yearly loan rate and the aggregate of the 
        loans.''.
    (b) Loan Provisions.--Section 836(b) of the Public Health Service 
Act (42 U.S.C. 297b(b)) is amended--
            (1) in paragraph (1)(C), by striking ``1986'' and inserting 
        ``2000''; and
            (2) in paragraph (3), by striking ``the date of enactment 
        of the Nurse Training Amendments of 1979'' and inserting 
        ``September 29, 1995''.

SEC. 5203. HEALTH CARE WORKFORCE LOAN REPAYMENT PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.) is amended by adding at the end the following:

            ``Subpart 3--Recruitment and Retention Programs

``SEC. 775. INVESTMENT IN TOMORROW'S PEDIATRIC HEALTH CARE WORKFORCE.

    ``(a) Establishment.--The Secretary shall establish and carry out a 
pediatric specialty loan repayment program under which the eligible 
individual agrees to be employed full-time for a specified period 
(which shall not be less than 2 years) in providing pediatric medical 
subspecialty, pediatric surgical specialty, or child and adolescent 
mental and behavioral health care, including substance abuse prevention 
and treatment services.
    ``(b) Program Administration.--Through the program established 
under this section, the Secretary shall enter into contracts with 
qualified health professionals under which--
            ``(1) such qualified health professionals will agree to 
        provide pediatric medical subspecialty, pediatric surgical 
        specialty, or child and adolescent mental and behavioral health 
        care in an area with a shortage of the specified pediatric 
        subspecialty that has a sufficient pediatric population to 
        support such pediatric subspecialty, as determined by the 
        Secretary; and
            ``(2) the Secretary agrees to make payments on the 
        principal and interest of undergraduate, graduate, or graduate 
        medical education loans of professionals described in paragraph 
        (1) of not more than $35,000 a year for each year of agreed 
        upon service under such paragraph for a period of not more than 
        3 years during the qualified health professional's--
                    ``(A) participation in an accredited pediatric 
                medical subspecialty, pediatric surgical specialty, or 
                child and adolescent mental health subspecialty 
                residency or fellowship; or
                    ``(B) employment as a pediatric medical 
                subspecialist, pediatric surgical specialist, or child 
                and adolescent mental health professional serving an 
                area or population described in such paragraph.
    ``(c) In General.--
            ``(1) Eligible individuals.--
                    ``(A) Pediatric medical specialists and pediatric 
                surgical specialists.--For purposes of contracts with 
                respect to pediatric medical specialists and pediatric 
                surgical specialists, the term `qualified health 
                professional' means a licensed physician who--
                            ``(i) is entering or receiving training in 
                        an accredited pediatric medical subspecialty or 
                        pediatric surgical specialty residency or 
                        fellowship; or
                            ``(ii) has completed (but not prior to the 
                        end of the calendar year in which this section 
                        is enacted) the training described in 
                        subparagraph (B).
                    ``(B) Child and adolescent mental and behavioral 
                health.--For purposes of contracts with respect to 
                child and adolescent mental and behavioral health care, 
                the term `qualified health professional' means a health 
                care professional who--
                            ``(i) has received specialized training or 
                        clinical experience in child and adolescent 
                        mental health in psychiatry, psychology, school 
                        psychology, behavioral pediatrics, psychiatric 
                        nursing, social work, school social work, 
                        substance abuse disorder prevention and 
                        treatment, marriage and family therapy, school 
                        counseling, or professional counseling;
                            ``(ii) has a license or certification in a 
                        State to practice allopathic medicine, 
                        osteopathic medicine, psychology, school 
                        psychology, psychiatric nursing, social work, 
                        school social work, marriage and family 
                        therapy, school counseling, or professional 
                        counseling; or
                            ``(iii) is a mental health service 
                        professional who completed (but not before the 
                        end of the calendar year in which this section 
                        is enacted) specialized training or clinical 
                        experience in child and adolescent mental 
                        health described in clause (i).
            ``(2) Additional eligibility requirements.--The Secretary 
        may not enter into a contract under this subsection with an 
        eligible individual unless--
                    ``(A) the individual agrees to work in, or for a 
                provider serving, a health professional shortage area 
                or medically underserved area, or to serve a medically 
                underserved population;
                    ``(B) the individual is a United States citizen or 
                a permanent legal United States resident; and
                    ``(C) if the individual is enrolled in a graduate 
                program, the program is accredited, and the individual 
                has an acceptable level of academic standing (as 
                determined by the Secretary).
    ``(d) Priority.--In entering into contracts under this subsection, 
the Secretary shall give priority to applicants who--
            ``(1) are or will be working in a school or other pre-
        kindergarten, elementary, or secondary education setting;
            ``(2) have familiarity with evidence-based methods and 
        cultural and linguistic competence health care services; and
            ``(3) demonstrate financial need.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated $30,000,000 for each of fiscal years 2010 through 2014 to 
carry out subsection (c)(1)(A) and $20,000,000 for each of fiscal years 
2010 through 2013 to carry out subsection (c)(1)(B).''.

SEC. 5204. PUBLIC HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.), as amended by section 5203, is further amended by adding 
at the end the following:

``SEC. 776. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Loan Repayment Program (referred to in this section as 
the `Program') to assure an adequate supply of public health 
professionals to eliminate critical public health workforce shortages 
in Federal, State, local, and tribal public health agencies.
    ``(b) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1)(A) be accepted for enrollment, or be enrolled, as a 
        student in an accredited academic educational institution in a 
        State or territory in the final year of a course of study or 
        program leading to a public health or health professions degree 
        or certificate; and have accepted employment with a Federal, 
        State, local, or tribal public health agency, or a related 
        training fellowship, as recognized by the Secretary, to 
        commence upon graduation;
            ``(B)(i) have graduated, during the preceding 10-year 
        period, from an accredited educational institution in a State 
        or territory and received a public health or health professions 
        degree or certificate; and
            ``(ii) be employed by, or have accepted employment with, a 
        Federal, State, local, or tribal public health agency or a 
        related training fellowship, as recognized by the Secretary;
            ``(2) be a United States citizen; and
            ``(3)(A) submit an application to the Secretary to 
        participate in the Program;
            ``(B) execute a written contract as required in subsection 
        (c); and
            ``(4) not have received, for the same service, a reduction 
        of loan obligations under section 455(m), 428J, 428K, 428L, or 
        460 of the Higher Education Act of 1965.
    ``(c) Contract.--The written contract (referred to in this section 
as the `written contract') between the Secretary and an individual 
shall contain--
            ``(1) an agreement on the part of the Secretary that the 
        Secretary will repay on behalf of the individual loans incurred 
        by the individual in the pursuit of the relevant degree or 
        certificate in accordance with the terms of the contract;
            ``(2) an agreement on the part of the individual that the 
        individual will serve in the full-time employment of a Federal, 
        State, local, or tribal public health agency or a related 
        fellowship program in a position related to the course of study 
        or program for which the contract was awarded for a period of 
        time (referred to in this section as the `period of obligated 
        service') equal to the greater of--
                    ``(A) 3 years; or
                    ``(B) such longer period of time as determined 
                appropriate by the Secretary and the individual;
            ``(3) an agreement, as appropriate, on the part of the 
        individual to relocate to a priority service area (as 
        determined by the Secretary) in exchange for an additional loan 
        repayment incentive amount to be determined by the Secretary;
            ``(4) a provision that any financial obligation of the 
        United States arising out of a contract entered into under this 
        section and any obligation of the individual that is 
        conditioned thereon, is contingent on funds being appropriated 
        for loan repayments under this section;
            ``(5) a statement of the damages to which the United States 
        is entitled, under this section for the individual's breach of 
        the contract; and
            ``(6) such other statements of the rights and liabilities 
        of the Secretary and of the individual, not inconsistent with 
        this section.
    ``(d) Payments.--
            ``(1) In general.--A loan repayment provided for an 
        individual under a written contract under the Program shall 
        consist of payment, in accordance with paragraph (2), on behalf 
        of the individual of the principal, interest, and related 
        expenses on government and commercial loans received by the 
        individual regarding the undergraduate or graduate education of 
        the individual (or both), which loans were made for tuition 
        expenses incurred by the individual.
            ``(2) Payments for years served.--For each year of 
        obligated service that an individual contracts to serve under 
        subsection (c) the Secretary may pay up to $35,000 on behalf of 
        the individual for loans described in paragraph (1). With 
        respect to participants under the Program whose total eligible 
        loans are less than $105,000, the Secretary shall pay an amount 
        that does not exceed \1/3\ of the eligible loan balance for 
        each year of obligated service of the individual.
            ``(3) Tax liability.--For the purpose of providing 
        reimbursements for tax liability resulting from payments under 
        paragraph (2) on behalf of an individual, the Secretary shall, 
        in addition to such payments, make payments to the individual 
        in an amount not to exceed 39 percent of the total amount of 
        loan repayments made for the taxable year involved.
    ``(e) Postponing Obligated Service.--With respect to an individual 
receiving a degree or certificate from a health professions or other 
related school, the date of the initiation of the period of obligated 
service may be postponed as approved by the Secretary.
    ``(f) Breach of Contract.--An individual who fails to comply with 
the contract entered into under subsection (c) shall be subject to the 
same financial penalties as provided for under section 338E for 
breaches of loan repayment contracts under section 338B.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $195,000,000 for fiscal year 
2010, and such sums as may be necessary for each of fiscal years 2011 
through 2015.''.

SEC. 5205. ALLIED HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    (a) Purpose.--The purpose of this section is to assure an adequate 
supply of allied health professionals to eliminate critical allied 
health workforce shortages in Federal, State, local, and tribal public 
health agencies or in settings where patients might require health care 
services, including acute care facilities, ambulatory care facilities, 
personal residences and other settings, as recognized by the Secretary 
of Health and Human Services by authorizing an Allied Health Loan 
Forgiveness Program.
    (b) Allied Health Workforce Recruitment and Retention Program.--
Section 428K of the Higher Education Act of 1965 (20 U.S.C. 1078-11) is 
amended--
            (1) in subsection (b), by adding at the end the following:
            ``(18) Allied health professionals.--The individual is 
        employed full-time as an allied health professional--
                    ``(A) in a Federal, State, local, or tribal public 
                health agency; or
                    ``(B) in a setting where patients might require 
                health care services, including acute care facilities, 
                ambulatory care facilities, personal residences and 
                other settings located in health professional shortage 
                areas, medically underserved areas, or medically 
                underserved populations, as recognized by the Secretary 
                of Health and Human Services.''; and
            (2) in subsection (g)--
                    (A) by redesignating paragraphs (1) through (9) as 
                paragraphs (2) through (10), respectively; and
                    (B) by inserting before paragraph (2) (as 
                redesignated by subparagraph (A)) the following:
            ``(1) Allied health professional.--The term `allied health 
        professional' means an allied health professional as defined in 
        section 799B(5) of the Public Heath Service Act (42 U.S.C. 
        295p(5)) who--
                    ``(A) has graduated and received an allied health 
                professions degree or certificate from an institution 
                of higher education; and
                    ``(B) is employed with a Federal, State, local or 
                tribal public health agency, or in a setting where 
                patients might require health care services, including 
                acute care facilities, ambulatory care facilities, 
                personal residences and other settings located in 
                health professional shortage areas, medically 
                underserved areas, or medically underserved 
                populations, as recognized by the Secretary of Health 
                and Human Services.''.

SEC. 5206. GRANTS FOR STATE AND LOCAL PROGRAMS.

    (a) In General.--Section 765(d) of the Public Health Service Act 
(42 U.S.C. 295(d)) is amended--
            (1) in paragraph (7), by striking ``; or'' and inserting a 
        semicolon;
            (2) by redesignating paragraph (8) as paragraph (9); and
            (3) by inserting after paragraph (7) the following:
            ``(8) public health workforce loan repayment programs; 
        or''.
    (b) Training for Mid-career Public Health Professionals.--Part E of 
title VII of the Public Health Service Act (42 U.S.C. 294n et seq.), as 
amended by section 5204, is further amended by adding at the end the 
following:

``SEC. 777. TRAINING FOR MID-CAREER PUBLIC AND ALLIED HEALTH 
              PROFESSIONALS.

    ``(a) In General.--The Secretary may make grants to, or enter into 
contracts with, any eligible entity to award scholarships to eligible 
individuals to enroll in degree or professional training programs for 
the purpose of enabling mid-career professionals in the public health 
and allied health workforce to receive additional training in the field 
of public health and allied health.
    ``(b) Eligibility.--
            ``(1) Eligible entity.--The term `eligible entity' 
        indicates an accredited educational institution that offers a 
        course of study, certificate program, or professional training 
        program in public or allied health or a related discipline, as 
        determined by the Secretary
            ``(2) Eligible individuals.--The term `eligible 
        individuals' includes those individuals employed in public and 
        allied health positions at the Federal, State, tribal, or local 
        level who are interested in retaining or upgrading their 
        education.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $60,000,000 for fiscal year 
2010 and such sums as may be necessary for each of fiscal years 2011 
through 2015. Fifty percent of appropriated funds shall be allotted to 
public health mid-career professionals and 50 percent shall be allotted 
to allied health mid-career professionals.''.

SEC. 5207. FUNDING FOR NATIONAL HEALTH SERVICE CORPS.

    Section 338H(a) of the Public Health Service Act (42 U.S.C. 
254q(a)) is amended to read as follows:
    ``(a) Authorization of Appropriations.--For the purpose of carrying 
out this section, there is authorized to be appropriated, out of any 
funds in the Treasury not otherwise appropriated, the following:
            ``(1) For fiscal year 2010, $320,461,632.
            ``(2) For fiscal year 2011, $414,095,394.
            ``(3) For fiscal year 2012, $535,087,442.
            ``(4) For fiscal year 2013, $691,431,432.
            ``(5) For fiscal year 2014, $893,456,433.
            ``(6) For fiscal year 2015, $1,154,510,336.
            ``(7) For fiscal year 2016, and each subsequent fiscal 
        year, the amount appropriated for the preceding fiscal year 
        adjusted by the product of--
                    ``(A) one plus the average percentage increase in 
                the costs of health professions education during the 
                prior fiscal year; and
                    ``(B) one plus the average percentage change in the 
                number of individuals residing in health professions 
                shortage areas designated under section 333 during the 
                prior fiscal year, relative to the number of 
                individuals residing in such areas during the previous 
                fiscal year.''.

SEC. 5208. NURSE-MANAGED HEALTH CLINICS.

    (a) Purpose.--The purpose of this section is to fund the 
development and operation of nurse-managed health clinics.
    (b) Grants.--Subpart 1 of part D of title III of the Public Health 
Service Act (42 U.S.C. 254b et seq.) is amended by inserting after 
section 330A the following:

``SEC. 330A-1. GRANTS TO NURSE-MANAGED HEALTH CLINICS.

    ``(a) Definitions.--
            ``(1) Comprehensive primary health care services.--In this 
        section, the term `comprehensive primary health care services' 
        means the primary health services described in section 
        330(b)(1).
            ``(2) Nurse-managed health clinic.--The term `nurse-managed 
        health clinic' means a nurse-practice arrangement, managed by 
        advanced practice nurses, that provides primary care or 
        wellness services to underserved or vulnerable populations and 
        that is associated with a school, college, university or 
        department of nursing, federally qualified health center, or 
        independent nonprofit health or social services agency.
    ``(b) Authority to Award Grants.--The Secretary shall award grants 
for the cost of the operation of nurse-managed health clinics that meet 
the requirements of this section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be an NMHC; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing--
                    ``(A) assurances that nurses are the major 
                providers of services at the NMHC and that at least 1 
                advanced practice nurse holds an executive management 
                position within the organizational structure of the 
                NMHC;
                    ``(B) an assurance that the NMHC will continue 
                providing comprehensive primary health care services or 
                wellness services without regard to income or insurance 
                status of the patient for the duration of the grant 
                period; and
                    ``(C) an assurance that, not later than 90 days of 
                receiving a grant under this section, the NMHC will 
                establish a community advisory committee, for which a 
                majority of the members shall be individuals who are 
                served by the NMHC.
    ``(d) Grant Amount.--The amount of any grant made under this 
section for any fiscal year shall be determined by the Secretary, 
taking into account--
            ``(1) the financial need of the NMHC, considering State, 
        local, and other operational funding provided to the NMHC; and
            ``(2) other factors, as the Secretary determines 
        appropriate.
    ``(e) Authorization of Appropriations.--For the purposes of 
carrying out this section, there are authorized to be appropriated 
$50,000,000 for the fiscal year 2010 and such sums as may be necessary 
for each of the fiscal years 2011 through 2014.''.

SEC. 5209. ELIMINATION OF CAP ON COMMISSIONED CORPS.

    Section 202 of the Department of Health and Human Services 
Appropriations Act, 1993 (Public Law 102-394) is amended by striking 
``not to exceed 2,800''.

SEC. 5210. ESTABLISHING A READY RESERVE CORPS.

    Section 203 of the Public Health Service Act (42 U.S.C. 204) is 
amended to read as follows:

``SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS.

    ``(a) Establishment.--
            ``(1) In general.--There shall be in the Service a 
        commissioned Regular Corps and a Ready Reserve Corps for 
        service in time of national emergency.
            ``(2) Requirement.--All commissioned officers shall be 
        citizens of the United States and shall be appointed without 
        regard to the civil-service laws and compensated without regard 
        to the Classification Act of 1923, as amended.
            ``(3) Appointment.--Commissioned officers of the Ready 
        Reserve Corps shall be appointed by the President and 
        commissioned officers of the Regular Corps shall be appointed 
        by the President with the advice and consent of the Senate.
            ``(4) Active duty.--Commissioned officers of the Ready 
        Reserve Corps shall at all times be subject to call to active 
        duty by the Surgeon General, including active duty for the 
        purpose of training.
            ``(5) Warrant officers.--Warrant officers may be appointed 
        to the Service for the purpose of providing support to the 
        health and delivery systems maintained by the Service and any 
        warrant officer appointed to the Service shall be considered 
        for purposes of this Act and title 37, United States Code, to 
        be a commissioned officer within the Commissioned Corps of the 
        Service.
    ``(b) Assimilating Reserve Corp Officers Into the Regular Corps.--
Effective on the date of enactment of the Patient Protection and 
Affordable Care Act, all individuals classified as officers in the 
Reserve Corps under this section (as such section existed on the day 
before the date of enactment of such Act) and serving on active duty 
shall be deemed to be commissioned officers of the Regular Corps.
    ``(c) Purpose and Use of Ready Research.--
            ``(1) Purpose.--The purpose of the Ready Reserve Corps is 
        to fulfill the need to have additional Commissioned Corps 
        personnel available on short notice (similar to the uniformed 
        service's reserve program) to assist regular Commissioned Corps 
        personnel to meet both routine public health and emergency 
        response missions.
            ``(2) Uses.--The Ready Reserve Corps shall--
                    ``(A) participate in routine training to meet the 
                general and specific needs of the Commissioned Corps;
                    ``(B) be available and ready for involuntary calls 
                to active duty during national emergencies and public 
                health crises, similar to the uniformed service reserve 
                personnel;
                    ``(C) be available for backfilling critical 
                positions left vacant during deployment of active duty 
                Commissioned Corps members, as well as for deployment 
                to respond to public health emergencies, both foreign 
                and domestic; and
                    ``(D) be available for service assignment in 
                isolated, hardship, and medically underserved 
                communities (as defined in section 799B) to improve 
                access to health services.
    ``(d) Funding.--For the purpose of carrying out the duties and 
responsibilities of the Commissioned Corps under this section, there 
are authorized to be appropriated $5,000,000 for each of fiscal years 
2010 through 2014 for recruitment and training and $12,500,000 for each 
of fiscal years 2010 through 2014 for the Ready Reserve Corps.''.

   Subtitle D--Enhancing Health Care Workforce Education and Training

SEC. 5301. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, 
              GENERAL PEDIATRICS, AND PHYSICIAN ASSISTANTSHIP.

    Part C of title VII (42 U.S.C. 293k et seq.) is amended by striking 
section 747 and inserting the following:

``SEC. 747. PRIMARY CARE TRAINING AND ENHANCEMENT.

    ``(a) Support and Development of Primary Care Training Programs.--
            ``(1) In general.--The Secretary may make grants to, or 
        enter into contracts with, an accredited public or nonprofit 
        private hospital, school of medicine or osteopathic medicine, 
        academically affiliated physician assistant training program, 
        or a public or private nonprofit entity which the Secretary has 
        determined is capable of carrying out such grant or contract--
                    ``(A) to plan, develop, operate, or participate in 
                an accredited professional training program, including 
                an accredited residency or internship program in the 
                field of family medicine, general internal medicine, or 
                general pediatrics for medical students, interns, 
                residents, or practicing physicians as defined by the 
                Secretary;
                    ``(B) to provide need-based financial assistance in 
                the form of traineeships and fellowships to medical 
                students, interns, residents, practicing physicians, or 
                other medical personnel, who are participants in any 
                such program, and who plan to specialize or work in the 
                practice of the fields defined in subparagraph (A);
                    ``(C) to plan, develop, and operate a program for 
                the training of physicians who plan to teach in family 
                medicine, general internal medicine, or general 
                pediatrics training programs;
                    ``(D) to plan, develop, and operate a program for 
                the training of physicians teaching in community-based 
                settings;
                    ``(E) to provide financial assistance in the form 
                of traineeships and fellowships to physicians who are 
                participants in any such programs and who plan to teach 
                or conduct research in a family medicine, general 
                internal medicine, or general pediatrics training 
                program;
                    ``(F) to plan, develop, and operate a physician 
                assistant education program, and for the training of 
                individuals who will teach in programs to provide such 
                training;
                    ``(G) to plan, develop, and operate a demonstration 
                program that provides training in new competencies, as 
                recommended by the Advisory Committee on Training in 
                Primary Care Medicine and Dentistry and the National 
                Health Care Workforce Commission established in section 
                5101 of the Patient Protection and Affordable Care Act, 
                which may include--
                            ``(i) providing training to primary care 
                        physicians relevant to providing care through 
                        patient-centered medical homes (as defined by 
                        the Secretary for purposes of this section);
                            ``(ii) developing tools and curricula 
                        relevant to patient-centered medical homes; and
                            ``(iii) providing continuing education to 
                        primary care physicians relevant to patient-
                        centered medical homes; and
                    ``(H) to plan, develop, and operate joint degree 
                programs to provide interdisciplinary and 
                interprofessional graduate training in public health 
                and other health professions to provide training in 
                environmental health, infectious disease control, 
                disease prevention and health promotion, 
                epidemiological studies and injury control.
            ``(2) Duration of awards.--The period during which payments 
        are made to an entity from an award of a grant or contract 
        under this subsection shall be 5 years.
    ``(b) Capacity Building in Primary Care.--
            ``(1) In general.--The Secretary may make grants to or 
        enter into contracts with accredited schools of medicine or 
        osteopathic medicine to establish, maintain, or improve--
                    ``(A) academic units or programs that improve 
                clinical teaching and research in fields defined in 
                subsection (a)(1)(A); or
                    ``(B) programs that integrate academic 
                administrative units in fields defined in subsection 
                (a)(1)(A) to enhance interdisciplinary recruitment, 
                training, and faculty development.
            ``(2) Preference in making awards under this subsection.--
        In making awards of grants and contracts under paragraph (1), 
        the Secretary shall give preference to any qualified applicant 
        for such an award that agrees to expend the award for the 
        purpose of--
                    ``(A) establishing academic units or programs in 
                fields defined in subsection (a)(1)(A); or
                    ``(B) substantially expanding such units or 
                programs.
            ``(3) Priorities in making awards.--In awarding grants or 
        contracts under paragraph (1), the Secretary shall give 
        priority to qualified applicants that--
                    ``(A) proposes a collaborative project between 
                academic administrative units of primary care;
                    ``(B) proposes innovative approaches to clinical 
                teaching using models of primary care, such as the 
                patient centered medical home, team management of 
                chronic disease, and interprofessional integrated 
                models of health care that incorporate transitions in 
                health care settings and integration physical and 
                mental health provision;
                    ``(C) have a record of training the greatest 
                percentage of providers, or that have demonstrated 
                significant improvements in the percentage of providers 
                trained, who enter and remain in primary care practice;
                    ``(D) have a record of training individuals who are 
                from underrepresented minority groups or from a rural 
                or disadvantaged background;
                    ``(E) provide training in the care of vulnerable 
                populations such as children, older adults, homeless 
                individuals, victims of abuse or trauma, individuals 
                with mental health or substance-related disorders, 
                individuals with HIV/AIDS, and individuals with 
                disabilities;
                    ``(F) establish formal relationships and submit 
                joint applications with federally qualified health 
                centers, rural health clinics, area health education 
                centers, or clinics located in underserved areas or 
                that serve underserved populations;
                    ``(G) teach trainees the skills to provide 
                interprofessional, integrated care through 
                collaboration among health professionals;
                    ``(H) provide training in enhanced communication 
                with patients, evidence-based practice, chronic disease 
                management, preventive care, health information 
                technology, or other competencies as recommended by the 
                Advisory Committee on Training in Primary Care Medicine 
                and Dentistry and the National Health Care Workforce 
                Commission established in section 5101 of the Patient 
                Protection and Affordable Care Act; or
                    ``(I) provide training in cultural competency and 
                health literacy.
            ``(4) Duration of awards.--The period during which payments 
        are made to an entity from an award of a grant or contract 
        under this subsection shall be 5 years.
    ``(c) Authorization of Appropriations.--
            ``(1) In general.--For purposes of carrying out this 
        section (other than subsection (b)(1)(B)), there are authorized 
        to be appropriated $125,000,000 for fiscal year 2010, and such 
        sums as may be necessary for each of fiscal years 2011 through 
        2014.
            ``(2) Training programs.--Fifteen percent of the amount 
        appropriated pursuant to paragraph (1) in each such fiscal year 
        shall be allocated to the physician assistant training programs 
        described in subsection (a)(1)(F), which prepare students for 
        practice in primary care.
            ``(3) Integrating academic administrative units.--For 
        purposes of carrying out subsection (b)(1)(B), there are 
        authorized to be appropriated $750,000 for each of fiscal years 
        2010 through 2014.''.

SEC. 5302. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended by inserting after section 747, as amended by 
section 5301, the following:

``SEC. 747A. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

    ``(a) In General.--The Secretary shall award grants to eligible 
entities to enable such entities to provide new training opportunities 
for direct care workers who are employed in long-term care settings 
such as nursing homes (as defined in section 1908(e)(1) of the Social 
Security Act (42 U.S.C. 1396g(e)(1)), assisted living facilities and 
skilled nursing facilities, intermediate care facilities for 
individuals with mental retardation, home and community based settings, 
and any other setting the Secretary determines to be appropriate.
    ``(b) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be an institution of higher education (as defined in 
        section 102 of the Higher Education Act of 1965 (20 U.S.C. 
        1002)) that--
                    ``(A) is accredited by a nationally recognized 
                accrediting agency or association listed under section 
                101(c) of the Higher Education Act of 1965 (20 U.S.C. 
                1001(c)); and
                    ``(B) has established a public-private educational 
                partnership with a nursing home or skilled nursing 
                facility, agency or entity providing home and community 
                based services to individuals with disabilities, or 
                other long-term care provider; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require.
    ``(c) Use of Funds.--An eligible entity shall use amounts awarded 
under a grant under this section to provide assistance to eligible 
individuals to offset the cost of tuition and required fees for 
enrollment in academic programs provided by such entity.
    ``(d) Eligible Individual.--
            ``(1) Eligibility.--To be eligible for assistance under 
        this section, an individual shall be enrolled in courses 
        provided by a grantee under this subsection and maintain 
        satisfactory academic progress in such courses.
            ``(2) Condition of assistance.--As a condition of receiving 
        assistance under this section, an individual shall agree that, 
        following completion of the assistance period, the individual 
        will work in the field of geriatrics, disability services, long 
        term services and supports, or chronic care management for a 
        minimum of 2 years under guidelines set by the Secretary.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $10,000,000 for the period of 
fiscal years 2011 through 2013.''.

SEC. 5303. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTRY.

    Part C of Title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended by--
            (1) redesignating section 748, as amended by section 5103 
        of this Act, as section 749; and
            (2) inserting after section 747A, as added by section 5302, 
        the following:

``SEC. 748. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH 
              DENTISTRY.

    ``(a) Support and Development of Dental Training Programs.--
            ``(1) In general.--The Secretary may make grants to, or 
        enter into contracts with, a school of dentistry, public or 
        nonprofit private hospital, or a public or private nonprofit 
        entity which the Secretary has determined is capable of 
        carrying out such grant or contract--
                    ``(A) to plan, develop, and operate, or participate 
                in, an approved professional training program in the 
                field of general dentistry, pediatric dentistry, or 
                public health dentistry for dental students, residents, 
                practicing dentists, dental hygienists, or other 
                approved primary care dental trainees, that emphasizes 
                training for general, pediatric, or public health 
                dentistry;
                    ``(B) to provide financial assistance to dental 
                students, residents, practicing dentists, and dental 
                hygiene students who are in need thereof, who are 
                participants in any such program, and who plan to work 
                in the practice of general, pediatric, public heath 
                dentistry, or dental hygiene;
                    ``(C) to plan, develop, and operate a program for 
                the training of oral health care providers who plan to 
                teach in general, pediatric, public health dentistry, 
                or dental hygiene;
                    ``(D) to provide financial assistance in the form 
                of traineeships and fellowships to dentists who plan to 
                teach or are teaching in general, pediatric, or public 
                health dentistry;
                    ``(E) to meet the costs of projects to establish, 
                maintain, or improve dental faculty development 
                programs in primary care (which may be departments, 
                divisions or other units);
                    ``(F) to meet the costs of projects to establish, 
                maintain, or improve predoctoral and postdoctoral 
                training in primary care programs;
                    ``(G) to create a loan repayment program for 
                faculty in dental programs; and
                    ``(H) to provide technical assistance to pediatric 
                training programs in developing and implementing 
                instruction regarding the oral health status, dental 
                care needs, and risk-based clinical disease management 
                of all pediatric populations with an emphasis on 
                underserved children.
            ``(2) Faculty loan repayment.--
                    ``(A) In general.--A grant or contract under 
                subsection (a)(1)(G) may be awarded to a program of 
                general, pediatric, or public health dentistry 
                described in such subsection to plan, develop, and 
                operate a loan repayment program under which--
                            ``(i) individuals agree to serve full-time 
                        as faculty members; and
                            ``(ii) the program of general, pediatric or 
                        public health dentistry agrees to pay the 
                        principal and interest on the outstanding 
                        student loans of the individuals.
                    ``(B) Manner of payments.--With respect to the 
                payments described in subparagraph (A)(ii), upon 
                completion by an individual of each of the first, 
                second, third, fourth, and fifth years of service, the 
                program shall pay an amount equal to 10, 15, 20, 25, 
                and 30 percent, respectively, of the individual's 
                student loan balance as calculated based on principal 
                and interest owed at the initiation of the agreement.
    ``(b) Eligible Entity.--For purposes of this subsection, entities 
eligible for such grants or contracts in general, pediatric, or public 
health dentistry shall include entities that have programs in dental or 
dental hygiene schools, or approved residency or advanced education 
programs in the practice of general, pediatric, or public health 
dentistry. Eligible entities may partner with schools of public health 
to permit the education of dental students, residents, and dental 
hygiene students for a master's year in public health at a school of 
public health.
    ``(c) Priorities in Making Awards.--With respect to training 
provided for under this section, the Secretary shall give priority in 
awarding grants or contracts to the following:
            ``(1) Qualified applicants that propose collaborative 
        projects between departments of primary care medicine and 
        departments of general, pediatric, or public health dentistry.
            ``(2) Qualified applicants that have a record of training 
        the greatest percentage of providers, or that have demonstrated 
        significant improvements in the percentage of providers, who 
        enter and remain in general, pediatric, or public health 
        dentistry.
            ``(3) Qualified applicants that have a record of training 
        individuals who are from a rural or disadvantaged background, 
        or from underrepresented minorities.
            ``(4) Qualified applicants that establish formal 
        relationships with Federally qualified health centers, rural 
        health centers, or accredited teaching facilities and that 
        conduct training of students, residents, fellows, or faculty at 
        the center or facility.
            ``(5) Qualified applicants that conduct teaching programs 
        targeting vulnerable populations such as older adults, homeless 
        individuals, victims of abuse or trauma, individuals with 
        mental health or substance-related disorders, individuals with 
        disabilities, and individuals with HIV/AIDS, and in the risk-
        based clinical disease management of all populations.
            ``(6) Qualified applicants that include educational 
        activities in cultural competency and health literacy.
            ``(7) Qualified applicants that have a high rate for 
        placing graduates in practice settings that serve underserved 
        areas or health disparity populations, or who achieve a 
        significant increase in the rate of placing graduates in such 
        settings.
            ``(8) Qualified applicants that intend to establish a 
        special populations oral health care education center or 
        training program for the didactic and clinical education of 
        dentists, dental health professionals, and dental hygienists 
        who plan to teach oral health care for people with 
        developmental disabilities, cognitive impairment, complex 
        medical problems, significant physical limitations, and 
        vulnerable elderly.
    ``(d) Application.--An eligible entity desiring a grant under this 
section shall submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require.
    ``(e) Duration of Award.--The period during which payments are made 
to an entity from an award of a grant or contract under subsection (a) 
shall be 5 years. The provision of such payments shall be subject to 
annual approval by the Secretary and subject to the availability of 
appropriations for the fiscal year involved to make the payments.
    ``(f) Authorizations of Appropriations.--For the purpose of 
carrying out subsections (a) and (b), there is authorized to be 
appropriated $30,000,000 for fiscal year 2010 and such sums as may be 
necessary for each of fiscal years 2011 through 2015.
    ``(g) Carryover Funds.--An entity that receives an award under this 
section may carry over funds from 1 fiscal year to another without 
obtaining approval from the Secretary. In no case may any funds be 
carried over pursuant to the preceding sentence for more than 3 
years.''.

SEC. 5304. ALTERNATIVE DENTAL HEALTH CARE PROVIDERS DEMONSTRATION 
              PROJECT.

    Subpart X of part D of title III of the Public Health Service Act 
(42 U.S.C. 256f et seq.) is amended by adding at the end the following:

``SEC. 340G-1. DEMONSTRATION PROGRAM.

    ``(a) In General.--
            ``(1) Authorization.--The Secretary is authorized to award 
        grants to 15 eligible entities to enable such entities to 
        establish a demonstration program to establish training 
        programs to train, or to employ, alternative dental health care 
        providers in order to increase access to dental health care 
        services in rural and other underserved communities.
            ``(2) Definition.--The term `alternative dental health care 
        providers' includes community dental health coordinators, 
        advance practice dental hygienists, independent dental 
        hygienists, supervised dental hygienists, primary care 
        physicians, dental therapists, dental health aides, and any 
        other health professional that the Secretary determines 
        appropriate.
    ``(b) Timeframe.--The demonstration projects funded under this 
section shall begin not later than 2 years after the date of enactment 
of this section, and shall conclude not later than 7 years after such 
date of enactment.
    ``(c) Eligible Entities.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            ``(1) be--
                    ``(A) an institution of higher education, including 
                a community college;
                    ``(B) a public-private partnership;
                    ``(C) a federally qualified health center;
                    ``(D) an Indian Health Service facility or a tribe 
                or tribal organization (as such terms are defined in 
                section 4 of the Indian Self-Determination and 
                Education Assistance Act);
                    ``(E) a State or county public health clinic, a 
                health facility operated by an Indian tribe or tribal 
                organization, or urban Indian organization providing 
                dental services; or
                    ``(F) a public hospital or health system;
            ``(2) be within a program accredited by the Commission on 
        Dental Accreditation or within a dental education program in an 
        accredited institution; and
            ``(3) shall submit an application to the Secretary at such 
        time, in such manner, and containing such information as the 
        Secretary may require.
    ``(d) Administrative Provisions.--
            ``(1) Amount of grant.--Each grant under this section shall 
        be in an amount that is not less than $4,000,000 for the 5-year 
        period during which the demonstration project being conducted.
            ``(2) Disbursement of funds.--
                    ``(A) Preliminary disbursements.--Beginning 1 year 
                after the enactment of this section, the Secretary may 
                disperse to any entity receiving a grant under this 
                section not more than 20 percent of the total funding 
                awarded to such entity under such grant, for the 
                purpose of enabling the entity to plan the 
                demonstration project to be conducted under such grant.
                    ``(B) Subsequent disbursements.--The remaining 
                amount of grant funds not dispersed under subparagraph 
                (A) shall be dispersed such that not less than 15 
                percent of such remaining amount is dispersed each 
                subsequent year.
    ``(e) Compliance With State Requirements.--Each entity receiving a 
grant under this section shall certify that it is in compliance with 
all applicable State licensing requirements.
    ``(f) Evaluation.--The Secretary shall contract with the Director 
of the Institute of Medicine to conduct a study of the demonstration 
programs conducted under this section that shall provide analysis, 
based upon quantitative and qualitative data, regarding access to 
dental health care in the United States.
    ``(g) Clarification Regarding Dental Health Aide Program.--Nothing 
in this section shall prohibit a dental health aide training program 
approved by the Indian Health Service from being eligible for a grant 
under this section.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.

SEC. 5305. GERIATRIC EDUCATION AND TRAINING; CAREER AWARDS; 
              COMPREHENSIVE GERIATRIC EDUCATION.

    (a) Workforce Development; Career Awards.--Section 753 of the 
Public Health Service Act (42 U.S.C. 294c) is amended by adding at the 
end the following:
    ``(d) Geriatric Workforce Development.--
            ``(1) In general.--The Secretary shall award grants or 
        contracts under this subsection to entities that operate a 
        geriatric education center pursuant to subsection (a)(1).
            ``(2) Application.--To be eligible for an award under 
        paragraph (1), an entity described in such paragraph shall 
        submit to the Secretary an application at such time, in such 
        manner, and containing such information as the Secretary may 
        require.
            ``(3) Use of funds.--Amounts awarded under a grant or 
        contract under paragraph (1) shall be used to--
                    ``(A) carry out the fellowship program described in 
                paragraph (4); and
                    ``(B) carry out 1 of the 2 activities described in 
                paragraph (5).
            ``(4) Fellowship program.--
                    ``(A) In general.--Pursuant to paragraph (3), a 
                geriatric education center that receives an award under 
                this subsection shall use such funds to offer short-
                term intensive courses (referred to in this subsection 
                as a `fellowship') that focus on geriatrics, chronic 
                care management, and long-term care that provide 
                supplemental training for faculty members in medical 
                schools and other health professions schools with 
                programs in psychology, pharmacy, nursing, social work, 
                dentistry, public health, allied health, or other 
                health disciplines, as approved by the Secretary. Such 
                a fellowship shall be open to current faculty, and 
                appropriately credentialed volunteer faculty and 
                practitioners, who do not have formal training in 
                geriatrics, to upgrade their knowledge and clinical 
                skills for the care of older adults and adults with 
                functional limitations and to enhance their 
                interdisciplinary teaching skills.
                    ``(B) Location.--A fellowship shall be offered 
                either at the geriatric education center that is 
                sponsoring the course, in collaboration with other 
                geriatric education centers, or at medical schools, 
                schools of dentistry, schools of nursing, schools of 
                pharmacy, schools of social work, graduate programs in 
                psychology, or allied health and other health 
                professions schools approved by the Secretary with 
                which the geriatric education centers are affiliated.
                    ``(C) CME credit.--Participation in a fellowship 
                under this paragraph shall be accepted with respect to 
                complying with continuing health profession education 
                requirements. As a condition of such acceptance, the 
                recipient shall agree to subsequently provide a minimum 
                of 18 hours of voluntary instructional support through 
                a geriatric education center that is providing clinical 
                training to students or trainees in long-term care 
                settings.
            ``(5) Additional required activities described.--Pursuant 
        to paragraph (3), a geriatric education center that receives an 
        award under this subsection shall use such funds to carry out 1 
        of the following 2 activities.
                    ``(A) Family caregiver and direct care provider 
                training.--A geriatric education center that receives 
                an award under this subsection shall offer at least 2 
                courses each year, at no charge or nominal cost, to 
                family caregivers and direct care providers that are 
                designed to provide practical training for supporting 
                frail elders and individuals with disabilities. The 
                Secretary shall require such Centers to work with 
                appropriate community partners to develop training 
                program content and to publicize the availability of 
                training courses in their service areas. All family 
                caregiver and direct care provider training programs 
                shall include instruction on the management of 
                psychological and behavioral aspects of dementia, 
                communication techniques for working with individuals 
                who have dementia, and the appropriate, safe, and 
                effective use of medications for older adults.
                    ``(B) Incorporation of best practices.--A geriatric 
                education center that receives an award under this 
                subsection shall develop and include material on 
                depression and other mental disorders common among 
                older adults, medication safety issues for older 
                adults, and management of the psychological and 
                behavioral aspects of dementia and communication 
                techniques with individuals who have dementia in all 
                training courses, where appropriate.
            ``(6) Targets.--A geriatric education center that receives 
        an award under this subsection shall meet targets approved by 
        the Secretary for providing geriatric training to a certain 
        number of faculty or practitioners during the term of the 
        award, as well as other parameters established by the 
        Secretary.
            ``(7) Amount of award.--An award under this subsection 
        shall be in an amount of $150,000. Not more than 24 geriatric 
        education centers may receive an award under this subsection.
            ``(8) Maintenance of effort.--A geriatric education center 
        that receives an award under this subsection shall provide 
        assurances to the Secretary that funds provided to the 
        geriatric education center under this subsection will be used 
        only to supplement, not to supplant, the amount of Federal, 
        State, and local funds otherwise expended by the geriatric 
        education center.
            ``(9) Authorization of appropriations.--In addition to any 
        other funding available to carry out this section, there is 
        authorized to be appropriated to carry out this subsection, 
        $10,800,000 for the period of fiscal year 2011 through 2014.
    ``(e) Geriatric Career Incentive Awards.--
            ``(1) In general.--The Secretary shall award grants or 
        contracts under this section to individuals described in 
        paragraph (2) to foster greater interest among a variety of 
        health professionals in entering the field of geriatrics, long-
        term care, and chronic care management.
            ``(2) Eligible individuals.--To be eligible to received an 
        award under paragraph (1), an individual shall--
                    ``(A) be an advanced practice nurse, a clinical 
                social worker, a pharmacist, or student of psychology 
                who is pursuing a doctorate or other advanced degree in 
                geriatrics or related fields in an accredited health 
                professions school; and
                    ``(B) submit to the Secretary an application at 
                such time, in such manner, and containing such 
                information as the Secretary may require.
            ``(3) Condition of award.--As a condition of receiving an 
        award under this subsection, an individual shall agree that, 
        following completion of the award period, the individual will 
        teach or practice in the field of geriatrics, long-term care, 
        or chronic care management for a minimum of 5 years under 
        guidelines set by the Secretary.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, $10,000,000 
        for the period of fiscal years 2011 through 2013.''.
    (b) Expansion of Eligibility for Geriatric Academic Career Awards; 
Payment to Institution.--Section 753(c) of the Public Health Service 
Act 294(c)) is amended--
            (1) by redesignating paragraphs (4) and (5) as paragraphs 
        (5) and (6), respectively;
            (2) by striking paragraph (2) through paragraph (3) and 
        inserting the following:
            ``(2) Eligible individuals.--To be eligible to receive an 
        Award under paragraph (1), an individual shall--
                    ``(A) be board certified or board eligible in 
                internal medicine, family practice, psychiatry, or 
                licensed dentistry, or have completed any required 
                training in a discipline and employed in an accredited 
                health professions school that is approved by the 
                Secretary;
                    ``(B) have completed an approved fellowship program 
                in geriatrics or have completed specialty training in 
                geriatrics as required by the discipline and any 
                addition geriatrics training as required by the 
                Secretary; and
                    ``(C) have a junior (non-tenured) faculty 
                appointment at an accredited (as determined by the 
                Secretary) school of medicine, osteopathic medicine, 
                nursing, social work, psychology, dentistry, pharmacy, 
                or other allied health disciplines in an accredited 
                health professions school that is approved by the 
                Secretary.
            ``(3) Limitations.--No Award under paragraph (1) may be 
        made to an eligible individual unless the individual--
                    ``(A) has submitted to the Secretary an 
                application, at such time, in such manner, and 
                containing such information as the Secretary may 
                require, and the Secretary has approved such 
                application;
                    ``(B) provides, in such form and manner as the 
                Secretary may require, assurances that the individual 
                will meet the service requirement described in 
                paragraph (6); and
                    ``(C) provides, in such form and manner as the 
                Secretary may require, assurances that the individual 
                has a full-time faculty appointment in a health 
                professions institution and documented commitment from 
                such institution to spend 75 percent of the total time 
                of such individual on teaching and developing skills in 
                interdisciplinary education in geriatrics.
            ``(4) Maintenance of effort.--An eligible individual that 
        receives an Award under paragraph (1) shall provide assurances 
        to the Secretary that funds provided to the eligible individual 
        under this subsection will be used only to supplement, not to 
        supplant, the amount of Federal, State, and local funds 
        otherwise expended by the eligible individual.''; and
            (3) in paragraph (5), as so designated--
                    (A) in subparagraph (A)--
                            (i) by inserting ``for individuals who are 
                        physicians'' after ``this section''; and
                            (ii) by inserting after the period at the 
                        end the following: ``The Secretary shall 
                        determine the amount of an Award under this 
                        section for individuals who are not 
                        physicians.''; and
                    (B) by adding at the end the following:
                    ``(C) Payment to institution.--The Secretary shall 
                make payments to institutions which include schools of 
                medicine, osteopathic medicine, nursing, social work, 
                psychology, dentistry, and pharmacy, or other allied 
                health discipline in an accredited health professions 
                school that is approved by the Secretary.''.
    (c) Comprehensive Geriatric Education.--Section 855 of the Public 
Health Service Act (42 U.S.C. 298) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (3), by striking ``or'' at the 
                end;
                    (B) in paragraph (4), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(5) establish traineeships for individuals who are 
        preparing for advanced education nursing degrees in geriatric 
        nursing, long-term care, gero-psychiatric nursing or other 
        nursing areas that specialize in the care of the elderly 
        population.''; and
            (2) in subsection (e), by striking ``2003 through 2007'' 
        and inserting ``2010 through 2014''.

SEC. 5306. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS.

    (a) In General.--Part D of title VII (42 U.S.C. 294 et seq.) is 
amended by--
            (1) striking section 757;
            (2) redesignating section 756 (as amended by section 5103) 
        as section 757; and
            (3) inserting after section 755 the following:

``SEC. 756. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS.

    ``(a) Grants Authorized.--The Secretary may award grants to 
eligible institutions of higher education to support the recruitment of 
students for, and education and clinical experience of the students 
in--
            ``(1) baccalaureate, master's, and doctoral degree programs 
        of social work, as well as the development of faculty in social 
        work;
            ``(2) accredited master's, doctoral, internship, and post-
        doctoral residency programs of psychology for the development 
        and implementation of interdisciplinary training of psychology 
        graduate students for providing behavioral and mental health 
        services, including substance abuse prevention and treatment 
        services;
            ``(3) accredited institutions of higher education or 
        accredited professional training programs that are establishing 
        or expanding internships or other field placement programs in 
        child and adolescent mental health in psychiatry, psychology, 
        school psychology, behavioral pediatrics, psychiatric nursing, 
        social work, school social work, substance abuse prevention and 
        treatment, marriage and family therapy, school counseling, or 
        professional counseling; and
            ``(4) State-licensed mental health nonprofit and for-profit 
        organizations to enable such organizations to pay for programs 
        for preservice or in-service training of paraprofessional child 
        and adolescent mental health workers.
    ``(b) Eligibility Requirements.--To be eligible for a grant under 
this section, an institution shall demonstrate--
            ``(1) participation in the institutions' programs of 
        individuals and groups from different racial, ethnic, cultural, 
        geographic, religious, linguistic, and class backgrounds, and 
        different genders and sexual orientations;
            ``(2) knowledge and understanding of the concerns of the 
        individuals and groups described in subsection (a);
            ``(3) any internship or other field placement program 
        assisted under the grant will prioritize cultural and 
        linguistic competency;
            ``(4) the institution will provide to the Secretary such 
        data, assurances, and information as the Secretary may require; 
        and
            ``(5) with respect to any violation of the agreement 
        between the Secretary and the institution, the institution will 
        pay such liquidated damages as prescribed by the Secretary by 
        regulation.
    ``(c) Institutional Requirement.--For grants authorized under 
subsection (a)(1), at least 4 of the grant recipients shall be 
historically black colleges or universities or other minority-serving 
institutions.
    ``(d) Priority.--
            ``(1) In selecting the grant recipients in social work 
        under subsection (a)(1), the Secretary shall give priority to 
        applicants that--
                    ``(A) are accredited by the Council on Social Work 
                Education;
                    ``(B) have a graduation rate of not less than 80 
                percent for social work students; and
                    ``(C) exhibit an ability to recruit social workers 
                from and place social workers in areas with a high need 
                and high demand population.
            ``(2) In selecting the grant recipients in graduate 
        psychology under subsection (a)(2), the Secretary shall give 
        priority to institutions in which training focuses on the needs 
        of vulnerable groups such as older adults and children, 
        individuals with mental health or substance-related disorders, 
        victims of abuse or trauma and of combat stress disorders such 
        as posttraumatic stress disorder and traumatic brain injuries, 
        homeless individuals, chronically ill persons, and their 
        families.
            ``(3) In selecting the grant recipients in training 
        programs in child and adolescent mental health under 
        subsections (a)(3) and (a)(4), the Secretary shall give 
        priority to applicants that--
                    ``(A) have demonstrated the ability to collect data 
                on the number of students trained in child and 
                adolescent mental health and the populations served by 
                such students after graduation or completion of 
                preservice or in-service training;
                    ``(B) have demonstrated familiarity with evidence-
                based methods in child and adolescent mental health 
                services, including substance abuse prevention and 
                treatment services;
                    ``(C) have programs designed to increase the number 
                of professionals and paraprofessionals serving high-
                priority populations and to applicants who come from 
                high-priority communities and plan to serve medically 
                underserved populations, in health professional 
                shortage areas, or in medically underserved areas;
                    ``(D) offer curriculum taught collaboratively with 
                a family on the consumer and family lived experience or 
                the importance of family-professional or family-
                paraprofessional partnerships; and
                    ``(E) provide services through a community mental 
                health program described in section 1913(b)(1).
    ``(e) Authorization of Appropriation.--For the fiscal years 2010 
through 2013, there is authorized to be appropriated to carry out this 
section--
            ``(1) $8,000,000 for training in social work in subsection 
        (a)(1);
            ``(2) $12,000,000 for training in graduate psychology in 
        subsection (a)(2), of which not less than $10,000,000 shall be 
        allocated for doctoral, postdoctoral, and internship level 
        training;
            ``(3) $10,000,000 for training in professional child and 
        adolescent mental health in subsection (a)(3); and
            ``(4) $5,000,000 for training in paraprofessional child and 
        adolescent work in subsection (a)(4).''.
    (b) Conforming Amendments.--Section 757(b)(2) of the Public Health 
Service Act, as redesignated by subsection (a), is amended by striking 
``sections 751(a)(1)(A), 751(a)(1)(B), 753(b), 754(3)(A), and 755(b)'' 
and inserting ``sections 751(b)(1)(A), 753(b), and 755(b)''.

SEC. 5307. CULTURAL COMPETENCY, PREVENTION, AND PUBLIC HEALTH AND 
              INDIVIDUALS WITH DISABILITIES TRAINING.

    (a) Title VII.--Section 741 of the Public Health Service Act (42 
U.S.C. 293e) is amended--
            (1) in subsection (a)--
                    (A) by striking the subsection heading and 
                inserting ``Cultural Competency, Prevention, and Public 
                Health and Individuals With Disability Grants''; and
                    (B) in paragraph (1), by striking ``for the purpose 
                of'' and all that follows through the period at the end 
                and inserting ``for the development, evaluation, and 
                dissemination of research, demonstration projects, and 
                model curricula for cultural competency, prevention, 
                public health proficiency, reducing health disparities, 
                and aptitude for working with individuals with 
                disabilities training for use in health professions 
                schools and continuing education programs, and for 
                other purposes determined as appropriate by the 
                Secretary.''; and
            (2) by striking subsection (b) and inserting the following:
    ``(b) Collaboration.--In carrying out subsection (a), the Secretary 
shall collaborate with health professional societies, licensing and 
accreditation entities, health professions schools, and experts in 
minority health and cultural competency, prevention, and public health 
and disability groups, community-based organizations, and other 
organizations as determined appropriate by the Secretary. The Secretary 
shall coordinate with curricula and research and demonstration projects 
developed under section 807.
    ``(c) Dissemination.--
            ``(1) In general.--Model curricula developed under this 
        section shall be disseminated through the Internet 
        Clearinghouse under section 270 and such other means as 
        determined appropriate by the Secretary.
            ``(2) Evaluation.--The Secretary shall evaluate the 
        adoption and the implementation of cultural competency, 
        prevention, and public health, and working with individuals 
        with a disability training curricula, and the facilitate 
        inclusion of these competency measures in quality measurement 
        systems as appropriate.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2015.''.
    (b) Title VIII.--Section 807 of the Public Health Service Act (42 
U.S.C. 296e-1) is amended--
            (1) in subsection (a)--
                    (A) by striking the subsection heading and 
                inserting ``Cultural Competency, Prevention, and Public 
                Health and Individuals With Disability Grants''; and
                    (B) by striking ``for the purpose of'' and all that 
                follows through ``health care.'' and inserting ``for 
                the development, evaluation, and dissemination of 
                research, demonstration projects, and model curricula 
                for cultural competency, prevention, public health 
                proficiency, reducing health disparities, and aptitude 
                for working with individuals with disabilities training 
                for use in health professions schools and continuing 
                education programs, and for other purposes determined 
                as appropriate by the Secretary.''; and
            (2) by redesignating subsection (b) as subsection (d);
            (3) by inserting after subsection (a) the following:
    ``(b) Collaboration.--In carrying out subsection (a), the Secretary 
shall collaborate with the entities described in section 741(b). The 
Secretary shall coordinate with curricula and research and 
demonstration projects developed under such section 741.
    ``(c) Dissemination.--Model curricula developed under this section 
shall be disseminated and evaluated in the same manner as model 
curricula developed under section 741, as described in subsection (c) 
of such section.''; and
            (4) in subsection (d), as so redesignated--
                    (A) by striking ``subsection (a)'' and inserting 
                ``this section''; and
                    (B) by striking ``2001 through 2004'' and inserting 
                ``2010 through 2015''.

SEC. 5308. ADVANCED NURSING EDUCATION GRANTS.

    Section 811 of the Public Health Service Act (42 U.S.C. 296j) is 
amended--
            (1) in subsection (c)--
                    (A) in the subsection heading, by striking ``and 
                Nurse Midwifery Programs''; and
                    (B) by striking ``and nurse midwifery'';
            (2) in subsection (f)--
                    (A) by striking paragraph (2); and
                    (B) by redesignating paragraph (3) as paragraph 
                (2); and
            (3) by redesignating subsections (d), (e), and (f) as 
        subsections (e), (f), and (g), respectively; and
            (4) by inserting after subsection (c), the following:
    ``(d) Authorized Nurse-midwifery Programs.--Midwifery programs that 
are eligible for support under this section are educational programs 
that--
            ``(1) have as their objective the education of midwives; 
        and
            ``(2) are accredited by the American College of Nurse-
        Midwives Accreditation Commission for Midwifery Education.''.

SEC. 5309. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS.

    (a) In General.--Section 831 of the Public Health Service Act (42 
U.S.C. 296p) is amended--
            (1) in the section heading, by striking ``retention'' and 
        inserting ``quality'';
            (2) in subsection (a)--
                    (A) in paragraph (1), by adding ``or'' after the 
                semicolon;
                    (B) by striking paragraph (2); and
                    (C) by redesignating paragraph (3) as paragraph 
                (2);
            (3) in subsection (b)(3), by striking ``managed care, 
        quality improvement'' and inserting ``coordinated care'';
            (4) in subsection (g), by inserting ``, as defined in 
        section 801(2),'' after ``school of nursing''; and
            (5) in subsection (h), by striking ``2003 through 2007'' 
        and inserting ``2010 through 2014''.
    (b) Nurse Retention Grants.--Title VIII of the Public Health 
Service Act is amended by inserting after section 831 (42 U.S.C. 296b) 
the following:

``SEC. 831A. NURSE RETENTION GRANTS.

    ``(a) Retention Priority Areas.--The Secretary may award grants to, 
and enter into contracts with, eligible entities to enhance the nursing 
workforce by initiating and maintaining nurse retention programs 
pursuant to subsection (b) or (c).
    ``(b) Grants for Career Ladder Program.--The Secretary may award 
grants to, and enter into contracts with, eligible entities for 
programs--
            ``(1) to promote career advancement for individuals 
        including licensed practical nurses, licensed vocational 
        nurses, certified nurse assistants, home health aides, diploma 
        degree or associate degree nurses, to become baccalaureate 
        prepared registered nurses or advanced education nurses in 
        order to meet the needs of the registered nurse workforce;
            ``(2) developing and implementing internships and residency 
        programs in collaboration with an accredited school of nursing, 
        as defined by section 801(2), to encourage mentoring and the 
        development of specialties; or
            ``(3) to assist individuals in obtaining education and 
        training required to enter the nursing profession and advance 
        within such profession.
    ``(c) Enhancing Patient Care Delivery Systems.--
            ``(1) Grants.--The Secretary may award grants to eligible 
        entities to improve the retention of nurses and enhance patient 
        care that is directly related to nursing activities by 
        enhancing collaboration and communication among nurses and 
        other health care professionals, and by promoting nurse 
        involvement in the organizational and clinical decision-making 
        processes of a health care facility.
            ``(2) Priority.--In making awards of grants under this 
        subsection, the Secretary shall give preference to applicants 
        that have not previously received an award under this 
        subsection (or section 831(c) as such section existed on the 
        day before the date of enactment of this section).
            ``(3) Continuation of an award.--The Secretary shall make 
        continuation of any award under this subsection beyond the 
        second year of such award contingent on the recipient of such 
        award having demonstrated to the Secretary measurable and 
        substantive improvement in nurse retention or patient care.
    ``(d) Other Priority Areas.--The Secretary may award grants to, or 
enter into contracts with, eligible entities to address other areas 
that are of high priority to nurse retention, as determined by the 
Secretary.
    ``(e) Report.--The Secretary shall submit to the Congress before 
the end of each fiscal year a report on the grants awarded and the 
contracts entered into under this section. Each such report shall 
identify the overall number of such grants and contracts and provide an 
explanation of why each such grant or contract will meet the priority 
need of the nursing workforce.
    ``(f) Eligible Entity.--For purposes of this section, the term 
`eligible entity' includes an accredited school of nursing, as defined 
by section 801(2), a health care facility, or a partnership of such a 
school and facility.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2012.''.

SEC. 5310. LOAN REPAYMENT AND SCHOLARSHIP PROGRAM.

    (a) Loan Repayments and Scholarships.--Section 846(a)(3) of the 
Public Health Service Act (42 U.S.C. 297n(a)(3)) is amended by 
inserting before the semicolon the following: ``, or in a accredited 
school of nursing, as defined by section 801(2), as nurse faculty''.
    (b) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296 
et seq.) is amended--
            (1) by redesignating section 810 (relating to prohibition 
        against discrimination by schools on the basis of sex) as 
        section 809 and moving such section so that it follows section 
        808;
            (2) in sections 835, 836, 838, 840, and 842, by striking 
        the term ``this subpart'' each place it appears and inserting 
        ``this part'';
            (3) in section 836(h), by striking the last sentence;
            (4) in section 836, by redesignating subsection (l) as 
        subsection (k);
            (5) in section 839, by striking ``839'' and all that 
        follows through ``(a)'' and inserting ``839. (a)'';
            (6) in section 835(b), by striking ``841'' each place it 
        appears and inserting ``871'';
            (7) by redesignating section 841 as section 871, moving 
        part F to the end of the title, and redesignating such part as 
        part I;
            (8) in part G--
                    (A) by redesignating section 845 as section 851; 
                and
                    (B) by redesignating part G as part F;
            (9) in part H--
                    (A) by redesignating sections 851 and 852 as 
                sections 861 and 862, respectively; and
                    (B) by redesignating part H as part G; and
            (10) in part I--
                    (A) by redesignating section 855, as amended by 
                section 5305, as section 865; and
                    (B) by redesignating part I as part H.

SEC. 5311. NURSE FACULTY LOAN PROGRAM.

    (a) In General.--Section 846A of the Public Health Service Act (42 
U.S.C. 297n-1) is amended--
            (1) in subsection (a)--
                    (A) in the subsection heading, by striking 
                ``Establishment'' and inserting ``School of Nursing 
                Student Loan Fund''; and
                    (B) by inserting ``accredited'' after ``agreement 
                with any'';
            (2) in subsection (c)--
                    (A) in paragraph (2), by striking ``$30,000'' and 
                all that follows through the semicolon and inserting 
                ``$35,500, during fiscal years 2010 and 2011 fiscal 
                years (after fiscal year 2011, such amounts shall be 
                adjusted to provide for a cost-of-attendance increase 
                for the yearly loan rate and the aggregate loan;''; and
                    (B) in paragraph (3)(A), by inserting ``an 
                accredited'' after ``faculty member in'';
            (3) in subsection (e), by striking ``a school'' and 
        inserting ``an accredited school''; and
            (4) in subsection (f), by striking ``2003 through 2007'' 
        and inserting ``2010 through 2014''.
    (b) Eligible Individual Student Loan Repayment.--Title VIII of the 
Public Health Service Act is amended by inserting after section 846A 
(42 U.S.C. 297n-1) the following:

``SEC. 847. ELIGIBLE INDIVIDUAL STUDENT LOAN REPAYMENT.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, may enter into an 
agreement with eligible individuals for the repayment of education 
loans, in accordance with this section, to increase the number of 
qualified nursing faculty.
    ``(b) Agreements.--Each agreement entered into under this 
subsection shall require that the eligible individual shall serve as a 
full-time member of the faculty of an accredited school of nursing, for 
a total period, in the aggregate, of at least 4 years during the 6-year 
period beginning on the later of--
            ``(1) the date on which the individual receives a master's 
        or doctorate nursing degree from an accredited school of 
        nursing; or
            ``(2) the date on which the individual enters into an 
        agreement under this subsection.
    ``(c) Agreement Provisions.--Agreements entered into pursuant to 
subsection (b) shall be entered into on such terms and conditions as 
the Secretary may determine, except that--
            ``(1) not more than 10 months after the date on which the 
        6-year period described under subsection (b) begins, but in no 
        case before the individual starts as a full-time member of the 
        faculty of an accredited school of nursing the Secretary shall 
        begin making payments, for and on behalf of that individual, on 
        the outstanding principal of, and interest on, any loan of that 
        individual obtained to pay for such degree;
            ``(2) for an individual who has completed a master's in 
        nursing or equivalent degree in nursing--
                    ``(A) payments may not exceed $10,000 per calendar 
                year; and
                    ``(B) total payments may not exceed $40,000 during 
                the 2010 and 2011 fiscal years (after fiscal year 2011, 
                such amounts shall be adjusted to provide for a cost-
                of-attendance increase for the yearly loan rate and the 
                aggregate loan); and
            ``(3) for an individual who has completed a doctorate or 
        equivalent degree in nursing--
                    ``(A) payments may not exceed $20,000 per calendar 
                year; and
                    ``(B) total payments may not exceed $80,000 during 
                the 2010 and 2011 fiscal years (adjusted for subsequent 
                fiscal years as provided for in the same manner as in 
                paragraph (2)(B)).
    ``(d) Breach of Agreement.--
            ``(1) In general.--In the case of any agreement made under 
        subsection (b), the individual is liable to the Federal 
        Government for the total amount paid by the Secretary under 
        such agreement, and for interest on such amount at the maximum 
        legal prevailing rate, if the individual fails to meet the 
        agreement terms required under such subsection.
            ``(2) Waiver or suspension of liability.--In the case of an 
        individual making an agreement for purposes of paragraph (1), 
        the Secretary shall provide for the waiver or suspension of 
        liability under such paragraph if compliance by the individual 
        with the agreement involved is impossible or would involve 
        extreme hardship to the individual or if enforcement of the 
        agreement with respect to the individual would be 
        unconscionable.
            ``(3) Date certain for recovery.--Subject to paragraph (2), 
        any amount that the Federal Government is entitled to recover 
        under paragraph (1) shall be paid to the United States not 
        later than the expiration of the 3-year period beginning on the 
        date the United States becomes so entitled.
            ``(4) Availability.--Amounts recovered under paragraph (1) 
        shall be available to the Secretary for making loan repayments 
        under this section and shall remain available for such purpose 
        until expended.
    ``(e) Eligible Individual Defined.--For purposes of this section, 
the term `eligible individual' means an individual who--
            ``(1) is a United States citizen, national, or lawful 
        permanent resident;
            ``(2) holds an unencumbered license as a registered nurse; 
        and
            ``(3) has either already completed a master's or doctorate 
        nursing program at an accredited school of nursing or is 
        currently enrolled on a full-time or part-time basis in such a 
        program.
    ``(f) Priority.--For the purposes of this section and section 846A, 
funding priority will be awarded to School of Nursing Student Loans 
that support doctoral nursing students or Individual Student Loan 
Repayment that support doctoral nursing students.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 2010 through 2014.''.

SEC. 5312. AUTHORIZATION OF APPROPRIATIONS FOR PARTS B THROUGH D OF 
              TITLE VIII.

    Section 871 of the Public Health Service Act, as redesignated and 
moved by section 5310, is amended to read as follows:

``SEC. 871. AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out parts B, C, and D (subject to 
section 851(g)), there are authorized to be appropriated $338,000,000 
for fiscal year 2010, and such sums as may be necessary for each of the 
fiscal years 2011 through 2016.''.

SEC. 5313. GRANTS TO PROMOTE THE COMMUNITY HEALTH WORKFORCE.

    (a) In General.--Part P of title III of the Public Health Service 
Act (42 U.S.C. 280g et seq.) is amended by adding at the end the 
following:

``SEC. 399V. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS AND OUTCOMES.

    ``(a) Grants Authorized.--The Director of the Centers for Disease 
Control and Prevention, in collaboration with the Secretary, shall 
award grants to eligible entities to promote positive health behaviors 
and outcomes for populations in medically underserved communities 
through the use of community health workers.
    ``(b) Use of Funds.--Grants awarded under subsection (a) shall be 
used to support community health workers--
            ``(1) to educate, guide, and provide outreach in a 
        community setting regarding health problems prevalent in 
        medically underserved communities, particularly racial and 
        ethnic minority populations;
            ``(2) to educate and provide guidance regarding effective 
        strategies to promote positive health behaviors and discourage 
        risky health behaviors;
            ``(3) to educate and provide outreach regarding enrollment 
        in health insurance including the Children's Health Insurance 
        Program under title XXI of the Social Security Act, Medicare 
        under title XVIII of such Act and Medicaid under title XIX of 
        such Act;
            ``(4) to identify, educate, refer, and enroll underserved 
        populations to appropriate healthcare agencies and community-
        based programs and organizations in order to increase access to 
        quality healthcare services and to eliminate duplicative care; 
        or
            ``(5) to educate, guide, and provide home visitation 
        services regarding maternal health and prenatal care.
    ``(c) Application.--Each eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the 
Secretary, at such time, in such manner, and accompanied by such 
information as the Secretary may require.
    ``(d) Priority.--In awarding grants under subsection (a), the 
Secretary shall give priority to applicants that--
            ``(1) propose to target geographic areas--
                    ``(A) with a high percentage of residents who are 
                eligible for health insurance but are uninsured or 
                underinsured;
                    ``(B) with a high percentage of residents who 
                suffer from chronic diseases; or
                    ``(C) with a high infant mortality rate;
            ``(2) have experience in providing health or health-related 
        social services to individuals who are underserved with respect 
        to such services; and
            ``(3) have documented community activity and experience 
        with community health workers.
    ``(e) Collaboration With Academic Institutions and the One-stop 
Delivery System.--The Secretary shall encourage community health worker 
programs receiving funds under this section to collaborate with 
academic institutions and one-stop delivery systems under section 
134(c) of the Workforce Investment Act of 1998. Nothing in this section 
shall be construed to require such collaboration.
    ``(f) Evidence-based Interventions.--The Secretary shall encourage 
community health worker programs receiving funding under this section 
to implement a process or an outcome-based payment system that rewards 
community health workers for connecting underserved populations with 
the most appropriate services at the most appropriate time. Nothing in 
this section shall be construed to require such a payment.
    ``(g) Quality Assurance and Cost Effectiveness.--The Secretary 
shall establish guidelines for assuring the quality of the training and 
supervision of community health workers under the programs funded under 
this section and for assuring the cost-effectiveness of such programs.
    ``(h) Monitoring.--The Secretary shall monitor community health 
worker programs identified in approved applications under this section 
and shall determine whether such programs are in compliance with the 
guidelines established under subsection (g).
    ``(i) Technical Assistance.--The Secretary may provide technical 
assistance to community health worker programs identified in approved 
applications under this section with respect to planning, developing, 
and operating programs under the grant.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated, such sums as may be necessary to carry out this section 
for each of fiscal years 2010 through 2014.
    ``(k) Definitions.--In this section:
            ``(1) Community health worker.--The term `community health 
        worker', as defined by the Department of Labor as Standard 
        Occupational Classification [21-1094] means an individual who 
        promotes health or nutrition within the community in which the 
        individual resides--
                    ``(A) by serving as a liaison between communities 
                and healthcare agencies;
                    ``(B) by providing guidance and social assistance 
                to community residents;
                    ``(C) by enhancing community residents' ability to 
                effectively communicate with healthcare providers;
                    ``(D) by providing culturally and linguistically 
                appropriate health or nutrition education;
                    ``(E) by advocating for individual and community 
                health;
                    ``(F) by providing referral and follow-up services 
                or otherwise coordinating care; and
                    ``(G) by proactively identifying and enrolling 
                eligible individuals in Federal, State, local, private 
                or nonprofit health and human services programs.
            ``(2) Community setting.--The term `community setting' 
        means a home or a community organization located in the 
        neighborhood in which a participant in the program under this 
        section resides.
            ``(3) Eligible entity.--The term `eligible entity' means a 
        public or nonprofit private entity (including a State or public 
        subdivision of a State, a public health department, a free 
        health clinic, a hospital, or a Federally-qualified health 
        center (as defined in section 1861(aa) of the Social Security 
        Act)), or a consortium of any such entities.
            ``(4) Medically underserved community.--The term `medically 
        underserved community' means a community identified by a 
        State--
                    ``(A) that has a substantial number of individuals 
                who are members of a medically underserved population, 
                as defined by section 330(b)(3); and
                    ``(B) a significant portion of which is a health 
                professional shortage area as designated under section 
                332.''.

SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.), as amended by section 5206, is further amended by adding 
at the end the following:

``SEC. 778. FELLOWSHIP TRAINING IN APPLIED PUBLIC HEALTH EPIDEMIOLOGY, 
              PUBLIC HEALTH LABORATORY SCIENCE, PUBLIC HEALTH 
              INFORMATICS, AND EXPANSION OF THE EPIDEMIC INTELLIGENCE 
              SERVICE.

    ``(a) In General.--The Secretary may carry out activities to 
address documented workforce shortages in State and local health 
departments in the critical areas of applied public health epidemiology 
and public health laboratory science and informatics and may expand the 
Epidemic Intelligence Service.
    ``(b) Specific Uses.--In carrying out subsection (a), the Secretary 
shall provide for the expansion of existing fellowship programs 
operated through the Centers for Disease Control and Prevention in a 
manner that is designed to alleviate shortages of the type described in 
subsection (a).
    ``(c) Other Programs.--The Secretary may provide for the expansion 
of other applied epidemiology training programs that meet objectives 
similar to the objectives of the programs described in subsection (b).
    ``(d) Work Obligation.--Participation in fellowship training 
programs under this section shall be deemed to be service for purposes 
of satisfying work obligations stipulated in contracts under section 
338I(j).
    ``(e) General Support.--Amounts may be used from grants awarded 
under this section to expand the Public Health Informatics Fellowship 
Program at the Centers for Disease Control and Prevention to better 
support all public health systems at all levels of government.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $39,500,000 for each of fiscal 
years 2010 through 2013, of which--
            ``(1) $5,000,000 shall be made available in each such 
        fiscal year for epidemiology fellowship training program 
        activities under subsections (b) and (c);
            ``(2) $5,000,000 shall be made available in each such 
        fiscal year for laboratory fellowship training programs under 
        subsection (b);
            ``(3) $5,000,000 shall be made available in each such 
        fiscal year for the Public Health Informatics Fellowship 
        Program under subsection (e); and
            ``(4) $24,500,000 shall be made available for expanding the 
        Epidemic Intelligence Service under subsection (a).''.

SEC. 5315. UNITED STATES PUBLIC HEALTH SCIENCES TRACK.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) 
is amended by adding at the end the following:

          ``PART D--UNITED STATES PUBLIC HEALTH SCIENCES TRACK

``SEC. 271. ESTABLISHMENT.

    ``(a) United States Public Health Services Track.--
            ``(1) In general.--There is hereby authorized to be 
        established a United States Public Health Sciences Track 
        (referred to in this part as the `Track'), at sites to be 
        selected by the Secretary, with authority to grant appropriate 
        advanced degrees in a manner that uniquely emphasizes team-
        based service, public health, epidemiology, and emergency 
        preparedness and response. It shall be so organized as to 
        graduate not less than--
                    ``(A) 150 medical students annually, 10 of whom 
                shall be awarded studentships to the Uniformed Services 
                University of Health Sciences;
                    ``(B) 100 dental students annually;
                    ``(C) 250 nursing students annually;
                    ``(D) 100 public health students annually;
                    ``(E) 100 behavioral and mental health professional 
                students annually;
                    ``(F) 100 physician assistant or nurse practitioner 
                students annually; and
                    ``(G) 50 pharmacy students annually.
            ``(2) Locations.--The Track shall be located at existing 
        and accredited, affiliated health professions education 
        training programs at academic health centers located in regions 
        of the United States determined appropriate by the Surgeon 
        General, in consultation with the National Health Care 
        Workforce Commission established in section 5101 of the Patient 
        Protection and Affordable Care Act.
    ``(b) Number of Graduates.--Except as provided in subsection (a), 
the number of persons to be graduated from the Track shall be 
prescribed by the Secretary. In so prescribing the number of persons to 
be graduated from the Track, the Secretary shall institute actions 
necessary to ensure the maximum number of first-year enrollments in the 
Track consistent with the academic capacity of the affiliated sites and 
the needs of the United States for medical, dental, and nursing 
personnel.
    ``(c) Development.--The development of the Track may be by such 
phases as the Secretary may prescribe subject to the requirements of 
subsection (a).
    ``(d) Integrated Longitudinal Plan.--The Surgeon General shall 
develop an integrated longitudinal plan for health professions 
continuing education throughout the continuum of health-related 
education, training, and practice. Training under such plan shall 
emphasize patient-centered, interdisciplinary, and care coordination 
skills. Experience with deployment of emergency response teams shall be 
included during the clinical experiences.
    ``(e) Faculty Development.--The Surgeon General shall develop 
faculty development programs and curricula in decentralized venues of 
health care, to balance urban, tertiary, and inpatient venues.

``SEC. 272. ADMINISTRATION.

    ``(a) In General.--The business of the Track shall be conducted by 
the Surgeon General with funds appropriated for and provided by the 
Department of Health and Human Services. The National Health Care 
Workforce Commission shall assist the Surgeon General in an advisory 
capacity.
    ``(b) Faculty.--
            ``(1) In general.--The Surgeon General, after considering 
        the recommendations of the National Health Care Workforce 
        Commission, shall obtain the services of such professors, 
        instructors, and administrative and other employees as may be 
        necessary to operate the Track, but utilize when possible, 
        existing affiliated health professions training institutions. 
        Members of the faculty and staff shall be employed under salary 
        schedules and granted retirement and other related benefits 
        prescribed by the Secretary so as to place the employees of the 
        Track faculty on a comparable basis with the employees of fully 
        accredited schools of the health professions within the United 
        States.
            ``(2) Titles.--The Surgeon General may confer academic 
        titles, as appropriate, upon the members of the faculty.
            ``(3) Nonapplication of provisions.--The limitations in 
        section 5373 of title 5, United States Code, shall not apply to 
        the authority of the Surgeon General under paragraph (1) to 
        prescribe salary schedules and other related benefits.
    ``(c) Agreements.--The Surgeon General may negotiate agreements 
with agencies of the Federal Government to utilize on a reimbursable 
basis appropriate existing Federal medical resources located in the 
United States (or locations selected in accordance with section 
271(a)(2)). Under such agreements the facilities concerned will retain 
their identities and basic missions. The Surgeon General may negotiate 
affiliation agreements with accredited universities and health 
professions training institutions in the United States. Such agreements 
may include provisions for payments for educational services provided 
students participating in Department of Health and Human Services 
educational programs.
    ``(d) Programs.--The Surgeon General may establish the following 
educational programs for Track students:
            ``(1) Postdoctoral, postgraduate, and technological 
        programs.
            ``(2) A cooperative program for medical, dental, physician 
        assistant, pharmacy, behavioral and mental health, public 
        health, and nursing students.
            ``(3) Other programs that the Surgeon General determines 
        necessary in order to operate the Track in a cost-effective 
        manner.
    ``(e) Continuing Medical Education.--The Surgeon General shall 
establish programs in continuing medical education for members of the 
health professions to the end that high standards of health care may be 
maintained within the United States.
    ``(f) Authority of the Surgeon General.--
            ``(1) In general.--The Surgeon General is authorized--
                    ``(A) to enter into contracts with, accept grants 
                from, and make grants to any nonprofit entity for the 
                purpose of carrying out cooperative enterprises in 
                medical, dental, physician assistant, pharmacy, 
                behavioral and mental health, public health, and 
                nursing research, consultation, and education;
                    ``(B) to enter into contracts with entities under 
                which the Surgeon General may furnish the services of 
                such professional, technical, or clerical personnel as 
                may be necessary to fulfill cooperative enterprises 
                undertaken by the Track;
                    ``(C) to accept, hold, administer, invest, and 
                spend any gift, devise, or bequest of personal property 
                made to the Track, including any gift, devise, or 
                bequest for the support of an academic chair, teaching, 
                research, or demonstration project;
                    ``(D) to enter into agreements with entities that 
                may be utilized by the Track for the purpose of 
                enhancing the activities of the Track in education, 
                research, and technological applications of knowledge; 
                and
                    ``(E) to accept the voluntary services of guest 
                scholars and other persons.
            ``(2) Limitation.--The Surgeon General may not enter into 
        any contract with an entity if the contract would obligate the 
        Track to make outlays in advance of the enactment of budget 
        authority for such outlays.
            ``(3) Scientists.--Scientists or other medical, dental, or 
        nursing personnel utilized by the Track under an agreement 
        described in paragraph (1) may be appointed to any position 
        within the Track and may be permitted to perform such duties 
        within the Track as the Surgeon General may approve.
            ``(4) Volunteer services.--A person who provides voluntary 
        services under the authority of subparagraph (E) of paragraph 
        (1) shall be considered to be an employee of the Federal 
        Government for the purposes of chapter 81 of title 5, relating 
        to compensation for work-related injuries, and to be an 
        employee of the Federal Government for the purposes of chapter 
        171 of title 28, relating to tort claims. Such a person who is 
        not otherwise employed by the Federal Government shall not be 
        considered to be a Federal employee for any other purpose by 
        reason of the provision of such services.

``SEC. 273. STUDENTS; SELECTION; OBLIGATION.

    ``(a) Student Selection.--
            ``(1) In general.--Medical, dental, physician assistant, 
        pharmacy, behavioral and mental health, public health, and 
        nursing students at the Track shall be selected under 
        procedures prescribed by the Surgeon General. In so 
        prescribing, the Surgeon General shall consider the 
        recommendations of the National Health Care Workforce 
        Commission.
            ``(2) Priority.--In developing admissions procedures under 
        paragraph (1), the Surgeon General shall ensure that such 
        procedures give priority to applicant medical, dental, 
        physician assistant, pharmacy, behavioral and mental health, 
        public health, and nursing students from rural communities and 
        underrepresented minorities.
    ``(b) Contract and Service Obligation.--
            ``(1) Contract.--Upon being admitted to the Track, a 
        medical, dental, physician assistant, pharmacy, behavioral and 
        mental health, public health, or nursing student shall enter 
        into a written contract with the Surgeon General that shall 
        contain--
                    ``(A) an agreement under which--
                            ``(i) subject to subparagraph (B), the 
                        Surgeon General agrees to provide the student 
                        with tuition (or tuition remission) and a 
                        student stipend (described in paragraph (2)) in 
                        each school year for a period of years (not to 
                        exceed 4 school years) determined by the 
                        student, during which period the student is 
                        enrolled in the Track at an affiliated or other 
                        participating health professions institution 
                        pursuant to an agreement between the Track and 
                        such institution; and
                            ``(ii) subject to subparagraph (B), the 
                        student agrees--
                                    ``(I) to accept the provision of 
                                such tuition and student stipend to the 
                                student;
                                    ``(II) to maintain enrollment at 
                                the Track until the student completes 
                                the course of study involved;
                                    ``(III) while enrolled in such 
                                course of study, to maintain an 
                                acceptable level of academic standing 
                                (as determined by the Surgeon General);
                                    ``(IV) if pursuing a degree from a 
                                school of medicine or osteopathic 
                                medicine, dental, public health, or 
                                nursing school or a physician 
                                assistant, pharmacy, or behavioral and 
                                mental health professional program, to 
                                complete a residency or internship in a 
                                specialty that the Surgeon General 
                                determines is appropriate; and
                                    ``(V) to serve for a period of time 
                                (referred to in this part as the 
                                `period of obligated service') within 
                                the Commissioned Corps of the Public 
                                Health Service equal to 2 years for 
                                each school year during which such 
                                individual was enrolled at the College, 
                                reduced as provided for in paragraph 
                                (3);
                    ``(B) a provision that any financial obligation of 
                the United States arising out of a contract entered 
                into under this part and any obligation of the student 
                which is conditioned thereon, is contingent upon funds 
                being appropriated to carry out this part;
                    ``(C) a statement of the damages to which the 
                United States is entitled for the student's breach of 
                the contract; and
                    ``(D) such other statements of the rights and 
                liabilities of the Secretary and of the individual, not 
                inconsistent with the provisions of this part.
            ``(2) Tuition and student stipend.--
                    ``(A) Tuition remission rates.--The Surgeon 
                General, based on the recommendations of the National 
                Health Care Workforce Commission, shall establish 
                Federal tuition remission rates to be used by the Track 
                to provide reimbursement to affiliated and other 
                participating health professions institutions for the 
                cost of educational services provided by such 
                institutions to Track students. The agreement entered 
                into by such participating institutions under paragraph 
                (1)(A)(i) shall contain an agreement to accept as 
                payment in full the established remission rate under 
                this subparagraph.
                    ``(B) Stipend.--The Surgeon General, based on the 
                recommendations of the National Health Care Workforce 
                Commission, shall establish and update Federal stipend 
                rates for payment to students under this part.
            ``(3) Reductions in the period of obligated service.--The 
        period of obligated service under paragraph (1)(A)(ii)(V) shall 
        be reduced--
                    ``(A) in the case of a student who elects to 
                participate in a high-needs speciality residency (as 
                determined by the National Health Care Workforce 
                Commission), by 3 months for each year of such 
                participation (not to exceed a total of 12 months); and
                    ``(B) in the case of a student who, upon completion 
                of their residency, elects to practice in a Federal 
                medical facility (as defined in section 781(e)) that is 
                located in a health professional shortage area (as 
                defined in section 332), by 3 months for year of full-
                time practice in such a facility (not to exceed a total 
                of 12 months).
    ``(c) Second 2 Years of Service.--During the third and fourth years 
in which a medical, dental, physician assistant, pharmacy, behavioral 
and mental health, public health, or nursing student is enrolled in the 
Track, training should be designed to prioritize clinical rotations in 
Federal medical facilities in health professional shortage areas, and 
emphasize a balance of hospital and community-based experiences, and 
training within interdisciplinary teams.
    ``(d) Dentist, Physician Assistant, Pharmacist, Behavioral and 
Mental Health Professional, Public Health Professional, and Nurse 
Training.--The Surgeon General shall establish provisions applicable 
with respect to dental, physician assistant, pharmacy, behavioral and 
mental health, public health, and nursing students that are comparable 
to those for medical students under this section, including service 
obligations, tuition support, and stipend support. The Surgeon General 
shall give priority to health professions training institutions that 
train medical, dental, physician assistant, pharmacy, behavioral and 
mental health, public health, and nursing students for some significant 
period of time together, but at a minimum have a discrete and shared 
core curriculum.
    ``(e) Elite Federal Disaster Teams.--The Surgeon General, in 
consultation with the Secretary, the Director of the Centers for 
Disease Control and Prevention, and other appropriate military and 
Federal government agencies, shall develop criteria for the appointment 
of highly qualified Track faculty, medical, dental, physician 
assistant, pharmacy, behavioral and mental health, public health, and 
nursing students, and graduates to elite Federal disaster preparedness 
teams to train and to respond to public health emergencies, natural 
disasters, bioterrorism events, and other emergencies.
    ``(f) Student Dropped From Track in Affiliate School.--A medical, 
dental, physician assistant, pharmacy, behavioral and mental health, 
public health, or nursing student who, under regulations prescribed by 
the Surgeon General, is dropped from the Track in an affiliated school 
for deficiency in conduct or studies, or for other reasons, shall be 
liable to the United States for all tuition and stipend support 
provided to the student.

``SEC. 274. FUNDING.

    ``Beginning with fiscal year 2010, the Secretary shall transfer 
from the Public Health and Social Services Emergency Fund such sums as 
may be necessary to carry out this part.''.

       Subtitle E--Supporting the Existing Health Care Workforce

SEC. 5401. CENTERS OF EXCELLENCE.

    Section 736 of the Public Health Service Act (42 U.S.C. 293) is 
amended by striking subsection (h) and inserting the following:
    ``(h) Formula for Allocations.--
            ``(1) Allocations.--Based on the amount appropriated under 
        subsection (i) for a fiscal year, the following subparagraphs 
        shall apply as appropriate:
                    ``(A) In general.--If the amounts appropriated 
                under subsection (i) for a fiscal year are $24,000,000 
                or less--
                            ``(i) the Secretary shall make available 
                        $12,000,000 for grants under subsection (a) to 
                        health professions schools that meet the 
                        conditions described in subsection (c)(2)(A); 
                        and
                            ``(ii) and available after grants are made 
                        with funds under clause (i), the Secretary 
                        shall make available--
                                    ``(I) 60 percent of such amount for 
                                grants under subsection (a) to health 
                                professions schools that meet the 
                                conditions described in paragraph (3) 
                                or (4) of subsection (c) (including 
                                meeting the conditions under subsection 
                                (e)); and
                                    ``(II) 40 percent of such amount 
                                for grants under subsection (a) to 
                                health professions schools that meet 
                                the conditions described in subsection 
                                (c)(5).
                    ``(B) Funding in excess of $24,000,000.--If amounts 
                appropriated under subsection (i) for a fiscal year 
                exceed $24,000,000 but are less than $30,000,000--
                            ``(i) 80 percent of such excess amounts 
                        shall be made available for grants under 
                        subsection (a) to health professions schools 
                        that meet the requirements described in 
                        paragraph (3) or (4) of subsection (c) 
                        (including meeting conditions pursuant to 
                        subsection (e)); and
                            ``(ii) 20 percent of such excess amount 
                        shall be made available for grants under 
                        subsection (a) to health professions schools 
                        that meet the conditions described in 
                        subsection (c)(5).
                    ``(C) Funding in excess of $30,000,000.--If amounts 
                appropriated under subsection (i) for a fiscal year 
                exceed $30,000,000 but are less than $40,000,000, the 
                Secretary shall make available--
                            ``(i) not less than $12,000,000 for grants 
                        under subsection (a) to health professions 
                        schools that meet the conditions described in 
                        subsection (c)(2)(A);
                            ``(ii) not less than $12,000,000 for grants 
                        under subsection (a) to health professions 
                        schools that meet the conditions described in 
                        paragraph (3) or (4) of subsection (c) 
                        (including meeting conditions pursuant to 
                        subsection (e));
                            ``(iii) not less than $6,000,000 for grants 
                        under subsection (a) to health professions 
                        schools that meet the conditions described in 
                        subsection (c)(5); and
                            ``(iv) after grants are made with funds 
                        under clauses (i) through (iii), any remaining 
                        excess amount for grants under subsection (a) 
                        to health professions schools that meet the 
                        conditions described in paragraph (2)(A), (3), 
                        (4), or (5) of subsection (c).
                    ``(D) Funding in excess of $40,000,000.--If amounts 
                appropriated under subsection (i) for a fiscal year are 
                $40,000,000 or more, the Secretary shall make 
                available--
                            ``(i) not less than $16,000,000 for grants 
                        under subsection (a) to health professions 
                        schools that meet the conditions described in 
                        subsection (c)(2)(A);
                            ``(ii) not less than $16,000,000 for grants 
                        under subsection (a) to health professions 
                        schools that meet the conditions described in 
                        paragraph (3) or (4) of subsection (c) 
                        (including meeting conditions pursuant to 
                        subsection (e));
                            ``(iii) not less than $8,000,000 for grants 
                        under subsection (a) to health professions 
                        schools that meet the conditions described in 
                        subsection (c)(5); and
                            ``(iv) after grants are made with funds 
                        under clauses (i) through (iii), any remaining 
                        funds for grants under subsection (a) to health 
                        professions schools that meet the conditions 
                        described in paragraph (2)(A), (3), (4), or (5) 
                        of subsection (c).
            ``(2) No limitation.--Nothing in this subsection shall be 
        construed as limiting the centers of excellence referred to in 
        this section to the designated amount, or to preclude such 
        entities from competing for grants under this section.
            ``(3) Maintenance of effort.--
                    ``(A) In general.--With respect to activities for 
                which a grant made under this part are authorized to be 
                expended, the Secretary may not make such a grant to a 
                center of excellence for any fiscal year unless the 
                center agrees to maintain expenditures of non-Federal 
                amounts for such activities at a level that is not less 
                than the level of such expenditures maintained by the 
                center for the fiscal year preceding the fiscal year 
                for which the school receives such a grant.
                    ``(B) Use of federal funds.--With respect to any 
                Federal amounts received by a center of excellence and 
                available for carrying out activities for which a grant 
                under this part is authorized to be expended, the 
                center shall, before expending the grant, expend the 
                Federal amounts obtained from sources other than the 
                grant, unless given prior approval from the Secretary.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) $50,000,000 for each of the fiscal years 2010 through 
        2015; and
            ``(2) and such sums as are necessary for each subsequent 
        fiscal year.''.

SEC. 5402. HEALTH CARE PROFESSIONALS TRAINING FOR DIVERSITY.

    (a) Loan Repayments and Fellowships Regarding Faculty Positions.--
Section 738(a)(1) of the Public Health Service Act (42 U.S.C. 
293b(a)(1)) is amended by striking ``$20,000 of the principal and 
interest of the educational loans of such individuals.'' and inserting 
``$30,000 of the principal and interest of the educational loans of 
such individuals.''.
    (b) Scholarships for Disadvantaged Students.--Section 740(a) of 
such Act (42 U.S.C. 293d(a)) is amended by striking ``$37,000,000'' and 
all that follows through ``2002'' and inserting ``$51,000,000 for 
fiscal year 2010, and such sums as may be necessary for each of the 
fiscal years 2011 through 2014''.
    (c) Reauthorization for Loan Repayments and Fellowships Regarding 
Faculty Positions.--Section 740(b) of such Act (42 U.S.C. 293d(b)) is 
amended by striking ``appropriated'' and all that follows through the 
period at the end and inserting ``appropriated, $5,000,000 for each of 
the fiscal years 2010 through 2014.''.
    (d) Reauthorization for Educational Assistance in the Health 
Professions Regarding Individuals From a Disadvantaged Background.--
Section 740(c) of such Act (42 U.S.C. 293d(c)) is amended by striking 
the first sentence and inserting the following: ``For the purpose of 
grants and contracts under section 739(a)(1), there is authorized to be 
appropriated $60,000,000 for fiscal year 2010 and such sums as may be 
necessary for each of the fiscal years 2011 through 2014.''

SEC. 5403. INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES.

    (a) Area Health Education Centers.--Section 751 of the Public 
Health Service Act (42 U.S.C. 294a) is amended to read as follows:

``SEC. 751. AREA HEALTH EDUCATION CENTERS.

    ``(a) Establishment of Awards.--The Secretary shall make the 
following 2 types of awards in accordance with this section:
            ``(1) Infrastructure development award.--The Secretary 
        shall make awards to eligible entities to enable such entities 
        to initiate health care workforce educational programs or to 
        continue to carry out comparable programs that are operating at 
        the time the award is made by planning, developing, operating, 
        and evaluating an area health education center program.
            ``(2) Point of service maintenance and enhancement award.--
        The Secretary shall make awards to eligible entities to 
        maintain and improve the effectiveness and capabilities of an 
        existing area health education center program, and make other 
        modifications to the program that are appropriate due to 
        changes in demographics, needs of the populations served, or 
        other similar issues affecting the area health education center 
        program. For the purposes of this section, the term `Program' 
        refers to the area health education center program.
    ``(b) Eligible Entities; Application.--
            ``(1) Eligible entities.--
                    ``(A) Infrastructure development.--For purposes of 
                subsection (a)(1), the term `eligible entity' means a 
                school of medicine or osteopathic medicine, an 
                incorporated consortium of such schools, or the parent 
                institutions of such a school. With respect to a State 
                in which no area health education center program is in 
                operation, the Secretary may award a grant or contract 
                under subsection (a)(1) to a school of nursing.
                    ``(B) Point of service maintenance and 
                enhancement.--For purposes of subsection (a)(2), the 
                term `eligible entity' means an entity that has 
                received funds under this section, is operating an area 
                health education center program, including an area 
                health education center or centers, and has a center or 
                centers that are no longer eligible to receive 
                financial assistance under subsection (a)(1).
            ``(2) Application.--An eligible entity desiring to receive 
        an award under this section shall submit to the Secretary an 
        application at such time, in such manner, and containing such 
        information as the Secretary may require.
    ``(c) Use of Funds.--
            ``(1) Required activities.--An eligible entity shall use 
        amounts awarded under a grant under subsection (a)(1) or (a)(2) 
        to carry out the following activities:
                    ``(A) Develop and implement strategies, in 
                coordination with the applicable one-stop delivery 
                system under section 134(c) of the Workforce Investment 
                Act of 1998, to recruit individuals from 
                underrepresented minority populations or from 
                disadvantaged or rural backgrounds into health 
                professions, and support such individuals in attaining 
                such careers.
                    ``(B) Develop and implement strategies to foster 
                and provide community-based training and education to 
                individuals seeking careers in health professions 
                within underserved areas for the purpose of developing 
                and maintaining a diverse health care workforce that is 
                prepared to deliver high-quality care, with an emphasis 
                on primary care, in underserved areas or for health 
                disparity populations, in collaboration with other 
                Federal and State health care workforce development 
                programs, the State workforce agency, and local 
                workforce investment boards, and in health care safety 
                net sites.
                    ``(C) Prepare individuals to more effectively 
                provide health services to underserved areas and health 
                disparity populations through field placements or 
                preceptorships in conjunction with community-based 
                organizations, accredited primary care residency 
                training programs, Federally qualified health centers, 
                rural health clinics, public health departments, or 
                other appropriate facilities.
                    ``(D) Conduct and participate in interdisciplinary 
                training that involves physicians, physician 
                assistants, nurse practitioners, nurse midwives, 
                dentists, psychologists, pharmacists, optometrists, 
                community health workers, public and allied health 
                professionals, or other health professionals, as 
                practicable.
                    ``(E) Deliver or facilitate continuing education 
                and information dissemination programs for health care 
                professionals, with an emphasis on individuals 
                providing care in underserved areas and for health 
                disparity populations.
                    ``(F) Propose and implement effective program and 
                outcomes measurement and evaluation strategies.
                    ``(G) Establish a youth public health program to 
                expose and recruit high school students into health 
                careers, with a focus on careers in public health.
            ``(2) Innovative opportunities.--An eligible entity may use 
        amounts awarded under a grant under subsection (a)(1) or 
        subsection (a)(2) to carry out any of the following activities:
                    ``(A) Develop and implement innovative curricula in 
                collaboration with community-based accredited primary 
                care residency training programs, Federally qualified 
                health centers, rural health clinics, behavioral and 
                mental health facilities, public health departments, or 
                other appropriate facilities, with the goal of 
                increasing the number of primary care physicians and 
                other primary care providers prepared to serve in 
                underserved areas and health disparity populations.
                    ``(B) Coordinate community-based participatory 
                research with academic health centers, and facilitate 
                rapid flow and dissemination of evidence-based health 
                care information, research results, and best practices 
                to improve quality, efficiency, and effectiveness of 
                health care and health care systems within community 
                settings.
                    ``(C) Develop and implement other strategies to 
                address identified workforce needs and increase and 
                enhance the health care workforce in the area served by 
                the area health education center program.
    ``(d) Requirements.--
            ``(1) Area health education center program.--In carrying 
        out this section, the Secretary shall ensure the following:
                    ``(A) An entity that receives an award under this 
                section shall conduct at least 10 percent of clinical 
                education required for medical students in community 
                settings that are removed from the primary teaching 
                facility of the contracting institution for grantees 
                that operate a school of medicine or osteopathic 
                medicine. In States in which an entity that receives an 
                award under this section is a nursing school or its 
                parent institution, the Secretary shall alternatively 
                ensure that--
                            ``(i) the nursing school conducts at least 
                        10 percent of clinical education required for 
                        nursing students in community settings that are 
                        remote from the primary teaching facility of 
                        the school; and
                            ``(ii) the entity receiving the award 
                        maintains a written agreement with a school of 
                        medicine or osteopathic medicine to place 
                        students from that school in training sites in 
                        the area health education center program area.
                    ``(B) An entity receiving funds under subsection 
                (a)(2) does not distribute such funding to a center 
                that is eligible to receive funding under subsection 
                (a)(1).
            ``(2) Area health education center.--The Secretary shall 
        ensure that each area health education center program includes 
        at least 1 area health education center, and that each such 
        center--
                    ``(A) is a public or private organization whose 
                structure, governance, and operation is independent 
                from the awardee and the parent institution of the 
                awardee;
                    ``(B) is not a school of medicine or osteopathic 
                medicine, the parent institution of such a school, or a 
                branch campus or other subunit of a school of medicine 
                or osteopathic medicine or its parent institution, or a 
                consortium of such entities;
                    ``(C) designates an underserved area or population 
                to be served by the center which is in a location 
                removed from the main location of the teaching 
                facilities of the schools participating in the program 
                with such center and does not duplicate, in whole or in 
                part, the geographic area or population served by any 
                other center;
                    ``(D) fosters networking and collaboration among 
                communities and between academic health centers and 
                community-based centers;
                    ``(E) serves communities with a demonstrated need 
                of health professionals in partnership with academic 
                medical centers;
                    ``(F) addresses the health care workforce needs of 
                the communities served in coordination with the public 
                workforce investment system; and
                    ``(G) has a community-based governing or advisory 
                board that reflects the diversity of the communities 
                involved.
    ``(e) Matching Funds.--With respect to the costs of operating a 
program through a grant under this section, to be eligible for 
financial assistance under this section, an entity shall make available 
(directly or through contributions from State, county or municipal 
governments, or the private sector) recurring non-Federal contributions 
in cash or in kind, toward such costs in an amount that is equal to not 
less than 50 percent of such costs. At least 25 percent of the total 
required non-Federal contributions shall be in cash. An entity may 
apply to the Secretary for a waiver of not more than 75 percent of the 
matching fund amount required by the entity for each of the first 3 
years the entity is funded through a grant under subsection (a)(1).
    ``(f) Limitation.--Not less than 75 percent of the total amount 
provided to an area health education center program under subsection 
(a)(1) or (a)(2) shall be allocated to the area health education 
centers participating in the program under this section. To provide 
needed flexibility to newly funded area health education center 
programs, the Secretary may waive the requirement in the sentence for 
the first 2 years of a new area health education center program funded 
under subsection (a)(1).
    ``(g) Award.--An award to an entity under this section shall be not 
less than $250,000 annually per area health education center included 
in the program involved. If amounts appropriated to carry out this 
section are not sufficient to comply with the preceding sentence, the 
Secretary may reduce the per center amount provided for in such 
sentence as necessary, provided the distribution established in 
subsection (j)(2) is maintained.
    ``(h) Project Terms.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        period during which payments may be made under an award under 
        subsection (a)(1) may not exceed--
                    ``(A) in the case of a program, 12 years; or
                    ``(B) in the case of a center within a program, 6 
                years.
            ``(2) Exception.--The periods described in paragraph (1) 
        shall not apply to programs receiving point of service 
        maintenance and enhancement awards under subsection (a)(2) to 
        maintain existing centers and activities.
    ``(i) Inapplicability of Provision.--Notwithstanding any other 
provision of this title, section 791(a) shall not apply to an area 
health education center funded under this section.
    ``(j) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be appropriated 
        to carry out this section $125,000,000 for each of the fiscal 
        years 2010 through 2014.
            ``(2) Requirements.--Of the amounts appropriated for a 
        fiscal year under paragraph (1)--
                    ``(A) not more than 35 percent shall be used for 
                awards under subsection (a)(1);
                    ``(B) not less than 60 percent shall be used for 
                awards under subsection (a)(2);
                    ``(C) not more than 1 percent shall be used for 
                grants and contracts to implement outcomes evaluation 
                for the area health education centers; and
                    ``(D) not more than 4 percent shall be used for 
                grants and contracts to provide technical assistance to 
                entities receiving awards under this section.
            ``(3) Carryover funds.--An entity that receives an award 
        under this section may carry over funds from 1 fiscal year to 
        another without obtaining approval from the Secretary. In no 
        case may any funds be carried over pursuant to the preceding 
        sentence for more than 3 years.
    ``(k) Sense of Congress.--It is the sense of the Congress that 
every State have an area health education center program in effect 
under this section.''.
    (b) Continuing Educational Support for Health Professionals Serving 
in Underserved Communities.--Part D of title VII of the Public Health 
Service Act (42 U.S.C. 294 et seq.) is amended by striking section 752 
and inserting the following:

``SEC. 752. CONTINUING EDUCATIONAL SUPPORT FOR HEALTH PROFESSIONALS 
              SERVING IN UNDERSERVED COMMUNITIES.

    ``(a) In General.--The Secretary shall make grants to, and enter 
into contracts with, eligible entities to improve health care, increase 
retention, increase representation of minority faculty members, enhance 
the practice environment, and provide information dissemination and 
educational support to reduce professional isolation through the timely 
dissemination of research findings using relevant resources.
    ``(b) Eligible Entities.--For purposes of this section, the term 
`eligible entity' means an entity described in section 799(b).
    ``(c) Application.--An eligible entity desiring to receive an award 
under this section shall submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary 
may require.
    ``(d) Use of Funds.--An eligible entity shall use amounts awarded 
under a grant or contract under this section to provide innovative 
supportive activities to enhance education through distance learning, 
continuing educational activities, collaborative conferences, and 
electronic and telelearning activities, with priority for primary care.
    ``(e) Authorization.--There is authorized to be appropriated to 
carry out this section $5,000,000 for each of the fiscal years 2010 
through 2014, and such sums as may be necessary for each subsequent 
fiscal year.''.

SEC. 5404. WORKFORCE DIVERSITY GRANTS.

    Section 821 of the Public Health Service Act (42 U.S.C. 296m) is 
amended--
            (1) in subsection (a)--
                    (A) by striking ``The Secretary may'' and inserting 
                the following:
            ``(1) Authority.--The Secretary may'';
                    (B) by striking ``pre-entry preparation, and 
                retention activities'' and inserting the following: 
                ``stipends for diploma or associate degree nurses to 
                enter a bridge or degree completion program, student 
                scholarships or stipends for accelerated nursing degree 
                programs, pre-entry preparation, advanced education 
                preparation, and retention activities''; and
            (2) in subsection (b)--
                    (A) by striking ``First'' and all that follows 
                through ``including the'' and inserting ``National 
                Advisory Council on Nurse Education and Practice and 
                consult with nursing associations including the 
                National Coalition of Ethnic Minority Nurse 
                Associations,''; and
                    (B) by inserting before the period the following: 
                ``, and other organizations determined appropriate by 
                the Secretary''.

SEC. 5405. PRIMARY CARE EXTENSION PROGRAM.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.), as amended by section 5313, is further amended by adding 
at the end the following:

``SEC. 399W. PRIMARY CARE EXTENSION PROGRAM.

    ``(a) Establishment, Purpose and Definition.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Agency for Healthcare Research and Quality, 
        shall establish a Primary Care Extension Program.
            ``(2) Purpose.--The Primary Care Extension Program shall 
        provide support and assistance to primary care providers to 
        educate providers about preventive medicine, health promotion, 
        chronic disease management, mental and behavioral health 
        services (including substance abuse prevention and treatment 
        services), and evidence-based and evidence-informed therapies 
        and techniques, in order to enable providers to incorporate 
        such matters into their practice and to improve community 
        health by working with community-based health connectors 
        (referred to in this section as `Health Extension Agents').
            ``(3) Definitions.--In this section:
                    ``(A) Health extension agent.--The term `Health 
                Extension Agent' means any local, community-based 
                health worker who facilitates and provides assistance 
                to primary care practices by implementing quality 
                improvement or system redesign, incorporating the 
                principles of the patient-centered medical home to 
                provide high-quality, effective, efficient, and safe 
                primary care and to provide guidance to patients in 
                culturally and linguistically appropriate ways, and 
                linking practices to diverse health system resources.
                    ``(B) Primary care provider.--The term `primary 
                care provider' means a clinician who provides 
                integrated, accessible health care services and who is 
                accountable for addressing a large majority of personal 
                health care needs, including providing preventive and 
                health promotion services for men, women, and children 
                of all ages, developing a sustained partnership with 
                patients, and practicing in the context of family and 
                community, as recognized by a State licensing or 
                regulatory authority, unless otherwise specified in 
                this section.
    ``(b) Grants to Establish State Hubs and Local Primary Care 
Extension Agencies.--
            ``(1) Grants.--The Secretary shall award competitive grants 
        to States for the establishment of State- or multistate-level 
        primary care Primary Care Extension Program State Hubs 
        (referred to in this section as `Hubs').
            ``(2) Composition of hubs.--A Hub established by a State 
        pursuant to paragraph (1)--
                    ``(A) shall consist of, at a minimum, the State 
                health department, the entity responsible for 
                administering the State Medicaid program (if other than 
                the State health department), the State-level entity 
                administering the Medicare program, and the departments 
                of 1 or more health professions schools in the State 
                that train providers in primary care; and
                    ``(B) may include entities such as hospital 
                associations, primary care practice-based research 
                networks, health professional societies, State primary 
                care associations, State licensing boards, 
                organizations with a contract with the Secretary under 
                section 1153 of the Social Security Act, consumer 
                groups, and other appropriate entities.
    ``(c) State and Local Activities.--
            ``(1) Hub activities.--Hubs established under a grant under 
        subsection (b) shall--
                    ``(A) submit to the Secretary a plan to coordinate 
                functions with quality improvement organizations and 
                area health education centers if such entities are 
                members of the Hub not described in subsection 
                (b)(2)(A);
                    ``(B) contract with a county- or local-level entity 
                that shall serve as the Primary Care Extension Agency 
                to administer the services described in paragraph (2);
                    ``(C) organize and administer grant funds to 
                county- or local-level Primary Care Extension Agencies 
                that serve a catchment area, as determined by the 
                State; and
                    ``(D) organize State-wide or multistate networks of 
                local-level Primary Care Extension Agencies to share 
                and disseminate information and practices.
            ``(2) Local primary care extension agency activities.--
                    ``(A) Required activities.--Primary Care Extension 
                Agencies established by a Hub under paragraph (1) 
                shall--
                            ``(i) assist primary care providers to 
                        implement a patient-centered medical home to 
                        improve the accessibility, quality, and 
                        efficiency of primary care services, including 
                        health homes;
                            ``(ii) develop and support primary care 
                        learning communities to enhance the 
                        dissemination of research findings for 
                        evidence-based practice, assess implementation 
                        of practice improvement, share best practices, 
                        and involve community clinicians in the 
                        generation of new knowledge and identification 
                        of important questions for research;
                            ``(iii) participate in a national network 
                        of Primary Care Extension Hubs and propose how 
                        the Primary Care Extension Agency will share 
                        and disseminate lessons learned and best 
                        practices; and
                            ``(iv) develop a plan for financial 
                        sustainability involving State, local, and 
                        private contributions, to provide for the 
                        reduction in Federal funds that is expected 
                        after an initial 6-year period of program 
                        establishment, infrastructure development, and 
                        planning.
                    ``(B) Discretionary activities.--Primary Care 
                Extension Agencies established by a Hub under paragraph 
                (1) may--
                            ``(i) provide technical assistance, 
                        training, and organizational support for 
                        community health teams established under 
                        section 3602 of the Patient Protection and 
                        Affordable Care Act;
                            ``(ii) collect data and provision of 
                        primary care provider feedback from 
                        standardized measurements of processes and 
                        outcomes to aid in continuous performance 
                        improvement;
                            ``(iii) collaborate with local health 
                        departments, community health centers, tribes 
                        and tribal entities, and other community 
                        agencies to identify community health 
                        priorities and local health workforce needs, 
                        and participate in community-based efforts to 
                        address the social and primary determinants of 
                        health, strengthen the local primary care 
                        workforce, and eliminate health disparities;
                            ``(iv) develop measures to monitor the 
                        impact of the proposed program on the health of 
                        practice enrollees and of the wider community 
                        served; and
                            ``(v) participate in other activities, as 
                        determined appropriate by the Secretary.
    ``(d) Federal Program Administration.--
            ``(1) Grants; types.--Grants awarded under subsection (b) 
        shall be--
                    ``(A) program grants, that are awarded to State or 
                multistate entities that submit fully-developed plans 
                for the implementation of a Hub, for a period of 6 
                years; or
                    ``(B) planning grants, that are awarded to State or 
                multistate entities with the goal of developing a plan 
                for a Hub, for a period of 2 years.
            ``(2) Applications.--To be eligible for a grant under 
        subsection (b), a State or multistate entity shall submit to 
        the Secretary an application, at such time, in such manner, and 
        containing such information as the Secretary may require.
            ``(3) Evaluation.--A State that receives a grant under 
        subsection (b) shall be evaluated at the end of the grant 
        period by an evaluation panel appointed by the Secretary.
            ``(4) Continuing support.--After the sixth year in which 
        assistance is provided to a State under a grant awarded under 
        subsection (b), the State may receive additional support under 
        this section if the State program has received satisfactory 
        evaluations with respect to program performance and the merits 
        of the State sustainability plan, as determined by the 
        Secretary.
            ``(5) Limitation.--A State shall not use in excess of 10 
        percent of the amount received under a grant to carry out 
        administrative activities under this section. Funds awarded 
        pursuant to this section shall not be used for funding direct 
        patient care.
    ``(e) Requirements on the Secretary.--In carrying out this section, 
the Secretary shall consult with the heads of other Federal agencies 
with demonstrated experience and expertise in health care and 
preventive medicine, such as the Centers for Disease Control and 
Prevention, the Substance Abuse and Mental Health Administration, the 
Health Resources and Services Administration, the National Institutes 
of Health, the Office of the National Coordinator for Health 
Information Technology, the Indian Health Service, the Agricultural 
Cooperative Extension Service of the Department of Agriculture, and 
other entities, as the Secretary determines appropriate.
    ``(f) Authorization of Appropriations.--To awards grants as 
provided in subsection (d), there are authorized to be appropriated 
$120,000,000 for each of fiscal years 2011 and 2012, and such sums as 
may be necessary to carry out this section for each of fiscal years 
2013 through 2014.''.

Subtitle F--Strengthening Primary Care and Other Workforce Improvements

SEC. 5501. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND GENERAL 
              SURGERY SERVICES.

    (a) Incentive Payment Program for Primary Care Services.--
            (1) In general.--Section 1833 of the Social Security Act 
        (42 U.S.C. 1395l) is amended by adding at the end the following 
        new subsection:
    ``(x) Incentive Payments for Primary Care Services.--
            ``(1) In general.--In the case of primary care services 
        furnished on or after January 1, 2011, and before January 1, 
        2016, by a primary care practitioner, in addition to the amount 
        of payment that would otherwise be made for such services under 
        this part, there also shall be paid (on a monthly or quarterly 
        basis) an amount equal to 10 percent of the payment amount for 
        the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) Primary care practitioner.--The term `primary 
                care practitioner' means an individual--
                            ``(i) who--
                                    ``(I) is a physician (as described 
                                in section 1861(r)(1)) who has a 
                                primary specialty designation of family 
                                medicine, internal medicine, geriatric 
                                medicine, or pediatric medicine; or
                                    ``(II) is a nurse practitioner, 
                                clinical nurse specialist, or physician 
                                assistant (as those terms are defined 
                                in section 1861(aa)(5)); and
                            ``(ii) for whom primary care services 
                        accounted for at least 60 percent of the 
                        allowed charges under this part for such 
                        physician or practitioner in a prior period as 
                        determined appropriate by the Secretary.
                    ``(B) Primary care services.--The term `primary 
                care services' means services identified, as of January 
                1, 2009, by the following HCPCS codes (and as 
                subsequently modified by the Secretary):
                            ``(i) 99201 through 99215.
                            ``(ii) 99304 through 99340.
                            ``(iii) 99341 through 99350.
            ``(3) Coordination with other payments.--The amount of the 
        additional payment for a service under this subsection and 
        subsection (m) shall be determined without regard to any 
        additional payment for the service under subsection (m) and 
        this subsection, respectively.
            ``(4) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 1878, or 
        otherwise, respecting the identification of primary care 
        practitioners under this subsection.''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by 
        adding at the end the following sentence: ``Section 1833(x) 
        shall not be taken into account in determining the amounts that 
        would otherwise be paid pursuant to the preceding sentence.''.
    (b) Incentive Payment Program for Major Surgical Procedures 
Furnished in Health Professional Shortage Areas.--
            (1) In general.--Section 1833 of the Social Security Act 
        (42 U.S.C. 1395l), as amended by subsection (a)(1), is amended 
        by adding at the end the following new subsection:
    ``(y) Incentive Payments for Major Surgical Procedures Furnished in 
Health Professional Shortage Areas.--
            ``(1) In general.--In the case of major surgical procedures 
        furnished on or after January 1, 2011, and before January 1, 
        2016, by a general surgeon in an area that is designated (under 
        section 332(a)(1)(A) of the Public Health Service Act) as a 
        health professional shortage area as identified by the 
        Secretary prior to the beginning of the year involved, in 
        addition to the amount of payment that would otherwise be made 
        for such services under this part, there also shall be paid (on 
        a monthly or quarterly basis) an amount equal to 10 percent of 
        the payment amount for the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) General surgeon.--In this subsection, the 
                term `general surgeon' means a physician (as described 
                in section 1861(r)(1)) who has designated CMS specialty 
                code 02-General Surgery as their primary specialty code 
                in the physician's enrollment under section 1866(j).
                    ``(B) Major surgical procedures.--The term `major 
                surgical procedures' means physicians' services which 
                are surgical procedures for which a 10-day or 90-day 
                global period is used for payment under the fee 
                schedule under section 1848(b).
            ``(3) Coordination with other payments.--The amount of the 
        additional payment for a service under this subsection and 
        subsection (m) shall be determined without regard to any 
        additional payment for the service under subsection (m) and 
        this subsection, respectively.
            ``(4) Application.--The provisions of paragraph (2) and (4) 
        of subsection (m) shall apply to the determination of 
        additional payments under this subsection in the same manner as 
        such provisions apply to the determination of additional 
        payments under subsection (m).''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by 
        subsection (a)(2), is amended by striking ``Section 1833(x)'' 
        and inserting ``Subsections (x) and (y) of section 1833'' in 
        the last sentence.
    (c) Budget-neutrality Adjustment.--Section 1848(c)(2)(B) of the 
Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is amended by adding 
at the end the following new clause:
                            ``(vii) Adjustment for certain physician 
                        incentive payments.--Fifty percent of the 
                        additional expenditures under this part 
                        attributable to subsections (x) and (y) of 
                        section 1833 for a year (as estimated by the 
                        Secretary) shall be taken into account in 
                        applying clause (ii)(II) for 2011 and 
                        subsequent years. In lieu of applying the 
                        budget-neutrality adjustments required under 
                        clause (ii)(II) to relative value units to 
                        account for such costs for the year, the 
                        Secretary shall apply such budget-neutrality 
                        adjustments to the conversion factor otherwise 
                        determined for the year. For 2011 and 
                        subsequent years, the Secretary shall increase 
                        the incentive payment otherwise applicable 
                        under section 1833(m) by a percent estimated to 
                        be equal to the additional expenditures 
                        estimated under the first sentence of this 
                        clause for such year that is applicable to 
                        physicians who primarily furnish services in 
                        areas designated (under section 332(a)(1)(A) of 
                        the Public Health Service Act) as health 
                        professional shortage areas.''.

SEC. 5502. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER IMPROVEMENTS.

    (a)  Expansion of Medicare-Covered Preventive Services at Federally 
Qualified Health Centers.--
            (1) In general.--Section 1861(aa)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395w (aa)(3)(A)) is amended to read as 
        follows:
                    ``(A) services of the type described subparagraphs 
                (A) through (C) of paragraph (1) and preventive 
                services (as defined in section 1861(ddd)(3)); and''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished on or after January 1, 2011.
    (b) Prospective Payment System for Federally Qualified Health 
Centers.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is 
amended by adding at the end the following new subsection:
    ``(n) Development and Implementation of Prospective Payment 
System.--
            ``(1) Development.--
                    ``(A) In general.--The Secretary shall develop a 
                prospective payment system for payment for Federally 
                qualified health services furnished by Federally 
                qualified health centers under this title. Such system 
                shall include a process for appropriately describing 
                the services furnished by Federally qualified health 
                centers.
                    ``(B) Collection of data and evaluation.--The 
                Secretary shall require Federally qualified health 
                centers to submit to the Secretary such information as 
                the Secretary may require in order to develop and 
                implement the prospective payment system under this 
                paragraph and paragraph (2), respectively, including 
                the reporting of services using HCPCS codes.
            ``(2) Implementation.--
                    ``(A) In general.--Notwithstanding section 
                1833(a)(3)(B), the Secretary shall provide, for cost 
                reporting periods beginning on or after October 1, 
                2014, for payments for Federally qualified health 
                services furnished by Federally qualified health 
                centers under this title in accordance with the 
                prospective payment system developed by the Secretary 
                under paragraph (1).
                    ``(B) Payments.--
                            ``(i) Initial payments.--The Secretary 
                        shall implement such prospective payment system 
                        so that the estimated amount of expenditures 
                        under this title for Federally qualified health 
                        services in the first year that the prospective 
                        payment system is implemented is equal to 103 
                        percent of the estimated amount of expenditures 
                        under this title that would have occurred for 
                        such services in such year if the system had 
                        not been implemented.
                            ``(ii) Payments in subsequent years.--In 
                        the year after the first year of implementation 
                        of such system, and in each subsequent year, 
                        the payment rate for Federally qualified health 
                        services furnished in the year shall be equal 
                        to the payment rate established for such 
                        services furnished in the preceding year under 
                        this subparagraph increased by the percentage 
                        increase in the MEI (as defined in 1842(i)(3)) 
                        for the year involved.''.

SEC. 5503. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (3) in paragraph (7)(E), by inserting ``or paragraph (8)'' 
        before the period at the end; and
            (4) by adding at the end the following new paragraph:
            ``(8) Distribution of additional residency positions.--
                    ``(A) Reductions in limit based on unused 
                positions.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if a hospital's reference resident 
                        level (as defined in subparagraph (H)(i)) is 
                        less than the otherwise applicable resident 
                        limit (as defined in subparagraph (H)(iii)), 
                        effective for portions of cost reporting 
                        periods occurring on or after July 1, 2011, the 
                        otherwise applicable resident limit shall be 
                        reduced by 65 percent of the difference between 
                        such otherwise applicable resident limit and 
                        such reference resident level.
                            ``(ii) Exceptions.--This subparagraph shall 
                        not apply to--
                                    ``(I) a hospital located in a rural 
                                area (as defined in subsection 
                                (d)(2)(D)(ii)) with fewer than 250 
                                acute care inpatient beds;
                                    ``(II) a hospital that was part of 
                                a qualifying entity which had a 
                                voluntary residency reduction plan 
                                approved under paragraph (6)(B) or 
                                under the authority of section 402 of 
                                Public Law 90-248, if the hospital 
                                demonstrates to the Secretary that it 
                                has a specified plan in place for 
                                filling the unused positions by not 
                                later than 2 years after the date of 
                                enactment of this paragraph; or
                                    ``(III) a hospital described in 
                                paragraph (4)(H)(v).
                    ``(B) Distribution.--
                            ``(i) In general.--The Secretary shall 
                        increase the otherwise applicable resident 
                        limit for each qualifying hospital that submits 
                        an application under this subparagraph by such 
                        number as the Secretary may approve for 
                        portions of cost reporting periods occurring on 
                        or after July 1, 2011. The aggregate number of 
                        increases in the otherwise applicable resident 
                        limit under this subparagraph shall be equal to 
                        the aggregate reduction in such limits 
                        attributable to subparagraph (A) (as estimated 
                        by the Secretary).
                            ``(ii) Requirements.--Subject to clause 
                        (iii), a hospital that receives an increase in 
                        the otherwise applicable resident limit under 
                        this subparagraph shall ensure, during the 5-
                        year period beginning on the date of such 
                        increase, that--
                                    ``(I) the number of full-time 
                                equivalent primary care residents, as 
                                defined in paragraph (5)(H) (as 
                                determined by the Secretary), excluding 
                                any additional positions under 
                                subclause (II), is not less than the 
                                average number of full-time equivalent 
                                primary care residents (as so 
                                determined) during the 3 most recent 
                                cost reporting periods ending prior to 
                                the date of enactment of this 
                                paragraph; and
                                    ``(II) not less than 75 percent of 
                                the positions attributable to such 
                                increase are in a primary care or 
                                general surgery residency (as 
                                determined by the Secretary).
                        The Secretary may determine whether a hospital 
                        has met the requirements under this clause 
                        during such 5-year period in such manner and at 
                        such time as the Secretary determines 
                        appropriate, including at the end of such 5-
                        year period.
                            ``(iii) Redistribution of positions if 
                        hospital no longer meets certain 
                        requirements.--In the case where the Secretary 
                        determines that a hospital described in clause 
                        (ii) does not meet either of the requirements 
                        under subclause (I) or (II) of such clause, the 
                        Secretary shall--
                                    ``(I) reduce the otherwise 
                                applicable resident limit of the 
                                hospital by the amount by which such 
                                limit was increased under this 
                                paragraph; and
                                    ``(II) provide for the distribution 
                                of positions attributable to such 
                                reduction in accordance with the 
                                requirements of this paragraph.
                    ``(C) Considerations in redistribution.--In 
                determining for which hospitals the increase in the 
                otherwise applicable resident limit is provided under 
                subparagraph (B), the Secretary shall take into 
                account--
                            ``(i) the demonstration likelihood of the 
                        hospital filling the positions made available 
                        under this paragraph within the first 3 cost 
                        reporting periods beginning on or after July 1, 
                        2011, as determined by the Secretary; and
                            ``(ii) whether the hospital has an 
                        accredited rural training track (as described 
                        in paragraph (4)(H)(iv)).
                    ``(D) Priority for certain areas.--In determining 
                for which hospitals the increase in the otherwise 
                applicable resident limit is provided under 
                subparagraph (B), subject to subparagraph (E), the 
                Secretary shall distribute the increase to hospitals 
                based on the following factors:
                            ``(i) Whether the hospital is located in a 
                        State with a resident-to-population ratio in 
                        the lowest quartile (as determined by the 
                        Secretary).
                            ``(ii) Whether the hospital is located in a 
                        State, a territory of the United States, or the 
                        District of Columbia that is among the top 10 
                        States, territories, or Districts in terms of 
                        the ratio of--
                                    ``(I) the total population of the 
                                State, territory, or District living in 
                                an area designated (under such section 
                                332(a)(1)(A)) as a health professional 
                                shortage area (as of the date of 
                                enactment of this paragraph); to
                                    ``(II) the total population of the 
                                State, territory, or District (as 
                                determined by the Secretary based on 
                                the most recent available population 
                                data published by the Bureau of the 
                                Census).
                            ``(iii) Whether the hospital is located in 
                        a rural area (as defined in subsection 
                        (d)(2)(D)(ii)).
                    ``(E) Reservation of positions for certain 
                hospitals.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall reserve the positions 
                        available for distribution under this paragraph 
                        as follows:
                                    ``(I) 70 percent of such positions 
                                for distribution to hospitals described 
                                in clause (i) of subparagraph (D).
                                    ``(II) 30 percent of such positions 
                                for distribution to hospitals described 
                                in clause (ii) and (iii) of such 
                                subparagraph.
                            ``(ii) Exception if positions not 
                        redistributed by july 1, 2011.--In the case 
                        where the Secretary does not distribute 
                        positions to hospitals in accordance with 
                        clause (i) by July 1, 2011, the Secretary shall 
                        distribute such positions to other hospitals in 
                        accordance with the considerations described in 
                        subparagraph (C) and the priority described in 
                        subparagraph (D).
                    ``(F) Limitation.--A hospital may not receive more 
                than 75 full-time equivalent additional residency 
                positions under this paragraph.
                    ``(G) Application of per resident amounts for 
                primary care and nonprimary care.--With respect to 
                additional residency positions in a hospital 
                attributable to the increase provided under this 
                paragraph, the approved FTE per resident amounts are 
                deemed to be equal to the hospital per resident amounts 
                for primary care and nonprimary care computed under 
                paragraph (2)(D) for that hospital.
                    ``(H) Definitions.--In this paragraph:
                            ``(i) Reference resident level.--The term 
                        `reference resident level' means, with respect 
                        to a hospital, the highest resident level for 
                        any of the 3 most recent cost reporting periods 
                        (ending before the date of the enactment of 
                        this paragraph) of the hospital for which a 
                        cost report has been settled (or, if not, 
                        submitted (subject to audit)), as determined by 
                        the Secretary.
                            ``(ii) Resident level.--The term `resident 
                        level' has the meaning given such term in 
                        paragraph (7)(C)(i).
                            ``(iii) Otherwise applicable resident 
                        limit.--The term `otherwise applicable resident 
                        limit' means, with respect to a hospital, the 
                        limit otherwise applicable under subparagraphs 
                        (F)(i) and (H) of paragraph (4) on the resident 
                        level for the hospital determined without 
                        regard to this paragraph but taking into 
                        account paragraph (7)(A).''.
    (b) IME.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
        sentence, is amended--
                    (A) by striking ``subsection (h)(7)'' and inserting 
                ``subsections (h)(7) and (h)(8)''; and
                    (B) by striking ``it applies'' and inserting ``they 
                apply''.
            (2) Conforming amendment.--Section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
        adding at the end the following clause:
            ``(x) For discharges occurring on or after July 1, 2011, 
        insofar as an additional payment amount under this subparagraph 
        is attributable to resident positions distributed to a hospital 
        under subsection (h)(8)(B), the indirect teaching adjustment 
        factor shall be computed in the same manner as provided under 
        clause (ii) with respect to such resident positions.''.
    (c) Conforming Amendment.--Section 422(b)(2) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173) is amended by striking ``section 1886(h)(7)'' and all that 
follows and inserting ``paragraphs (7) and (8) of subsection (h) of 
section 1886 of the Social Security Act''.

SEC. 5504. COUNTING RESIDENT TIME IN NONPROVIDER SETTINGS.

    (a) GME.--Section 1886(h)(4)(E) of the Social Security Act (42 
U.S.C. 1395ww(h)(4)(E)) is amended--
            (1) by striking ``shall be counted and that all the time'' 
        and inserting ``shall be counted and that--
                            ``(i) effective for cost reporting periods 
                        beginning before July 1, 2010, all the time;'';
            (2) in clause (i), as inserted by paragraph (1), by 
        striking the period at the end and inserting ``; and'';
            (3) by inserting after clause (i), as so inserted, the 
        following new clause:
                            ``(ii) effective for cost reporting periods 
                        beginning on or after July 1, 2010, all the 
                        time so spent by a resident shall be counted 
                        towards the determination of full-time 
                        equivalency, without regard to the setting in 
                        which the activities are performed, if a 
                        hospital incurs the costs of the stipends and 
                        fringe benefits of the resident during the time 
                        the resident spends in that setting. If more 
                        than one hospital incurs these costs, either 
                        directly or through a third party, such 
                        hospitals shall count a proportional share of 
                        the time, as determined by written agreement 
                        between the hospitals, that a resident spends 
                        training in that setting.''; and
            (4) by adding at the end the following flush sentence:
                ``Any hospital claiming under this subparagraph for 
                time spent in a nonprovider setting shall maintain and 
                make available to the Secretary records regarding the 
                amount of such time and such amount in comparison with 
                amounts of such time in such base year as the Secretary 
                shall specify.''.
    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)) is amended--
            (1) by striking ``(iv) Effective for discharges occurring 
        on or after October 1, 1997'' and inserting ``(iv)(I) Effective 
        for discharges occurring on or after October 1, 1997, and 
        before July 1, 2010''; and
            (2) by inserting after clause (I), as inserted by paragraph 
        (1), the following new subparagraph:
            ``(II) Effective for discharges occurring on or after July 
        1, 2010, all the time spent by an intern or resident in patient 
        care activities in a nonprovider setting shall be counted 
        towards the determination of full-time equivalency if a 
        hospital incurs the costs of the stipends and fringe benefits 
        of the intern or resident during the time the intern or 
        resident spends in that setting. If more than one hospital 
        incurs these costs, either directly or through a third party, 
        such hospitals shall count a proportional share of the time, as 
        determined by written agreement between the hospitals, that a 
        resident spends training in that setting.''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. 1395ww(h)).

SEC. 5505. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
              ACTIVITIES AND OTHER ACTIVITIES.

    (a) GME.--Section 1886(h) of the Social Security Act (42 U.S.C. 
1395ww(h)), as amended by section 5504, is amended--
            (1) in paragraph (4)--
                    (A) in subparagraph (E), by striking ``Such rules'' 
                and inserting ``Subject to subparagraphs (J) and (K), 
                such rules''; and
                    (B) by adding at the end the following new 
                subparagraphs:
                    ``(J) Treatment of certain nonprovider and didactic 
                activities.--Such rules shall provide that all time 
                spent by an intern or resident in an approved medical 
                residency training program in a nonprovider setting 
                that is primarily engaged in furnishing patient care 
                (as defined in paragraph (5)(K)) in non-patient care 
                activities, such as didactic conferences and seminars, 
                but not including research not associated with the 
                treatment or diagnosis of a particular patient, as such 
                time and activities are defined by the Secretary, shall 
                be counted toward the determination of full-time 
                equivalency.
                    ``(K) Treatment of certain other activities.--In 
                determining the hospital's number of full-time 
                equivalent residents for purposes of this subsection, 
                all the time that is spent by an intern or resident in 
                an approved medical residency training program on 
                vacation, sick leave, or other approved leave, as such 
                time is defined by the Secretary, and that does not 
                prolong the total time the resident is participating in 
                the approved program beyond the normal duration of the 
                program shall be counted toward the determination of 
                full-time equivalency.''; and
            (2) in paragraph (5), by adding at the end the following 
        new subparagraph:
                    ``(K) Nonprovider setting that is primarily engaged 
                in furnishing patient care.--The term `nonprovider 
                setting that is primarily engaged in furnishing patient 
                care' means a nonprovider setting in which the primary 
                activity is the care and treatment of patients, as 
                defined by the Secretary.''.
    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following 
new clause:
                            ``(x)(I) The provisions of subparagraph (K) 
                        of subsection (h)(4) shall apply under this 
                        subparagraph in the same manner as they apply 
                        under such subsection.
                            ``(II) In determining the hospital's number 
                        of full-time equivalent residents for purposes 
                        of this subparagraph, all the time spent by an 
                        intern or resident in an approved medical 
                        residency training program in non-patient care 
                        activities, such as didactic conferences and 
                        seminars, as such time and activities are 
                        defined by the Secretary, that occurs in the 
                        hospital shall be counted toward the 
                        determination of full-time equivalency if the 
                        hospital--
                                    ``(aa) is recognized as a 
                                subsection (d) hospital;
                                    ``(bb) is recognized as a 
                                subsection (d) Puerto Rico hospital;
                                    ``(cc) is reimbursed under a 
                                reimbursement system authorized under 
                                section 1814(b)(3); or
                                    ``(dd) is a provider-based hospital 
                                outpatient department.
                            ``(III) In determining the hospital's 
                        number of full-time equivalent residents for 
                        purposes of this subparagraph, all the time 
                        spent by an intern or resident in an approved 
                        medical residency training program in research 
                        activities that are not associated with the 
                        treatment or diagnosis of a particular patient, 
                        as such time and activities are defined by the 
                        Secretary, shall not be counted toward the 
                        determination of full-time equivalency.''.
    (c) Effective Dates.--
            (1) In general.--Except as otherwise provided, the 
        Secretary of Health and Human Services shall implement the 
        amendments made by this section in a manner so as to apply to 
        cost reporting periods beginning on or after January 1, 1983.
            (2) GME.--Section 1886(h)(4)(J) of the Social Security Act, 
        as added by subsection (a)(1)(B), shall apply to cost reporting 
        periods beginning on or after July 1, 2009.
            (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social 
        Security Act, as added by subsection (b), shall apply to cost 
        reporting periods beginning on or after October 1, 2001. Such 
        section, as so added, shall not give rise to any inference as 
        to how the law in effect prior to such date should be 
        interpreted.

SEC. 5506. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED 
              HOSPITALS.

    (a) GME.--Section 1886(h)(4)(H) of the Social Security Act (42 
U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the 
following new clause:
                            ``(vi) Redistribution of residency slots 
                        after a hospital closes.--
                                    ``(I) In general.--Subject to the 
                                succeeding provisions of this clause, 
                                the Secretary shall, by regulation, 
                                establish a process under which, in the 
                                case where a hospital (other than a 
                                hospital described in clause (v)) with 
                                an approved medical residency program 
                                closes on or after a date that is 2 
                                years before the date of enactment of 
                                this clause, the Secretary shall 
                                increase the otherwise applicable 
                                resident limit under this paragraph for 
                                other hospitals in accordance with this 
                                clause.
                                    ``(II) Priority for hospitals in 
                                certain areas.--Subject to the 
                                succeeding provisions of this clause, 
                                in determining for which hospitals the 
                                increase in the otherwise applicable 
                                resident limit is provided under such 
                                process, the Secretary shall distribute 
                                the increase to hospitals in the 
                                following priority order (with 
                                preference given within each category 
                                to hospitals that are members of the 
                                same affiliated group (as defined by 
                                the Secretary under clause (ii)) as the 
                                closed hospital):
                                            ``(aa) First, to hospitals 
                                        located in the same core-based 
                                        statistical area as, or a core-
                                        based statistical area 
                                        contiguous to, the hospital 
                                        that closed.
                                            ``(bb) Second, to hospitals 
                                        located in the same State as 
                                        the hospital that closed.
                                            ``(cc) Third, to hospitals 
                                        located in the same region of 
                                        the country as the hospital 
                                        that closed.
                                            ``(dd) Fourth, only if the 
                                        Secretary is not able to 
                                        distribute the increase to 
                                        hospitals described in item 
                                        (cc), to qualifying hospitals 
                                        in accordance with the 
                                        provisions of paragraph (8).
                                    ``(III) Requirement hospital likely 
                                to fill position within certain time 
                                period.--The Secretary may only 
                                increase the otherwise applicable 
                                resident limit of a hospital under such 
                                process if the Secretary determines the 
                                hospital has demonstrated a likelihood 
                                of filling the positions made available 
                                under this clause within 3 years.
                                    ``(IV) Limitation.--The aggregate 
                                number of increases in the otherwise 
                                applicable resident limits for 
                                hospitals under this clause shall be 
                                equal to the number of resident 
                                positions in the approved medical 
                                residency programs that closed on or 
                                after the date described in subclause 
                                (I).
                                    ``(V) Administration.--Chapter 35 
                                of title 44, United States Code, shall 
                                not apply to the implementation of this 
                                clause.''.
    (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by 
section 5503, is amended by striking ``subsections (h)(7) and (h)(8)'' 
and inserting ``subsections (h)(4)(H)(vi), (h)(7), and (h)(8)''.
    (c) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled hospital 
cost reports as to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act on the issue of 
payment for indirect costs of medical education under section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or 
for direct graduate medical education costs under section 1886(h) of 
such Act (42 U.S.C. Section 1395ww(h)).
    (d) Effect on Temporary FTE Cap Adjustments.--The Secretary of 
Health and Human Services shall give consideration to the effect of the 
amendments made by this section on any temporary adjustment to a 
hospital's FTE cap under section 413.79(h) of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act) in 
order to ensure that there is no duplication of FTE slots. Such 
amendments shall not affect the application of section 1886(h)(4)(H)(v) 
of the Social Security Act (42 U.S.C. 1395ww(h)(4)(H)(v)).
    (e) Conforming Amendment.--Section 1886(h)(7)(E) of the Social 
Security Act (42 U.S.C. 1395ww(h)(7)(E)), as amended by section 
5503(a), is amended by striking ``paragraph or paragraph (8)'' and 
inserting ``this paragraph, paragraph (8), or paragraph (4)(H)(vi)''.

SEC. 5507. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
              WORKFORCE NEEDS; EXTENSION OF FAMILY-TO-FAMILY HEALTH 
              INFORMATION CENTERS.

    (a) Authority to Conduct Demonstration Projects.--Title XX of the 
Social Security Act (42 U.S.C. 1397 et seq.) is amended by adding at 
the end the following:

``SEC. 2008. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
              WORKFORCE NEEDS.

    ``(a) Demonstration Projects To Provide Low-Income Individuals With 
Opportunities for Education, Training, and Career Advancement To 
Address Health Professions Workforce Needs.--
            ``(1) Authority to award grants.--The Secretary, in 
        consultation with the Secretary of Labor, shall award grants to 
        eligible entities to conduct demonstration projects that are 
        designed to provide eligible individuals with the opportunity 
        to obtain education and training for occupations in the health 
        care field that pay well and are expected to either experience 
        labor shortages or be in high demand.
            ``(2) Requirements.--
                    ``(A) Aid and supportive services.--
                            ``(i) In general.--A demonstration project 
                        conducted by an eligible entity awarded a grant 
                        under this section shall, if appropriate, 
                        provide eligible individuals participating in 
                        the project with financial aid, child care, 
                        case management, and other supportive services.
                            ``(ii) Treatment.--Any aid, services, or 
                        incentives provided to an eligible beneficiary 
                        participating in a demonstration project under 
                        this section shall not be considered income, 
                        and shall not be taken into account for 
                        purposes of determining the individual's 
                        eligibility for, or amount of, benefits under 
                        any means-tested program.
                    ``(B) Consultation and coordination.--An eligible 
                entity applying for a grant to carry out a 
                demonstration project under this section shall 
                demonstrate in the application that the entity has 
                consulted with the State agency responsible for 
                administering the State TANF program, the local 
                workforce investment board in the area in which the 
                project is to be conducted (unless the applicant is 
                such board), the State workforce investment board 
                established under section 111 of the Workforce 
                Investment Act of 1998, and the State Apprenticeship 
                Agency recognized under the Act of August 16, 1937 
                (commonly known as the `National Apprenticeship Act') 
                (or if no agency has been recognized in the State, the 
                Office of Apprenticeship of the Department of Labor) 
                and that the project will be carried out in 
                coordination with such entities.
                    ``(C) Assurance of opportunities for indian 
                populations.--The Secretary shall award at least 3 
                grants under this subsection to an eligible entity that 
                is an Indian tribe, tribal organization, or Tribal 
                College or University.
            ``(3) Reports and evaluation.--
                    ``(A) Eligible entities.--An eligible entity 
                awarded a grant to conduct a demonstration project 
                under this subsection shall submit interim reports to 
                the Secretary on the activities carried out under the 
                project and a final report on such activities upon the 
                conclusion of the entities' participation in the 
                project. Such reports shall include assessments of the 
                effectiveness of such activities with respect to 
                improving outcomes for the eligible individuals 
                participating in the project and with respect to 
                addressing health professions workforce needs in the 
                areas in which the project is conducted.
                    ``(B) Evaluation.--The Secretary shall, by grant, 
                contract, or interagency agreement, evaluate the 
                demonstration projects conducted under this subsection. 
                Such evaluation shall include identification of 
                successful activities for creating opportunities for 
                developing and sustaining, particularly with respect to 
                low-income individuals and other entry-level workers, a 
                health professions workforce that has accessible entry 
                points, that meets high standards for education, 
                training, certification, and professional development, 
                and that provides increased wages and affordable 
                benefits, including health care coverage, that are 
                responsive to the workforce's needs.
                    ``(C) Report to congress.--The Secretary shall 
                submit interim reports and, based on the evaluation 
                conducted under subparagraph (B), a final report to 
                Congress on the demonstration projects conducted under 
                this subsection.
            ``(4) Definitions.--In this subsection:
                    ``(A) Eligible entity.--The term `eligible entity' 
                means a State, an Indian tribe or tribal organization, 
                an institution of higher education, a local workforce 
                investment board established under section 117 of the 
                Workforce Investment Act of 1998, a sponsor of an 
                apprenticeship program registered under the National 
                Apprenticeship Act or a community-based organization.
                    ``(B) Eligible individual.--
                            ``(i) In general.--The term `eligible 
                        individual' means a individual receiving 
                        assistance under the State TANF program.
                            ``(ii) Other low-income individuals.--Such 
                        term may include other low-income individuals 
                        described by the eligible entity in its 
                        application for a grant under this section.
                    ``(C) Indian tribe; tribal organization.--The terms 
                `Indian tribe' and `tribal organization' have the 
                meaning given such terms in section 4 of the Indian 
                Self-Determination and Education Assistance Act (25 
                U.S.C. 450b).
                    ``(D) Institution of higher education.--The term 
                `institution of higher education' has the meaning given 
                that term in section 101 of the Higher Education Act of 
                1965 (20 U.S.C. 1001).
                    ``(E) State.--The term `State' means each of the 50 
                States, the District of Columbia, the Commonwealth of 
                Puerto Rico, the United States Virgin Islands, Guam, 
                and American Samoa.
                    ``(F) State tanf program.--The term `State TANF 
                program' means the temporary assistance for needy 
                families program funded under part A of title IV.
                    ``(G) Tribal college or university.--The term 
                `Tribal College or University' has the meaning given 
                that term in section 316(b) of the Higher Education Act 
                of 1965 (20 U.S.C. 1059c(b)).
    ``(b) Demonstration Project To Develop Training and Certification 
Programs for Personal or Home Care Aides.--
            ``(1) Authority to award grants.--Not later than 18 months 
        after the date of enactment of this section, the Secretary 
        shall award grants to eligible entities that are States to 
        conduct demonstration projects for purposes of developing core 
        training competencies and certification programs for personal 
        or home care aides. The Secretary shall--
                    ``(A) evaluate the efficacy of the core training 
                competencies described in paragraph (3)(A) for newly 
                hired personal or home care aides and the methods used 
                by States to implement such core training competencies 
                in accordance with the issues specified in paragraph 
                (3)(B); and
                    ``(B) ensure that the number of hours of training 
                provided by States under the demonstration project with 
                respect to such core training competencies are not less 
                than the number of hours of training required under any 
                applicable State or Federal law or regulation.
            ``(2) Duration.--A demonstration project shall be conducted 
        under this subsection for not less than 3 years.
            ``(3) Core training competencies for personal or home care 
        aides.--
                    ``(A) In general.--The core training competencies 
                for personal or home care aides described in this 
                subparagraph include competencies with respect to the 
                following areas:
                            ``(i) The role of the personal or home care 
                        aide (including differences between a personal 
                        or home care aide employed by an agency and a 
                        personal or home care aide employed directly by 
                        the health care consumer or an independent 
                        provider).
                            ``(ii) Consumer rights, ethics, and 
                        confidentiality (including the role of proxy 
                        decision-makers in the case where a health care 
                        consumer has impaired decision-making 
                        capacity).
                            ``(iii) Communication, cultural and 
                        linguistic competence and sensitivity, problem 
                        solving, behavior management, and relationship 
                        skills.
                            ``(iv) Personal care skills.
                            ``(v) Health care support.
                            ``(vi) Nutritional support.
                            ``(vii) Infection control.
                            ``(viii) Safety and emergency training.
                            ``(ix) Training specific to an individual 
                        consumer's needs (including older individuals, 
                        younger individuals with disabilities, 
                        individuals with developmental disabilities, 
                        individuals with dementia, and individuals with 
                        mental and behavioral health needs).
                            ``(x) Self-Care.
                    ``(B) Implementation.--The implementation issues 
                specified in this subparagraph include the following:
                            ``(i) The length of the training.
                            ``(ii) The appropriate trainer to student 
                        ratio.
                            ``(iii) The amount of instruction time 
                        spent in the classroom as compared to on-site 
                        in the home or a facility.
                            ``(iv) Trainer qualifications.
                            ``(v) Content for a `hands-on' and written 
                        certification exam.
                            ``(vi) Continuing education requirements.
            ``(4) Application and selection criteria.--
                    ``(A) In general.--
                            ``(i) Number of states.--The Secretary 
                        shall enter into agreements with not more than 
                        6 States to conduct demonstration projects 
                        under this subsection.
                            ``(ii) Requirements for states.--An 
                        agreement entered into under clause (i) shall 
                        require that a participating State--
                                    ``(I) implement the core training 
                                competencies described in paragraph 
                                (3)(A); and
                                    ``(II) develop written materials 
                                and protocols for such core training 
                                competencies, including the development 
                                of a certification test for personal or 
                                home care aides who have completed such 
                                training competencies.
                            ``(iii) Consultation and collaboration with 
                        community and vocational colleges.--The 
                        Secretary shall encourage participating States 
                        to consult with community and vocational 
                        colleges regarding the development of curricula 
                        to implement the project with respect to 
                        activities, as applicable, which may include 
                        consideration of such colleges as partners in 
                        such implementation.
                    ``(B) Application and eligibility.--A State seeking 
                to participate in the project shall--
                            ``(i) submit an application to the 
                        Secretary containing such information and at 
                        such time as the Secretary may specify;
                            ``(ii) meet the selection criteria 
                        established under subparagraph (C); and
                            ``(iii) meet such additional criteria as 
                        the Secretary may specify.
                    ``(C) Selection criteria.--In selecting States to 
                participate in the program, the Secretary shall 
                establish criteria to ensure (if applicable with 
                respect to the activities involved)--
                            ``(i) geographic and demographic diversity;
                            ``(ii) that participating States offer 
                        medical assistance for personal care services 
                        under the State Medicaid plan;
                            ``(iii) that the existing training 
                        standards for personal or home care aides in 
                        each participating State--
                                    ``(I) are different from such 
                                standards in the other participating 
                                States; and
                                    ``(II) are different from the core 
                                training competencies described in 
                                paragraph (3)(A);
                            ``(iv) that participating States do not 
                        reduce the number of hours of training required 
                        under applicable State law or regulation after 
                        being selected to participate in the project; 
                        and
                            ``(v) that participating States recruit a 
                        minimum number of eligible health and long-term 
                        care providers to participate in the project.
                    ``(D) Technical assistance.--The Secretary shall 
                provide technical assistance to States in developing 
                written materials and protocols for such core training 
                competencies.
            ``(5) Evaluation and report.--
                    ``(A) Evaluation.--The Secretary shall develop an 
                experimental or control group testing protocol in 
                consultation with an independent evaluation contractor 
                selected by the Secretary. Such contractor shall 
                evaluate--
                            ``(i) the impact of core training 
                        competencies described in paragraph (3)(A), 
                        including curricula developed to implement such 
                        core training competencies, for personal or 
                        home care aides within each participating State 
                        on job satisfaction, mastery of job skills, 
                        beneficiary and family caregiver satisfaction 
                        with services, and additional measures 
                        determined by the Secretary in consultation 
                        with the expert panel;
                            ``(ii) the impact of providing such core 
                        training competencies on the existing training 
                        infrastructure and resources of States; and
                            ``(iii) whether a minimum number of hours 
                        of initial training should be required for 
                        personal or home care aides and, if so, what 
                        minimum number of hours should be required.
                    ``(B) Reports.--
                            ``(i) Report on initial implementation.--
                        Not later than 2 years after the date of 
                        enactment of this section, the Secretary shall 
                        submit to Congress a report on the initial 
                        implementation of activities conducted under 
                        the demonstration project, including any 
                        available results of the evaluation conducted 
                        under subparagraph (A) with respect to such 
                        activities, together with such recommendations 
                        for legislation or administrative action as the 
                        Secretary determines appropriate.
                            ``(ii) Final report.--Not later than 1 year 
                        after the completion of the demonstration 
                        project, the Secretary shall submit to Congress 
                        a report containing the results of the 
                        evaluation conducted under subparagraph (A), 
                        together with such recommendations for 
                        legislation or administrative action as the 
                        Secretary determines appropriate.
            ``(6) Definitions.--In this subsection:
                    ``(A) Eligible health and long-term care 
                provider.--The term `eligible health and long-term care 
                provider' means a personal or home care agency 
                (including personal or home care public authorities), a 
                nursing home, a home health agency (as defined in 
                section 1861(o)), or any other health care provider the 
                Secretary determines appropriate which--
                            ``(i) is licensed or authorized to provide 
                        services in a participating State; and
                            ``(ii) receives payment for services under 
                        title XIX.
                    ``(B) Personal care services.--The term `personal 
                care services' has the meaning given such term for 
                purposes of title XIX.
                    ``(C) Personal or home care aide.--The term 
                `personal or home care aide' means an individual who 
                helps individuals who are elderly, disabled, ill, or 
                mentally disabled (including an individual with 
                Alzheimer's disease or other dementia) to live in their 
                own home or a residential care facility (such as a 
                nursing home, assisted living facility, or any other 
                facility the Secretary determines appropriate) by 
                providing routine personal care services and other 
                appropriate services to the individual.
                    ``(D) State.--The term `State' has the meaning 
                given that term for purposes of title XIX.
    ``(c) Funding.--
            ``(1) In general.--Subject to paragraph (2), out of any 
        funds in the Treasury not otherwise appropriated, there are 
        appropriated to the Secretary to carry out subsections (a) and 
        (b), $85,000,000 for each of fiscal years 2010 through 2014.
            ``(2) Training and certification programs for personal and 
        home care aides.--With respect to the demonstration projects 
        under subsection (b), the Secretary shall use $5,000,000 of the 
        amount appropriated under paragraph (1) for each of fiscal 
        years 2010 through 2012 to carry out such projects. No funds 
        appropriated under paragraph (1) shall be used to carry out 
        demonstration projects under subsection (b) after fiscal year 
        2012.
    ``(d) Nonapplication.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        preceding sections of this title shall not apply to grant 
        awarded under this section.
            ``(2) Limitations on use of grants.--Section 2005(a) (other 
        than paragraph (6)) shall apply to a grant awarded under this 
        section to the same extent and in the same manner as such 
        section applies to payments to States under this title.''.
    (b) Extension of Family-To-Family Health Information Centers.--
Section 501(c)(1)(A)(iii) of the Social Security Act (42 U.S.C. 
701(c)(1)(A)(iii)) is amended by striking ``fiscal year 2009'' and 
inserting ``each of fiscal years 2009 through 2012''.

SEC. 5508. INCREASING TEACHING CAPACITY.

    (a) Teaching Health Centers Training and Enhancement.--Part C of 
title VII of the Public Health Service Act (42 U.S.C. 293k et. seq.), 
as amended by section 5303, is further amended by inserting after 
section 749 the following:

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

    ``(a) Program Authorized.--The Secretary may award grants under 
this section to teaching health centers for the purpose of establishing 
new accredited or expanded primary care residency programs.
    ``(b) Amount and Duration.--Grants awarded under this section shall 
be for a term of not more than 3 years and the maximum award may not be 
more than $500,000.
    ``(c) Use of Funds.--Amounts provided under a grant under this 
section shall be used to cover the costs of--
            ``(1) establishing or expanding a primary care residency 
        training program described in subsection (a), including costs 
        associated with--
                    ``(A) curriculum development;
                    ``(B) recruitment, training and retention of 
                residents and faculty:
                    ``(C) accreditation by the Accreditation Council 
                for Graduate Medical Education (ACGME), the American 
                Dental Association (ADA), or the American Osteopathic 
                Association (AOA); and
                    ``(D) faculty salaries during the development 
                phase; and
            ``(2) technical assistance provided by an eligible entity.
    ``(d) Application.--A teaching health center seeking a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require.
    ``(e) Preference for Certain Applications.--In selecting recipients 
for grants under this section, the Secretary shall give preference to 
any such application that documents an existing affiliation agreement 
with an area health education center program as defined in sections 751 
and 799B.
    ``(f) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means an 
        organization capable of providing technical assistance 
        including an area health education center program as defined in 
        sections 751 and 799B.
            ``(2) Primary care residency program.--The term `primary 
        care residency program' means an approved graduate medical 
        residency training program (as defined in section 340H) in 
        family medicine, internal medicine, pediatrics, internal 
        medicine-pediatrics, obstetrics and gynecology, psychiatry, 
        general dentistry, pediatric dentistry, and geriatrics.
            ``(3) Teaching health center.--
                    ``(A) In general.--The term `teaching health 
                center' means an entity that--
                            ``(i) is a community based, ambulatory 
                        patient care center; and
                            ``(ii) operates a primary care residency 
                        program.
                    ``(B) Inclusion of certain entities.--Such term 
                includes the following:
                            ``(i) A Federally qualified health center 
                        (as defined in section 1905(l)(2)(B), of the 
                        Social Security Act).
                            ``(ii) A community mental health center (as 
                        defined in section 1861(ff)(3)(B) of the Social 
                        Security Act).
                            ``(iii) A rural health clinic, as defined 
                        in section 1861(aa) of the Social Security Act.
                            ``(iv) A health center operated by the 
                        Indian Health Service, an Indian tribe or 
                        tribal organization, or an urban Indian 
                        organization (as defined in section 4 of the 
                        Indian Health Care Improvement Act).
                            ``(v) An entity receiving funds under title 
                        X of the Public Health Service Act.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated, $25,000,000 for fiscal year 2010, $50,000,000 for fiscal 
year 2011, $50,000,000 for fiscal year 2012, and such sums as may be 
necessary for each fiscal year thereafter to carry out this section. 
Not to exceed $5,000,000 annually may be used for technical assistance 
program grants.''.
    (b) National Health Service Corps Teaching Capacity.--Section 
338C(a) of the Public Health Service Act (42 U.S.C. 254m(a)) is amended 
to read as follows:
    ``(a) Service in Full-time Clinical Practice.--Except as provided 
in section 338D, each individual who has entered into a written 
contract with the Secretary under section 338A or 338B shall provide 
service in the full-time clinical practice of such individual's 
profession as a member of the Corps for the period of obligated service 
provided in such contract. For the purpose of calculating time spent in 
full-time clinical practice under this subsection, up to 50 percent of 
time spent teaching by a member of the Corps may be counted toward his 
or her service obligation.''.
    (c) Payments to Qualified Teaching Health Centers.--Part D of title 
III of the Public Health Service Act (42 U.S.C. 254b et seq.) is 
amended by adding at the end the following:

   ``Subpart XI--Support of Graduate Medical Education in Qualified 
                        Teaching Health Centers

``SEC. 340H. PROGRAM OF PAYMENTS TO TEACHING HEALTH CENTERS THAT 
              OPERATE GRADUATE MEDICAL EDUCATION PROGRAMS.

    ``(a) Payments.--Subject to subsection (h)(2), the Secretary shall 
make payments under this section for direct expenses and for indirect 
expenses to qualified teaching health centers that are listed as 
sponsoring institutions by the relevant accrediting body for expansion 
of existing or establishment of new approved graduate medical residency 
training programs.
    ``(b) Amount of Payments.--
            ``(1) In general.--Subject to paragraph (2), the amounts 
        payable under this section to qualified teaching health centers 
        for an approved graduate medical residency training program for 
        a fiscal year are each of the following amounts:
                    ``(A) Direct expense amount.--The amount determined 
                under subsection (c) for direct expenses associated 
                with sponsoring approved graduate medical residency 
                training programs.
                    ``(B) Indirect expense amount.--The amount 
                determined under subsection (d) for indirect expenses 
                associated with the additional costs relating to 
                teaching residents in such programs.
            ``(2) Capped amount.--
                    ``(A) In general.--The total of the payments made 
                to qualified teaching health centers under paragraph 
                (1)(A) or paragraph (1)(B) in a fiscal year shall not 
                exceed the amount of funds appropriated under 
                subsection (g) for such payments for that fiscal year.
                    ``(B) Limitation.--The Secretary shall limit the 
                funding of full-time equivalent residents in order to 
                ensure the direct and indirect payments as determined 
                under subsection (c) and (d) do not exceed the total 
                amount of funds appropriated in a fiscal year under 
                subsection (g).
    ``(c) Amount of Payment for Direct Graduate Medical Education.--
            ``(1) In general.--The amount determined under this 
        subsection for payments to qualified teaching health centers 
        for direct graduate expenses relating to approved graduate 
        medical residency training programs for a fiscal year is equal 
        to the product of--
                    ``(A) the updated national per resident amount for 
                direct graduate medical education, as determined under 
                paragraph (2); and
                    ``(B) the average number of full-time equivalent 
                residents in the teaching health center's graduate 
                approved medical residency training programs as 
                determined under section 1886(h)(4) of the Social 
                Security Act (without regard to the limitation under 
                subparagraph (F) of such section) during the fiscal 
                year.
            ``(2) Updated national per resident amount for direct 
        graduate medical education.--The updated per resident amount 
        for direct graduate medical education for a qualified teaching 
        health center for a fiscal year is an amount determined as 
        follows:
                    ``(A) Determination of qualified teaching health 
                center per resident amount.--The Secretary shall 
                compute for each individual qualified teaching health 
                center a per resident amount--
                            ``(i) by dividing the national average per 
                        resident amount computed under section 
                        340E(c)(2)(D) into a wage-related portion and a 
                        non-wage related portion by applying the 
                        proportion determined under subparagraph (B);
                            ``(ii) by multiplying the wage-related 
                        portion by the factor applied under section 
                        1886(d)(3)(E) of the Social Security Act (but 
                        without application of section 4410 of the 
                        Balanced Budget Act of 1997 (42 U.S.C. 1395ww 
                        note)) during the preceding fiscal year for the 
                        teaching health center's area; and
                            ``(iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    ``(B) Updating rate.--The Secretary shall update 
                such per resident amount for each such qualified 
                teaching health center as determined appropriate by the 
                Secretary.
    ``(d) Amount of Payment for Indirect Medical Education.--
            ``(1) In general.--The amount determined under this 
        subsection for payments to qualified teaching health centers 
        for indirect expenses associated with the additional costs of 
        teaching residents for a fiscal year is equal to an amount 
        determined appropriate by the Secretary.
            ``(2) Factors.--In determining the amount under paragraph 
        (1), the Secretary shall--
                    ``(A) evaluate indirect training costs relative to 
                supporting a primary care residency program in 
                qualified teaching health centers; and
                    ``(B) based on this evaluation, assure that the 
                aggregate of the payments for indirect expenses under 
                this section and the payments for direct graduate 
                medical education as determined under subsection (c) in 
                a fiscal year do not exceed the amount appropriated for 
                such expenses as determined in subsection (g).
            ``(3) Interim payment.--Before the Secretary makes a 
        payment under this subsection pursuant to a determination of 
        indirect expenses under paragraph (1), the Secretary may 
        provide to qualified teaching health centers a payment, in 
        addition to any payment made under subsection (c), for expected 
        indirect expenses associated with the additional costs of 
        teaching residents for a fiscal year, based on an estimate by 
        the Secretary.
    ``(e) Clarification Regarding Relationship to Other Payments for 
Graduate Medical Education.--Payments under this section--
            ``(1) shall be in addition to any payments--
                    ``(A) for the indirect costs of medical education 
                under section 1886(d)(5)(B) of the Social Security Act;
                    ``(B) for direct graduate medical education costs 
                under section 1886(h) of such Act; and
                    ``(C) for direct costs of medical education under 
                section 1886(k) of such Act;
            ``(2) shall not be taken into account in applying the 
        limitation on the number of total full-time equivalent 
        residents under subparagraphs (F) and (G) of section 1886(h)(4) 
        of such Act and clauses (v), (vi)(I), and (vi)(II) of section 
        1886(d)(5)(B) of such Act for the portion of time that a 
        resident rotates to a hospital; and
            ``(3) shall not include the time in which a resident is 
        counted toward full-time equivalency by a hospital under 
        paragraph (2) or under section 1886(d)(5)(B)(iv) of the Social 
        Security Act, section 1886(h)(4)(E) of such Act, or section 
        340E of this Act.
    ``(f) Reconciliation.--The Secretary shall determine any changes to 
the number of residents reported by a hospital in the application of 
the hospital for the current fiscal year to determine the final amount 
payable to the hospital for the current fiscal year for both direct 
expense and indirect expense amounts. Based on such determination, the 
Secretary shall recoup any overpayments made to pay any balance due to 
the extent possible. The final amount so determined shall be considered 
a final intermediary determination for the purposes of section 1878 of 
the Social Security Act and shall be subject to administrative and 
judicial review under that section in the same manner as the amount of 
payment under section 1186(d) of such Act is subject to review under 
such section.
    ``(g) Funding.--To carry out this section, there are appropriated 
such sums as may be necessary, not to exceed $230,000,000, for the 
period of fiscal years 2011 through 2015.
    ``(h) Annual Reporting Required.--
            ``(1) Annual report.--The report required under this 
        paragraph for a qualified teaching health center for a fiscal 
        year is a report that includes (in a form and manner specified 
        by the Secretary) the following information for the residency 
        academic year completed immediately prior to such fiscal year:
                    ``(A) The types of primary care resident approved 
                training programs that the qualified teaching health 
                center provided for residents.
                    ``(B) The number of approved training positions for 
                residents described in paragraph (4).
                    ``(C) The number of residents described in 
                paragraph (4) who completed their residency training at 
                the end of such residency academic year and care for 
                vulnerable populations living in underserved areas.
                    ``(D) Other information as deemed appropriate by 
                the Secretary.
            ``(2) Audit authority; limitation on payment.--
                    ``(A) Audit authority.--The Secretary may audit a 
                qualified teaching health center to ensure the accuracy 
                and completeness of the information submitted in a 
                report under paragraph (1).
                    ``(B) Limitation on payment.--A teaching health 
                center may only receive payment in a cost reporting 
                period for a number of such resident positions that is 
                greater than the base level of primary care resident 
                positions, as determined by the Secretary. For purposes 
                of this subparagraph, the `base level of primary care 
                residents' for a teaching health center is the level of 
                such residents as of a base period.
            ``(3) Reduction in payment for failure to report.--
                    ``(A) In general.--The amount payable under this 
                section to a qualified teaching health center for a 
                fiscal year shall be reduced by at least 25 percent if 
                the Secretary determines that--
                            ``(i) the qualified teaching health center 
                        has failed to provide the Secretary, as an 
                        addendum to the qualified teaching health 
                        center's application under this section for 
                        such fiscal year, the report required under 
                        paragraph (1) for the previous fiscal year; or
                            ``(ii) such report fails to provide 
                        complete and accurate information required 
                        under any subparagraph of such paragraph.
                    ``(B) Notice and opportunity to provide accurate 
                and missing information.--Before imposing a reduction 
                under subparagraph (A) on the basis of a qualified 
                teaching health center's failure to provide complete 
                and accurate information described in subparagraph 
                (A)(ii), the Secretary shall provide notice to the 
                teaching health center of such failure and the 
                Secretary's intention to impose such reduction and 
                shall provide the teaching health center with the 
                opportunity to provide the required information within 
                the period of 30 days beginning on the date of such 
                notice. If the teaching health center provides such 
                information within such period, no reduction shall be 
                made under subparagraph (A) on the basis of the 
                previous failure to provide such information.
            ``(4) Residents.--The residents described in this paragraph 
        are those who are in part-time or full-time equivalent resident 
        training positions at a qualified teaching health center in any 
        approved graduate medical residency training program.
    ``(i) Regulations.--The Secretary shall promulgate regulations to 
carry out this section.
    ``(j) Definitions.--In this section:
            ``(1) Approved graduate medical residency training 
        program.--The term `approved graduate medical residency 
        training program' means a residency or other postgraduate 
        medical training program--
                    ``(A) participation in which may be counted toward 
                certification in a specialty or subspecialty and 
                includes formal postgraduate training programs in 
                geriatric medicine approved by the Secretary; and
                    ``(B) that meets criteria for accreditation (as 
                established by the Accreditation Council for Graduate 
                Medical Education, the American Osteopathic 
                Association, or the American Dental Association).
            ``(2) Primary care residency program.--The term `primary 
        care residency program' has the meaning given that term in 
        section 749A.
            ``(3) Qualified teaching health center.--The term 
        `qualified teaching health center' has the meaning given the 
        term `teaching health center' in section 749A.''.

SEC. 5509. GRADUATE NURSE EDUCATION DEMONSTRATION.

    (a) In General.--
            (1) Establishment.--
                    (A) In general.--The Secretary shall establish a 
                graduate nurse education demonstration under title 
                XVIII of the Social Security Act (42 U.S.C. 1395 et 
                seq.) under which an eligible hospital may receive 
                payment for the hospital's reasonable costs (described 
                in paragraph (2)) for the provision of qualified 
                clinical training to advance practice nurses.
                    (B) Number.--The demonstration shall include up to 
                5 eligible hospitals.
                    (C) Written agreements.--Eligible hospitals 
                selected to participate in the demonstration shall 
                enter into written agreements pursuant to subsection 
                (b) in order to reimburse the eligible partners of the 
                hospital the share of the costs attributable to each 
                partner.
            (2) Costs described.--
                    (A) In general.--Subject to subparagraph (B) and 
                subsection (d), the costs described in this paragraph 
                are the reasonable costs (as described in section 
                1861(v) of the Social Security Act (42 U.S.C. 
                1395x(v))) of each eligible hospital for the clinical 
                training costs (as determined by the Secretary) that 
                are attributable to providing advanced practice 
                registered nurses with qualified training.
                    (B) Limitation.--With respect to a year, the amount 
                reimbursed under subparagraph (A) may not exceed the 
                amount of costs described in subparagraph (A) that are 
                attributable to an increase in the number of advanced 
                practice registered nurses enrolled in a program that 
                provides qualified training during the year and for 
                which the hospital is being reimbursed under the 
                demonstration, as compared to the average number of 
                advanced practice registered nurses who graduated in 
                each year during the period beginning on January 1, 
                2006, and ending on December 31, 2010 (as determined by 
                the Secretary) from the graduate nursing education 
                program operated by the applicable school of nursing 
                that is an eligible partner of the hospital for 
                purposes of the demonstration.
            (3) Waiver authority.--The Secretary may waive such 
        requirements of titles XI and XVIII of the Social Security Act 
        as may be necessary to carry out the demonstration.
            (4) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to the implementation of this section.
    (b) Written Agreements With Eligible Partners.--No payment shall be 
made under this section to an eligible hospital unless such hospital 
has in effect a written agreement with the eligible partners of the 
hospital. Such written agreement shall describe, at a minimum--
            (1) the obligations of the eligible partners with respect 
        to the provision of qualified training; and
            (2) the obligation of the eligible hospital to reimburse 
        such eligible partners applicable (in a timely manner) for the 
        costs of such qualified training attributable to partner.
    (c) Evaluation.--Not later than October 17, 2017, the Secretary 
shall submit to Congress a report on the demonstration. Such report 
shall include an analysis of the following:
            (1) The growth in the number of advanced practice 
        registered nurses with respect to a specific base year as a 
        result of the demonstration.
            (2) The growth for each of the specialties described in 
        subparagraphs (A) through (D) of subsection (e)(1).
            (3) The costs to the Medicare program under title XVIII of 
        the Social Security Act as a result of the demonstration.
            (4) Other items the Secretary determines appropriate and 
        relevant.
    (d) Funding.--
            (1) In general.--There is hereby appropriated to the 
        Secretary, out of any funds in the Treasury not otherwise 
        appropriated, $50,000,000 for each of fiscal years 2012 through 
        2015 to carry out this section, including the design, 
        implementation, monitoring, and evaluation of the 
        demonstration.
            (2) Proration.--If the aggregate payments to eligible 
        hospitals under the demonstration exceed $50,000,000 for a 
        fiscal year described in paragraph (1), the Secretary shall 
        prorate the payment amounts to each eligible hospital in order 
        to ensure that the aggregate payments do not exceed such 
        amount.
            (3) Without fiscal year limitation.--Amounts appropriated 
        under this subsection shall remain available without fiscal 
        year limitation.
    (e) Definitions.--In this section:
            (1) Advanced practice registered nurse.--The term 
        ``advanced practice registered nurse'' includes the following:
                    (A) A clinical nurse specialist (as defined in 
                subsection (aa)(5) of section 1861 of the Social 
                Security Act (42 U.S.C. 1395x)).
                    (B) A nurse practitioner (as defined in such 
                subsection).
                    (C) A certified registered nurse anesthetist (as 
                defined in subsection (bb)(2) of such section).
                    (D) A certified nurse-midwife (as defined in 
                subsection (gg)(2) of such section).
            (2) Applicable non-hospital community-based care setting.--
        The term ``applicable non-hospital community-based care 
        setting'' means a non-hospital community-based care setting 
        which has entered into a written agreement (as described in 
        subsection (b)) with the eligible hospital participating in the 
        demonstration. Such settings include Federally qualified health 
        centers, rural health clinics, and other non-hospital settings 
        as determined appropriate by the Secretary.
            (3) Applicable school of nursing.--The term ``applicable 
        school of nursing'' means an accredited school of nursing (as 
        defined in section 801 of the Public Health Service Act) which 
        has entered into a written agreement (as described in 
        subsection (b)) with the eligible hospital participating in the 
        demonstration.
            (4) Demonstration.--The term ``demonstration'' means the 
        graduate nurse education demonstration established under 
        subsection (a).
            (5) Eligible hospital.--The term ``eligible hospital'' 
        means a hospital (as defined in subsection (e) of section 1861 
        of the Social Security Act (42 U.S.C. 1395x)) or a critical 
        access hospital (as defined in subsection (mm)(1) of such 
        section) that has a written agreement in place with--
                    (A) 1 or more applicable schools of nursing; and
                    (B) 2 or more applicable non-hospital community-
                based care settings.
            (6) Eligible partners.--The term ``eligible partners'' 
        includes the following:
                    (A) An applicable non-hospital community-based care 
                setting.
                    (B) An applicable school of nursing.
            (7) Qualified training.--
                    (A) In general.--The term ``qualified training'' 
                means training--
                            (i) that provides an advanced practice 
                        registered nurse with the clinical skills 
                        necessary to provide primary care, preventive 
                        care, transitional care, chronic care 
                        management, and other services appropriate for 
                        individuals entitled to, or enrolled for, 
                        benefits under part A of title XVIII of the 
                        Social Security Act, or enrolled under part B 
                        of such title; and
                            (ii) subject to subparagraph (B), at least 
                        half of which is provided in a non-hospital 
                        community-based care setting.
                    (B) Waiver of requirement half of training be 
                provided in non-hospital community-based care setting 
                in certain areas.--The Secretary may waive the 
                requirement under subparagraph (A)(ii) with respect to 
                eligible hospitals located in rural or medically 
                underserved areas.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

          Subtitle G--Improving Access to Health Care Services

SEC. 5601. SPENDING FOR FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS).

    (a) In General.--Section 330(r) of the Public Health Service Act 
(42 U.S.C. 254b(r)) is amended by striking paragraph (1) and inserting 
the following:
            ``(1) General amounts for grants.--For the purpose of 
        carrying out this section, in addition to the amounts 
        authorized to be appropriated under subsection (d), there is 
        authorized to be appropriated the following:
                    ``(A) For fiscal year 2010, $2,988,821,592.
                    ``(B) For fiscal year 2011, $3,862,107,440.
                    ``(C) For fiscal year 2012, $4,990,553,440.
                    ``(D) For fiscal year 2013, $6,448,713,307.
                    ``(E) For fiscal year 2014, $7,332,924,155.
                    ``(F) For fiscal year 2015, $8,332,924,155.
                    ``(G) For fiscal year 2016, and each subsequent 
                fiscal year, the amount appropriated for the preceding 
                fiscal year adjusted by the product of--
                            ``(i) one plus the average percentage 
                        increase in costs incurred per patient served; 
                        and
                            ``(ii) one plus the average percentage 
                        increase in the total number of patients 
                        served.''.
    (b) Rule of Construction.--Section 330(r) of the Public Health 
Service Act (42 U.S.C. 254b(r)) is amended by adding at the end the 
following:
            ``(4) Rule of construction with respect to rural health 
        clinics.--
                    ``(A) In general.--Nothing in this section shall be 
                construed to prevent a community health center from 
                contracting with a Federally certified rural health 
                clinic (as defined in section 1861(aa)(2) of the Social 
                Security Act), a low-volume hospital (as defined for 
                purposes of section 1886 of such Act), a critical 
                access hospital, a sole community hospital (as defined 
                for purposes of section 1886(d)(5)(D)(iii) of such 
                Act), or a medicare-dependent share hospital (as 
                defined for purposes of section 1886(d)(5)(G)(iv) of 
                such Act) for the delivery of primary health care 
                services that are available at the clinic or hospital 
                to individuals who would otherwise be eligible for free 
                or reduced cost care if that individual were able to 
                obtain that care at the community health center. Such 
                services may be limited in scope to those primary 
                health care services available in that clinic or 
                hospitals.
                    ``(B) Assurances.--In order for a clinic or 
                hospital to receive funds under this section through a 
                contract with a community health center under 
                subparagraph (A), such clinic or hospital shall 
                establish policies to ensure--
                            ``(i) nondiscrimination based on the 
                        ability of a patient to pay; and
                            ``(ii) the establishment of a sliding fee 
                        scale for low-income patients.''.

SEC. 5602. NEGOTIATED RULEMAKING FOR DEVELOPMENT OF METHODOLOGY AND 
              CRITERIA FOR DESIGNATING MEDICALLY UNDERSERVED 
              POPULATIONS AND HEALTH PROFESSIONS SHORTAGE AREAS.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish, through a negotiated rulemaking process under 
        subchapter 3 of chapter 5 of title 5, United States Code, a 
        comprehensive methodology and criteria for designation of--
                    (A) medically underserved populations in accordance 
                with section 330(b)(3) of the Public Health Service Act 
                (42 U.S.C. 254b(b)(3));
                    (B) health professions shortage areas under section 
                332 of the Public Health Service Act (42 U.S.C. 254e).
            (2) Factors to consider.--In establishing the methodology 
        and criteria under paragraph (1), the Secretary--
                    (A) shall consult with relevant stakeholders who 
                will be significantly affected by a rule (such as 
                national, State and regional organizations representing 
                affected entities), State health offices, community 
                organizations, health centers and other affected 
                entities, and other interested parties; and
                    (B) shall take into account--
                            (i) the timely availability and 
                        appropriateness of data used to determine a 
                        designation to potential applicants for such 
                        designations;
                            (ii) the impact of the methodology and 
                        criteria on communities of various types and on 
                        health centers and other safety net providers;
                            (iii) the degree of ease or difficulty that 
                        will face potential applicants for such 
                        designations in securing the necessary data; 
                        and
                            (iv) the extent to which the methodology 
                        accurately measures various barriers that 
                        confront individuals and population groups in 
                        seeking health care services.
    (b) Publication of Notice.--In carrying out the rulemaking process 
under this subsection, the Secretary shall publish the notice provided 
for under section 564(a) of title 5, United States Code, by not later 
than 45 days after the date of the enactment of this Act.
    (c) Target Date for Publication of Rule.--As part of the notice 
under subsection (b), and for purposes of this subsection, the ``target 
date for publication'', as referred to in section 564(a)(5) of title 5, 
United Sates Code, shall be July 1, 2010.
    (d) Appointment of Negotiated Rulemaking Committee and 
Facilitator.--The Secretary shall provide for--
            (1) the appointment of a negotiated rulemaking committee 
        under section 565(a) of title 5, United States Code, by not 
        later than 30 days after the end of the comment period provided 
        for under section 564(c) of such title; and
            (2) the nomination of a facilitator under section 566(c) of 
        such title 5 by not later than 10 days after the date of 
        appointment of the committee.
    (e) Preliminary Committee Report.--The negotiated rulemaking 
committee appointed under subsection (d) shall report to the Secretary, 
by not later than April 1, 2010, regarding the committee's progress on 
achieving a consensus with regard to the rulemaking proceeding and 
whether such consensus is likely to occur before one month before the 
target date for publication of the rule. If the committee reports that 
the committee has failed to make significant progress toward such 
consensus or is unlikely to reach such consensus by the target date, 
the Secretary may terminate such process and provide for the 
publication of a rule under this section through such other methods as 
the Secretary may provide.
    (f) Final Committee Report.--If the committee is not terminated 
under subsection (e), the rulemaking committee shall submit a report 
containing a proposed rule by not later than one month before the 
target publication date.
    (g) Interim Final Effect.--The Secretary shall publish a rule under 
this section in the Federal Register by not later than the target 
publication date. Such rule shall be effective and final immediately on 
an interim basis, but is subject to change and revision after public 
notice and opportunity for a period (of not less than 90 days) for 
public comment. In connection with such rule, the Secretary shall 
specify the process for the timely review and approval of applications 
for such designations pursuant to such rules and consistent with this 
section.
    (h) Publication of Rule After Public Comment.--The Secretary shall 
provide for consideration of such comments and republication of such 
rule by not later than 1 year after the target publication date.

SEC. 5603. REAUTHORIZATION OF THE WAKEFIELD EMERGENCY MEDICAL SERVICES 
              FOR CHILDREN PROGRAM.

    Section 1910 of the Public Health Service Act (42 U.S.C. 300w-9) is 
amended--
            (1) in subsection (a), by striking ``3-year period (with an 
        optional 4th year'' and inserting ``4-year period (with an 
        optional 5th year''; and
            (2) in subsection (d)--
                    (A) by striking ``and such sums'' and inserting 
                ``such sums''; and
                    (B) by inserting before the period the following: 
                ``, $25,000,000 for fiscal year 2010, $26,250,000 for 
                fiscal year 2011, $27,562,500 for fiscal year 2012, 
                $28,940,625 for fiscal year 2013, and $30,387,656 for 
                fiscal year 2014''.

SEC. 5604. CO-LOCATING PRIMARY AND SPECIALTY CARE IN COMMUNITY-BASED 
              MENTAL HEALTH SETTINGS.

    Subpart 3 of part B of title V of the Public Health Service Act (42 
U.S.C. 290bb-31 et seq.) is amended by adding at the end the following:

``SEC. 520K. AWARDS FOR CO-LOCATING PRIMARY AND SPECIALTY CARE IN 
              COMMUNITY-BASED MENTAL HEALTH SETTINGS.

    ``(a) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means a 
        qualified community mental health program defined under section 
        1913(b)(1).
            ``(2) Special populations.--The term `special populations' 
        means adults with mental illnesses who have co-occurring 
        primary care conditions and chronic diseases.
    ``(b) Program Authorized.--The Secretary, acting through the 
Administrator shall award grants and cooperative agreements to eligible 
entities to establish demonstration projects for the provision of 
coordinated and integrated services to special populations through the 
co-location of primary and specialty care services in community-based 
mental and behavioral health settings.
    ``(c) Application.--To be eligible to receive a grant or 
cooperative agreement under this section, an eligible entity shall 
submit an application to the Administrator at such time, in such 
manner, and accompanied by such information as the Administrator may 
require, including a description of partnerships, or other arrangements 
with local primary care providers, including community health centers, 
to provide services to special populations.
    ``(d) Use of Funds.--
            ``(1) In general.--For the benefit of special populations, 
        an eligible entity shall use funds awarded under this section 
        for--
                    ``(A) the provision, by qualified primary care 
                professionals, of on site primary care services;
                    ``(B) reasonable costs associated with medically 
                necessary referrals to qualified specialty care 
                professionals, other coordinators of care or, if 
                permitted by the terms of the grant or cooperative 
                agreement, by qualified specialty care professionals on 
                a reasonable cost basis on site at the eligible entity;
                    ``(C) information technology required to 
                accommodate the clinical needs of primary and specialty 
                care professionals; or
                    ``(D) facility modifications needed to bring 
                primary and specialty care professionals on site at the 
                eligible entity.
            ``(2) Limitation.--Not to exceed 15 percent of grant or 
        cooperative agreement funds may be used for activities 
        described in subparagraphs (C) and (D) of paragraph (1).
    ``(e) Evaluation.--Not later than 90 days after a grant or 
cooperative agreement awarded under this section expires, an eligible 
entity shall submit to the Secretary the results of an evaluation to be 
conducted by the entity concerning the effectiveness of the activities 
carried out under the grant or agreement.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $50,000,000 for fiscal year 
2010 and such sums as may be necessary for each of fiscal years 2011 
through 2014.''.

SEC. 5605. KEY NATIONAL INDICATORS.

    (a) Definitions.--In this section:
            (1) Academy.--The term ``Academy'' means the National 
        Academy of Sciences.
            (2) Commission.--The term ``Commission'' means the 
        Commission on Key National Indicators established under 
        subsection (b).
            (3) Institute.--The term ``Institute'' means a Key National 
        Indicators Institute as designated under subsection (c)(3).
    (b) Commission on Key National Indicators.--
            (1) Establishment.--There is established a ``Commission on 
        Key National Indicators''.
            (2) Membership.--
                    (A) Number and appointment.--The Commission shall 
                be composed of 8 members, to be appointed equally by 
                the majority and minority leaders of the Senate and the 
                Speaker and minority leader of the House of 
                Representatives.
                    (B) Prohibited appointments.--Members of the 
                Commission shall not include Members of Congress or 
                other elected Federal, State, or local government 
                officials.
                    (C) Qualifications.--In making appointments under 
                subparagraph (A), the majority and minority leaders of 
                the Senate and the Speaker and minority leader of the 
                House of Representatives shall appoint individuals who 
                have shown a dedication to improving civic dialogue and 
                decision-making through the wide use of scientific 
                evidence and factual information.
                    (D) Period of appointment.--Each member of the 
                Commission shall be appointed for a 2-year term, except 
                that 1 initial appointment shall be for 3 years. Any 
                vacancies shall not affect the power and duties of the 
                Commission but shall be filled in the same manner as 
                the original appointment and shall last only for the 
                remainder of that term.
                    (E) Date.--Members of the Commission shall be 
                appointed by not later than 30 days after the date of 
                enactment of this Act.
                    (F) Initial organizing period.---Not later than 60 
                days after the date of enactment of this Act, the 
                Commission shall develop and implement a schedule for 
                completion of the review and reports required under 
                subsection (d).
                    (G) Co-chairpersons.--The Commission shall select 2 
                Co-Chairpersons from among its members.
    (c) Duties of the Commission.--
            (1) In general.--The Commission shall--
                    (A) conduct comprehensive oversight of a newly 
                established key national indicators system consistent 
                with the purpose described in this subsection;
                    (B) make recommendations on how to improve the key 
                national indicators system;
                    (C) coordinate with Federal Government users and 
                information providers to assure access to relevant and 
                quality data; and
                    (D) enter into contracts with the Academy.
            (2) Reports.--
                    (A) Annual report to congress.--Not later than 1 
                year after the selection of the 2 Co-Chairpersons of 
                the Commission, and each subsequent year thereafter, 
                the Commission shall prepare and submit to the 
                appropriate Committees of Congress and the President a 
                report that contains a detailed statement of the 
                recommendations, findings, and conclusions of the 
                Commission on the activities of the Academy and a 
                designated Institute related to the establishment of a 
                Key National Indicator System.
                    (B) Annual report to the academy.--
                            (i) In general.--Not later than 6 months 
                        after the selection of the 2 Co-Chairpersons of 
                        the Commission, and each subsequent year 
                        thereafter, the Commission shall prepare and 
                        submit to the Academy and a designated 
                        Institute a report making recommendations 
                        concerning potential issue areas and key 
                        indicators to be included in the Key National 
                        Indicators.
                            (ii) Limitation.--The Commission shall not 
                        have the authority to direct the Academy or, if 
                        established, the Institute, to adopt, modify, 
                        or delete any key indicators.
            (3) Contract with the national academy of sciences.--
                    (A) In general.---As soon as practicable after the 
                selection of the 2 Co-Chairpersons of the Commission, 
                the Co-Chairpersons shall enter into an arrangement 
                with the National Academy of Sciences under which the 
                Academy shall--
                            (i) review available public and private 
                        sector research on the selection of a set of 
                        key national indicators;
                            (ii) determine how best to establish a key 
                        national indicator system for the United 
                        States, by either creating its own 
                        institutional capability or designating an 
                        independent private nonprofit organization as 
                        an Institute to implement a key national 
                        indicator system;
                            (iii) if the Academy designates an 
                        independent Institute under clause (ii), 
                        provide scientific and technical advice to the 
                        Institute and create an appropriate governance 
                        mechanism that balances Academy involvement and 
                        the independence of the Institute; and
                            (iv) provide an annual report to the 
                        Commission addressing scientific and technical 
                        issues related to the key national indicator 
                        system and, if established, the Institute, and 
                        governance of the Institute's budget and 
                        operations.
                    (B) Participation.--In executing the arrangement 
                under subparagraph (A), the National Academy of 
                Sciences shall convene a multi-sector, multi-
                disciplinary process to define major scientific and 
                technical issues associated with developing, 
                maintaining, and evolving a Key National Indicator 
                System and, if an Institute is established, to provide 
                it with scientific and technical advice.
                    (C) Establishment of a key national indicator 
                system.--
                            (i) In general.--In executing the 
                        arrangement under subparagraph (A), the 
                        National Academy of Sciences shall enable the 
                        establishment of a key national indicator 
                        system by--
                                    (I) creating its own institutional 
                                capability; or
                                    (II) partnering with an independent 
                                private nonprofit organization as an 
                                Institute to implement a key national 
                                indicator system.
                            (ii) Institute.--If the Academy designates 
                        an Institute under clause (i)(II), such 
                        Institute shall be a non-profit entity (as 
                        defined for purposes of section 501(c)(3) of 
                        the Internal Revenue Code of 1986) with an 
                        educational mission, a governance structure 
                        that emphasizes independence, and 
                        characteristics that make such entity 
                        appropriate for establishing a key national 
                        indicator system.
                            (iii) Responsibilities.--Either the Academy 
                        or the Institute designated under clause 
                        (i)(II) shall be responsible for the following:
                                    (I) Identifying and selecting issue 
                                areas to be represented by the key 
                                national indicators.
                                    (II) Identifying and selecting the 
                                measures used for key national 
                                indicators within the issue areas under 
                                subclause (I).
                                    (III) Identifying and selecting 
                                data to populate the key national 
                                indicators described under subclause 
                                (II).
                                    (IV) Designing, publishing, and 
                                maintaining a public website that 
                                contains a freely accessible database 
                                allowing public access to the key 
                                national indicators.
                                    (V) Developing a quality assurance 
                                framework to ensure rigorous and 
                                independent processes and the selection 
                                of quality data.
                                    (VI) Developing a budget for the 
                                construction and management of a 
                                sustainable, adaptable, and evolving 
                                key national indicator system that 
                                reflects all Commission funding of 
                                Academy and, if an Institute is 
                                established, Institute activities.
                                    (VII) Reporting annually to the 
                                Commission regarding its selection of 
                                issue areas, key indicators, data, and 
                                progress toward establishing a web-
                                accessible database.
                                    (VIII) Responding directly to the 
                                Commission in response to any 
                                Commission recommendations and to the 
                                Academy regarding any inquiries by the 
                                Academy.
                            (iv) Governance.--Upon the establishment of 
                        a key national indicator system, the Academy 
                        shall create an appropriate governance 
                        mechanism that incorporates advisory and 
                        control functions. If an Institute is 
                        designated under clause (i)(II), the governance 
                        mechanism shall balance appropriate Academy 
                        involvement and the independence of the 
                        Institute.
                            (v) Modification and changes.--The Academy 
                        shall retain the sole discretion, at any time, 
                        to alter its approach to the establishment of a 
                        key national indicator system or, if an 
                        Institute is designated under clause (i)(II), 
                        to alter any aspect of its relationship with 
                        the Institute or to designate a different non-
                        profit entity to serve as the Institute.
                            (vi) Construction.--Nothing in this section 
                        shall be construed to limit the ability of the 
                        Academy or the Institute designated under 
                        clause (i)(II) to receive private funding for 
                        activities related to the establishment of a 
                        key national indicator system.
                    (D) Annual report.--As part of the arrangement 
                under subparagraph (A), the National Academy of 
                Sciences shall, not later than 270 days after the date 
                of enactment of this Act, and annually thereafter, 
                submit to the Co-Chairpersons of the Commission a 
                report that contains the findings and recommendations 
                of the Academy.
    (d) Government Accountability Office Study and Report.--
            (1) GAO study.--The Comptroller General of the United 
        States shall conduct a study of previous work conducted by all 
        public agencies, private organizations, or foreign countries 
        with respect to best practices for a key national indicator 
        system. The study shall be submitted to the appropriate 
        authorizing committees of Congress.
            (2) GAO financial audit.--If an Institute is established 
        under this section, the Comptroller General shall conduct an 
        annual audit of the financial statements of the Institute, in 
        accordance with generally accepted government auditing 
        standards and submit a report on such audit to the Commission 
        and the appropriate authorizing committees of Congress.
            (3) GAO programmatic review.--The Comptroller General of 
        the United States shall conduct programmatic assessments of the 
        Institute established under this section as determined 
        necessary by the Comptroller General and report the findings to 
        the Commission and to the appropriate authorizing committees of 
        Congress.
    (e) Authorization of Appropriations.--
            (1) In general.---There are authorized to be appropriated 
        to carry out the purposes of this section, $10,000,000 for 
        fiscal year 2010, and $7,500,000 for each of fiscal year 2011 
        through 2018.
            (2) Availability.---Amounts appropriated under paragraph 
        (1) shall remain available until expended.

                     Subtitle H--General Provisions

SEC. 5701. REPORTS.

    (a) Reports by Secretary of Health and Human Services.--On an 
annual basis, the Secretary of Health and Human Services shall submit 
to the appropriate Committees of Congress a report on the activities 
carried out under the amendments made by this title, and the 
effectiveness of such activities.
    (b) Reports by Recipients of Funds.--The Secretary of Health and 
Human Services may require, as a condition of receiving funds under the 
amendments made by this title, that the entity receiving such award 
submit to such Secretary such reports as the such Secretary may require 
on activities carried out with such award, and the effectiveness of 
such activities.

              TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY

         Subtitle A--Physician Ownership and Other Transparency

SEC. 6001. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBITION ON 
              CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (d)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in the case where the entity is a hospital, 
                the hospital meets the requirements of paragraph 
                (3)(D).'';
            (2) in subsection (d)(3)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) the hospital meets the requirements described 
                in subsection (i)(1) not later than 18 months after the 
                date of the enactment of this subparagraph.''; and
            (3) by adding at the end the following new subsection:
    ``(i) Requirements for Hospitals to Qualify for Rural Provider and 
Hospital Exception to Ownership or Investment Prohibition.--
            ``(1) Requirements described.--For purposes of subsection 
        (d)(3)(D), the requirements described in this paragraph for a 
        hospital are as follows:
                    ``(A) Provider agreement.--The hospital had--
                            ``(i) physician ownership or investment on 
                        February 1, 2010; and
                            ``(ii) a provider agreement under section 
                        1866 in effect on such date.
                    ``(B) Limitation on expansion of facility 
                capacity.--Except as provided in paragraph (3), the 
                number of operating rooms, procedure rooms, and beds 
                for which the hospital is licensed at any time on or 
                after the date of the enactment of this subsection is 
                no greater than the number of operating rooms, 
                procedure rooms, and beds for which the hospital is 
                licensed as of such date.
                    ``(C) Preventing conflicts of interest.--
                            ``(i) The hospital submits to the Secretary 
                        an annual report containing a detailed 
                        description of--
                                    ``(I) the identity of each 
                                physician owner or investor and any 
                                other owners or investors of the 
                                hospital; and
                                    ``(II) the nature and extent of all 
                                ownership and investment interests in 
                                the hospital.
                            ``(ii) The hospital has procedures in place 
                        to require that any referring physician owner 
                        or investor discloses to the patient being 
                        referred, by a time that permits the patient to 
                        make a meaningful decision regarding the 
                        receipt of care, as determined by the 
                        Secretary--
                                    ``(I) the ownership or investment 
                                interest, as applicable, of such 
                                referring physician in the hospital; 
                                and
                                    ``(II) if applicable, any such 
                                ownership or investment interest of the 
                                treating physician.
                            ``(iii) The hospital does not condition any 
                        physician ownership or investment interests 
                        either directly or indirectly on the physician 
                        owner or investor making or influencing 
                        referrals to the hospital or otherwise 
                        generating business for the hospital.
                            ``(iv) The hospital discloses the fact that 
                        the hospital is partially owned or invested in 
                        by physicians--
                                    ``(I) on any public website for the 
                                hospital; and
                                    ``(II) in any public advertising 
                                for the hospital.
                    ``(D) Ensuring bona fide investment.--
                            ``(i) The percentage of the total value of 
                        the ownership or investment interests held in 
                        the hospital, or in an entity whose assets 
                        include the hospital, by physician owners or 
                        investors in the aggregate does not exceed such 
                        percentage as of the date of enactment of this 
                        subsection.
                            ``(ii) Any ownership or investment 
                        interests that the hospital offers to a 
                        physician owner or investor are not offered on 
                        more favorable terms than the terms offered to 
                        a person who is not a physician owner or 
                        investor.
                            ``(iii) The hospital (or any owner or 
                        investor in the hospital) does not directly or 
                        indirectly provide loans or financing for any 
                        investment in the hospital by a physician owner 
                        or investor.
                            ``(iv) The hospital (or any owner or 
                        investor in the hospital) does not directly or 
                        indirectly guarantee a loan, make a payment 
                        toward a loan, or otherwise subsidize a loan, 
                        for any individual physician owner or investor 
                        or group of physician owners or investors that 
                        is related to acquiring any ownership or 
                        investment interest in the hospital.
                            ``(v) Ownership or investment returns are 
                        distributed to each owner or investor in the 
                        hospital in an amount that is directly 
                        proportional to the ownership or investment 
                        interest of such owner or investor in the 
                        hospital.
                            ``(vi) Physician owners and investors do 
                        not receive, directly or indirectly, any 
                        guaranteed receipt of or right to purchase 
                        other business interests related to the 
                        hospital, including the purchase or lease of 
                        any property under the control of other owners 
                        or investors in the hospital or located near 
                        the premises of the hospital.
                            ``(vii) The hospital does not offer a 
                        physician owner or investor the opportunity to 
                        purchase or lease any property under the 
                        control of the hospital or any other owner or 
                        investor in the hospital on more favorable 
                        terms than the terms offered to an individual 
                        who is not a physician owner or investor.
                    ``(E) Patient safety.--
                            ``(i) Insofar as the hospital admits a 
                        patient and does not have any physician 
                        available on the premises to provide services 
                        during all hours in which the hospital is 
                        providing services to such patient, before 
                        admitting the patient--
                                    ``(I) the hospital discloses such 
                                fact to a patient; and
                                    ``(II) following such disclosure, 
                                the hospital receives from the patient 
                                a signed acknowledgment that the 
                                patient understands such fact.
                            ``(ii) The hospital has the capacity to--
                                    ``(I) provide assessment and 
                                initial treatment for patients; and
                                    ``(II) refer and transfer patients 
                                to hospitals with the capability to 
                                treat the needs of the patient 
                                involved.
                    ``(F) Limitation on application to certain 
                converted facilities.--The hospital was not converted 
                from an ambulatory surgical center to a hospital on or 
                after the date of enactment of this subsection.
            ``(2) Publication of information reported.--The Secretary 
        shall publish, and update on an annual basis, the information 
        submitted by hospitals under paragraph (1)(C)(i) on the public 
        Internet website of the Centers for Medicare & Medicaid 
        Services.
            ``(3) Exception to prohibition on expansion of facility 
        capacity.--
                    ``(A) Process.--
                            ``(i) Establishment.--The Secretary shall 
                        establish and implement a process under which 
                        an applicable hospital (as defined in 
                        subparagraph (E)) may apply for an exception 
                        from the requirement under paragraph (1)(B).
                            ``(ii) Opportunity for community input.--
                        The process under clause (i) shall provide 
                        individuals and entities in the community in 
                        which the applicable hospital applying for an 
                        exception is located with the opportunity to 
                        provide input with respect to the application.
                            ``(iii) Timing for implementation.--The 
                        Secretary shall implement the process under 
                        clause (i) on August 1, 2011.
                            ``(iv) Regulations.--Not later than July 1, 
                        2011, the Secretary shall promulgate 
                        regulations to carry out the process under 
                        clause (i).
                    ``(B) Frequency.--The process described in 
                subparagraph (A) shall permit an applicable hospital to 
                apply for an exception up to once every 2 years.
                    ``(C) Permitted increase.--
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraph (D), an applicable hospital 
                        granted an exception under the process 
                        described in subparagraph (A) may increase the 
                        number of operating rooms, procedure rooms, and 
                        beds for which the applicable hospital is 
                        licensed above the baseline number of operating 
                        rooms, procedure rooms, and beds of the 
                        applicable hospital (or, if the applicable 
                        hospital has been granted a previous exception 
                        under this paragraph, above the number of 
                        operating rooms, procedure rooms, and beds for 
                        which the hospital is licensed after the 
                        application of the most recent increase under 
                        such an exception).
                            ``(ii) 100 percent increase limitation.--
                        The Secretary shall not permit an increase in 
                        the number of operating rooms, procedure rooms, 
                        and beds for which an applicable hospital is 
                        licensed under clause (i) to the extent such 
                        increase would result in the number of 
                        operating rooms, procedure rooms, and beds for 
                        which the applicable hospital is licensed 
                        exceeding 200 percent of the baseline number of 
                        operating rooms, procedure rooms, and beds of 
                        the applicable hospital.
                            ``(iii) Baseline number of operating rooms, 
                        procedure rooms, and beds.--In this paragraph, 
                        the term `baseline number of operating rooms, 
                        procedure rooms, and beds' means the number of 
                        operating rooms, procedure rooms, and beds for 
                        which the applicable hospital is licensed as of 
                        the date of enactment of this subsection.
                    ``(D) Increase limited to facilities on the main 
                campus of the hospital.--Any increase in the number of 
                operating rooms, procedure rooms, and beds for which an 
                applicable hospital is licensed pursuant to this 
                paragraph may only occur in facilities on the main 
                campus of the applicable hospital.
                    ``(E) Applicable hospital.--In this paragraph, the 
                term `applicable hospital' means a hospital--
                            ``(i) that is located in a county in which 
                        the percentage increase in the population 
                        during the most recent 5-year period (as of the 
                        date of the application under subparagraph (A)) 
                        is at least 150 percent of the percentage 
                        increase in the population growth of the State 
                        in which the hospital is located during that 
                        period, as estimated by Bureau of the Census;
                            ``(ii) whose annual percent of total 
                        inpatient admissions that represent inpatient 
                        admissions under the program under title XIX is 
                        equal to or greater than the average percent 
                        with respect to such admissions for all 
                        hospitals located in the county in which the 
                        hospital is located;
                            ``(iii) that does not discriminate against 
                        beneficiaries of Federal health care programs 
                        and does not permit physicians practicing at 
                        the hospital to discriminate against such 
                        beneficiaries;
                            ``(iv) that is located in a State in which 
                        the average bed capacity in the State is less 
                        than the national average bed capacity; and
                            ``(v) that has an average bed occupancy 
                        rate that is greater than the average bed 
                        occupancy rate in the State in which the 
                        hospital is located.
                    ``(F) Procedure rooms.--In this subsection, the 
                term `procedure rooms' includes rooms in which 
                catheterizations, angiographies, angiograms, and 
                endoscopies are performed, except such term shall not 
                include emergency rooms or departments (exclusive of 
                rooms in which catheterizations, angiographies, 
                angiograms, and endoscopies are performed).
                    ``(G) Publication of final decisions.--Not later 
                than 60 days after receiving a complete application 
                under this paragraph, the Secretary shall publish in 
                the Federal Register the final decision with respect to 
                such application.
                    ``(H) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the process under this 
                paragraph (including the establishment of such 
                process).
            ``(4) Collection of ownership and investment information.--
        For purposes of subparagraphs (A)(i) and (D)(i) of paragraph 
        (1), the Secretary shall collect physician ownership and 
        investment information for each hospital.
            ``(5) Physician owner or investor defined.--For purposes of 
        this subsection, the term `physician owner or investor' means a 
        physician (or an immediate family member of such physician) 
        with a direct or an indirect ownership or investment interest 
        in the hospital.
            ``(6) Clarification.--Nothing in this subsection shall be 
        construed as preventing the Secretary from revoking a 
        hospital's provider agreement if not in compliance with 
        regulations implementing section 1866.''.
    (b) Enforcement.--
            (1) Ensuring compliance.--The Secretary of Health and Human 
        Services shall establish policies and procedures to ensure 
        compliance with the requirements described in subsection (i)(1) 
        of section 1877 of the Social Security Act, as added by 
        subsection (a)(3), beginning on the date such requirements 
        first apply. Such policies and procedures may include 
        unannounced site reviews of hospitals.
            (2) Audits.--Beginning not later than November 1, 2011, the 
        Secretary of Health and Human Services shall conduct audits to 
        determine if hospitals violate the requirements referred to in 
        paragraph (1).

SEC. 6002. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR 
              INVESTMENT INTERESTS.

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

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

    ``(a) Transparency Reports.--
            ``(1) Payments or other transfers of value.--
                    ``(A) In general.--On March 31, 2013, and on the 
                90th day of each calendar year beginning thereafter, 
                any applicable manufacturer that provides a payment or 
                other transfer of value to a covered recipient (or to 
                an entity or individual at the request of or designated 
                on behalf of a covered recipient), shall submit to the 
                Secretary, in such electronic form as the Secretary 
                shall require, the following information with respect 
                to the preceding calendar year:
                            ``(i) The name of the covered recipient.
                            ``(ii) The business address of the covered 
                        recipient and, in the case of a covered 
                        recipient who is a physician, the specialty and 
                        National Provider Identifier of the covered 
                        recipient.
                            ``(iii) The amount of the payment or other 
                        transfer of value.
                            ``(iv) The dates on which the payment or 
                        other transfer of value was provided to the 
                        covered recipient.
                            ``(v) A description of the form of the 
                        payment or other transfer of value, indicated 
                        (as appropriate for all that apply) as--
                                    ``(I) cash or a cash equivalent;
                                    ``(II) in-kind items or services;
                                    ``(III) stock, a stock option, or 
                                any other ownership interest, dividend, 
                                profit, or other return on investment; 
                                or
                                    ``(IV) any other form of payment or 
                                other transfer of value (as defined by 
                                the Secretary).
                            ``(vi) A description of the nature of the 
                        payment or other transfer of value, indicated 
                        (as appropriate for all that apply) as--
                                    ``(I) consulting fees;
                                    ``(II) compensation for services 
                                other than consulting;
                                    ``(III) honoraria;
                                    ``(IV) gift;
                                    ``(V) entertainment;
                                    ``(VI) food;
                                    ``(VII) travel (including the 
                                specified destinations);
                                    ``(VIII) education;
                                    ``(IX) research;
                                    ``(X) charitable contribution;
                                    ``(XI) royalty or license;
                                    ``(XII) current or prospective 
                                ownership or investment interest;
                                    ``(XIII) direct compensation for 
                                serving as faculty or as a speaker for 
                                a medical education program;
                                    ``(XIV) grant; or
                                    ``(XV) any other nature of the 
                                payment or other transfer of value (as 
                                defined by the Secretary).
                            ``(vii) If the payment or other transfer of 
                        value is related to marketing, education, or 
                        research specific to a covered drug, device, 
                        biological, or medical supply, the name of that 
                        covered drug, device, biological, or medical 
                        supply.
                            ``(viii) Any other categories of 
                        information regarding the payment or other 
                        transfer of value the Secretary determines 
                        appropriate.
                    ``(B) Special rule for certain payments or other 
                transfers of value.--In the case where an applicable 
                manufacturer provides a payment or other transfer of 
                value to an entity or individual at the request of or 
                designated on behalf of a covered recipient, the 
                applicable manufacturer shall disclose that payment or 
                other transfer of value under the name of the covered 
                recipient.
            ``(2) Physician ownership.--In addition to the requirement 
        under paragraph (1)(A), on March 31, 2013, and on the 90th day 
        of each calendar year beginning thereafter, any applicable 
        manufacturer or applicable group purchasing organization shall 
        submit to the Secretary, in such electronic form as the 
        Secretary shall require, the following information regarding 
        any ownership or investment interest (other than an ownership 
        or investment interest in a publicly traded security and mutual 
        fund, as described in section 1877(c)) held by a physician (or 
        an immediate family member of such physician (as defined for 
        purposes of section 1877(a))) in the applicable manufacturer or 
        applicable group purchasing organization during the preceding 
        year:
                    ``(A) The dollar amount invested by each physician 
                holding such an ownership or investment interest.
                    ``(B) The value and terms of each such ownership or 
                investment interest.
                    ``(C) Any payment or other transfer of value 
                provided to a physician holding such an ownership or 
                investment interest (or to an entity or individual at 
                the request of or designated on behalf of a physician 
                holding such an ownership or investment interest), 
                including the information described in clauses (i) 
                through (viii) of paragraph (1)(A), except that in 
                applying such clauses, `physician' shall be substituted 
                for `covered recipient' each place it appears.
                    ``(D) Any other information regarding the ownership 
                or investment interest the Secretary determines 
                appropriate.
    ``(b) Penalties for Noncompliance.--
            ``(1) Failure to report.--
                    ``(A) In general.--Subject to subparagraph (B) 
                except as provided in paragraph (2), any applicable 
                manufacturer or applicable group purchasing 
                organization that fails to submit information required 
                under subsection (a) in a timely manner in accordance 
                with rules or regulations promulgated to carry out such 
                subsection, shall be subject to a civil money penalty 
                of not less than $1,000, but not more than $10,000, for 
                each payment or other transfer of value or ownership or 
                investment interest not reported as required under such 
                subsection. Such penalty shall be imposed and collected 
                in the same manner as civil money penalties under 
                subsection (a) of section 1128A are imposed and 
                collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                applicable group purchasing organization shall not 
                exceed $150,000.
            ``(2) Knowing failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                applicable manufacturer or applicable group purchasing 
                organization that knowingly fails to submit information 
                required under subsection (a) in a timely manner in 
                accordance with rules or regulations promulgated to 
                carry out such subsection, shall be subject to a civil 
                money penalty of not less than $10,000, but not more 
                than $100,000, for each payment or other transfer of 
                value or ownership or investment interest not reported 
                as required under such subsection. Such penalty shall 
                be imposed and collected in the same manner as civil 
                money penalties under subsection (a) of section 1128A 
                are imposed and collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                applicable group purchasing organization shall not 
                exceed $1,000,000.
            ``(3) Use of funds.--Funds collected by the Secretary as a 
        result of the imposition of a civil money penalty under this 
        subsection shall be used to carry out this section.
    ``(c) Procedures for Submission of Information and Public 
Availability.--
            ``(1) In general.--
                    ``(A) Establishment.--Not later than October 1, 
                2011, the Secretary shall establish procedures--
                            ``(i) for applicable manufacturers and 
                        applicable group purchasing organizations to 
                        submit information to the Secretary under 
                        subsection (a); and
                            ``(ii) for the Secretary to make such 
                        information submitted available to the public.
                    ``(B) Definition of terms.--The procedures 
                established under subparagraph (A) shall provide for 
                the definition of terms (other than those terms defined 
                in subsection (e)), as appropriate, for purposes of 
                this section.
                    ``(C) Public availability.--Except as provided in 
                subparagraph (E), the procedures established under 
                subparagraph (A)(ii) shall ensure that, not later than 
                September 30, 2013, and on June 30 of each calendar 
                year beginning thereafter, the information submitted 
                under subsection (a) with respect to the preceding 
                calendar year is made available through an Internet 
                website that--
                            ``(i) is searchable and is in a format that 
                        is clear and understandable;
                            ``(ii) contains information that is 
                        presented by the name of the applicable 
                        manufacturer or applicable group purchasing 
                        organization, the name of the covered 
                        recipient, the business address of the covered 
                        recipient, the specialty of the covered 
                        recipient, the value of the payment or other 
                        transfer of value, the date on which the 
                        payment or other transfer of value was provided 
                        to the covered recipient, the form of the 
                        payment or other transfer of value, indicated 
                        (as appropriate) under subsection (a)(1)(A)(v), 
                        the nature of the payment or other transfer of 
                        value, indicated (as appropriate) under 
                        subsection (a)(1)(A)(vi), and the name of the 
                        covered drug, device, biological, or medical 
                        supply, as applicable;
                            ``(iii) contains information that is able 
                        to be easily aggregated and downloaded;
                            ``(iv) contains a description of any 
                        enforcement actions taken to carry out this 
                        section, including any penalties imposed under 
                        subsection (b), during the preceding year;
                            ``(v) contains background information on 
                        industry-physician relationships;
                            ``(vi) in the case of information submitted 
                        with respect to a payment or other transfer of 
                        value described in subparagraph (E)(i), lists 
                        such information separately from the other 
                        information submitted under subsection (a) and 
                        designates such separately listed information 
                        as funding for clinical research;
                            ``(vii) contains any other information the 
                        Secretary determines would be helpful to the 
                        average consumer;
                            ``(viii) does not contain the National 
                        Provider Identifier of the covered recipient, 
                        and
                            ``(ix) subject to subparagraph (D), 
                        provides the applicable manufacturer, 
                        applicable group purchasing organization, or 
                        covered recipient an opportunity to review and 
                        submit corrections to the information submitted 
                        with respect to the applicable manufacturer, 
                        applicable group purchasing organization, or 
                        covered recipient, respectively, for a period 
                        of not less than 45 days prior to such 
                        information being made available to the public.
                    ``(D) Clarification of time period for review and 
                corrections.--In no case may the 45-day period for 
                review and submission of corrections to information 
                under subparagraph (C)(ix) prevent such information 
                from being made available to the public in accordance 
                with the dates described in the matter preceding clause 
                (i) in subparagraph (C).
                    ``(E) Delayed publication for payments made 
                pursuant to product research or development agreements 
                and clinical investigations.--
                            ``(i) In general.--In the case of 
                        information submitted under subsection (a) with 
                        respect to a payment or other transfer of value 
                        made to a covered recipient by an applicable 
                        manufacturer pursuant to a product research or 
                        development agreement for services furnished in 
                        connection with research on a potential new 
                        medical technology or a new application of an 
                        existing medical technology or the development 
                        of a new drug, device, biological, or medical 
                        supply, or by an applicable manufacturer in 
                        connection with a clinical investigation 
                        regarding a new drug, device, biological, or 
                        medical supply, the procedures established 
                        under subparagraph (A)(ii) shall provide that 
                        such information is made available to the 
                        public on the first date described in the 
                        matter preceding clause (i) in subparagraph (C) 
                        after the earlier of the following:
                                    ``(I) The date of the approval or 
                                clearance of the covered drug, device, 
                                biological, or medical supply by the 
                                Food and Drug Administration.
                                    ``(II) Four calendar years after 
                                the date such payment or other transfer 
                                of value was made.
                            ``(ii) Confidentiality of information prior 
                        to publication.--Information described in 
                        clause (i) shall be considered confidential and 
                        shall not be subject to disclosure under 
                        section 552 of title 5, United States Code, or 
                        any other similar Federal, State, or local law, 
                        until on or after the date on which the 
                        information is made available to the public 
                        under such clause.
            ``(2) Consultation.--In establishing the procedures under 
        paragraph (1), the Secretary shall consult with the Inspector 
        General of the Department of Health and Human Services, 
        affected industry, consumers, consumer advocates, and other 
        interested parties in order to ensure that the information made 
        available to the public under such paragraph is presented in 
        the appropriate overall context.
    ``(d) Annual Reports and Relation to State Laws.--
            ``(1) Annual report to congress.--Not later than April 1 of 
        each year beginning with 2013, the Secretary shall submit to 
        Congress a report that includes the following:
                    ``(A) The information submitted under subsection 
                (a) during the preceding year, aggregated for each 
                applicable manufacturer and applicable group purchasing 
                organization that submitted such information during 
                such year (except, in the case of information submitted 
                with respect to a payment or other transfer of value 
                described in subsection (c)(1)(E)(i), such information 
                shall be included in the first report submitted to 
                Congress after the date on which such information is 
                made available to the public under such subsection).
                    ``(B) A description of any enforcement actions 
                taken to carry out this section, including any 
                penalties imposed under subsection (b), during the 
                preceding year.
            ``(2) Annual reports to states.--Not later than September 
        30, 2013 and on June 30 of each calendar year thereafter, the 
        Secretary shall submit to States a report that includes a 
        summary of the information submitted under subsection (a) 
        during the preceding year with respect to covered recipients in 
        the State (except, in the case of information submitted with 
        respect to a payment or other transfer of value described in 
        subsection (c)(1)(E)(i), such information shall be included in 
        the first report submitted to States after the date on which 
        such information is made available to the public under such 
        subsection).
            ``(3) Relation to state laws.--
                    ``(A) In general.--In the case of a payment or 
                other transfer of value provided by an applicable 
                manufacturer that is received by a covered recipient 
                (as defined in subsection (e)) on or after January 1, 
                2012, subject to subparagraph (B), the provisions of 
                this section shall preempt any statute or regulation of 
                a State or of a political subdivision of a State that 
                requires an applicable manufacturer (as so defined) to 
                disclose or report, in any format, the type of 
                information (as described in subsection (a)) regarding 
                such payment or other transfer of value.
                    ``(B) No preemption of additional requirements.--
                Subparagraph (A) shall not preempt any statute or 
                regulation of a State or of a political subdivision of 
                a State that requires the disclosure or reporting of 
                information--
                            ``(i) not of the type required to be 
                        disclosed or reported under this section;
                            ``(ii) described in subsection (e)(10)(B), 
                        except in the case of information described in 
                        clause (i) of such subsection;
                            ``(iii) by any person or entity other than 
                        an applicable manufacturer (as so defined) or a 
                        covered recipient (as defined in subsection 
                        (e)); or
                            ``(iv) to a Federal, State, or local 
                        governmental agency for public health 
                        surveillance, investigation, or other public 
                        health purposes or health oversight purposes.
                    ``(C) Nothing in subparagraph (A) shall be 
                construed to limit the discovery or admissibility of 
                information described in such subparagraph in a 
                criminal, civil, or administrative proceeding.
            ``(4) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human 
        Services on the implementation of this section.
    ``(e) Definitions.--In this section:
            ``(1) Applicable group purchasing organization.--The term 
        `applicable group purchasing organization' means a group 
        purchasing organization (as defined by the Secretary) that 
        purchases, arranges for, or negotiates the purchase of a 
        covered drug, device, biological, or medical supply which is 
        operating in the United States, or in a territory, possession, 
        or commonwealth of the United States.
            ``(2) Applicable manufacturer.--The term `applicable 
        manufacturer' means a manufacturer of a covered drug, device, 
        biological, or medical supply which is operating in the United 
        States, or in a territory, possession, or commonwealth of the 
        United States.
            ``(3) Clinical investigation.--The term `clinical 
        investigation' means any experiment involving 1 or more human 
        subjects, or materials derived from human subjects, in which a 
        drug or device is administered, dispensed, or used.
            ``(4) Covered device.--The term `covered device' means any 
        device for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(5) Covered drug, device, biological, or medical 
        supply.--The term `covered drug, device, biological, or medical 
        supply' means any drug, biological product, device, or medical 
        supply for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(6) Covered recipient.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered recipient' means 
                the following:
                            ``(i) A physician.
                            ``(ii) A teaching hospital.
                    ``(B) Exclusion.--Such term does not include a 
                physician who is an employee of the applicable 
                manufacturer that is required to submit information 
                under subsection (a).
            ``(7) Employee.--The term `employee' has the meaning given 
        such term in section 1877(h)(2).
            ``(8) Knowingly.--The term `knowingly' has the meaning 
        given such term in section 3729(b) of title 31, United States 
        Code.
            ``(9) Manufacturer of a covered drug, device, biological, 
        or medical supply.--The term `manufacturer of a covered drug, 
        device, biological, or medical supply' means any entity which 
        is engaged in the production, preparation, propagation, 
        compounding, or conversion of a covered drug, device, 
        biological, or medical supply (or any entity under common 
        ownership with such entity which provides assistance or support 
        to such entity with respect to the production, preparation, 
        propagation, compounding, conversion, marketing, promotion, 
        sale, or distribution of a covered drug, device, biological, or 
        medical supply).
            ``(10) Payment or other transfer of value.--
                    ``(A) In general.--The term `payment or other 
                transfer of value' means a transfer of anything of 
                value. Such term does not include a transfer of 
                anything of value that is made indirectly to a covered 
                recipient through a third party in connection with an 
                activity or service in the case where the applicable 
                manufacturer is unaware of the identity of the covered 
                recipient.
                    ``(B) Exclusions.--An applicable manufacturer shall 
                not be required to submit information under subsection 
                (a) with respect to the following:
                            ``(i) A transfer of anything the value of 
                        which is less than $10, unless the aggregate 
                        amount transferred to, requested by, or 
                        designated on behalf of the covered recipient 
                        by the applicable manufacturer during the 
                        calendar year exceeds $100. For calendar years 
                        after 2012, the dollar amounts specified in the 
                        preceding sentence shall be increased by the 
                        same percentage as the percentage increase in 
                        the consumer price index for all urban 
                        consumers (all items; U.S. city average) for 
                        the 12-month period ending with June of the 
                        previous year.
                            ``(ii) Product samples that are not 
                        intended to be sold and are intended for 
                        patient use.
                            ``(iii) Educational materials that directly 
                        benefit patients or are intended for patient 
                        use.
                            ``(iv) The loan of a covered device for a 
                        short-term trial period, not to exceed 90 days, 
                        to permit evaluation of the covered device by 
                        the covered recipient.
                            ``(v) Items or services provided under a 
                        contractual warranty, including the replacement 
                        of a covered device, where the terms of the 
                        warranty are set forth in the purchase or lease 
                        agreement for the covered device.
                            ``(vi) A transfer of anything of value to a 
                        covered recipient when the covered recipient is 
                        a patient and not acting in the professional 
                        capacity of a covered recipient.
                            ``(vii) Discounts (including rebates).
                            ``(viii) In-kind items used for the 
                        provision of charity care.
                            ``(ix) A dividend or other profit 
                        distribution from, or ownership or investment 
                        interest in, a publicly traded security and 
                        mutual fund (as described in section 1877(c)).
                            ``(x) In the case of an applicable 
                        manufacturer who offers a self-insured plan, 
                        payments for the provision of health care to 
                        employees under the plan.
                            ``(xi) In the case of a covered recipient 
                        who is a licensed non-medical professional, a 
                        transfer of anything of value to the covered 
                        recipient if the transfer is payment solely for 
                        the non-medical professional services of such 
                        licensed non-medical professional.
                            ``(xii) In the case of a covered recipient 
                        who is a physician, a transfer of anything of 
                        value to the covered recipient if the transfer 
                        is payment solely for the services of the 
                        covered recipient with respect to a civil or 
                        criminal action or an administrative 
                        proceeding.
            ``(11) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r).''.

SEC. 6003. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY SERVICES 
              EXCEPTION TO THE PROHIBITION ON PHYSICIAN SELF-REFERRAL 
              FOR CERTAIN IMAGING SERVICES.

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

SEC. 6004. PRESCRIPTION DRUG SAMPLE TRANSPARENCY.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 6002, is amended by inserting after 
section 1128G the following new section:

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

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

SEC. 6005. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1150 the following new 
section:

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

    ``(a) Provision of Information.--A health benefits plan or any 
entity that provides pharmacy benefits management services on behalf of 
a health benefits plan (in this section referred to as a `PBM') that 
manages prescription drug coverage under a contract with--
            ``(1) a PDP sponsor of a prescription drug plan or an MA 
        organization offering an MA-PD plan under part D of title 
        XVIII; or
            ``(2) a qualified health benefits plan offered through an 
        exchange established by a State under section 1311 of the 
        Patient Protection and Affordable Care Act,
shall provide the information described in subsection (b) to the 
Secretary and, in the case of a PBM, to the plan with which the PBM is 
under contract with, at such times, and in such form and manner, as the 
Secretary shall specify.
    ``(b) Information Described.--The information described in this 
subsection is the following with respect to services provided by a 
health benefits plan or PBM for a contract year:
            ``(1) The percentage of all prescriptions that were 
        provided through retail pharmacies compared to mail order 
        pharmacies, and the percentage of prescriptions for which a 
        generic drug was available and dispensed (generic dispensing 
        rate), by pharmacy type (which includes an independent 
        pharmacy, chain pharmacy, supermarket pharmacy, or mass 
        merchandiser pharmacy that is licensed as a pharmacy by the 
        State and that dispenses medication to the general public), 
        that is paid by the health benefits plan or PBM under the 
        contract.
            ``(2) The aggregate amount, and the type of rebates, 
        discounts, or price concessions (excluding bona fide service 
        fees, which include but are not limited to distribution service 
        fees, inventory management fees, product stocking allowances, 
        and fees associated with administrative services agreements and 
        patient care programs (such as medication compliance programs 
        and patient education programs))that the PBM negotiates that 
        are attributable to patient utilization under the plan, and the 
        aggregate amount of the rebates, discounts, or price 
        concessions that are passed through to the plan sponsor, and 
        the total number of prescriptions that were dispensed.
            ``(3) The aggregate amount of the difference between the 
        amount the health benefits plan pays the PBM and the amount 
        that the PBM pays retail pharmacies, and mail order pharmacies, 
        and the total number of prescriptions that were dispensed.
    ``(c) Confidentiality.--Information disclosed by a health benefits 
plan or PBM under this section is confidential and shall not be 
disclosed by the Secretary or by a plan receiving the information, 
except that the Secretary may disclose the information in a form which 
does not disclose the identity of a specific PBM, plan, or prices 
charged for drugs, for the following purposes:
            ``(1) As the Secretary determines to be necessary to carry 
        out this section or part D of title XVIII.
            ``(2) To permit the Comptroller General to review the 
        information provided.
            ``(3) To permit the Director of the Congressional Budget 
        Office to review the information provided.
            ``(4) To States to carry out section 1311 of the Patient 
        Protection and Affordable Care Act.
    ``(d) Penalties.--The provisions of subsection (b)(3)(C) of section 
1927 shall apply to a health benefits plan or PBM that fails to provide 
information required under subsection (a) on a timely basis or that 
knowingly provides false information in the same manner as such 
provisions apply to a manufacturer with an agreement under that 
section.''.

         Subtitle B--Nursing Home Transparency and Improvement

             PART I--IMPROVING TRANSPARENCY OF INFORMATION

SEC. 6101. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE 
              PARTIES INFORMATION.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C. 
1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable 
Parties Information.--
            ``(1) Disclosure.--A facility shall have the information 
        described in paragraph (2) available--
                    ``(A) during the period beginning on the date of 
                the enactment of this subsection and ending on the date 
                such information is made available to the public under 
                section 6101(b) of the Patient Protection and 
                Affordable Care Act for submission to the Secretary, 
                the Inspector General of the Department of Health and 
                Human Services, the State in which the facility is 
                located, and the State long-term care ombudsman in the 
                case where the Secretary, the Inspector General, the 
                State, or the State long-term care ombudsman requests 
                such information; and
                    ``(B) beginning on the effective date of the final 
                regulations promulgated under paragraph (3)(A), for 
                reporting such information in accordance with such 
                final regulations.
        Nothing in subparagraph (A) shall be construed as authorizing a 
        facility to dispose of or delete information described in such 
        subparagraph after the effective date of the final regulations 
        promulgated under paragraph (3)(A).
            ``(2) Information described.--
                    ``(A) In general.--The following information is 
                described in this paragraph:
                            ``(i) The information described in 
                        subsections (a) and (b), subject to 
                        subparagraph (C).
                            ``(ii) The identity of and information on--
                                    ``(I) each member of the governing 
                                body of the facility, including the 
                                name, title, and period of service of 
                                each such member;
                                    ``(II) each person or entity who is 
                                an officer, director, member, partner, 
                                trustee, or managing employee of the 
                                facility, including the name, title, 
                                and period of service of each such 
                                person or entity; and
                                    ``(III) each person or entity who 
                                is an additional disclosable party of 
                                the facility.
                            ``(iii) The organizational structure of 
                        each additional disclosable party of the 
                        facility and a description of the relationship 
                        of each such additional disclosable party to 
                        the facility and to one another.
                    ``(B) Special rule where information is already 
                reported or submitted.--To the extent that information 
                reported by a facility to the Internal Revenue Service 
                on Form 990, information submitted by a facility to the 
                Securities and Exchange Commission, or information 
                otherwise submitted to the Secretary or any other 
                Federal agency contains the information described in 
                clauses (i), (ii), or (iii) of subparagraph (A), the 
                facility may provide such Form or such information 
                submitted to meet the requirements of paragraph (1).
                    ``(C) Special rule.--In applying subparagraph 
                (A)(i)--
                            ``(i) with respect to subsections (a) and 
                        (b), `ownership or control interest' shall 
                        include direct or indirect interests, including 
                        such interests in intermediate entities; and
                            ``(ii) subsection (a)(3)(A)(ii) shall 
                        include the owner of a whole or part interest 
                        in any mortgage, deed of trust, note, or other 
                        obligation secured, in whole or in part, by the 
                        entity or any of the property or assets 
                        thereof, if the interest is equal to or exceeds 
                        5 percent of the total property or assets of 
                        the entirety.
            ``(3) Reporting.--
                    ``(A) In general.--Not later than the date that is 
                2 years after the date of the enactment of this 
                subsection, the Secretary shall promulgate final 
                regulations requiring, effective on the date that is 90 
                days after the date on which such final regulations are 
                published in the Federal Register, a facility to report 
                the information described in paragraph (2) to the 
                Secretary in a standardized format, and such other 
                regulations as are necessary to carry out this 
                subsection. Such final regulations shall ensure that 
                the facility certifies, as a condition of participation 
                and payment under the program under title XVIII or XIX, 
                that the information reported by the facility in 
                accordance with such final regulations is, to the best 
                of the facility's knowledge, accurate and current.
                    ``(B) Guidance.--The Secretary shall provide 
                guidance and technical assistance to States on how to 
                adopt the standardized format under subparagraph (A).
            ``(4) No effect on existing reporting requirements.--
        Nothing in this subsection shall reduce, diminish, or alter any 
        reporting requirement for a facility that is in effect as of 
        the date of the enactment of this subsection.
            ``(5) Definitions.--In this subsection:
                    ``(A) Additional disclosable party.--The term 
                `additional disclosable party' means, with respect to a 
                facility, any person or entity who--
                            ``(i) exercises operational, financial, or 
                        managerial control over the facility or a part 
                        thereof, or provides policies or procedures for 
                        any of the operations of the facility, or 
                        provides financial or cash management services 
                        to the facility;
                            ``(ii) leases or subleases real property to 
                        the facility, or owns a whole or part interest 
                        equal to or exceeding 5 percent of the total 
                        value of such real property; or
                            ``(iii) provides management or 
                        administrative services, management or clinical 
                        consulting services, or accounting or financial 
                        services to the facility.
                    ``(B) Facility.--The term `facility' means a 
                disclosing entity which is--
                            ``(i) a skilled nursing facility (as 
                        defined in section 1819(a)); or
                            ``(ii) a nursing facility (as defined in 
                        section 1919(a)).
                    ``(C) Managing employee.--The term `managing 
                employee' means, with respect to a facility, an 
                individual (including a general manager, business 
                manager, administrator, director, or consultant) who 
                directly or indirectly manages, advises, or supervises 
                any element of the practices, finances, or operations 
                of the facility.
                    ``(D) Organizational structure.--The term 
                `organizational structure' means, in the case of--
                            ``(i) a corporation, the officers, 
                        directors, and shareholders of the corporation 
                        who have an ownership interest in the 
                        corporation which is equal to or exceeds 5 
                        percent;
                            ``(ii) a limited liability company, the 
                        members and managers of the limited liability 
                        company (including, as applicable, what 
                        percentage each member and manager has of the 
                        ownership interest in the limited liability 
                        company);
                            ``(iii) a general partnership, the partners 
                        of the general partnership;
                            ``(iv) a limited partnership, the general 
                        partners and any limited partners of the 
                        limited partnership who have an ownership 
                        interest in the limited partnership which is 
                        equal to or exceeds 10 percent;
                            ``(v) a trust, the trustees of the trust;
                            ``(vi) an individual, contact information 
                        for the individual; and
                            ``(vii) any other person or entity, such 
                        information as the Secretary determines 
                        appropriate.''.
    (b) Public Availability of Information.--Not later than the date 
that is 1 year after the date on which the final regulations 
promulgated under section 1124(c)(3)(A) of the Social Security Act, as 
added by subsection (a), are published in the Federal Register, the 
Secretary of Health and Human Services shall make the information 
reported in accordance with such final regulations available to the 
public in accordance with procedures established by the Secretary.
    (c) Conforming Amendments.--
            (1) In general.--
                    (A) Skilled nursing facilities.--Section 1819(d)(1) 
                of the Social Security Act (42 U.S.C. 1395i-3(d)(1)) is 
                amended by striking subparagraph (B) and redesignating 
                subparagraph (C) as subparagraph (B).
                    (B) Nursing facilities.--Section 1919(d)(1) of the 
                Social Security Act (42 U.S.C. 1396r(d)(1)) is amended 
                by striking subparagraph (B) and redesignating 
                subparagraph (C) as subparagraph (B).
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on the date on which the Secretary makes the 
        information described in subsection (b)(1) available to the 
        public under such subsection.

SEC. 6102. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING FACILITIES 
              AND NURSING FACILITIES.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by sections 6002 and 6004, is amended by inserting 
after section 1128H the following new section:

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

    ``(a) Definition of Facility.--In this section, the term `facility' 
means--
            ``(1) a skilled nursing facility (as defined in section 
        1819(a)); or
            ``(2) a nursing facility (as defined in section 1919(a)).
    ``(b) Effective Compliance and Ethics Programs.--
            ``(1) Requirement.--On or after the date that is 36 months 
        after the date of the enactment of this section, a facility 
        shall, with respect to the entity that operates the facility 
        (in this subparagraph referred to as the `operating 
        organization' or `organization'), have in operation a 
        compliance and ethics program that is effective in preventing 
        and detecting criminal, civil, and administrative violations 
        under this Act and in promoting quality of care consistent with 
        regulations developed under paragraph (2).
            ``(2) Development of regulations.--
                    ``(A) In general.--Not later than the date that is 
                2 years after such date of the enactment, the 
                Secretary, working jointly with the Inspector General 
                of the Department of Health and Human Services, shall 
                promulgate regulations for an effective compliance and 
                ethics program for operating organizations, which may 
                include a model compliance program.
                    ``(B)  Design of regulations.--Such regulations 
                with respect to specific elements or formality of a 
                program shall, in the case of an organization that 
                operates 5 or more facilities, vary with the size of 
                the organization, such that larger organizations should 
                have a more formal program and include established 
                written policies defining the standards and procedures 
                to be followed by its employees. Such requirements may 
                specifically apply to the corporate level management of 
                multi unit nursing home chains.
                    ``(C) Evaluation.--Not later than 3 years after the 
                date of the promulgation of regulations under this 
                paragraph, the Secretary shall complete an evaluation 
                of the compliance and ethics programs required to be 
                established under this subsection. Such evaluation 
                shall determine if such programs led to changes in 
                deficiency citations, changes in quality performance, 
                or changes in other metrics of patient quality of care. 
                The Secretary shall submit to Congress a report on such 
                evaluation and shall include in such report such 
                recommendations regarding changes in the requirements 
                for such programs as the Secretary determines 
                appropriate.
            ``(3) Requirements for compliance and ethics programs.--In 
        this subsection, the term `compliance and ethics program' 
        means, with respect to a facility, a program of the operating 
        organization that--
                    ``(A) has been reasonably designed, implemented, 
                and enforced so that it generally will be effective in 
                preventing and detecting criminal, civil, and 
                administrative violations under this Act and in 
                promoting quality of care; and
                    ``(B) includes at least the required components 
                specified in paragraph (4).
            ``(4) Required components of program.--The required 
        components of a compliance and ethics program of an operating 
        organization are the following:
                    ``(A) The organization must have established 
                compliance standards and procedures to be followed by 
                its employees and other agents that are reasonably 
                capable of reducing the prospect of criminal, civil, 
                and administrative violations under this Act.
                    ``(B) Specific individuals within high-level 
                personnel of the organization must have been assigned 
                overall responsibility to oversee compliance with such 
                standards and procedures and have sufficient resources 
                and authority to assure such compliance.
                    ``(C) The organization must have used due care not 
                to delegate substantial discretionary authority to 
                individuals whom the organization knew, or should have 
                known through the exercise of due diligence, had a 
                propensity to engage in criminal, civil, and 
                administrative violations under this Act.
                    ``(D) The organization must have taken steps to 
                communicate effectively its standards and procedures to 
                all employees and other agents, such as by requiring 
                participation in training programs or by disseminating 
                publications that explain in a practical manner what is 
                required.
                    ``(E) The organization must have taken reasonable 
                steps to achieve compliance with its standards, such as 
                by utilizing monitoring and auditing systems reasonably 
                designed to detect criminal, civil, and administrative 
                violations under this Act by its employees and other 
                agents and by having in place and publicizing a 
                reporting system whereby employees and other agents 
                could report violations by others within the 
                organization without fear of retribution.
                    ``(F) The standards must have been consistently 
                enforced through appropriate disciplinary mechanisms, 
                including, as appropriate, discipline of individuals 
                responsible for the failure to detect an offense.
                    ``(G) After an offense has been detected, the 
                organization must have taken all reasonable steps to 
                respond appropriately to the offense and to prevent 
                further similar offenses, including any necessary 
                modification to its program to prevent and detect 
                criminal, civil, and administrative violations under 
                this Act.
                    ``(H) The organization must periodically undertake 
                reassessment of its compliance program to identify 
                changes necessary to reflect changes within the 
                organization and its facilities.
    ``(c) Quality Assurance and Performance Improvement Program.--
            ``(1) In general.--Not later than December 31, 2011, the 
        Secretary shall establish and implement a quality assurance and 
        performance improvement program (in this subparagraph referred 
        to as the `QAPI program') for facilities, including multi unit 
        chains of facilities. Under the QAPI program, the Secretary 
        shall establish standards relating to quality assurance and 
        performance improvement with respect to facilities and provide 
        technical assistance to facilities on the development of best 
        practices in order to meet such standards. Not later than 1 
        year after the date on which the regulations are promulgated 
        under paragraph (2), a facility must submit to the Secretary a 
        plan for the facility to meet such standards and implement such 
        best practices, including how to coordinate the implementation 
        of such plan with quality assessment and assurance activities 
        conducted under sections 1819(b)(1)(B) and 1919(b)(1)(B), as 
        applicable.
            ``(2) Regulations.--The Secretary shall promulgate 
        regulations to carry out this subsection.''.

SEC. 6103. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819 of the Social Security Act 
        (42 U.S.C. 1395i-3) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, updated on a 
                timely basis, easily accessible, readily understandable 
                to consumers of long-term care services, and 
                searchable:
                            ``(i) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under section 1128I(g), 
                        including information on staffing turnover and 
                        tenure, in a format that is clearly 
                        understandable to consumers of long-term care 
                        services and allows such consumers to compare 
                        differences in staffing between facilities and 
                        State and national averages for the facilities. 
                        Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as a plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(ii) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report. 
                        Any such links shall be posted on a timely 
                        basis.
                            ``(iii) The standardized complaint form 
                        developed under section 1128I(f), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(iv) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(v) The number of adjudicated instances 
                        of criminal violations by a facility or the 
                        employees of a facility--
                                    ``(I) that were committed inside 
                                the facility;
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed inside of the facility that 
                                were the violations or crimes of abuse, 
                                neglect, and exploitation, criminal 
                                sexual abuse, or other violations or 
                                crimes that resulted in serious bodily 
                                injury; and
                                    ``(III) the number of civil 
                                monetary penalties levied against the 
                                facility, employees, contractors, and 
                                other agents.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) is included on such website 
                        (or a successor website) not later than the 
                        date on which the requirements under section 
                        1128I(g) are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups; and
                            ``(iv) any other representatives of 
                        programs or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1819(g)(5) of the Social 
                Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a skilled nursing 
                facility (including any enforcement actions taken by 
                the State) to the Secretary not later than the date on 
                which the State sends such information to the facility. 
                The Secretary shall use the information submitted under 
                the preceding sentence to update the information 
                provided on the Nursing Home Compare Medicare website 
                as expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1819(f) of the 
        Social Security Act (42 U.S.C. 1395i-3(f)) is amended by adding 
        at the end the following new paragraph:
            ``(8) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for skilled nursing facilities that the 
                Secretary has identified as having substantially failed 
                to meet applicable requirement of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less than once every 6 months.''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919 of the Social Security Act 
        (42 U.S.C. 1396r) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, updated on a 
                timely basis, easily accessible, readily understandable 
                to consumers of long-term care services, and 
                searchable:
                            ``(i) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under section 1128I(g), 
                        including information on staffing turnover and 
                        tenure, in a format that is clearly 
                        understandable to consumers of long-term care 
                        services and allows such consumers to compare 
                        differences in staffing between facilities and 
                        State and national averages for the facilities. 
                        Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(ii) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report. 
                        Any such links shall be posted on a timely 
                        basis.
                            ``(iii) The standardized complaint form 
                        developed under section 1128I(f), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(iv) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(v) The number of adjudicated instances 
                        of criminal violations by a facility or the 
                        employees of a facility--
                                    ``(I) that were committed inside of 
                                the facility; and
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed outside of the facility, that 
                                were violations or crimes that resulted 
                                in the serious bodily injury of an 
                                elder.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) is included on such website 
                        (or a successor website) not later than the 
                        date on which the requirements under section 
                        1128I(g) are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups;
                            ``(iv) skilled nursing facility employees 
                        and their representatives; and
                            ``(v) any other representatives of programs 
                        or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1919(g)(5) of the Social 
                Security Act (42 U.S.C. 1396r(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a nursing facility 
                (including any enforcement actions taken by the State) 
                to the Secretary not later than the date on which the 
                State sends such information to the facility. The 
                Secretary shall use the information submitted under the 
                preceding sentence to update the information provided 
                on the Nursing Home Compare Medicare website as 
                expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1919(f) of the 
        Social Security Act (42 U.S.C. 1396r(f)) is amended by adding 
        at the end of the following new paragraph:
            ``(10) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for nursing facilities that the Secretary 
                has identified as having substantially failed to meet 
                applicable requirements of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less often than once every 6 months.''.
    (c) Availability of Reports on Surveys, Certifications, and 
Complaint Investigations.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        section 6101, is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Availability of survey, certification, and 
                complaint investigation reports.--A skilled nursing 
                facility must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 
        6101, is amended by adding at the end the following new 
        subparagraph:
                    ``(V) Availability of survey, certification, and 
                complaint investigation reports.--A nursing facility 
                must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect 1 year after the date of the enactment of 
        this Act.
    (d) Guidance to States on Form 2567 State Inspection Reports and 
Complaint Investigation Reports.--
            (1) Guidance.--The Secretary of Health and Human Services 
        (in this subtitle referred to as the ``Secretary'') shall 
        provide guidance to States on how States can establish 
        electronic links to Form 2567 State inspection reports (or a 
        successor form), complaint investigation reports, and a 
        facility's plan of correction or other response to such Form 
        2567 State inspection reports (or a successor form) on the 
        Internet website of the State that provides information on 
        skilled nursing facilities and nursing facilities and the 
        Secretary shall, if possible, include such information on 
        Nursing Home Compare.
            (2) Requirement.--Section 1902(a)(9) of the Social Security 
        Act (42 U.S.C. 1396a(a)(9)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking the semicolon at the end of 
                subparagraph (C) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) that the State maintain a consumer-oriented 
                website providing useful information to consumers 
                regarding all skilled nursing facilities and all 
                nursing facilities in the State, including for each 
                facility, Form 2567 State inspection reports (or a 
                successor form), complaint investigation reports, the 
                facility's plan of correction, and such other 
                information that the State or the Secretary considers 
                useful in assisting the public to assess the quality of 
                long term care options and the quality of care provided 
                by individual facilities;''.
            (3) Definitions.--In this subsection:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).
    (e) Development of Consumer Rights Information Page on Nursing Home 
Compare Website.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall ensure that the Department of Health and 
Human Services, as part of the information provided for comparison of 
nursing facilities on the Nursing Home Compare Medicare website 
develops and includes a consumer rights information page that contains 
links to descriptions of, and information with respect to, the 
following:
            (1) The documentation on nursing facilities that is 
        available to the public.
            (2) General information and tips on choosing a nursing 
        facility that meets the needs of the individual.
            (3) General information on consumer rights with respect to 
        nursing facilities.
            (4) The nursing facility survey process (on a national and 
        State-specific basis).
            (5) On a State-specific basis, the services available 
        through the State long-term care ombudsman for such State.

SEC. 6104. REPORTING OF EXPENDITURES.

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

SEC. 6105. STANDARDIZED COMPLAINT FORM.

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

SEC. 6106. ENSURING STAFFING ACCOUNTABILITY.

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

SEC. 6107. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING SYSTEM.

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

                     PART II--TARGETING ENFORCEMENT

SEC. 6111. CIVIL MONEY PENALTIES.

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

SEC. 6112. NATIONAL INDEPENDENT MONITOR DEMONSTRATION PROJECT.

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

SEC. 6113. NOTIFICATION OF FACILITY CLOSURE.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(h) Notification of Facility Closure.--
            ``(1) In general.--Any individual who is the administrator 
        of a facility must--
                    ``(A) submit to the Secretary, the State long-term 
                care ombudsman, residents of the facility, and the 
                legal representatives of such residents or other 
                responsible parties, written notification of an 
                impending closure--
                            ``(i) subject to clause (ii), not later 
                        than the date that is 60 days prior to the date 
                        of such closure; and
                            ``(ii) in the case of a facility where the 
                        Secretary terminates the facility's 
                        participation under this title, not later than 
                        the date that the Secretary determines 
                        appropriate;
                    ``(B) ensure that the facility does not admit any 
                new residents on or after the date on which such 
                written notification is submitted; and
                    ``(C) include in the notice a plan for the transfer 
                and adequate relocation of the residents of the 
                facility by a specified date prior to closure that has 
                been approved by the State, including assurances that 
                the residents will be transferred to the most 
                appropriate facility or other setting in terms of 
                quality, services, and location, taking into 
                consideration the needs, choice, and best interests of 
                each resident.
            ``(2) Relocation.--
                    ``(A) In general.--The State shall ensure that, 
                before a facility closes, all residents of the facility 
                have been successfully relocated to another facility or 
                an alternative home and community-based setting.
                    ``(B) Continuation of payments until residents 
                relocated.--The Secretary may, as the Secretary 
                determines appropriate, continue to make payments under 
                this title with respect to residents of a facility that 
                has submitted a notification under paragraph (1) during 
                the period beginning on the date such notification is 
                submitted and ending on the date on which the resident 
                is successfully relocated.
            ``(3) Sanctions.--Any individual who is the administrator 
        of a facility that fails to comply with the requirements of 
        paragraph (1)--
                    ``(A) shall be subject to a civil monetary penalty 
                of up to $100,000;
                    ``(B) may be subject to exclusion from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)); and
                    ``(C) shall be subject to any other penalties that 
                may be prescribed by law.
            ``(4) Procedure.--The provisions of section 1128A (other 
        than subsections (a) and (b) and the second sentence of 
        subsection (f)) shall apply to a civil money penalty or 
        exclusion under paragraph (3) in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a).''.
    (b) Conforming Amendments.--Section 1819(h)(4) of the Social 
Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
            (1) in the first sentence, by striking ``the Secretary 
        shall terminate'' and inserting ``the Secretary, subject to 
        section 1128I(h), shall terminate''; and
            (2) in the second sentence, by striking ``subsection 
        (c)(2)'' and inserting ``subsection (c)(2) and section 
        1128I(h)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 6114. NATIONAL DEMONSTRATION PROJECTS ON CULTURE CHANGE AND USE OF 
              INFORMATION TECHNOLOGY IN NURSING HOMES.

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

                   PART III--IMPROVING STAFF TRAINING

SEC. 6121. DEMENTIA AND ABUSE PREVENTION TRAINING.

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

Subtitle C--Nationwide Program for National and State Background Checks 
  on Direct Patient Access Employees of Long-term Care Facilities and 
                               Providers

SEC. 6201. NATIONWIDE PROGRAM FOR NATIONAL AND STATE BACKGROUND CHECKS 
              ON DIRECT PATIENT ACCESS EMPLOYEES OF LONG-TERM CARE 
              FACILITIES AND PROVIDERS.

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

             Subtitle D--Patient-Centered Outcomes Research

SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH.

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

         ``Part D--Comparative Clinical Effectiveness Research

             ``comparative clinical effectiveness research

    ``Sec. 1181.  (a) Definitions.--In this section:
            ``(1) Board.--The term `Board' means the Board of Governors 
        established under subsection (f).
            ``(2) Comparative clinical effectiveness research; 
        research.--
                    ``(A) In general.--The terms `comparative clinical 
                effectiveness research' and `research' mean research 
                evaluating and comparing health outcomes and the 
                clinical effectiveness, risks, and benefits of 2 or 
                more medical treatments, services, and items described 
                in subparagraph (B).
                    ``(B) Medical treatments, services, and items 
                described.--The medical treatments, services, and items 
                described in this subparagraph are health care 
                interventions, protocols for treatment, care 
                management, and delivery, procedures, medical devices, 
                diagnostic tools, pharmaceuticals (including drugs and 
                biologicals), integrative health practices, and any 
                other strategies or items being used in the treatment, 
                management, and diagnosis of, or prevention of illness 
                or injury in, individuals.
            ``(3) Conflict of interest.--The term `conflict of 
        interest' means an association, including a financial or 
        personal association, that have the potential to bias or have 
        the appearance of biasing an individual's decisions in matters 
        related to the Institute or the conduct of activities under 
        this section.
            ``(4) Real conflict of interest.--The term `real conflict 
        of interest' means any instance where a member of the Board, 
        the methodology committee established under subsection (d)(6), 
        or an advisory panel appointed under subsection (d)(4), or a 
        close relative of such member, has received or could receive 
        either of the following:
                    ``(A) A direct financial benefit of any amount 
                deriving from the result or findings of a study 
                conducted under this section.
                    ``(B) A financial benefit from individuals or 
                companies that own or manufacture medical treatments, 
                services, or items to be studied under this section 
                that in the aggregate exceeds $10,000 per year. For 
                purposes of the preceding sentence, a financial benefit 
                includes honoraria, fees, stock, or other financial 
                benefit and the current value of the member or close 
                relative's already existing stock holdings, in addition 
                to any direct financial benefit deriving from the 
                results or findings of a study conducted under this 
                section.
    ``(b) Patient-Centered Outcomes Research Institute.--
            ``(1) Establishment.--There is authorized to be established 
        a nonprofit corporation, to be known as the `Patient-Centered 
        Outcomes Research Institute' (referred to in this section as 
        the `Institute') which is neither an agency nor establishment 
        of the United States Government.
            ``(2) Application of provisions.--The Institute shall be 
        subject to the provisions of this section, and, to the extent 
        consistent with this section, to the District of Columbia 
        Nonprofit Corporation Act.
            ``(3) Funding of comparative clinical effectiveness 
        research.--For fiscal year 2010 and each subsequent fiscal 
        year, amounts in the Patient-Centered Outcomes Research Trust 
        Fund (referred to in this section as the `PCORTF') under 
        section 9511 of the Internal Revenue Code of 1986 shall be 
        available, without further appropriation, to the Institute to 
        carry out this section.
    ``(c) Purpose.--The purpose of the Institute is to assist patients, 
clinicians, purchasers, and policy-makers in making informed health 
decisions by advancing the quality and relevance of evidence concerning 
the manner in which diseases, disorders, and other health conditions 
can effectively and appropriately be prevented, diagnosed, treated, 
monitored, and managed through research and evidence synthesis that 
considers variations in patient subpopulations, and the dissemination 
of research findings with respect to the relative health outcomes, 
clinical effectiveness, and appropriateness of the medical treatments, 
services, and items described in subsection (a)(2)(B).
    ``(d) Duties.--
            ``(1) Identifying research priorities and establishing 
        research project agenda.--
                    ``(A) Identifying research priorities.--The 
                Institute shall identify national priorities for 
                research, taking into account factors of disease 
                incidence, prevalence, and burden in the United States 
                (with emphasis on chronic conditions), gaps in evidence 
                in terms of clinical outcomes, practice variations and 
                health disparities in terms of delivery and outcomes of 
                care, the potential for new evidence to improve patient 
                health, well-being, and the quality of care, the effect 
                on national expenditures associated with a health care 
                treatment, strategy, or health conditions, as well as 
                patient needs, outcomes, and preferences, the relevance 
                to patients and clinicians in making informed health 
                decisions, and priorities in the National Strategy for 
                quality care established under section 399H of the 
                Public Health Service Act that are consistent with this 
                section.
                    ``(B) Establishing research project agenda.--The 
                Institute shall establish and update a research project 
                agenda for research to address the priorities 
                identified under subparagraph (A), taking into 
                consideration the types of research that might address 
                each priority and the relative value (determined based 
                on the cost of conducting research compared to the 
                potential usefulness of the information produced by 
                research) associated with the different types of 
                research, and such other factors as the Institute 
                determines appropriate.
            ``(2) Carrying out research project agenda.--
                    ``(A) Research.--The Institute shall carry out the 
                research project agenda established under paragraph 
                (1)(B) in accordance with the methodological standards 
                adopted under paragraph (9) using methods, including 
                the following:
                            ``(i) Systematic reviews and assessments of 
                        existing and future research and evidence 
                        including original research conducted 
                        subsequent to the date of the enactment of this 
                        section.
                            ``(ii) Primary research, such as randomized 
                        clinical trials, molecularly informed trials, 
                        and observational studies.
                            ``(iii) Any other methodologies recommended 
                        by the methodology committee established under 
                        paragraph (6) that are adopted by the Board 
                        under paragraph (9).
                    ``(B) Contracts for the management of funding and 
                conduct of research.--
                            ``(i) Contracts.--
                                    ``(I) In general.--In accordance 
                                with the research project agenda 
                                established under paragraph (1)(B), the 
                                Institute shall enter into contracts 
                                for the management of funding and 
                                conduct of research in accordance with 
                                the following:
                                            ``(aa) Appropriate agencies 
                                        and instrumentalities of the 
                                        Federal Government.
                                            ``(bb) Appropriate academic 
                                        research, private sector 
                                        research, or study-conducting 
                                        entities.
                                    ``(II) Preference.--In entering 
                                into contracts under subclause (I), the 
                                Institute shall give preference to the 
                                Agency for Healthcare Research and 
                                Quality and the National Institutes of 
                                Health, but only if the research to be 
                                conducted or managed under such 
                                contract is authorized by the governing 
                                statutes of such Agency or Institutes.
                            ``(ii) Conditions for contracts.--A 
                        contract entered into under this subparagraph 
                        shall require that the agency, instrumentality, 
                        or other entity--
                                    ``(I) abide by the transparency and 
                                conflicts of interest requirements 
                                under subsection (h) that apply to the 
                                Institute with respect to the research 
                                managed or conducted under such 
                                contract;
                                    ``(II) comply with the 
                                methodological standards adopted under 
                                paragraph (9) with respect to such 
                                research;
                                    ``(III) consult with the expert 
                                advisory panels for clinical trials and 
                                rare disease appointed under clauses 
                                (ii) and (iii), respectively, of 
                                paragraph (4)(A);
                                    ``(IV) subject to clause (iv), 
                                permit a researcher who conducts 
                                original research under the contract 
                                for the agency, instrumentality, or 
                                other entity to have such research 
                                published in a peer-reviewed journal or 
                                other publication;
                                    ``(V) have appropriate processes in 
                                place to manage data privacy and meet 
                                ethical standards for the research;
                                    ``(VI) comply with the requirements 
                                of the Institute for making the 
                                information available to the public 
                                under paragraph (8); and
                                    ``(VII) comply with other terms and 
                                conditions determined necessary by the 
                                Institute to carry out the research 
                                agenda adopted under paragraph (2).
                            ``(iii) Coverage of copayments or 
                        coinsurance.--A contract entered into under 
                        this subparagraph may allow for the coverage of 
                        copayments or coinsurance, or allow for other 
                        appropriate measures, to the extent that such 
                        coverage or other measures are necessary to 
                        preserve the validity of a research project, 
                        such as in the case where the research project 
                        must be blinded.
                            ``(iv) Requirements for publication of 
                        research.--Any research published under clause 
                        (ii)(IV) shall be within the bounds of and 
                        entirely consistent with the evidence and 
                        findings produced under the contract with the 
                        Institute under this subparagraph. If the 
                        Institute determines that those requirements 
                        are not met, the Institute shall not enter into 
                        another contract with the agency, 
                        instrumentality, or entity which managed or 
                        conducted such research for a period determined 
                        appropriate by the Institute (but not less than 
                        5 years).
                    ``(C) Review and update of evidence.--The Institute 
                shall review and update evidence on a periodic basis as 
                appropriate.
                    ``(D) Taking into account potential differences.--
                Research shall be designed, as appropriate, to take 
                into account the potential for differences in the 
                effectiveness of health care treatments, services, and 
                items as used with various subpopulations, such as 
                racial and ethnic minorities, women, age, and groups of 
                individuals with different comorbidities, genetic and 
                molecular sub-types, or quality of life preferences and 
                include members of such subpopulations as subjects in 
                the research as feasible and appropriate.
                    ``(E) Differences in treatment modalities.--
                Research shall be designed, as appropriate, to take 
                into account different characteristics of treatment 
                modalities that may affect research outcomes, such as 
                the phase of the treatment modality in the innovation 
                cycle and the impact of the skill of the operator of 
                the treatment modality.
            ``(3) Data collection.--
                    ``(A) In general.--The Secretary shall, with 
                appropriate safeguards for privacy, make available to 
                the Institute such data collected by the Centers for 
                Medicare & Medicaid Services under the programs under 
                titles XVIII, XIX, and XXI, as well as provide access 
                to the data networks developed under section 937(f) of 
                the Public Health Service Act, as the Institute and its 
                contractors may require to carry out this section. The 
                Institute may also request and obtain data from 
                Federal, State, or private entities, including data 
                from clinical databases and registries.
                    ``(B) Use of data.--The Institute shall only use 
                data provided to the Institute under subparagraph (A) 
                in accordance with laws and regulations governing the 
                release and use of such data, including applicable 
                confidentiality and privacy standards.
            ``(4) Appointing expert advisory panels.--
                    ``(A) Appointment.--
                            ``(i) In general.--The Institute may 
                        appoint permanent or ad hoc expert advisory 
                        panels as determined appropriate to assist in 
                        identifying research priorities and 
                        establishing the research project agenda under 
                        paragraph (1) and for other purposes.
                            ``(ii) Expert advisory panels for clinical 
                        trials.--The Institute shall appoint expert 
                        advisory panels in carrying out randomized 
                        clinical trials under the research project 
                        agenda under paragraph (2)(A)(ii). Such expert 
                        advisory panels shall advise the Institute and 
                        the agency, instrumentality, or entity 
                        conducting the research on the research 
                        question involved and the research design or 
                        protocol, including important patient subgroups 
                        and other parameters of the research. Such 
                        panels shall be available as a resource for 
                        technical questions that may arise during the 
                        conduct of such research.
                            ``(iii) Expert advisory panel for rare 
                        disease.--In the case of a research study for 
                        rare disease, the Institute shall appoint an 
                        expert advisory panel for purposes of assisting 
                        in the design of the research study and 
                        determining the relative value and feasibility 
                        of conducting the research study.
                    ``(B) Composition.--An expert advisory panel 
                appointed under subparagraph (A) shall include 
                representatives of practicing and research clinicians, 
                patients, and experts in scientific and health services 
                research, health services delivery, and evidence-based 
                medicine who have experience in the relevant topic, and 
                as appropriate, experts in integrative health and 
                primary prevention strategies. The Institute may 
                include a technical expert of each manufacturer or each 
                medical technology that is included under the relevant 
                topic, project, or category for which the panel is 
                established.
            ``(5) Supporting patient and consumer representatives.--The 
        Institute shall provide support and resources to help patient 
        and consumer representatives effectively participate on the 
        Board and expert advisory panels appointed by the Institute 
        under paragraph (4).
            ``(6) Establishing methodology committee.--
                    ``(A) In general.--The Institute shall establish a 
                standing methodology committee to carry out the 
                functions described in subparagraph (C).
                    ``(B) Appointment and composition.--The methodology 
                committee established under subparagraph (A) shall be 
                composed of not more than 15 members appointed by the 
                Comptroller General of the United States. Members 
                appointed to the methodology committee shall be experts 
                in their scientific field, such as health services 
                research, clinical research, comparative clinical 
                effectiveness research, biostatistics, genomics, and 
                research methodologies. Stakeholders with such 
                expertise may be appointed to the methodology 
                committee. In addition to the members appointed under 
                the first sentence, the Directors of the National 
                Institutes of Health and the Agency for Healthcare 
                Research and Quality (or their designees) shall each be 
                included as members of the methodology committee.
                    ``(C) Functions.--Subject to subparagraph (D), the 
                methodology committee shall work to develop and improve 
                the science and methods of comparative clinical 
                effectiveness research by, not later than 18 months 
                after the establishment of the Institute, directly or 
                through subcontract, developing and periodically 
                updating the following:
                            ``(i) Methodological standards for 
                        research. Such methodological standards shall 
                        provide specific criteria for internal 
                        validity, generalizability, feasibility, and 
                        timeliness of research and for health outcomes 
                        measures, risk adjustment, and other relevant 
                        aspects of research and assessment with respect 
                        to the design of research. Any methodological 
                        standards developed and updated under this 
                        subclause shall be scientifically based and 
                        include methods by which new information, data, 
                        or advances in technology are considered and 
                        incorporated into ongoing research projects by 
                        the Institute, as appropriate. The process for 
                        developing and updating such standards shall 
                        include input from relevant experts, 
                        stakeholders, and decisionmakers, and shall 
                        provide opportunities for public comment. Such 
                        standards shall also include methods by which 
                        patient subpopulations can be accounted for and 
                        evaluated in different types of research. As 
                        appropriate, such standards shall build on 
                        existing work on methodological standards for 
                        defined categories of health interventions and 
                        for each of the major categories of comparative 
                        clinical effectiveness research methods 
                        (determined as of the date of enactment of the 
                        Patient Protection and Affordable Care Act).
                            ``(ii) A translation table that is designed 
                        to provide guidance and act as a reference for 
                        the Board to determine research methods that 
                        are most likely to address each specific 
                        research question.
                    ``(D) Consultation and conduct of examinations.--
                The methodology committee may consult and contract with 
                the Institute of Medicine of the National Academies and 
                academic, nonprofit, or other private and governmental 
                entities with relevant expertise to carry out 
                activities described in subparagraph (C) and may 
                consult with relevant stakeholders to carry out such 
                activities.
                    ``(E) Reports.--The methodology committee shall 
                submit reports to the Board on the committee's 
                performance of the functions described in subparagraph 
                (C). Reports shall contain recommendations for the 
                Institute to adopt methodological standards developed 
                and updated by the methodology committee as well as 
                other actions deemed necessary to comply with such 
                methodological standards.
            ``(7) Providing for a peer-review process for primary 
        research.--
                    ``(A) In general.--The Institute shall ensure that 
                there is a process for peer review of primary research 
                described in subparagraph (A)(ii) of paragraph (2) that 
                is conducted under such paragraph. Under such process--
                            ``(i) evidence from such primary research 
                        shall be reviewed to assess scientific 
                        integrity and adherence to methodological 
                        standards adopted under paragraph (9); and
                            ``(ii) a list of the names of individuals 
                        contributing to any peer-review process during 
                        the preceding year or years shall be made 
                        public and included in annual reports in 
                        accordance with paragraph (10)(D).
                    ``(B) Composition.--Such peer-review process shall 
                be designed in a manner so as to avoid bias and 
                conflicts of interest on the part of the reviewers and 
                shall be composed of experts in the scientific field 
                relevant to the research under review.
                    ``(C) Use of existing processes.--
                            ``(i) Processes of another entity.--In the 
                        case where the Institute enters into a contract 
                        or other agreement with another entity for the 
                        conduct or management of research under this 
                        section, the Institute may utilize the peer-
                        review process of such entity if such process 
                        meets the requirements under subparagraphs (A) 
                        and (B).
                            ``(ii) Processes of appropriate medical 
                        journals.--The Institute may utilize the peer-
                        review process of appropriate medical journals 
                        if such process meets the requirements under 
                        subparagraphs (A) and (B).
            ``(8) Release of research findings.--
                    ``(A) In general.--The Institute shall, not later 
                than 90 days after the conduct or receipt of research 
                findings under this part, make such research findings 
                available to clinicians, patients, and the general 
                public. The Institute shall ensure that the research 
                findings--
                            ``(i) convey the findings of research in a 
                        manner that is comprehensible and useful to 
                        patients and providers in making health care 
                        decisions;
                            ``(ii) fully convey findings and discuss 
                        considerations specific to certain 
                        subpopulations, risk factors, and 
                        comorbidities, as appropriate;
                            ``(iii) include limitations of the research 
                        and what further research may be needed as 
                        appropriate;
                            ``(iv) not be construed as mandates for 
                        practice guidelines, coverage recommendations, 
                        payment, or policy recommendations; and
                            ``(v) not include any data which would 
                        violate the privacy of research participants or 
                        any confidentiality agreements made with 
                        respect to the use of data under this section.
                    ``(B) Definition of research findings.--In this 
                paragraph, the term `research findings' means the 
                results of a study or assessment.
            ``(9) Adoption.--Subject to subsection (h)(1), the 
        Institute shall adopt the national priorities identified under 
        paragraph (1)(A), the research project agenda established under 
        paragraph (1)(B), the methodological standards developed and 
        updated by the methodology committee under paragraph (6)(C)(i), 
        and any peer-review process provided under paragraph (7) by 
        majority vote. In the case where the Institute does not adopt 
        such processes in accordance with the preceding sentence, the 
        processes shall be referred to the appropriate staff or entity 
        within the Institute (or, in the case of the methodological 
        standards, the methodology committee) for further review.
            ``(10) Annual reports.--The Institute shall submit an 
        annual report to Congress and the President, and shall make the 
        annual report available to the public. Such report shall 
        contain--
                    ``(A) a description of the activities conducted 
                under this section, research priorities identified 
                under paragraph (1)(A) and methodological standards 
                developed and updated by the methodology committee 
                under paragraph (6)(C)(i) that are adopted under 
                paragraph (9) during the preceding year;
                    ``(B) the research project agenda and budget of the 
                Institute for the following year;
                    ``(C) any administrative activities conducted by 
                the Institute during the preceding year;
                    ``(D) the names of individuals contributing to any 
                peer-review process under paragraph (7), without 
                identifying them with a particular research project; 
                and
                    ``(E) any other relevant information (including 
                information on the membership of the Board, expert 
                advisory panels, methodology committee, and the 
                executive staff of the Institute, any conflicts of 
                interest with respect to these individuals, and any 
                bylaws adopted by the Board during the preceding year).
    ``(e) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Board 
        shall carry out the duties of the Institute.
            ``(2) Nondelegable duties.--The activities described in 
        subsections (d)(1) and (d)(9) are nondelegable.
    ``(f) Board of Governors.--
            ``(1) In general.--The Institute shall have a Board of 
        Governors, which shall consist of the following members:
                    ``(A) The Director of Agency for Healthcare 
                Research and Quality (or the Director's designee).
                    ``(B) The Director of the National Institutes of 
                Health (or the Director's designee).
                    ``(C) Seventeen members appointed, not later than 6 
                months after the date of enactment of this section, by 
                the Comptroller General of the United States as 
                follows:
                            ``(i) 3 members representing patients and 
                        health care consumers.
                            ``(ii) 5 members representing physicians 
                        and providers, including at least 1 surgeon, 
                        nurse, State-licensed integrative health care 
                        practitioner, and representative of a hospital.
                            ``(iii) 3 members representing private 
                        payers, of whom at least 1 member shall 
                        represent health insurance issuers and at least 
                        1 member shall represent employers who self-
                        insure employee benefits.
                            ``(iv) 3 members representing 
                        pharmaceutical, device, and diagnostic 
                        manufacturers or developers.
                            ``(v) 1 member representing quality 
                        improvement or independent health service 
                        researchers.
                            ``(vi) 2 members representing the Federal 
                        Government or the States, including at least 1 
                        member representing a Federal health program or 
                        agency.
            ``(2) Qualifications.--The Board shall represent a broad 
        range of perspectives and collectively have scientific 
        expertise in clinical health sciences research, including 
        epidemiology, decisions sciences, health economics, and 
        statistics. In appointing the Board, the Comptroller General of 
        the United States shall consider and disclose any conflicts of 
        interest in accordance with subsection (h)(4)(B). Members of 
        the Board shall be recused from relevant Institute activities 
        in the case where the member (or an immediate family member of 
        such member) has a real conflict of interest directly related 
        to the research project or the matter that could affect or be 
        affected by such participation.
            ``(3) Terms; vacancies.--A member of the Board shall be 
        appointed for a term of 6 years, except with respect to the 
        members first appointed, whose terms of appointment shall be 
        staggered evenly over 2-year increments. No individual shall be 
        appointed to the Board for more than 2 terms. Vacancies shall 
        be filled in the same manner as the original appointment was 
        made.
            ``(4) Chairperson and vice-chairperson.--The Comptroller 
        General of the United States shall designate a Chairperson and 
        Vice Chairperson of the Board from among the members of the 
        Board. Such members shall serve as Chairperson or Vice 
        Chairperson for a period of 3 years.
            ``(5) Compensation.--Each member of the Board who is not an 
        officer or employee of the Federal Government shall be entitled 
        to compensation (equivalent to the rate provided for level IV 
        of the Executive Schedule under section 5315 of title 5, United 
        States Code) and expenses incurred while performing the duties 
        of the Board. An officer or employee of the Federal government 
        who is a member of the Board shall be exempt from compensation.
            ``(6) Director and staff; experts and consultants.--The 
        Board may employ and fix the compensation of an Executive 
        Director and such other personnel as may be necessary to carry 
        out the duties of the Institute and may seek such assistance 
        and support of, or contract with, experts and consultants that 
        may be necessary for the performance of the duties of the 
        Institute.
            ``(7) Meetings and hearings.--The Board shall meet and hold 
        hearings at the call of the Chairperson or a majority of its 
        members. Meetings not solely concerning matters of personnel 
        shall be advertised at least 7 days in advance and open to the 
        public. A majority of the Board members shall constitute a 
        quorum, but a lesser number of members may meet and hold 
        hearings.
    ``(g) Financial and Governmental Oversight.--
            ``(1) Contract for audit.--The Institute shall provide for 
        the conduct of financial audits of the Institute on an annual 
        basis by a private entity with expertise in conducting 
        financial audits.
            ``(2) Review and annual reports.--
                    ``(A) Review.--The Comptroller General of the 
                United States shall review the following:
                            ``(i) Not less frequently than on an annual 
                        basis, the financial audits conducted under 
                        paragraph (1).
                            ``(ii) Not less frequently than every 5 
                        years, the processes established by the 
                        Institute, including the research priorities 
                        and the conduct of research projects, in order 
                        to determine whether information produced by 
                        such research projects is objective and 
                        credible, is produced in a manner consistent 
                        with the requirements under this section, and 
                        is developed through a transparent process.
                            ``(iii) Not less frequently than every 5 
                        years, the dissemination and training 
                        activities and data networks established under 
                        section 937 of the Public Health Service Act, 
                        including the methods and products used to 
                        disseminate research, the types of training 
                        conducted and supported, and the types and 
                        functions of the data networks established, in 
                        order to determine whether the activities and 
                        data are produced in a manner consistent with 
                        the requirements under such section.
                            ``(iv) Not less frequently than every 5 
                        years, the overall effectiveness of activities 
                        conducted under this section and the 
                        dissemination, training, and capacity building 
                        activities conducted under section 937 of the 
                        Public Health Service Act. Such review shall 
                        include an analysis of the extent to which 
                        research findings are used by health care 
                        decision-makers, the effect of the 
                        dissemination of such findings on reducing 
                        practice variation and disparities in health 
                        care, and the effect of the research conducted 
                        and disseminated on innovation and the health 
                        care economy of the United States.
                            ``(v) Not later than 8 years after the date 
                        of enactment of this section, the adequacy and 
                        use of the funding for the Institute and the 
                        activities conducted under section 937 of the 
                        Public Health Service Act, including a 
                        determination as to whether, based on the 
                        utilization of research findings by public and 
                        private payers, funding sources for the 
                        Patient-Centered Outcomes Research Trust Fund 
                        under section 9511 of the Internal Revenue Code 
                        of 1986 are appropriate and whether such 
                        sources of funding should be continued or 
                        adjusted.
                    ``(B) Annual reports.--Not later than April 1 of 
                each year, the Comptroller General of the United States 
                shall submit to Congress a report containing the 
                results of the review conducted under subparagraph (A) 
                with respect to the preceding year (or years, if 
                applicable), together with recommendations for such 
                legislation and administrative action as the 
                Comptroller General determines appropriate.
    ``(h) Ensuring Transparency, Credibility, and Access.--The 
Institute shall establish procedures to ensure that the following 
requirements for ensuring transparency, credibility, and access are 
met:
            ``(1) Public comment periods.--The Institute shall provide 
        for a public comment period of not less than 45 days and not 
        more than 60 days prior to the adoption under subsection (d)(9) 
        of the national priorities identified under subsection 
        (d)(1)(A), the research project agenda established under 
        subsection (d)(1)(B), the methodological standards developed 
        and updated by the methodology committee under subsection 
        (d)(6)(C)(i), and the peer-review process provided under 
        paragraph (7), and after the release of draft findings with 
        respect to systematic reviews of existing research and 
        evidence.
            ``(2) Additional forums.--The Institute shall support 
        forums to increase public awareness and obtain and incorporate 
        public input and feedback through media (such as an Internet 
        website) on research priorities, research findings, and other 
        duties, activities, or processes the Institute determines 
        appropriate.
            ``(3) Public availability.--The Institute shall make 
        available to the public and disclose through the official 
        public Internet website of the Institute the following:
                    ``(A) Information contained in research findings as 
                specified in subsection (d)(9).
                    ``(B) The process and methods for the conduct of 
                research, including the identity of the entity and the 
                investigators conducing such research and any conflicts 
                of interests of such parties, any direct or indirect 
                links the entity has to industry, and research 
                protocols, including measures taken, methods of 
                research and analysis, research results, and such other 
                information the Institute determines appropriate) 
                concurrent with the release of research findings.
                    ``(C) Notice of public comment periods under 
                paragraph (1), including deadlines for public comments.
                    ``(D) Subsequent comments received during each of 
                the public comment periods.
                    ``(E) In accordance with applicable laws and 
                processes and as the Institute determines appropriate, 
                proceedings of the Institute.
            ``(4) Disclosure of conflicts of interest.--
                    ``(A) In general.--A conflict of interest shall be 
                disclosed in the following manner:
                            ``(i) By the Institute in appointing 
                        members to an expert advisory panel under 
                        subsection (d)(4), in selecting individuals to 
                        contribute to any peer-review process under 
                        subsection (d)(7), and for employment as 
                        executive staff of the Institute.
                            ``(ii) By the Comptroller General in 
                        appointing members of the methodology committee 
                        under subsection (d)(6);
                            ``(iii) By the Institute in the annual 
                        report under subsection (d)(10), except that, 
                        in the case of individuals contributing to any 
                        such peer review process, such description 
                        shall be in a manner such that those 
                        individuals cannot be identified with a 
                        particular research project.
                    ``(B) Manner of disclosure.--Conflicts of interest 
                shall be disclosed as described in subparagraph (A) as 
                soon as practicable on the Internet web site of the 
                Institute and of the Government Accountability Office. 
                The information disclosed under the preceding sentence 
                shall include the type, nature, and magnitude of the 
                interests of the individual involved, except to the 
                extent that the individual recuses himself or herself 
                from participating in the consideration of or any other 
                activity with respect to the study as to which the 
                potential conflict exists.
    ``(i) Rules.--The Institute, its Board or staff, shall be 
prohibited from accepting gifts, bequeaths, or donations of services or 
property. In addition, the Institute shall be prohibited from 
establishing a corporation or generating revenues from activities other 
than as provided under this section.
    ``(j) Rules of Construction.--
            ``(1) Coverage.--Nothing in this section shall be 
        construed--
                    ``(A) to permit the Institute to mandate coverage, 
                reimbursement, or other policies for any public or 
                private payer; or
                    ``(B) as preventing the Secretary from covering the 
                routine costs of clinical care received by an 
                individual entitled to, or enrolled for, benefits under 
                title XVIII, XIX, or XXI in the case where such 
                individual is participating in a clinical trial and 
                such costs would otherwise be covered under such title 
                with respect to the beneficiary.''.
    (b) Dissemination and Building Capacity for Research.--Title IX of 
the Public Health Service Act (42 U.S.C. 299 et seq.), as amended by 
section 3606, is further amended by inserting after section 936 the 
following:

``SEC. 937. DISSEMINATION AND BUILDING CAPACITY FOR RESEARCH.

    ``(a) In General.--
            ``(1) Dissemination.--The Office of Communication and 
        Knowledge Transfer (referred to in this section as the 
        `Office') at the Agency for Healthcare Research and Quality (or 
        any other relevant office designated by Agency for Healthcare 
        Research and Quality), in consultation with the National 
        Institutes of Health, shall broadly disseminate the research 
        findings that are published by the Patient Centered Outcomes 
        Research Institute established under section 1181(b) of the 
        Social Security Act (referred to in this section as the 
        `Institute') and other government-funded research relevant to 
        comparative clinical effectiveness research. The Office shall 
        create informational tools that organize and disseminate 
        research findings for physicians, health care providers, 
        patients, payers, and policy makers. The Office shall also 
        develop a publicly available resource database that collects 
        and contains government-funded evidence and research from 
        public, private, not-for profit, and academic sources.
            ``(2) Requirements.--The Office shall provide for the 
        dissemination of the Institute's research findings and 
        government-funded research relevant to comparative clinical 
        effectiveness research to physicians, health care providers, 
        patients, vendors of health information technology focused on 
        clinical decision support, appropriate professional 
        associations, and Federal and private health plans. Materials, 
        forums, and media used to disseminate the findings, 
        informational tools, and resource databases shall--
                    ``(A) include a description of considerations for 
                specific subpopulations, the research methodology, and 
                the limitations of the research, and the names of the 
                entities, agencies, instrumentalities, and individuals 
                who conducted any research which was published by the 
                Institute; and
                    ``(B) not be construed as mandates, guidelines, or 
                recommendations for payment, coverage, or treatment.
    ``(b) Incorporation of Research Findings.--The Office, in 
consultation with relevant medical and clinical associations, shall 
assist users of health information technology focused on clinical 
decision support to promote the timely incorporation of research 
findings disseminated under subsection (a) into clinical practices and 
to promote the ease of use of such incorporation.
    ``(c) Feedback.--The Office shall establish a process to receive 
feedback from physicians, health care providers, patients, and vendors 
of health information technology focused on clinical decision support, 
appropriate professional associations, and Federal and private health 
plans about the value of the information disseminated and the 
assistance provided under this section.
    ``(d) Rule of Construction.--Nothing in this section shall preclude 
the Institute from making its research findings publicly available as 
required under section 1181(d)(8) of the Social Security Act.
    ``(e) Training of Researchers.--The Agency for Health Care Research 
and Quality, in consultation with the National Institutes of Health, 
shall build capacity for comparative clinical effectiveness research by 
establishing a grant program that provides for the training of 
researchers in the methods used to conduct such research, including 
systematic reviews of existing research and primary research such as 
clinical trials. At a minimum, such training shall be in methods that 
meet the methodological standards adopted under section 1181(d)(9) of 
the Social Security Act.
    ``(f) Building Data for Research.--The Secretary shall provide for 
the coordination of relevant Federal health programs to build data 
capacity for comparative clinical effectiveness research, including the 
development and use of clinical registries and health outcomes research 
data networks, in order to develop and maintain a comprehensive, 
interoperable data network to collect, link, and analyze data on 
outcomes and effectiveness from multiple sources, including electronic 
health records.
    ``(g) Authority to Contract With the Institute.--Agencies and 
instrumentalities of the Federal Government may enter into agreements 
with the Institute, and accept and retain funds, for the conduct and 
support of research described in this part, provided that the research 
to be conducted or supported under such agreements is authorized under 
the governing statutes of such agencies and instrumentalities.''.
    (c) In General.--Part D of title XI of the Social Security Act, as 
added by subsection (a), is amended by adding at the end the following 
new section:

  ``limitations on certain uses of comparative clinical effectiveness 
                                research

    ``Sec. 1182.  (a) The Secretary may only use evidence and findings 
from research conducted under section 1181 to make a determination 
regarding coverage under title XVIII if such use is through an 
iterative and transparent process which includes public comment and 
considers the effect on subpopulations.
    ``(b) Nothing in section 1181 shall be construed as--
            ``(1) superceding or modifying the coverage of items or 
        services under title XVIII that the Secretary determines are 
        reasonable and necessary under section 1862(l)(1); or
            ``(2) authorizing the Secretary to deny coverage of items 
        or services under such title solely on the basis of comparative 
        clinical effectiveness research.
    ``(c)(1) The Secretary shall not use evidence or findings from 
comparative clinical effectiveness research conducted under section 
1181 in determining coverage, reimbursement, or incentive programs 
under title XVIII in a manner that treats extending the life of an 
elderly, disabled, or terminally ill individual as of lower value than 
extending the life of an individual who is younger, nondisabled, or not 
terminally ill.
    ``(2) Paragraph (1) shall not be construed as preventing the 
Secretary from using evidence or findings from such comparative 
clinical effectiveness research in determining coverage, reimbursement, 
or incentive programs under title XVIII based upon a comparison of the 
difference in the effectiveness of alternative treatments in extending 
an individual's life due to the individual's age, disability, or 
terminal illness.
    ``(d)(1) The Secretary shall not use evidence or findings from 
comparative clinical effectiveness research conducted under section 
1181 in determining coverage, reimbursement, or incentive programs 
under title XVIII in a manner that precludes, or with the intent to 
discourage, an individual from choosing a health care treatment based 
on how the individual values the tradeoff between extending the length 
of their life and the risk of disability.
    ``(2)(A) Paragraph (1) shall not be construed to--
            ``(i) limit the application of differential copayments 
        under title XVIII based on factors such as cost or type of 
        service; or
            ``(ii) prevent the Secretary from using evidence or 
        findings from such comparative clinical effectiveness research 
        in determining coverage, reimbursement, or incentive programs 
        under such title based upon a comparison of the difference in 
        the effectiveness of alternative health care treatments in 
        extending an individual's life due to that individual's age, 
        disability, or terminal illness.
    ``(3) Nothing in the provisions of, or amendments made by the 
Patient Protection and Affordable Care Act, shall be construed to limit 
comparative clinical effectiveness research or any other research, 
evaluation, or dissemination of information concerning the likelihood 
that a health care treatment will result in disability.
    ``(e) The Patient-Centered Outcomes Research Institute established 
under section 1181(b)(1) shall not develop or employ a dollars-per-
quality adjusted life year (or similar measure that discounts the value 
of a life because of an individual's disability) as a threshold to 
establish what type of health care is cost effective or recommended. 
The Secretary shall not utilize such an adjusted life year (or such a 
similar measure) as a threshold to determine coverage, reimbursement, 
or incentive programs under title XVIII.''.
    (d) In General.--Part D of title XI of the Social Security Act, as 
added by subsection (a) and amended by subsection (c), is amended by 
adding at the end the following new section:

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

    ``Sec. 1183.  (a) In General.--The Secretary shall provide for the 
transfer, from the Federal Hospital Insurance Trust Fund under section 
1817 and the Federal Supplementary Medical Insurance Trust Fund under 
section 1841, in proportion (as estimated by the Secretary) to the 
total expenditures during such fiscal year that are made under title 
XVIII from the respective trust fund, to the Patient-Centered Outcomes 
Research Trust Fund (referred to in this section as the `PCORTF') under 
section 9511 of the Internal Revenue Code of 1986, of the following:
            ``(1) For fiscal year 2013, an amount equal to $1 
        multiplied by the average number of individuals entitled to 
        benefits under part A, or enrolled under part B, of title XVIII 
        during such fiscal year.
            ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 
        2018, and 2019, an amount equal to $2 multiplied by the average 
        number of individuals entitled to benefits under part A, or 
        enrolled under part B, of title XVIII during such fiscal year.
    ``(b) Adjustments for Increases in Health Care Spending.--In the 
case of any fiscal year beginning after September 30, 2014, the dollar 
amount in effect under subsection (a)(2) for such fiscal year shall be 
equal to the sum of such dollar amount for the previous fiscal year 
(determined after the application of this subsection), plus an amount 
equal to the product of--
            ``(1) such dollar amount for the previous fiscal year, 
        multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures, as most recently 
        published by the Secretary before the beginning of the fiscal 
        year.''.
    (e) Patient-Centered Outcomes Research Trust Fund; Financing for 
Trust Fund.--
            (1) Establishment of trust fund.--
                    (A) In general.--Subchapter A of chapter 98 of the 
                Internal Revenue Code of 1986 (relating to 
                establishment of trust funds) is amended by adding at 
                the end the following new section:

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

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Patient-Centered 
Outcomes Research Trust Fund' (hereafter in this section referred to as 
the `PCORTF'), consisting of such amounts as may be appropriated or 
credited to such Trust Fund as provided in this section and section 
9602(b).
    ``(b) Transfers to Fund.--
            ``(1) Appropriation.--There are hereby appropriated to the 
        Trust Fund the following:
                    ``(A) For fiscal year 2010, $10,000,000.
                    ``(B) For fiscal year 2011, $50,000,000.
                    ``(C) For fiscal year 2012, $150,000,000.
                    ``(D) For fiscal year 2013--
                            ``(i) an amount equivalent to the net 
                        revenues received in the Treasury from the fees 
                        imposed under subchapter B of chapter 34 
                        (relating to fees on health insurance and self-
                        insured plans) for such fiscal year; and
                            ``(ii) $150,000,000.
                    ``(E) For each of fiscal years 2014, 2015, 2016, 
                2017, 2018, and 2019--
                            ``(i) an amount equivalent to the net 
                        revenues received in the Treasury from the fees 
                        imposed under subchapter B of chapter 34 
                        (relating to fees on health insurance and self-
                        insured plans) for such fiscal year; and
                            ``(ii) $150,000,000.
                The amounts appropriated under subparagraphs (A), (B), 
                (C), (D)(ii), and (E)(ii) shall be transferred from the 
                general fund of the Treasury, from funds not otherwise 
                appropriated.
            ``(2) Trust fund transfers.--In addition to the amounts 
        appropriated under paragraph (1), there shall be credited to 
        the PCORTF the amounts transferred under section 1183 of the 
        Social Security Act.
            ``(3) Limitation on transfers to pcortf.--No amount may be 
        appropriated or transferred to the PCORTF on and after the date 
        of any expenditure from the PCORTF which is not an expenditure 
        permitted under this section. The determination of whether an 
        expenditure is so permitted shall be made without regard to--
                    ``(A) any provision of law which is not contained 
                or referenced in this chapter or in a revenue Act, and
                    ``(B) whether such provision of law is a 
                subsequently enacted provision or directly or 
                indirectly seeks to waive the application of this 
                paragraph.
    ``(c) Trustee.--The Secretary of the Treasury shall be a trustee of 
the PCORTF.
    ``(d) Expenditures From Fund.--
            ``(1) Amounts available to the patient-centered outcomes 
        research institute.--Subject to paragraph (2), amounts in the 
        PCORTF are available, without further appropriation, to the 
        Patient-Centered Outcomes Research Institute established under 
        section 1181(b) of the Social Security Act for carrying out 
        part D of title XI of the Social Security Act (as in effect on 
        the date of enactment of such Act).
            ``(2) Transfer of funds.--
                    ``(A) In general.--The trustee of the PCORTF shall 
                provide for the transfer from the PCORTF of 20 percent 
                of the amounts appropriated or credited to the PCORTF 
                for each of fiscal years 2011 through 2019 to the 
                Secretary of Health and Human Services to carry out 
                section 937 of the Public Health Service Act.
                    ``(B) Availability.--Amounts transferred under 
                subparagraph (A) shall remain available until expended.
                    ``(C) Requirements.--Of the amounts transferred 
                under subparagraph (A) with respect to a fiscal year, 
                the Secretary of Health and Human Services shall 
                distribute--
                            ``(i) 80 percent to the Office of 
                        Communication and Knowledge Transfer of the 
                        Agency for Healthcare Research and Quality (or 
                        any other relevant office designated by Agency 
                        for Healthcare Research and Quality) to carry 
                        out the activities described in section 937 of 
                        the Public Health Service Act; and
                            ``(ii) 20 percent to the Secretary to carry 
                        out the activities described in such section 
                        937.
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary of the Treasury 
based on the excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 
        resulting from the fees imposed by such subchapter.
    ``(f) Termination.--No amounts shall be available for expenditure 
from the PCORTF after September 30, 2019, and any amounts in such Trust 
Fund after such date shall be transferred to the general fund of the 
Treasury.''.
                    (B) Clerical amendment.--The table of sections for 
                subchapter A of chapter 98 of such Code is amended by 
                adding at the end the following new item:

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

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

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

``SEC. 4375. HEALTH INSURANCE.

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

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

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

``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

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

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

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

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

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

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

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

SEC. 6302. FEDERAL COORDINATING COUNCIL FOR COMPARATIVE EFFECTIVENESS 
              RESEARCH.

    Notwithstanding any other provision of law, the Federal 
Coordinating Council for Comparative Effectiveness Research established 
under section 804 of Division A of the American Recovery and 
Reinvestment Act of 2009 (42 U.S.C. 299b-8), including the requirement 
under subsection (e)(2) of such section, shall terminate on the date of 
enactment of this Act.

 Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions

SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIREMENTS UNDER 
              MEDICARE, MEDICAID, AND CHIP.

    (a) Medicare.--Section 1866(j) of the Social Security Act (42 
U.S.C. 1395cc(j)) is amended--
            (1) in paragraph (1)(A), by adding at the end the 
        following: ``Such process shall include screening of providers 
        and suppliers in accordance with paragraph (2), a provisional 
        period of enhanced oversight in accordance with paragraph (3), 
        disclosure requirements in accordance with paragraph (4), the 
        imposition of temporary enrollment moratoria in accordance with 
        paragraph (5), and the establishment of compliance programs in 
        accordance with paragraph (6).'';
            (2) by redesignating paragraph (2) as paragraph (7); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Provider screening.--
                    ``(A) Procedures.--Not later than 180 days after 
                the date of enactment of this paragraph, the Secretary, 
                in consultation with the Inspector General of the 
                Department of Health and Human Services, shall 
                establish procedures under which screening is conducted 
                with respect to providers of medical or other items or 
                services and suppliers under the program under this 
                title, the Medicaid program under title XIX, and the 
                CHIP program under title XXI.
                    ``(B) Level of screening.--The Secretary shall 
                determine the level of screening conducted under this 
                paragraph according to the risk of fraud, waste, and 
                abuse, as determined by the Secretary, with respect to 
                the category of provider of medical or other items or 
                services or supplier. Such screening--
                            ``(i) shall include a licensure check, 
                        which may include such checks across States; 
                        and
                            ``(ii) may, as the Secretary determines 
                        appropriate based on the risk of fraud, waste, 
                        and abuse described in the preceding sentence, 
                        include--
                                    ``(I) a criminal background check;
                                    ``(II) fingerprinting;
                                    ``(III) unscheduled and unannounced 
                                site visits, including preenrollment 
                                site visits;
                                    ``(IV) database checks (including 
                                such checks across States); and
                                    ``(V) such other screening as the 
                                Secretary determines appropriate.
                    ``(C) Application fees.--
                            ``(i) Individual providers.--Except as 
                        provided in clause (iii), the Secretary shall 
                        impose a fee on each individual provider of 
                        medical or other items or services or supplier 
                        (such as a physician, physician assistant, 
                        nurse practitioner, or clinical nurse 
                        specialist) with respect to which screening is 
                        conducted under this paragraph in an amount 
                        equal to--
                                    ``(I) for 2010, $200; and
                                    ``(II) for 2011 and each subsequent 
                                year, the amount determined under this 
                                clause for the preceding year, adjusted 
                                by the percentage change in the 
                                consumer price index for all urban 
                                consumers (all items; United States 
                                city average) for the 12-month period 
                                ending with June of the previous year.
                            ``(ii) Institutional providers.--Except as 
                        provided in clause (iii), the Secretary shall 
                        impose a fee on each institutional provider of 
                        medical or other items or services or supplier 
                        (such as a hospital or skilled nursing 
                        facility) with respect to which screening is 
                        conducted under this paragraph in an amount 
                        equal to--
                                    ``(I) for 2010, $500; and
                                    ``(II) for 2011 and each subsequent 
                                year, the amount determined under this 
                                clause for the preceding year, adjusted 
                                by the percentage change in the 
                                consumer price index for all urban 
                                consumers (all items; United States 
                                city average) for the 12-month period 
                                ending with June of the previous year.
                            ``(iii) Hardship exception; waiver for 
                        certain medicaid providers.--The Secretary may, 
                        on a case-by-case basis, exempt a provider of 
                        medical or other items or services or supplier 
                        from the imposition of an application fee under 
                        this subparagraph if the Secretary determines 
                        that the imposition of the application fee 
                        would result in a hardship. The Secretary may 
                        waive the application fee under this 
                        subparagraph for providers enrolled in a State 
                        Medicaid program for whom the State 
                        demonstrates that imposition of the fee would 
                        impede beneficiary access to care.
                            ``(iv) Use of funds.--Amounts collected as 
                        a result of the imposition of a fee under this 
                        subparagraph shall be used by the Secretary for 
                        program integrity efforts, including to cover 
                        the costs of conducting screening under this 
                        paragraph and to carry out this subsection and 
                        section 1128J.
                    ``(D) Application and enforcement.--
                            ``(i) New providers of services and 
                        suppliers.--The screening under this paragraph 
                        shall apply, in the case of a provider of 
                        medical or other items or services or supplier 
                        who is not enrolled in the program under this 
                        title, title XIX , or title XXI as of the date 
                        of enactment of this paragraph, on or after the 
                        date that is 1 year after such date of 
                        enactment.
                            ``(ii) Current providers of services and 
                        suppliers.--The screening under this paragraph 
                        shall apply, in the case of a provider of 
                        medical or other items or services or supplier 
                        who is enrolled in the program under this 
                        title, title XIX, or title XXI as of such date 
                        of enactment, on or after the date that is 2 
                        years after such date of enactment.
                            ``(iii) Revalidation of enrollment.--
                        Effective beginning on the date that is 180 
                        days after such date of enactment, the 
                        screening under this paragraph shall apply with 
                        respect to the revalidation of enrollment of a 
                        provider of medical or other items or services 
                        or supplier in the program under this title, 
                        title XIX, or title XXI.
                            ``(iv) Limitation on enrollment and 
                        revalidation of enrollment.--In no case may a 
                        provider of medical or other items or services 
                        or supplier who has not been screened under 
                        this paragraph be initially enrolled or 
                        reenrolled in the program under this title, 
                        title XIX, or title XXI on or after the date 
                        that is 3 years after such date of enactment.
                    ``(E) Expedited rulemaking.--The Secretary may 
                promulgate an interim final rule to carry out this 
                paragraph.
            ``(3) Provisional period of enhanced oversight for new 
        providers of services and suppliers.--
                    ``(A) In general.--The Secretary shall establish 
                procedures to provide for a provisional period of not 
                less than 30 days and not more than 1 year during which 
                new providers of medical or other items or services and 
                suppliers, as the Secretary determines appropriate, 
                including categories of providers or suppliers, would 
                be subject to enhanced oversight, such as prepayment 
                review and payment caps, under the program under this 
                title, the Medicaid program under title XIX. and the 
                CHIP program under title XXI.
                    ``(B) Implementation.--The Secretary may establish 
                by program instruction or otherwise the procedures 
                under this paragraph.
            ``(4) Increased disclosure requirements.--
                    ``(A) Disclosure.--A provider of medical or other 
                items or services or supplier who submits an 
                application for enrollment or revalidation of 
                enrollment in the program under this title , title XIX, 
                or title XXI on or after the date that is 1 year after 
                the date of enactment of this paragraph shall disclose 
                (in a form and manner and at such time as determined by 
                the Secretary) any current or previous affiliation 
                (directly or indirectly) with a provider of medical or 
                other items or services or supplier that has 
                uncollected debt, has been or is subject to a payment 
                suspension under a Federal health care program (as 
                defined in section 1128B(f)), has been excluded from 
                participation under the program under this title, the 
                Medicaid program under title XIX, or the CHIP program 
                under title XXI, or has had its billing privileges 
                denied or revoked.
                    ``(B) Authority to deny enrollment.--If the 
                Secretary determines that such previous affiliation 
                poses an undue risk of fraud, waste, or abuse, the 
                Secretary may deny such application. Such a denial 
                shall be subject to appeal in accordance with paragraph 
                (7).
            ``(5) Authority to adjust payments of providers of services 
        and suppliers with the same tax identification number for past-
        due obligations.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, in the case of an applicable 
                provider of services or supplier, the Secretary may 
                make any necessary adjustments to payments to the 
                applicable provider of services or supplier under the 
                program under this title in order to satisfy any past-
                due obligations described in subparagraph (B)(ii) of an 
                obligated provider of services or supplier.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) In general.--The term `applicable 
                        provider of services or supplier' means a 
                        provider of services or supplier that has the 
                        same taxpayer identification number assigned 
                        under section 6109 of the Internal Revenue Code 
                        of 1986 as is assigned to the obligated 
                        provider of services or supplier under such 
                        section, regardless of whether the applicable 
                        provider of services or supplier is assigned a 
                        different billing number or national provider 
                        identification number under the program under 
                        this title than is assigned to the obligated 
                        provider of services or supplier.
                            ``(ii) Obligated provider of services or 
                        supplier.--The term `obligated provider of 
                        services or supplier' means a provider of 
                        services or supplier that owes a past-due 
                        obligation under the program under this title 
                        (as determined by the Secretary).
            ``(6) Temporary moratorium on enrollment of new 
        providers.--
                    ``(A) In general.--The Secretary may impose a 
                temporary moratorium on the enrollment of new providers 
                of services and suppliers, including categories of 
                providers of services and suppliers, in the program 
                under this title, under the Medicaid program under 
                title XIX, or under the CHIP program under title XXI if 
                the Secretary determines such moratorium is necessary 
                to prevent or combat fraud, waste, or abuse under 
                either such program.
                    ``(B) Limitation on review.--There shall be no 
                judicial review under section 1869, section 1878, or 
                otherwise, of a temporary moratorium imposed under 
                subparagraph (A).
            ``(7) Compliance programs.--
                    ``(A) In general.--On or after the date of 
                implementation determined by the Secretary under 
                subparagraph (C), a provider of medical or other items 
                or services or supplier within a particular industry 
                sector or category shall, as a condition of enrollment 
                in the program under this title, title XIX, or title 
                XXI, establish a compliance program that contains the 
                core elements established under subparagraph (B) with 
                respect to that provider or supplier and industry or 
                category.
                    ``(B) Establishment of core elements.--The 
                Secretary, in consultation with the Inspector General 
                of the Department of Health and Human Services, shall 
                establish core elements for a compliance program under 
                subparagraph (A) for providers or suppliers within a 
                particular industry or category.
                    ``(C) Timeline for implementation.--The Secretary 
                shall determine the timeline for the establishment of 
                the core elements under subparagraph (B) and the date 
                of the implementation of subparagraph (A) for providers 
                or suppliers within a particular industry or category. 
                The Secretary shall, in determining such date of 
                implementation, consider the extent to which the 
                adoption of compliance programs by a provider of 
                medical or other items or services or supplier is 
                widespread in a particular industry sector or with 
                respect to a particular provider or supplier 
                category.''.
    (b) Medicaid.--
            (1) State plan amendment.--Section 1902(a) of the Social 
        Security Act (42 U.S.C. 1396a(a)), as amended by section 
        4302(b), is amended--
                    (A) in subsection (a)--
                            (i) by striking ``and'' at the end of 
                        paragraph (75);
                            (ii) by striking the period at the end of 
                        paragraph (76) and inserting a semicolon; and
                            (iii) by inserting after paragraph (76) the 
                        following:
            ``(77) provide that the State shall comply with provider 
        and supplier screening, oversight, and reporting requirements 
        in accordance with subsection (ii);''; and
                    (B) by adding at the end the following:
    ``(ii) Provider and Supplier Screening, Oversight, and Reporting 
Requirements.--For purposes of subsection (a)(77), the requirements of 
this subsection are the following:
            ``(1) Screening.--The State complies with the process for 
        screening providers and suppliers under this title, as 
        established by the Secretary under section 1886(j)(2).
            ``(2) Provisional period of enhanced oversight for new 
        providers and suppliers.--The State complies with procedures to 
        provide for a provisional period of enhanced oversight for new 
        providers and suppliers under this title, as established by the 
        Secretary under section 1886(j)(3).
            ``(3) Disclosure requirements.--The State requires 
        providers and suppliers under the State plan or under a waiver 
        of the plan to comply with the disclosure requirements 
        established by the Secretary under section 1886(j)(4).
            ``(4) Temporary moratorium on enrollment of new providers 
        or suppliers.--
                    ``(A) Temporary moratorium imposed by the 
                secretary.--
                            ``(i) In general.--Subject to clause (ii), 
                        the State complies with any temporary 
                        moratorium on the enrollment of new providers 
                        or suppliers imposed by the Secretary under 
                        section 1886(j)(6).
                            ``(ii) Exception.--A State shall not be 
                        required to comply with a temporary moratorium 
                        described in clause (i) if the State determines 
                        that the imposition of such temporary 
                        moratorium would adversely impact 
                        beneficiaries' access to medical assistance.
                    ``(B) Moratorium on enrollment of providers and 
                suppliers.--At the option of the State, the State 
                imposes, for purposes of entering into participation 
                agreements with providers or suppliers under the State 
                plan or under a waiver of the plan, periods of 
                enrollment moratoria, or numerical caps or other 
                limits, for providers or suppliers identified by the 
                Secretary as being at high-risk for fraud, waste, or 
                abuse as necessary to combat fraud, waste, or abuse, 
                but only if the State determines that the imposition of 
                any such period, cap, or other limits would not 
                adversely impact beneficiaries' access to medical 
                assistance.
            ``(5) Compliance programs.--The State requires providers 
        and suppliers under the State plan or under a waiver of the 
        plan to establish, in accordance with the requirements of 
        section 1866(j)(7), a compliance program that contains the core 
        elements established under subparagraph (B) of that section 
        1866(j)(7) for providers or suppliers within a particular 
        industry or category.
            ``(6) Reporting of adverse provider actions.--The State 
        complies with the national system for reporting criminal and 
        civil convictions, sanctions, negative licensure actions, and 
        other adverse provider actions to the Secretary, through the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        in accordance with regulations of the Secretary.
            ``(7) Enrollment and npi of ordering or referring 
        providers.--The State requires--
                    ``(A) all ordering or referring physicians or other 
                professionals to be enrolled under the State plan or 
                under a waiver of the plan as a participating provider; 
                and
                    ``(B) the national provider identifier of any 
                ordering or referring physician or other professional 
                to be specified on any claim for payment that is based 
                on an order or referral of the physician or other 
                professional.
            ``(8) Other state oversight.--Nothing in this subsection 
        shall be interpreted to preclude or limit the ability of a 
        State to engage in provider and supplier screening or enhanced 
        provider and supplier oversight activities beyond those 
        required by the Secretary.''.
            (2) Disclosure of medicare terminated providers and 
        suppliers to states.--The Administrator of the Centers for 
        Medicare & Medicaid Services shall establish a process for 
        making available to the each State agency with responsibility 
        for administering a State Medicaid plan (or a waiver of such 
        plan) under title XIX of the Social Security Act or a child 
        health plan under title XXI the name, national provider 
        identifier, and other identifying information for any provider 
        of medical or other items or services or supplier under the 
        Medicare program under title XVIII or under the CHIP program 
        under title XXI that is terminated from participation under 
        that program within 30 days of the termination (and, with 
        respect to all such providers or suppliers who are terminated 
        from the Medicare program on the date of enactment of this Act, 
        within 90 days of such date).
            (3) Conforming amendment.--Section 1902(a)(23) of the 
        Social Security Act (42 U.S.C. 1396a), is amended by inserting 
        before the semicolon at the end the following: ``or by a 
        provider or supplier to which a moratorium under subsection 
        (ii)(4) is applied during the period of such moratorium''.
    (c) CHIP.--Section 2107(e)(1) of the Social Security Act (42 U.S.C. 
1397gg(e)(1)), as amended by section 2101(d), is amended--
            (1) by redesignating subparagraphs (D) through (M) as 
        subparagraphs (E) through (N), respectively; and
            (2) by inserting after subparagraph (C), the following:
                    ``(D) Subsections (a)(77) and (ii) of section 1902 
                (relating to provider and supplier screening, 
                oversight, and reporting requirements).''.

SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.), as amended by sections 6002, 6004, and 6102, is 
amended by inserting after section 1128I the following new section:

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

    ``(a) Data Matching.--
            ``(1) Integrated data repository.--
                    ``(A) Inclusion of certain data.--
                            ``(i) In general.--The Integrated Data 
                        Repository of the Centers for Medicare & 
                        Medicaid Services shall include, at a minimum, 
                        claims and payment data from the following:
                                    ``(I) The programs under titles 
                                XVIII and XIX (including parts A, B, C, 
                                and D of title XVIII).
                                    ``(II) The program under title XXI.
                                    ``(III) Health-related programs 
                                administered by the Secretary of 
                                Veterans Affairs.
                                    ``(IV) Health-related programs 
                                administered by the Secretary of 
                                Defense.
                                    ``(V) The program of old-age, 
                                survivors, and disability insurance 
                                benefits established under title II.
                                    ``(VI) The Indian Health Service 
                                and the Contract Health Service 
                                program.
                            ``(ii) Priority for inclusion of certain 
                        data.--Inclusion of the data described in 
                        subclause (I) of such clause in the Integrated 
                        Data Repository shall be a priority. Data 
                        described in subclauses (II) through (VI) of 
                        such clause shall be included in the Integrated 
                        Data Repository as appropriate.
                    ``(B) Data sharing and matching.--
                            ``(i) In general.--The Secretary shall 
                        enter into agreements with the individuals 
                        described in clause (ii) under which such 
                        individuals share and match data in the system 
                        of records of the respective agencies of such 
                        individuals with data in the system of records 
                        of the Department of Health and Human Services 
                        for the purpose of identifying potential fraud, 
                        waste, and abuse under the programs under 
                        titles XVIII and XIX.
                            ``(ii) Individuals described.--The 
                        following individuals are described in this 
                        clause:
                                    ``(I) The Commissioner of Social 
                                Security.
                                    ``(II) The Secretary of Veterans 
                                Affairs.
                                    ``(III) The Secretary of Defense.
                                    ``(IV) The Director of the Indian 
                                Health Service.
                            ``(iii) Definition of system of records.--
                        For purposes of this paragraph, the term 
                        `system of records' has the meaning given such 
                        term in section 552a(a)(5) of title 5, United 
                        States Code.
            ``(2) Access to claims and payment databases.--For purposes 
        of conducting law enforcement and oversight activities and to 
        the extent consistent with applicable information, privacy, 
        security, and disclosure laws, including the regulations 
        promulgated under the Health Insurance Portability and 
        Accountability Act of 1996 and section 552a of title 5, United 
        States Code, and subject to any information systems security 
        requirements under such laws or otherwise required by the 
        Secretary, the Inspector General of the Department of Health 
        and Human Services and the Attorney General shall have access 
        to claims and payment data of the Department of Health and 
        Human Services and its contractors related to titles XVIII, 
        XIX, and XXI.
    ``(b) OIG Authority To Obtain Information.--
            ``(1) In general.--Notwithstanding and in addition to any 
        other provision of law, the Inspector General of the Department 
        of Health and Human Services may, for purposes of protecting 
        the integrity of the programs under titles XVIII and XIX, 
        obtain information from any individual (including a beneficiary 
        provided all applicable privacy protections are followed) or 
        entity that--
                    ``(A) is a provider of medical or other items or 
                services, supplier, grant recipient, contractor, or 
                subcontractor; or
                    ``(B) directly or indirectly provides, orders, 
                manufactures, distributes, arranges for, prescribes, 
                supplies, or receives medical or other items or 
                services payable by any Federal health care program (as 
                defined in section 1128B(f)) regardless of how the item 
                or service is paid for, or to whom such payment is 
                made.
            ``(2) Inclusion of certain information.--Information which 
        the Inspector General may obtain under paragraph (1) includes 
        any supporting documentation necessary to validate claims for 
        payment or payments under title XVIII or XIX, including a 
        prescribing physician's medical records for an individual who 
        is prescribed an item or service which is covered under part B 
        of title XVIII, a covered part D drug (as defined in section 
        1860D-2(e)) for which payment is made under an MA-PD plan under 
        part C of such title, or a prescription drug plan under part D 
        of such title, and any records necessary for evaluation of the 
        economy, efficiency, and effectiveness of the programs under 
        titles XVIII and XIX.
    ``(c) Administrative Remedy for Knowing Participation by 
Beneficiary in Health Care Fraud Scheme.--
            ``(1) In general.--In addition to any other applicable 
        remedies, if an applicable individual has knowingly 
        participated in a Federal health care fraud offense or a 
        conspiracy to commit a Federal health care fraud offense, the 
        Secretary shall impose an appropriate administrative penalty 
        commensurate with the offense or conspiracy.
            ``(2) Applicable individual.--For purposes of paragraph 
        (1), the term `applicable individual' means an individual--
                    ``(A) entitled to, or enrolled for, benefits under 
                part A of title XVIII or enrolled under part B of such 
                title;
                    ``(B) eligible for medical assistance under a State 
                plan under title XIX or under a waiver of such plan; or
                    ``(C) eligible for child health assistance under a 
                child health plan under title XXI.
    ``(d) Reporting and Returning of Overpayments.--
            ``(1) In general.--If a person has received an overpayment, 
        the person shall--
                    ``(A) report and return the overpayment to the 
                Secretary, the State, an intermediary, a carrier, or a 
                contractor, as appropriate, at the correct address; and
                    ``(B) notify the Secretary, State, intermediary, 
                carrier, or contractor to whom the overpayment was 
                returned in writing of the reason for the overpayment.
            ``(2) Deadline for reporting and returning overpayments.--
        An overpayment must be reported and returned under paragraph 
        (1) by the later of--
                    ``(A) the date which is 60 days after the date on 
                which the overpayment was identified; or
                    ``(B) the date any corresponding cost report is 
                due, if applicable.
            ``(3) Enforcement.--Any overpayment retained by a person 
        after the deadline for reporting and returning the overpayment 
        under paragraph (2) is an obligation (as defined in section 
        3729(b)(3) of title 31, United States Code) for purposes of 
        section 3729 of such title.
            ``(4) Definitions.--In this subsection:
                    ``(A) Knowing and knowingly.--The terms `knowing' 
                and `knowingly' have the meaning given those terms in 
                section 3729(b) of title 31, United States Code.
                    ``(B) Overpayment.--The term ``overpayment'' means 
                any funds that a person receives or retains under title 
                XVIII or XIX to which the person, after applicable 
                reconciliation, is not entitled under such title.
                    ``(C) Person.--
                            ``(i) In general.--The term `person' means 
                        a provider of services, supplier, medicaid 
                        managed care organization (as defined in 
                        section 1903(m)(1)(A)), Medicare Advantage 
                        organization (as defined in section 
                        1859(a)(1)), or PDP sponsor (as defined in 
                        section 1860D-41(a)(13)).
                            ``(ii) Exclusion.--Such term does not 
                        include a beneficiary.
    ``(e) Inclusion of National Provider Identifier on All Applications 
and Claims.--The Secretary shall promulgate a regulation that requires, 
not later than January 1, 2011, all providers of medical or other items 
or services and suppliers under the programs under titles XVIII and XIX 
that qualify for a national provider identifier to include their 
national provider identifier on all applications to enroll in such 
programs and on all claims for payment submitted under such 
programs.''.
    (b) Access to Data.--
            (1) Medicare part d.--Section 1860D-15(f)(2) of the Social 
        Security Act (42 U.S.C. 1395w-116(f)(2)) is amended by striking 
        ``may be used by'' and all that follows through the period at 
        the end and inserting ``may be used--
                    ``(A) by officers, employees, and contractors of 
                the Department of Health and Human Services for the 
                purposes of, and to the extent necessary in--
                            ``(i) carrying out this section; and
                            ``(ii) conducting oversight, evaluation, 
                        and enforcement under this title; and
                    ``(B) by the Attorney General and the Comptroller 
                General of the United States for the purposes of, and 
                to the extent necessary in, carrying out health 
                oversight activities.''.
            (2) Data matching.--Section 552a(a)(8)(B) of title 5, 
        United States Code, is amended--
                    (A) in clause (vii), by striking ``or'' at the end;
                    (B) in clause (viii), by inserting ``or'' after the 
                semicolon; and
                    (C) by adding at the end the following new clause:
                            ``(ix) matches performed by the Secretary 
                        of Health and Human Services or the Inspector 
                        General of the Department of Health and Human 
                        Services with respect to potential fraud, 
                        waste, and abuse, including matches of a system 
                        of records with non-Federal records;''.
            (3) Matching agreements with the commissioner of social 
        security.--Section 205(r) of the Social Security Act (42 U.S.C. 
        405(r)) is amended by adding at the end the following new 
        paragraph:
            ``(9)(A) The Commissioner of Social Security shall, upon 
        the request of the Secretary or the Inspector General of the 
        Department of Health and Human Services--
                    ``(i) enter into an agreement with the Secretary or 
                such Inspector General for the purpose of matching data 
                in the system of records of the Social Security 
                Administration and the system of records of the 
                Department of Health and Human Services; and
                    ``(ii) include in such agreement safeguards to 
                assure the maintenance of the confidentiality of any 
                information disclosed.
            ``(B) For purposes of this paragraph, the term `system of 
        records' has the meaning given such term in section 552a(a)(5) 
        of title 5, United States Code.''.
    (c) Withholding of Federal Matching Payments for States That Fail 
to Report Enrollee Encounter Data in the Medicaid Statistical 
Information System.--Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)) is amended--
            (1) in paragraph (23), by striking ``or'' at the end;
            (2) in paragraph (24), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following new paragraph:.
            ``(25) with respect to any amounts expended for medical 
        assistance for individuals for whom the State does not report 
        enrollee encounter data (as defined by the Secretary) to the 
        Medicaid Statistical Information System (MSIS) in a timely 
        manner (as determined by the Secretary).''.
    (d) Permissive Exclusions and Civil Monetary Penalties.--
            (1) Permissive exclusions.--Section 1128(b) of the Social 
        Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at the 
        end the following new paragraph:
            ``(16) Making false statements or misrepresentation of 
        material facts.--Any individual or entity that knowingly makes 
        or causes to be made any false statement, omission, or 
        misrepresentation of a material fact in any application, 
        agreement, bid, or contract to participate or enroll as a 
        provider of services or supplier under a Federal health care 
        program (as defined in section 1128B(f)), including Medicare 
        Advantage organizations under part C of title XVIII, 
        prescription drug plan sponsors under part D of title XVIII, 
        medicaid managed care organizations under title XIX, and 
        entities that apply to participate as providers of services or 
        suppliers in such managed care organizations and such plans.''.
            (2) Civil monetary penalties.--
                    (A) In general.--Section 1128A(a) of the Social 
                Security Act (42 U.S.C. 1320a-7a(a)) is amended--
                            (i) in paragraph (1)(D), by striking ``was 
                        excluded'' and all that follows through the 
                        period at the end and inserting ``was excluded 
                        from the Federal health care program (as 
                        defined in section 1128B(f)) under which the 
                        claim was made pursuant to Federal law.'';
                            (ii) in paragraph (6), by striking ``or'' 
                        at the end;
                            (iii) by inserting after paragraph (7), the 
                        following new paragraphs:
            ``(8) orders or prescribes a medical or other item or 
        service during a period in which the person was excluded from a 
        Federal health care program (as so defined), in the case where 
        the person knows or should know that a claim for such medical 
        or other item or service will be made under such a program;
            ``(9) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material fact in 
        any application, bid, or contract to participate or enroll as a 
        provider of services or a supplier under a Federal health care 
        program (as so defined), including Medicare Advantage 
        organizations under part C of title XVIII, prescription drug 
        plan sponsors under part D of title XVIII, medicaid managed 
        care organizations under title XIX, and entities that apply to 
        participate as providers of services or suppliers in such 
        managed care organizations and such plans;
            ``(10) knows of an overpayment (as defined in paragraph (4) 
        of section 1128J(d)) and does not report and return the 
        overpayment in accordance with such section;'';
                            (iv) in the first sentence--
                                    (I) by striking the ``or'' after 
                                ``prohibited relationship occurs;''; 
                                and
                                    (II) by striking ``act)'' and 
                                inserting ``act; or in cases under 
                                paragraph (9), $50,000 for each false 
                                statement or misrepresentation of a 
                                material fact)''; and
                            (v) in the second sentence, by striking 
                        ``purpose)'' and inserting ``purpose; or in 
                        cases under paragraph (9), an assessment of not 
                        more than 3 times the total amount claimed for 
                        each item or service for which payment was made 
                        based upon the application containing the false 
                        statement or misrepresentation of a material 
                        fact)''.
                    (B) Clarification of treatment of certain 
                charitable and other innocuous programs.--Section 
                1128A(i)(6) of the Social Security Act (42 U.S.C. 
                1320a-7a(i)(6)) is amended--
                            (i) in subparagraph (C), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (D), as redesignated 
                        by section 4331(e) of the Balanced Budget Act 
                        of 1997 (Public Law 105-33), by striking the 
                        period at the end and inserting a semicolon;
                            (iii) by redesignating subparagraph (D), as 
                        added by section 4523(c) of such Act, as 
                        subparagraph (E) and striking the period at the 
                        end and inserting ``; or''; and
                            (iv) by adding at the end the following new 
                        subparagraphs:
                    ``(F) any other remuneration which promotes access 
                to care and poses a low risk of harm to patients and 
                Federal health care programs (as defined in section 
                1128B(f) and designated by the Secretary under 
                regulations);
                    ``(G) the offer or transfer of items or services 
                for free or less than fair market value by a person, 
                if--
                            ``(i) the items or services consist of 
                        coupons, rebates, or other rewards from a 
                        retailer;
                            ``(ii) the items or services are offered or 
                        transferred on equal terms available to the 
                        general public, regardless of health insurance 
                        status; and
                            ``(iii) the offer or transfer of the items 
                        or services is not tied to the provision of 
                        other items or services reimbursed in whole or 
                        in part by the program under title XVIII or a 
                        State health care program (as defined in 
                        section 1128(h));
                    ``(H) the offer or transfer of items or services 
                for free or less than fair market value by a person, 
                if--
                            ``(i) the items or services are not offered 
                        as part of any advertisement or solicitation;
                            ``(ii) the items or services are not tied 
                        to the provision of other services reimbursed 
                        in whole or in part by the program under title 
                        XVIII or a State health care program (as so 
                        defined);
                            ``(iii) there is a reasonable connection 
                        between the items or services and the medical 
                        care of the individual; and
                            ``(iv) the person provides the items or 
                        services after determining in good faith that 
                        the individual is in financial need; or
                    ``(I) effective on a date specified by the 
                Secretary (but not earlier than January 1, 2011), the 
                waiver by a PDP sponsor of a prescription drug plan 
                under part D of title XVIII or an MA organization 
                offering an MA-PD plan under part C of such title of 
                any copayment for the first fill of a covered part D 
                drug (as defined in section 1860D-2(e)) that is a 
                generic drug for individuals enrolled in the 
                prescription drug plan or MA-PD plan, respectively.''.
    (e) Testimonial Subpoena Authority in Exclusion-only Cases.--
Section 1128(f) of the Social Security Act (42 U.S.C. 1320a-7(f)) is 
amended by adding at the end the following new paragraph:
            ``(4) The provisions of subsections (d) and (e) of section 
        205 shall apply with respect to this section to the same extent 
        as they are applicable with respect to title II. The Secretary 
        may delegate the authority granted by section 205(d) (as made 
        applicable to this section) to the Inspector General of the 
        Department of Health and Human Services for purposes of any 
        investigation under this section.''.
    (f) Health Care Fraud.--
            (1) Kickbacks.--Section 1128B of the Social Security Act 
        (42 U.S.C. 1320a-7b) is amended by adding at the end the 
        following new subsection:
    ``(g) In addition to the penalties provided for in this section or 
section 1128A, a claim that includes items or services resulting from a 
violation of this section constitutes a false or fraudulent claim for 
purposes of subchapter III of chapter 37 of title 31, United States 
Code.''.
            (2) Revising the intent requirement.--Section 1128B of the 
        Social Security Act (42 U.S.C. 1320a-7b), as amended by 
        paragraph (1), is amended by adding at the end the following 
        new subsection:
    ``(h) With respect to violations of this section, a person need not 
have actual knowledge of this section or specific intent to commit a 
violation of this section.''.
    (g) Surety Bond Requirements.--
            (1) Durable medical equipment.--Section 1834(a)(16)(B) of 
        the Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is amended 
        by inserting ``that the Secretary determines is commensurate 
        with the volume of the billing of the supplier'' before the 
        period at the end.
            (2) Home health agencies.--Section 1861(o)(7)(C) of the 
        Social Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by 
        inserting ``that the Secretary determines is commensurate with 
        the volume of the billing of the home health agency'' before 
        the semicolon at the end.
            (3) Requirements for certain other providers of services 
        and suppliers.--Section 1862 of the Social Security Act (42 
        U.S.C. 1395y) is amended by adding at the end the following new 
        subsection:
    ``(n) Requirement of a Surety Bond for Certain Providers of 
Services and Suppliers.--
            ``(1) In general.--The Secretary may require a provider of 
        services or supplier described in paragraph (2) to provide the 
        Secretary on a continuing basis with a surety bond in a form 
        specified by the Secretary in an amount (not less than $50,000) 
        that the Secretary determines is commensurate with the volume 
        of the billing of the provider of services or supplier. The 
        Secretary may waive the requirement of a bond under the 
        preceding sentence in the case of a provider of services or 
        supplier that provides a comparable surety bond under State 
        law.
            ``(2) Provider of services or supplier described.--A 
        provider of services or supplier described in this paragraph is 
        a provider of services or supplier the Secretary determines 
        appropriate based on the level of risk involved with respect to 
        the provider of services or supplier, and consistent with the 
        surety bond requirements under sections 1834(a)(16)(B) and 
        1861(o)(7)(C).''.
    (h) Suspension of Medicare and Medicaid Payments Pending 
Investigation of Credible Allegations of Fraud.--
            (1) Medicare.--Section 1862 of the Social Security Act (42 
        U.S.C. 1395y), as amended by subsection (g)(3), is amended by 
        adding at the end the following new subsection:
    ``(o) Suspension of Payments Pending Investigation of Credible 
Allegations of Fraud.--
            ``(1) In general.--The Secretary may suspend payments to a 
        provider of services or supplier under this title pending an 
        investigation of a credible allegation of fraud against the 
        provider of services or supplier, unless the Secretary 
        determines there is good cause not to suspend such payments.
            ``(2) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human 
        Services in determining whether there is a credible allegation 
        of fraud against a provider of services or supplier.
            ``(3) Promulgation of regulations.--The Secretary shall 
        promulgate regulations to carry out this subsection and section 
        1903(i)(2)(C).''.
            (2) Medicaid.--Section 1903(i)(2) of such Act (42 U.S.C. 
        1396b(i)(2)) is amended--
                    (A) in subparagraph (A), by striking ``or'' at the 
                end; and
                    (B) by inserting after subparagraph (B), the 
                following:
                    ``(C) by any individual or entity to whom the State 
                has failed to suspend payments under the plan during 
                any period when there is pending an investigation of a 
                credible allegation of fraud against the individual or 
                entity, as determined by the State in accordance with 
                regulations promulgated by the Secretary for purposes 
                of section 1862(o) and this subparagraph, unless the 
                State determines in accordance with such regulations 
                there is good cause not to suspend such payments; or''.
    (i) Increased Funding to Fight Fraud and Abuse.--
            (1) In general.--Section 1817(k) of the Social Security Act 
        (42 U.S.C. 1395i(k)) is amended--
                    (A) by adding at the end the following new 
                paragraph:
            ``(7) Additional funding.--In addition to the funds 
        otherwise appropriated to the Account from the Trust Fund under 
        paragraphs (3) and (4) and for purposes described in paragraphs 
        (3)(C) and (4)(A), there are hereby appropriated an additional 
        $10,000,000 to such Account from such Trust Fund for each of 
        fiscal years 2011 through 2020. The funds appropriated under 
        this paragraph shall be allocated in the same proportion as the 
        total funding appropriated with respect to paragraphs (3)(A) 
        and (4)(A) was allocated with respect to fiscal year 2010, and 
        shall be available without further appropriation until 
        expended.''; and
                    (B) in paragraph (4)(A), by inserting ``until 
                expended'' after ``appropriation''.
            (2) Indexing of amounts appropriated.--
                    (A) Departments of health and human services and 
                justice.--Section 1817(k)(3)(A)(i) of the Social 
                Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) is amended--
                            (i) in subclause (III), by inserting 
                        ``and'' at the end;
                            (ii) in subclause (IV)--
                                    (I) by striking ``for each of 
                                fiscal years 2007, 2008, 2009, and 
                                2010'' and inserting ``for each fiscal 
                                year after fiscal year 2006''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                            (iii) by striking subclause (V).
                    (B) Office of the inspector general of the 
                department of health and human services.--Section 
                1817(k)(3)(A)(ii) of such Act (42 U.S.C. 
                1395i(k)(3)(A)(ii)) is amended--
                            (i) in subclause (VIII), by inserting 
                        ``and'' at the end;
                            (ii) in subclause (IX)--
                                    (I) by striking ``for each of 
                                fiscal years 2008, 2009, and 2010'' and 
                                inserting ``for each fiscal year after 
                                fiscal year 2007''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                            (iii) by striking subclause (X).
                    (C) Federal bureau of investigation.--Section 
                1817(k)(3)(B) of the Social Security Act (42 U.S.C. 
                1395i(k)(3)(B)) is amended--
                            (i) in clause (vii), by inserting ``and'' 
                        at the end;
                            (ii) in clause (viii)--
                                    (I) by striking ``for each of 
                                fiscal years 2007, 2008, 2009, and 
                                2010'' and inserting ``for each fiscal 
                                year after fiscal year 2006''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                            (iii) by striking clause (ix).
                    (D) Medicare integrity program.--Section 
                1817(k)(4)(C) of the Social Security Act (42 U.S.C. 
                1395i(k)(4)(C)) is amended by adding at the end the 
                following new clause:
                            ``(ii) For each fiscal year after 2010, by 
                        the percentage increase in the consumer price 
                        index for all urban consumers (all items; 
                        United States city average) over the previous 
                        year.''.
    (j) Medicare Integrity Program and Medicaid Integrity Program.--
            (1) Medicare integrity program.--
                    (A) Requirement to provide performance 
                statistics.--Section 1893(c) of the Social Security Act 
                (42 U.S.C. 1395ddd(c)) is amended--
                            (i) in paragraph (3), by striking ``and'' 
                        at the end;
                            (ii) by redesignating paragraph (4) as 
                        paragraph (5); and
                            (iii) by inserting after paragraph (3) the 
                        following new paragraph:
            ``(4) the entity agrees to provide the Secretary and the 
        Inspector General of the Department of Health and Human 
        Services with such performance statistics (including the number 
        and amount of overpayments recovered, the number of fraud 
        referrals, and the return on investment of such activities by 
        the entity) as the Secretary or the Inspector General may 
        request; and''.
                    (B) Evaluations and annual report.--Section 1893 of 
                the Social Security Act (42 U.S.C. 1395ddd) is amended 
                by adding at the end the following new subsection:
    ``(i) Evaluations and Annual Report.--
            ``(1) Evaluations.--The Secretary shall conduct evaluations 
        of eligible entities which the Secretary contracts with under 
        the Program not less frequently than every 3 years.
            ``(2) Annual report.--Not later than 180 days after the end 
        of each fiscal year (beginning with fiscal year 2011), the 
        Secretary shall submit a report to Congress which identifies--
                    ``(A) the use of funds, including funds transferred 
                from the Federal Hospital Insurance Trust Fund under 
                section 1817 and the Federal Supplementary Insurance 
                Trust Fund under section 1841, to carry out this 
                section; and
                    ``(B) the effectiveness of the use of such 
                funds.''.
                    (C) Flexibility in pursuing fraud and abuse.--
                Section 1893(a) of the Social Security Act (42 U.S.C. 
                1395ddd(a)) is amended by inserting ``, or otherwise,'' 
                after ``entities''.
            (2) Medicaid integrity program.--
                    (A) Requirement to provide performance 
                statistics.--Section 1936(c)(2) of the Social Security 
                Act (42 U.S.C. 1396u-6(c)(2)) is amended--
                            (i) by redesignating subparagraph (D) as 
                        subparagraph (E); and
                            (ii) by inserting after subparagraph (C) 
                        the following new subparagraph:
                    ``(D) The entity agrees to provide the Secretary 
                and the Inspector General of the Department of Health 
                and Human Services with such performance statistics 
                (including the number and amount of overpayments 
                recovered, the number of fraud referrals, and the 
                return on investment of such activities by the entity) 
                as the Secretary or the Inspector General may 
                request.''.
                    (B) Evaluations and annual report.--Section 1936(e) 
                of the Social Security Act (42 U.S.C. 1396u-7(e)) is 
                amended--
                            (i) by redesignating paragraph (4) as 
                        paragraph (5); and
                            (ii) by inserting after paragraph (3) the 
                        following new paragraph:
            ``(4) Evaluations.--The Secretary shall conduct evaluations 
        of eligible entities which the Secretary contracts with under 
        the Program not less frequently than every 3 years.''.
    (k) Expanded Application of Hardship Waivers for Exclusions.--
Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)(B)) is amended by striking ``individuals entitled to benefits 
under part A of title XVIII or enrolled under part B of such title, or 
both'' and inserting ``beneficiaries (as defined in section 
1128A(i)(5)) of that program''.

SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY 
              AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER 
              DATA BANK.

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

SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO 
              NOT MORE THAN 12 MONTHS.

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

SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED TO BE 
              MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE PROFESSIONALS.

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

SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON 
              REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

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

SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE 
              PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH 
              SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
            (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
                    (A) by striking ``and such services'' and inserting 
                ``such services''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and, in the case of a certification made 
                by a physician after January 1, 2010, prior to making 
                such certification the physician must document that the 
                physician himself or herself has had a face-to-face 
                encounter (including through use of telehealth, subject 
                to the requirements in section 1834(m), and other than 
                with respect to encounters that are incident to 
                services involved) with the individual within a 
                reasonable timeframe as determined by the Secretary''.
            (2) Part b.--Section 1835(a)(2)(A) of the Social Security 
        Act is amended--
                    (A) by striking ``and'' before ``(iii)''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and (iv) in the case of a certification 
                after January 1, 2010, prior to making such 
                certification the physician must document that the 
                physician has had a face-to-face encounter (including 
                through use of telehealth and other than with respect 
                to encounters that are incident to services involved) 
                with the individual during the 6-month period preceding 
                such certification, or other reasonable timeframe as 
                determined by the Secretary''.
    (b) Condition of Payment for Durable Medical Equipment.--Section 
1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) 
is amended--
            (1) by striking ``Order.--The Secretary'' and inserting 
        ``Order.--
                            ``(i) In general.--The Secretary''; and
            (2) by adding at the end the following new clause:
                            ``(ii) Requirement for face to face 
                        encounter.--The Secretary shall require that 
                        such an order be written pursuant to the 
                        physician documenting that a physician, a 
                        physician assistant, a nurse practitioner, or a 
                        clinical nurse specialist (as those terms are 
                        defined in section 1861(aa)(5)) has had a face-
                        to-face encounter (including through use of 
                        telehealth under subsection (m) and other than 
                        with respect to encounters that are incident to 
                        services involved) with the individual involved 
                        during the 6-month period preceding such 
                        written order, or other reasonable timeframe as 
                        determined by the Secretary.''.
    (c) Application to Other Areas Under Medicare.--The Secretary may 
apply the face-to-face encounter requirement described in the 
amendments made by subsections (a) and (b) to other items and services 
for which payment is provided under title XVIII of the Social Security 
Act based upon a finding that such an decision would reduce the risk of 
waste, fraud, or abuse.
    (d) Application to Medicaid.--The requirements pursuant to the 
amendments made by subsections (a) and (b) shall apply in the case of 
physicians making certifications for home health services under title 
XIX of the Social Security Act in the same manner and to the same 
extent as such requirements apply in the case of physicians making such 
certifications under title XVIII of such Act.

SEC. 6408. ENHANCED PENALTIES.

    (a) Civil Monetary Penalties for False Statements or Delaying 
Inspections.--Section 1128A(a) of the Social Security Act (42 U.S.C. 
1320a-7a(a)), as amended by section 5002(d)(2)(A), is amended--
            (1) in paragraph (6), by striking ``or'' at the end; and
            (2) by inserting after paragraph (7) the following new 
        paragraphs:
            ``(8) knowingly makes, uses, or causes to be made or used, 
        a false record or statement material to a false or fraudulent 
        claim for payment for items and services furnished under a 
        Federal health care program; or
            ``(9) fails to grant timely access, upon reasonable request 
        (as defined by the Secretary in regulations), to the Inspector 
        General of the Department of Health and Human Services, for the 
        purpose of audits, investigations, evaluations, or other 
        statutory functions of the Inspector General of the Department 
        of Health and Human Services;''; and
            (3) in the first sentence--
                    (A) by striking ``or in cases under paragraph (7)'' 
                and inserting ``in cases under paragraph (7)''; and
                    (B) by striking ``act)'' and inserting ``act, in 
                cases under paragraph (8), $50,000 for each false 
                record or statement, or in cases under paragraph (9), 
                $15,000 for each day of the failure described in such 
                paragraph)''.
    (b) Medicare Advantage and Part D Plans.--
            (1) Ensuring timely inspections relating to contracts with 
        ma organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 
        1395w-27(d)(2)) is amended--
                    (A) in subparagraph (A), by inserting ``timely'' 
                before ``inspect''; and
                    (B) in subparagraph (B), by inserting ``timely'' 
                before ``audit and inspect''.
            (2) Marketing violations.--Section 1857(g)(1) of the Social 
        Security Act (42 U.S.C. 1395w--27(g)(1)) is amended--
                    (A) in subparagraph (F), by striking ``or'' at the 
                end;
                    (B) by inserting after subparagraph (G) the 
                following new subparagraphs:
                    ``(H) except as provided under subparagraph (C) or 
                (D) of section 1860D-1(b)(1), enrolls an individual in 
                any plan under this part without the prior consent of 
                the individual or the designee of the individual;
                    ``(I) transfers an individual enrolled under this 
                part from one plan to another without the prior consent 
                of the individual or the designee of the individual or 
                solely for the purpose of earning a commission;
                    ``(J) fails to comply with marketing restrictions 
                described in subsections (h) and (j) of section 1851 or 
                applicable implementing regulations or guidance; or
                    ``(K) employs or contracts with any individual or 
                entity who engages in the conduct described in 
                subparagraphs (A) through (J) of this paragraph;''; and
                    (C) by adding at the end the following new 
                sentence: ``The Secretary may provide, in addition to 
                any other remedies authorized by law, for any of the 
                remedies described in paragraph (2), if the Secretary 
                determines that any employee or agent of such 
                organization, or any provider or supplier who contracts 
                with such organization, has engaged in any conduct 
                described in subparagraphs (A) through (K) of this 
                paragraph.''.
            (3) Provision of false information.--Section 1857(g)(2)(A) 
        of the Social Security Act (42 U.S.C. 1395w--27(g)(2)(A)) is 
        amended by inserting ``except with respect to a determination 
        under subparagraph (E), an assessment of not more than the 
        amount claimed by such plan or plan sponsor based upon the 
        misrepresentation or falsified information involved,'' after 
        ``for each such determination,''.
    (c) Obstruction of Program Audits.--Section 1128(b)(2) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(2)) is amended--
            (1) in the heading, by inserting ``or audit'' after 
        ``investigation''; and
            (2) by striking ``investigation into'' and all that follows 
        through the period and inserting ``investigation or audit 
        related to--''
                            ``(i) any offense described in paragraph 
                        (1) or in subsection (a); or
                            ``(ii) the use of funds received, directly 
                        or indirectly, from any Federal health care 
                        program (as defined in section 1128B(f)).''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to acts committed 
        on or after January 1, 2010.
            (2) Exception.--The amendments made by subsection (b)(1) 
        take effect on the date of enactment of this Act.

SEC. 6409. MEDICARE SELF-REFERRAL DISCLOSURE PROTOCOL.

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

SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL EQUIPMENT, 
              PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE 
              ACQUISITION PROGRAM.

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

SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM.

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

      Subtitle F--Additional Medicaid Program Integrity Provisions

SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID IF 
              TERMINATED UNDER MEDICARE OR OTHER STATE PLAN.

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

SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN 
              OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as 
amended by section 6401(b), is amended by inserting after paragraph 
(77) the following:
            ``(78) provide that the State agency described in paragraph 
        (9) exclude, with respect to a period, any individual or entity 
        from participation in the program under the State plan if such 
        individual or entity owns, controls, or manages an entity that 
        (or if such entity is owned, controlled, or managed by an 
        individual or entity that)--
                    ``(A) has unpaid overpayments (as defined by the 
                Secretary) under this title during such period 
                determined by the Secretary or the State agency to be 
                delinquent;
                    ``(B) is suspended or excluded from participation 
                under or whose participation is terminated under this 
                title during such period; or
                    ``(C) is affiliated with an individual or entity 
                that has been suspended or excluded from participation 
                under this title or whose participation is terminated 
                under this title during such period;''.

SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)), as amended by section 6502(a), is amended 
by inserting after paragraph (78), the following:
            ``(79) provide that any agent, clearinghouse, or other 
        alternate payee (as defined by the Secretary) that submits 
        claims on behalf of a health care provider must register with 
        the State and the Secretary in a form and manner specified by 
        the Secretary;''.

SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER 
              MMIS TO DETECT FRAUD AND ABUSE.

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

SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR ENTITIES LOCATED 
              OUTSIDE OF THE UNITED STATES.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396b(a)), as 
amended by section 6503, is amended by inserting after paragraph (79) 
the following new paragraph:
            ``(80) provide that the State shall not provide any 
        payments for items or services provided under the State plan or 
        under a waiver to any financial institution or entity located 
        outside of the United States;''.

SEC. 6506. OVERPAYMENTS.

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

SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE.

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

SEC. 6508. GENERAL EFFECTIVE DATE.

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

          Subtitle G--Additional Program Integrity Provisions

SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REPRESENTATIONS.

    (a) Prohibition.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is 
amended by adding at the end the following:

``SEC. 519. PROHIBITION ON FALSE STATEMENTS AND REPRESENTATIONS.

    ``No person, in connection with a plan or other arrangement that is 
multiple employer welfare arrangement described in section 3(40), shall 
make a false statement or false representation of fact, knowing it to 
be false, in connection with the marketing or sale of such plan or 
arrangement, to any employee, any member of an employee organization, 
any beneficiary, any employer, any employee organization, the 
Secretary, or any State, or the representative or agent of any such 
person, State, or the Secretary, concerning--
            ``(1) the financial condition or solvency of such plan or 
        arrangement;
            ``(2) the benefits provided by such plan or arrangement;
            ``(3) the regulatory status of such plan or other 
        arrangement under any Federal or State law governing collective 
        bargaining, labor management relations, or intern union 
        affairs; or
            ``(4) the regulatory status of such plan or other 
        arrangement regarding exemption from state regulatory authority 
        under this Act.
This section shall not apply to any plan or arrangement that does not 
fall within the meaning of the term `multiple employer welfare 
arrangement' under section 3(40)(A).''.
    (b) Criminal Penalties.--Section 501 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
            (1) by inserting ``(a)'' before ``Any person''; and
            (2) by adding at the end the following:
    ``(b) Any person that violates section 519 shall upon conviction be 
imprisoned not more than 10 years or fined under title 18, United 
States Code, or both.''.
    (c) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974 is amended by adding at the end the following:

``Sec. 519. Prohibition on false statement and representations.''.

SEC. 6602. CLARIFYING DEFINITION.

    Section 24(a)(2) of title 18, United States Code, is amended by 
inserting ``or section 411, 518, or 511 of the Employee Retirement 
Income Security Act of 1974,'' after ``1954 of this title''.

SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT FORM.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.) is amended by adding at the end the following:

``SEC. 2794. UNIFORM FRAUD AND ABUSE REFERRAL FORMAT.

    ``The Secretary shall request the National Association of Insurance 
Commissioners to develop a model uniform report form for private health 
insurance issuer seeking to refer suspected fraud and abuse to State 
insurance departments or other responsible State agencies for 
investigation. The Secretary shall request that the National 
Association of Insurance Commissioners develop recommendations for 
uniform reporting standards for such referrals.''.

SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND ABUSE.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as 
amended by section 6601, is further amended by adding at the end the 
following:

``SEC. 520. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND ABUSE.

    ``The Secretary may, for the purpose of identifying, preventing, or 
prosecuting fraud and abuse, adopt regulatory standards establishing, 
or issue an order relating to a specific person establishing, that a 
person engaged in the business of providing insurance through a 
multiple employer welfare arrangement described in section 3(40) is 
subject to the laws of the States in which such person operates which 
regulate insurance in such State, notwithstanding section 514(b)(6) of 
this Act or the Liability Risk Retention Act of 1986, and regardless of 
whether the law of the State is otherwise preempted under any of such 
provisions. This section shall not apply to any plan or arrangement 
that does not fall within the meaning of the term `multiple employer 
welfare arrangement' under section 3(40(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, as amended by section 6601, is further amended by adding at the 
end the following:

``Sec. 520. Applicability of State law to combat fraud and abuse.''.

SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO ISSUE ADMINISTRATIVE 
              SUMMARY CEASE AND DESIST ORDERS AND SUMMARY SEIZURES 
              ORDERS AGAINST PLANS THAT ARE IN FINANCIALLY HAZARDOUS 
              CONDITION.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as 
amended by section 6604, is further amended by adding at the end the 
following:

``SEC. 521. ADMINISTRATIVE SUMMARY CEASE AND DESIST ORDERS AND SUMMARY 
              SEIZURE ORDERS AGAINST MULTIPLE EMPLOYER WELFARE 
              ARRANGEMENTS IN FINANCIALLY HAZARDOUS CONDITION.

    ``(a) In General.--The Secretary may issue a cease and desist (ex 
parte) order under this title if it appears to the Secretary that the 
alleged conduct of a multiple employer welfare arrangement described in 
section 3(40), other than a plan or arrangement described in subsection 
(g), is fraudulent, or creates an immediate danger to the public safety 
or welfare, or is causing or can be reasonably expected to cause 
significant, imminent, and irreparable public injury.
    ``(b) Hearing.--A person that is adversely affected by the issuance 
of a cease and desist order under subsection (a) may request a hearing 
by the Secretary regarding such order. The Secretary may require that a 
proceeding under this section, including all related information and 
evidence, be conducted in a confidential manner.
    ``(c) Burden of Proof.--The burden of proof in any hearing 
conducted under subsection (b) shall be on the party requesting the 
hearing to show cause why the cease and desist order should be set 
aside.
    ``(d) Determination.--Based upon the evidence presented at a 
hearing under subsection (b), the cease and desist order involved may 
be affirmed, modified, or set aside by the Secretary in whole or in 
part.
    ``(e) Seizure.--The Secretary may issue a summary seizure order 
under this title if it appears that a multiple employer welfare 
arrangement is in a financially hazardous condition.
    ``(f) Regulations.--The Secretary may promulgate such regulations 
or other guidance as may be necessary or appropriate to carry out this 
section.
    ``(g) Exception.--This section shall not apply to any plan or 
arrangement that does not fall within the meaning of the term `multiple 
employer welfare arrangement' under section 3(40(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, as amended by section 6604, is further amended by adding at the 
end the following:

``Sec. 521. Administrative summary cease and desist orders and summary 
                            seizure orders against health plans in 
                            financially hazardous condition.''.

SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT OF LABOR.

    Section 101(g) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1021(g)) is amended--
            (1) by striking ``Secretary may'' and inserting ``Secretary 
        shall''; and
            (2) by inserting ``to register with the Secretary prior to 
        operating in a State and may, by regulation, require such 
        multiple employer welfare arrangements'' after ``not group 
        health plans''.

SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CONFIDENTIAL 
              COMMUNICATIONS.

    Section 504 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1134) is amended by adding at the end the following:
    ``(d) The Secretary may promulgate a regulation that provides an 
evidentiary privilege for, and provides for the confidentiality of 
communications between or among, any of the following entities or their 
agents, consultants, or employees:
            ``(1) A State insurance department.
            ``(2) A State attorney general.
            ``(3) The National Association of Insurance Commissioners.
            ``(4) The Department of Labor.
            ``(5) The Department of the Treasury.
            ``(6) The Department of Justice.
            ``(7) The Department of Health and Human Services.
            ``(8) Any other Federal or State authority that the 
        Secretary determines is appropriate for the purposes of 
        enforcing the provisions of this title.
    ``(e) The privilege established under subsection (d) shall apply to 
communications related to any investigation, audit, examination, or 
inquiry conducted or coordinated by any of the agencies. A 
communication that is privileged under subsection (d) shall not waive 
any privilege otherwise available to the communicating agency or to any 
person who provided the information that is communicated.''.

                     Subtitle H--Elder Justice Act

SEC. 6701. SHORT TITLE OF SUBTITLE.

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

SEC. 6702. DEFINITIONS.

    Except as otherwise specifically provided, any term that is defined 
in section 2011 of the Social Security Act (as added by section 
6703(a)) and is used in this subtitle has the meaning given such term 
by such section.

SEC. 6703. ELDER JUSTICE.

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

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

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

                      ``Subtitle B--Elder Justice

``SEC. 2011. DEFINITIONS.

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

``SEC. 2012. GENERAL PROVISIONS.

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

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

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

``SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL.

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

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

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

``SEC. 2023. RESEARCH PROTECTIONS.

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

``SEC. 2024. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

              ``PART II--PROGRAMS TO PROMOTE ELDER JUSTICE

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

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

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

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

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

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

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

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

``SEC. 2045. REPORT.

    ``Not later than October 1, 2014, the Secretary shall submit to the 
Elder Justice Coordinating Council established under section 2021, the 
Committee on Ways and Means and the Committee on Energy and Commerce of 
the House of Representatives, and the Committee on Finance of the 
Senate a report--
            ``(1) compiling, summarizing, and analyzing the information 
        contained in the State reports submitted under subsections 
        (b)(4) and (c)(4) of section 2042; and
            ``(2) containing such recommendations for legislative or 
        administrative action as the Secretary determines to be 
        appropriate.

``SEC. 2046. RULE OF CONSTRUCTION.

    ``Nothing in this subtitle shall be construed as--
            ``(1) limiting any cause of action or other relief related 
        to obligations under this subtitle that is available under the 
        law of any State, or political subdivision thereof; or
            ``(2) creating a private cause of action for a violation of 
        this subtitle.''.
            (2) Option for state plan under program for temporary 
        assistance for needy families.--
                    (A) In general.--Section 402(a)(1)(B) of the Social 
                Security Act (42 U.S.C. 602(a)(1)(B)) is amended by 
                adding at the end the following new clause:
                            ``(v) The document shall indicate whether 
                        the State intends to assist individuals to 
                        train for, seek, and maintain employment--
                                    ``(I) providing direct care in a 
                                long-term care facility (as such terms 
                                are defined under section 2011); or
                                    ``(II) in other occupations related 
                                to elder care determined appropriate by 
                                the State for which the State 
                                identifies an unmet need for service 
                                personnel,
                        and, if so, shall include an overview of such 
                        assistance.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall take effect on January 1, 2011.
    (b) Protecting Residents of Long-term Care Facilities.--
            (1) National training institute for surveyors.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall enter into a contract with an entity for 
                the purpose of establishing and operating a National 
                Training Institute for Federal and State surveyors. 
                Such Institute shall provide and improve the training 
                of surveyors with respect to investigating allegations 
                of abuse, neglect, and misappropriation of property in 
                programs and long-term care facilities that receive 
                payments under title XVIII or XIX of the Social 
                Security Act.
                    (B) Activities carried out by the institute.--The 
                contract entered into under subparagraph (A) shall 
                require the Institute established and operated under 
                such contract to carry out the following activities:
                            (i) Assess the extent to which State 
                        agencies use specialized surveyors for the 
                        investigation of reported allegations of abuse, 
                        neglect, and misappropriation of property in 
                        such programs and long-term care facilities.
                            (ii) Evaluate how the competencies of 
                        surveyors may be improved to more effectively 
                        investigate reported allegations of such abuse, 
                        neglect, and misappropriation of property, and 
                        provide feedback to Federal and State agencies 
                        on the evaluations conducted.
                            (iii) Provide a national program of 
                        training, tools, and technical assistance to 
                        Federal and State surveyors on investigating 
                        reports of such abuse, neglect, and 
                        misappropriation of property.
                            (iv) Develop and disseminate information on 
                        best practices for the investigation of such 
                        abuse, neglect, and misappropriation of 
                        property.
                            (v) Assess the performance of State 
                        complaint intake systems, in order to ensure 
                        that the intake of complaints occurs 24 hours 
                        per day, 7 days a week (including holidays).
                            (vi) To the extent approved by the 
                        Secretary of Health and Human Services, provide 
                        a national 24 hours per day, 7 days a week 
                        (including holidays), back-up system to State 
                        complaint intake systems in order to ensure 
                        optimum national responsiveness to complaints 
                        of such abuse, neglect, and misappropriation of 
                        property.
                            (vii) Analyze and report annually on the 
                        following:
                                    (I) The total number and sources of 
                                complaints of such abuse, neglect, and 
                                misappropriation of property.
                                    (II) The extent to which such 
                                complaints are referred to law 
                                enforcement agencies.
                                    (III) General results of Federal 
                                and State investigations of such 
                                complaints.
                            (viii) Conduct a national study of the cost 
                        to State agencies of conducting complaint 
                        investigations of skilled nursing facilities 
                        and nursing facilities under sections 1819 and 
                        1919, respectively, of the Social Security Act 
                        (42 U.S.C. 1395i-3; 1396r), and making 
                        recommendations to the Secretary of Health and 
                        Human Services with respect to options to 
                        increase the efficiency and cost-effectiveness 
                        of such investigations.
                    (C) Authorization.--There are authorized to be 
                appropriated to carry out this paragraph, for the 
                period of fiscal years 2011 through 2014, $12,000,000.
            (2) Grants to state survey agencies.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall make grants to State agencies that 
                perform surveys of skilled nursing facilities or 
                nursing facilities under sections 1819 or 1919, 
                respectively, of the Social Security Act (42 U.S.C. 
                1395i-3; 1395r).
                    (B) Use of funds.--A grant awarded under 
                subparagraph (A) shall be used for the purpose of 
                designing and implementing complaint investigations 
                systems that--
                            (i) promptly prioritize complaints in order 
                        to ensure a rapid response to the most serious 
                        and urgent complaints;
                            (ii) respond to complaints with optimum 
                        effectiveness and timeliness; and
                            (iii) optimize the collaboration between 
                        local authorities, consumers, and providers, 
                        including--
                                    (I) such State agency;
                                    (II) the State Long-Term Care 
                                Ombudsman;
                                    (III) local law enforcement 
                                agencies;
                                    (IV) advocacy and consumer 
                                organizations;
                                    (V) State aging units;
                                    (VI) Area Agencies on Aging; and
                                    (VII) other appropriate entities.
                    (C) Authorization.--There are authorized to be 
                appropriated to carry out this paragraph, for each of 
                fiscal years 2011 through 2014, $5,000,000.
            (3) Reporting of crimes in federally funded long-term care 
        facilities.--Part A of title XI of the Social Security Act (42 
        U.S.C. 1301 et seq.), as amended by section 6005, is amended by 
        inserting after section 1150A the following new section:

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

    ``Sec. 1150B.  (a) Determination and Notification.--
            ``(1) Determination.--The owner or operator of each long-
        term care facility that receives Federal funds under this Act 
        shall annually determine whether the facility received at least 
        $10,000 in such Federal funds during the preceding year.
            ``(2) Notification.--If the owner or operator determines 
        under paragraph (1) that the facility received at least $10,000 
        in such Federal funds during the preceding year, such owner or 
        operator shall annually notify each covered individual (as 
        defined in paragraph (3)) of that individual's obligation to 
        comply with the reporting requirements described in subsection 
        (b).
            ``(3) Covered individual defined.--In this section, the 
        term `covered individual' means each individual who is an 
        owner, operator, employee, manager, agent, or contractor of a 
        long-term care facility that is the subject of a determination 
        described in paragraph (1).
    ``(b) Reporting Requirements.--
            ``(1) In general.--Each covered individual shall report to 
        the Secretary and 1 or more law enforcement entities for the 
        political subdivision in which the facility is located any 
        reasonable suspicion of a crime (as defined by the law of the 
        applicable political subdivision) against any individual who is 
        a resident of, or is receiving care from, the facility.
            ``(2) Timing.--If the events that cause the suspicion--
                    ``(A) result in serious bodily injury, the 
                individual shall report the suspicion immediately, but 
                not later than 2 hours after forming the suspicion; and
                    ``(B) do not result in serious bodily injury, the 
                individual shall report the suspicion not later than 24 
                hours after forming the suspicion.
    ``(c) Penalties.--
            ``(1) In general.--If a covered individual violates 
        subsection (b)--
                    ``(A) the covered individual shall be subject to a 
                civil money penalty of not more than $200,000; and
                    ``(B) the Secretary may make a determination in the 
                same proceeding to exclude the covered individual from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)).
            ``(2) Increased harm.--If a covered individual violates 
        subsection (b) and the violation exacerbates the harm to the 
        victim of the crime or results in harm to another individual--
                    ``(A) the covered individual shall be subject to a 
                civil money penalty of not more than $300,000; and
                    ``(B) the Secretary may make a determination in the 
                same proceeding to exclude the covered individual from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)).
            ``(3) Excluded individual.--During any period for which a 
        covered individual is classified as an excluded individual 
        under paragraph (1)(B) or (2)(B), a long-term care facility 
        that employs such individual shall be ineligible to receive 
        Federal funds under this Act.
            ``(4) Extenuating circumstances.--
                    ``(A) In general.--The Secretary may take into 
                account the financial burden on providers with 
                underserved populations in determining any penalty to 
                be imposed under this subsection.
                    ``(B) Underserved population defined.--In this 
                paragraph, the term `underserved population' means the 
                population of an area designated by the Secretary as an 
                area with a shortage of elder justice programs or a 
                population group designated by the Secretary as having 
                a shortage of such programs. Such areas or groups 
                designated by the Secretary may include--
                            ``(i) areas or groups that are 
                        geographically isolated (such as isolated in a 
                        rural area);
                            ``(ii) racial and ethnic minority 
                        populations; and
                            ``(iii) populations underserved because of 
                        special needs (such as language barriers, 
                        disabilities, alien status, or age).
    ``(d) Additional Penalties for Retaliation.--
            ``(1) In general.--A long-term care facility may not--
                    ``(A) discharge, demote, suspend, threaten, harass, 
                or deny a promotion or other employment-related benefit 
                to an employee, or in any other manner discriminate 
                against an employee in the terms and conditions of 
                employment because of lawful acts done by the employee; 
                or
                    ``(B) file a complaint or a report against a nurse 
                or other employee with the appropriate State 
                professional disciplinary agency because of lawful acts 
                done by the nurse or employee,
        for making a report, causing a report to be made, or for taking 
        steps in furtherance of making a report pursuant to subsection 
        (b)(1).
            ``(2) Penalties for retaliation.--If a long-term care 
        facility violates subparagraph (A) or (B) of paragraph (1) the 
        facility shall be subject to a civil money penalty of not more 
        than $200,000 or the Secretary may classify the entity as an 
        excluded entity for a period of 2 years pursuant to section 
        1128(b), or both.
            ``(3) Requirement to post notice.--Each long-term care 
        facility shall post conspicuously in an appropriate location a 
        sign (in a form specified by the Secretary) specifying the 
        rights of employees under this section. Such sign shall include 
        a statement that an employee may file a complaint with the 
        Secretary against a long-term care facility that violates the 
        provisions of this subsection and information with respect to 
        the manner of filing such a complaint.
    ``(e) Procedure.--The provisions of section 1128A (other than 
subsections (a) and (b) and the second sentence of subsection (f)) 
shall apply to a civil money penalty or exclusion under this section in 
the same manner as such provisions apply to a penalty or proceeding 
under section 1128A(a).
    ``(f) Definitions.--In this section, the terms `elder justice', 
`long-term care facility', and `law enforcement' have the meanings 
given those terms in section 2011.''.
    (c) National Nurse Aide Registry.--
            (1) Definition of nurse aide.--In this subsection, the term 
        ``nurse aide'' has the meaning given that term in sections 
        1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42 
        U.S.C. 1395i-3(b)(5)(F); 1396r(b)(5)(F)).
            (2) Study and report.--
                    (A) In general.--The Secretary, in consultation 
                with appropriate government agencies and private sector 
                organizations, shall conduct a study on establishing a 
                national nurse aide registry.
                    (B) Areas evaluated.--The study conducted under 
                this subsection shall include an evaluation of--
                            (i) who should be included in the registry;
                            (ii) how such a registry would comply with 
                        Federal and State privacy laws and regulations;
                            (iii) how data would be collected for the 
                        registry;
                            (iv) what entities and individuals would 
                        have access to the data collected;
                            (v) how the registry would provide 
                        appropriate information regarding violations of 
                        Federal and State law by individuals included 
                        in the registry;
                            (vi) how the functions of a national nurse 
                        aide registry would be coordinated with the 
                        nationwide program for national and State 
                        background checks on direct patient access 
                        employees of long-term care facilities and 
                        providers under section 4301; and
                            (vii) how the information included in State 
                        nurse aide registries developed and maintained 
                        under sections 1819(e)(2) and 1919(e)(2) of the 
                        Social Security Act (42 U.S.C. 1395i-3(e)(2); 
                        1396r(e)(2)(2)) would be provided as part of a 
                        national nurse aide registry.
                    (C) Considerations.--In conducting the study and 
                preparing the report required under this subsection, 
                the Secretary shall take into consideration the 
                findings and conclusions of relevant reports and other 
                relevant resources, including the following:
                            (i) The Department of Health and Human 
                        Services Office of Inspector General Report, 
                        Nurse Aide Registries: State Compliance and 
                        Practices (February 2005).
                            (ii) The General Accounting Office (now 
                        known as the Government Accountability Office) 
                        Report, Nursing Homes: More Can Be Done to 
                        Protect Residents from Abuse (March 2002).
                            (iii) The Department of Health and Human 
                        Services Office of the Inspector General 
                        Report, Nurse Aide Registries: Long-Term Care 
                        Facility Compliance and Practices (July 2005).
                            (iv) The Department of Health and Human 
                        Services Health Resources and Services 
                        Administration Report, Nursing Aides, Home 
                        Health Aides, and Related Health Care 
                        Occupations--National and Local Workforce 
                        Shortages and Associated Data Needs (2004) (in 
                        particular with respect to chapter 7 and 
                        appendix F).
                            (v) The 2001 Report to CMS from the School 
                        of Rural Public Health, Texas A&M University, 
                        Preventing Abuse and Neglect in Nursing Homes: 
                        The Role of Nurse Aide Registries.
                            (vi) Information included in State nurse 
                        aide registries developed and maintained under 
                        sections 1819(e)(2) and 1919(e)(2) of the 
                        Social Security Act (42 U.S.C. 1395i-3(e)(2); 
                        1396r(e)(2)(2)).
                    (D) Report.--Not later than 18 months after the 
                date of enactment of this Act, the Secretary shall 
                submit to the Elder Justice Coordinating Council 
                established under section 2021 of the Social Security 
                Act, as added by section 1805(a), the Committee on 
                Finance of the Senate, and the Committee on Ways and 
                Means and the Committee on Energy and Commerce of the 
                House of Representatives a report containing the 
                findings and recommendations of the study conducted 
                under this paragraph.
                    (E) Funding limitation.--Funding for the study 
                conducted under this subsection shall not exceed 
                $500,000.
            (3) Congressional action.--After receiving the report 
        submitted by the Secretary under paragraph (2)(D), the 
        Committee on Finance of the Senate and the Committee on Ways 
        and Means and the Committee on Energy and Commerce of the House 
        of Representatives shall, as they deem appropriate, take action 
        based on the recommendations contained in the report.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary for the purpose 
        of carrying out this subsection.
    (d) Conforming Amendments.--
            (1) Title xx.--Title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.), as amended by section 6703(a), is 
        amended--
                    (A) in the heading of section 2001, by striking 
                ``title'' and inserting ``subtitle''; and
                    (B) in subtitle 1, by striking ``this title'' each 
                place it appears and inserting ``this subtitle''.
            (2) Title iv.--Title IV of the Social Security Act (42 
        U.S.C. 601 et seq.) is amended--
                    (A) in section 404(d)--
                            (i) in paragraphs (1)(A), (2)(A), and 
                        (3)(B), by inserting ``subtitle 1 of'' before 
                        ``title XX'' each place it appears;
                            (ii) in the heading of paragraph (2), by 
                        inserting ``subtitle 1 of'' before ``title 
                        xx''; and
                            (iii) in the heading of paragraph (3)(B), 
                        by inserting ``subtitle 1 of'' before ``title 
                        xx''; and
                    (B) in sections 422(b), 471(a)(4), 472(h)(1), and 
                473(b)(2), by inserting ``subtitle 1 of'' before 
                ``title XX'' each place it appears.
            (3) Title xi.--Title XI of the Social Security Act (42 
        U.S.C. 1301 et seq.) is amended--
                    (A) in section 1128(h)(3)--
                            (i) by inserting ``subtitle 1 of'' before 
                        ``title XX''; and
                            (ii) by striking ``such title'' and 
                        inserting ``such subtitle''; and
                    (B) in section 1128A(i)(1), by inserting ``subtitle 
                1 of'' before ``title XX''.

     Subtitle I--Sense of the Senate Regarding Medical Malpractice

SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE.

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

      TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

         Subtitle A--Biologics Price Competition and Innovation

SEC. 7001. SHORT TITLE.

    (a) In General.--This subtitle may be cited as the ``Biologics 
Price Competition and Innovation Act of 2009''.
    (b) Sense of the Senate.--It is the sense of the Senate that a 
biosimilars pathway balancing innovation and consumer interests should 
be established.

SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) Licensure of Biological Products as Biosimilar or 
Interchangeable.--Section 351 of the Public Health Service Act (42 
U.S.C. 262) is amended--
            (1) in subsection (a)(1)(A), by inserting ``under this 
        subsection or subsection (k)'' after ``biologics license''; and
            (2) by adding at the end the following:
    ``(k) Licensure of Biological Products as Biosimilar or 
Interchangeable.--
            ``(1) In general.--Any person may submit an application for 
        licensure of a biological product under this subsection.
            ``(2) Content.--
                    ``(A) In general.--
                            ``(i) Required information.--An application 
                        submitted under this subsection shall include 
                        information demonstrating that--
                                    ``(I) the biological product is 
                                biosimilar to a reference product based 
                                upon data derived from--
                                            ``(aa) analytical studies 
                                        that demonstrate that the 
                                        biological product is highly 
                                        similar to the reference 
                                        product notwithstanding minor 
                                        differences in clinically 
                                        inactive components;
                                            ``(bb) animal studies 
                                        (including the assessment of 
                                        toxicity); and
                                            ``(cc) a clinical study or 
                                        studies (including the 
                                        assessment of immunogenicity 
                                        and pharmacokinetics or 
                                        pharmacodynamics) that are 
                                        sufficient to demonstrate 
                                        safety, purity, and potency in 
                                        1 or more appropriate 
                                        conditions of use for which the 
                                        reference product is licensed 
                                        and intended to be used and for 
                                        which licensure is sought for 
                                        the biological product;
                                    ``(II) the biological product and 
                                reference product utilize the same 
                                mechanism or mechanisms of action for 
                                the condition or conditions of use 
                                prescribed, recommended, or suggested 
                                in the proposed labeling, but only to 
                                the extent the mechanism or mechanisms 
                                of action are known for the reference 
                                product;
                                    ``(III) the condition or conditions 
                                of use prescribed, recommended, or 
                                suggested in the labeling proposed for 
                                the biological product have been 
                                previously approved for the reference 
                                product;
                                    ``(IV) the route of administration, 
                                the dosage form, and the strength of 
                                the biological product are the same as 
                                those of the reference product; and
                                    ``(V) the facility in which the 
                                biological product is manufactured, 
                                processed, packed, or held meets 
                                standards designed to assure that the 
                                biological product continues to be 
                                safe, pure, and potent.
                            ``(ii) Determination by secretary.--The 
                        Secretary may determine, in the Secretary's 
                        discretion, that an element described in clause 
                        (i)(I) is unnecessary in an application 
                        submitted under this subsection.
                            ``(iii) Additional information.--An 
                        application submitted under this subsection--
                                    ``(I) shall include publicly-
                                available information regarding the 
                                Secretary's previous determination that 
                                the reference product is safe, pure, 
                                and potent; and
                                    ``(II) may include any additional 
                                information in support of the 
                                application, including publicly-
                                available information with respect to 
                                the reference product or another 
                                biological product.
                    ``(B) Interchangeability.--An application (or a 
                supplement to an application) submitted under this 
                subsection may include information demonstrating that 
                the biological product meets the standards described in 
                paragraph (4).
            ``(3) Evaluation by secretary.--Upon review of an 
        application (or a supplement to an application) submitted under 
        this subsection, the Secretary shall license the biological 
        product under this subsection if--
                    ``(A) the Secretary determines that the information 
                submitted in the application (or the supplement) is 
                sufficient to show that the biological product--
                            ``(i) is biosimilar to the reference 
                        product; or
                            ``(ii) meets the standards described in 
                        paragraph (4), and therefore is interchangeable 
                        with the reference product; and
                    ``(B) the applicant (or other appropriate person) 
                consents to the inspection of the facility that is the 
                subject of the application, in accordance with 
                subsection (c).
            ``(4) Safety standards for determining 
        interchangeability.--Upon review of an application submitted 
        under this subsection or any supplement to such application, 
        the Secretary shall determine the biological product to be 
        interchangeable with the reference product if the Secretary 
        determines that the information submitted in the application 
        (or a supplement to such application) is sufficient to show 
        that--
                    ``(A) the biological product--
                            ``(i) is biosimilar to the reference 
                        product; and
                            ``(ii) can be expected to produce the same 
                        clinical result as the reference product in any 
                        given patient; and
                    ``(B) for a biological product that is administered 
                more than once to an individual, the risk in terms of 
                safety or diminished efficacy of alternating or 
                switching between use of the biological product and the 
                reference product is not greater than the risk of using 
                the reference product without such alternation or 
                switch.
            ``(5) General rules.--
                    ``(A) One reference product per application.--A 
                biological product, in an application submitted under 
                this subsection, may not be evaluated against more than 
                1 reference product.
                    ``(B) Review.--An application submitted under this 
                subsection shall be reviewed by the division within the 
                Food and Drug Administration that is responsible for 
                the review and approval of the application under which 
                the reference product is licensed.
                    ``(C) Risk evaluation and mitigation strategies.--
                The authority of the Secretary with respect to risk 
                evaluation and mitigation strategies under the Federal 
                Food, Drug, and Cosmetic Act shall apply to biological 
                products licensed under this subsection in the same 
                manner as such authority applies to biological products 
                licensed under subsection (a).
            ``(6) Exclusivity for first interchangeable biological 
        product.--Upon review of an application submitted under this 
        subsection relying on the same reference product for which a 
        prior biological product has received a determination of 
        interchangeability for any condition of use, the Secretary 
        shall not make a determination under paragraph (4) that the 
        second or subsequent biological product is interchangeable for 
        any condition of use until the earlier of--
                    ``(A) 1 year after the first commercial marketing 
                of the first interchangeable biosimilar biological 
                product to be approved as interchangeable for that 
                reference product;
                    ``(B) 18 months after--
                            ``(i) a final court decision on all patents 
                        in suit in an action instituted under 
                        subsection (l)(6) against the applicant that 
                        submitted the application for the first 
                        approved interchangeable biosimilar biological 
                        product; or
                            ``(ii) the dismissal with or without 
                        prejudice of an action instituted under 
                        subsection (l)(6) against the applicant that 
                        submitted the application for the first 
                        approved interchangeable biosimilar biological 
                        product; or
                    ``(C)(i) 42 months after approval of the first 
                interchangeable biosimilar biological product if the 
                applicant that submitted such application has been sued 
                under subsection (l)(6) and such litigation is still 
                ongoing within such 42-month period; or
                    ``(ii) 18 months after approval of the first 
                interchangeable biosimilar biological product if the 
                applicant that submitted such application has not been 
                sued under subsection (l)(6).
        For purposes of this paragraph, the term `final court decision' 
        means a final decision of a court from which no appeal (other 
        than a petition to the United States Supreme Court for a writ 
        of certiorari) has been or can be taken.
            ``(7) Exclusivity for reference product.--
                    ``(A) Effective date of biosimilar application 
                approval.--Approval of an application under this 
                subsection may not be made effective by the Secretary 
                until the date that is 12 years after the date on which 
                the reference product was first licensed under 
                subsection (a).
                    ``(B) Filing period.--An application under this 
                subsection may not be submitted to the Secretary until 
                the date that is 4 years after the date on which the 
                reference product was first licensed under subsection 
                (a).
                    ``(C) First licensure.--Subparagraphs (A) and (B) 
                shall not apply to a license for or approval of--
                            ``(i) a supplement for the biological 
                        product that is the reference product; or
                            ``(ii) a subsequent application filed by 
                        the same sponsor or manufacturer of the 
                        biological product that is the reference 
                        product (or a licensor, predecessor in 
                        interest, or other related entity) for--
                                    ``(I) a change (not including a 
                                modification to the structure of the 
                                biological product) that results in a 
                                new indication, route of 
                                administration, dosing schedule, dosage 
                                form, delivery system, delivery device, 
                                or strength; or
                                    ``(II) a modification to the 
                                structure of the biological product 
                                that does not result in a change in 
                                safety, purity, or potency.
            ``(8) Guidance documents.--
                    ``(A) In general.--The Secretary may, after 
                opportunity for public comment, issue guidance in 
                accordance, except as provided in subparagraph (B)(i), 
                with section 701(h) of the Federal Food, Drug, and 
                Cosmetic Act with respect to the licensure of a 
                biological product under this subsection. Any such 
                guidance may be general or specific.
                    ``(B) Public comment.--
                            ``(i) In general.--The Secretary shall 
                        provide the public an opportunity to comment on 
                        any proposed guidance issued under subparagraph 
                        (A) before issuing final guidance.
                            ``(ii) Input regarding most valuable 
                        guidance.--The Secretary shall establish a 
                        process through which the public may provide 
                        the Secretary with input regarding priorities 
                        for issuing guidance.
                    ``(C) No requirement for application 
                consideration.--The issuance (or non-issuance) of 
                guidance under subparagraph (A) shall not preclude the 
                review of, or action on, an application submitted under 
                this subsection.
                    ``(D) Requirement for product class-specific 
                guidance.--If the Secretary issues product class-
                specific guidance under subparagraph (A), such guidance 
                shall include a description of--
                            ``(i) the criteria that the Secretary will 
                        use to determine whether a biological product 
                        is highly similar to a reference product in 
                        such product class; and
                            ``(ii) the criteria, if available, that the 
                        Secretary will use to determine whether a 
                        biological product meets the standards 
                        described in paragraph (4).
                    ``(E) Certain product classes.--
                            ``(i) Guidance.--The Secretary may indicate 
                        in a guidance document that the science and 
                        experience, as of the date of such guidance, 
                        with respect to a product or product class (not 
                        including any recombinant protein) does not 
                        allow approval of an application for a license 
                        as provided under this subsection for such 
                        product or product class.
                            ``(ii) Modification or reversal.--The 
                        Secretary may issue a subsequent guidance 
                        document under subparagraph (A) to modify or 
                        reverse a guidance document under clause (i).
                            ``(iii) No effect on ability to deny 
                        license.--Clause (i) shall not be construed to 
                        require the Secretary to approve a product with 
                        respect to which the Secretary has not 
                        indicated in a guidance document that the 
                        science and experience, as described in clause 
                        (i), does not allow approval of such an 
                        application.
    ``(l) Patents.--
            ``(1) Confidential access to subsection (k) application.--
                    ``(A) Application of paragraph.--Unless otherwise 
                agreed to by a person that submits an application under 
                subsection (k) (referred to in this subsection as the 
                `subsection (k) applicant') and the sponsor of the 
                application for the reference product (referred to in 
                this subsection as the `reference product sponsor'), 
                the provisions of this paragraph shall apply to the 
                exchange of information described in this subsection.
                    ``(B) In general.--
                            ``(i) Provision of confidential 
                        information.--When a subsection (k) applicant 
                        submits an application under subsection (k), 
                        such applicant shall provide to the persons 
                        described in clause (ii), subject to the terms 
                        of this paragraph, confidential access to the 
                        information required to be produced pursuant to 
                        paragraph (2) and any other information that 
                        the subsection (k) applicant determines, in its 
                        sole discretion, to be appropriate (referred to 
                        in this subsection as the `confidential 
                        information').
                            ``(ii) Recipients of information.--The 
                        persons described in this clause are the 
                        following:
                                    ``(I) Outside counsel.--One or more 
                                attorneys designated by the reference 
                                product sponsor who are employees of an 
                                entity other than the reference product 
                                sponsor (referred to in this paragraph 
                                as the `outside counsel'), provided 
                                that such attorneys do not engage, 
                                formally or informally, in patent 
                                prosecution relevant or related to the 
                                reference product.
                                    ``(II) In-house counsel.--One 
                                attorney that represents the reference 
                                product sponsor who is an employee of 
                                the reference product sponsor, provided 
                                that such attorney does not engage, 
                                formally or informally, in patent 
                                prosecution relevant or related to the 
                                reference product.
                            ``(iii) Patent owner access.--A 
                        representative of the owner of a patent 
                        exclusively licensed to a reference product 
                        sponsor with respect to the reference product 
                        and who has retained a right to assert the 
                        patent or participate in litigation concerning 
                        the patent may be provided the confidential 
                        information, provided that the representative 
                        informs the reference product sponsor and the 
                        subsection (k) applicant of his or her 
                        agreement to be subject to the confidentiality 
                        provisions set forth in this paragraph, 
                        including those under clause (ii).
                    ``(C) Limitation on disclosure.--No person that 
                receives confidential information pursuant to 
                subparagraph (B) shall disclose any confidential 
                information to any other person or entity, including 
                the reference product sponsor employees, outside 
                scientific consultants, or other outside counsel 
                retained by the reference product sponsor, without the 
                prior written consent of the subsection (k) applicant, 
                which shall not be unreasonably withheld.
                    ``(D) Use of confidential information.--
                Confidential information shall be used for the sole and 
                exclusive purpose of determining, with respect to each 
                patent assigned to or exclusively licensed by the 
                reference product sponsor, whether a claim of patent 
                infringement could reasonably be asserted if the 
                subsection (k) applicant engaged in the manufacture, 
                use, offering for sale, sale, or importation into the 
                United States of the biological product that is the 
                subject of the application under subsection (k).
                    ``(E) Ownership of confidential information.--The 
                confidential information disclosed under this paragraph 
                is, and shall remain, the property of the subsection 
                (k) applicant. By providing the confidential 
                information pursuant to this paragraph, the subsection 
                (k) applicant does not provide the reference product 
                sponsor or the outside counsel any interest in or 
                license to use the confidential information, for 
                purposes other than those specified in subparagraph 
                (D).
                    ``(F) Effect of infringement action.--In the event 
                that the reference product sponsor files a patent 
                infringement suit, the use of confidential information 
                shall continue to be governed by the terms of this 
                paragraph until such time as a court enters a 
                protective order regarding the information. Upon entry 
                of such order, the subsection (k) applicant may 
                redesignate confidential information in accordance with 
                the terms of that order. No confidential information 
                shall be included in any publicly-available complaint 
                or other pleading. In the event that the reference 
                product sponsor does not file an infringement action by 
                the date specified in paragraph (6), the reference 
                product sponsor shall return or destroy all 
                confidential information received under this paragraph, 
                provided that if the reference product sponsor opts to 
                destroy such information, it will confirm destruction 
                in writing to the subsection (k) applicant.
                    ``(G) Rule of construction.--Nothing in this 
                paragraph shall be construed--
                            ``(i) as an admission by the subsection (k) 
                        applicant regarding the validity, 
                        enforceability, or infringement of any patent; 
                        or
                            ``(ii) as an agreement or admission by the 
                        subsection (k) applicant with respect to the 
                        competency, relevance, or materiality of any 
                        confidential information.
                    ``(H) Effect of violation.--The disclosure of any 
                confidential information in violation of this paragraph 
                shall be deemed to cause the subsection (k) applicant 
                to suffer irreparable harm for which there is no 
                adequate legal remedy and the court shall consider 
                immediate injunctive relief to be an appropriate and 
                necessary remedy for any violation or threatened 
                violation of this paragraph.
            ``(2) Subsection (k) application information.--Not later 
        than 20 days after the Secretary notifies the subsection (k) 
        applicant that the application has been accepted for review, 
        the subsection (k) applicant--
                    ``(A) shall provide to the reference product 
                sponsor a copy of the application submitted to the 
                Secretary under subsection (k), and such other 
                information that describes the process or processes 
                used to manufacture the biological product that is the 
                subject of such application; and
                    ``(B) may provide to the reference product sponsor 
                additional information requested by or on behalf of the 
                reference product sponsor.
            ``(3) List and description of patents.--
                    ``(A) List by reference product sponsor.--Not later 
                than 60 days after the receipt of the application and 
                information under paragraph (2), the reference product 
                sponsor shall provide to the subsection (k) applicant--
                            ``(i) a list of patents for which the 
                        reference product sponsor believes a claim of 
                        patent infringement could reasonably be 
                        asserted by the reference product sponsor, or 
                        by a patent owner that has granted an exclusive 
                        license to the reference product sponsor with 
                        respect to the reference product, if a person 
                        not licensed by the reference product sponsor 
                        engaged in the making, using, offering to sell, 
                        selling, or importing into the United States of 
                        the biological product that is the subject of 
                        the subsection (k) application; and
                            ``(ii) an identification of the patents on 
                        such list that the reference product sponsor 
                        would be prepared to license to the subsection 
                        (k) applicant.
                    ``(B) List and description by subsection (k) 
                applicant.--Not later than 60 days after receipt of the 
                list under subparagraph (A), the subsection (k) 
                applicant--
                            ``(i) may provide to the reference product 
                        sponsor a list of patents to which the 
                        subsection (k) applicant believes a claim of 
                        patent infringement could reasonably be 
                        asserted by the reference product sponsor if a 
                        person not licensed by the reference product 
                        sponsor engaged in the making, using, offering 
                        to sell, selling, or importing into the United 
                        States of the biological product that is the 
                        subject of the subsection (k) application;
                            ``(ii) shall provide to the reference 
                        product sponsor, with respect to each patent 
                        listed by the reference product sponsor under 
                        subparagraph (A) or listed by the subsection 
                        (k) applicant under clause (i)--
                                    ``(I) a detailed statement that 
                                describes, on a claim by claim basis, 
                                the factual and legal basis of the 
                                opinion of the subsection (k) applicant 
                                that such patent is invalid, 
                                unenforceable, or will not be infringed 
                                by the commercial marketing of the 
                                biological product that is the subject 
                                of the subsection (k) application; or
                                    ``(II) a statement that the 
                                subsection (k) applicant does not 
                                intend to begin commercial marketing of 
                                the biological product before the date 
                                that such patent expires; and
                            ``(iii) shall provide to the reference 
                        product sponsor a response regarding each 
                        patent identified by the reference product 
                        sponsor under subparagraph (A)(ii).
                    ``(C) Description by reference product sponsor.--
                Not later than 60 days after receipt of the list and 
                statement under subparagraph (B), the reference product 
                sponsor shall provide to the subsection (k) applicant a 
                detailed statement that describes, with respect to each 
                patent described in subparagraph (B)(ii)(I), on a claim 
                by claim basis, the factual and legal basis of the 
                opinion of the reference product sponsor that such 
                patent will be infringed by the commercial marketing of 
                the biological product that is the subject of the 
                subsection (k) application and a response to the 
                statement concerning validity and enforceability 
                provided under subparagraph (B)(ii)(I).
            ``(4) Patent resolution negotiations.--
                    ``(A) In general.--After receipt by the subsection 
                (k) applicant of the statement under paragraph (3)(C), 
                the reference product sponsor and the subsection (k) 
                applicant shall engage in good faith negotiations to 
                agree on which, if any, patents listed under paragraph 
                (3) by the subsection (k) applicant or the reference 
                product sponsor shall be the subject of an action for 
                patent infringement under paragraph (6).
                    ``(B) Failure to reach agreement.--If, within 15 
                days of beginning negotiations under subparagraph (A), 
                the subsection (k) applicant and the reference product 
                sponsor fail to agree on a final and complete list of 
                which, if any, patents listed under paragraph (3) by 
                the subsection (k) applicant or the reference product 
                sponsor shall be the subject of an action for patent 
                infringement under paragraph (6), the provisions of 
                paragraph (5) shall apply to the parties.
            ``(5) Patent resolution if no agreement.--
                    ``(A) Number of patents.--The subsection (k) 
                applicant shall notify the reference product sponsor of 
                the number of patents that such applicant will provide 
                to the reference product sponsor under subparagraph 
                (B)(i)(I).
                    ``(B) Exchange of patent lists.--
                            ``(i) In general.--On a date agreed to by 
                        the subsection (k) applicant and the reference 
                        product sponsor, but in no case later than 5 
                        days after the subsection (k) applicant 
                        notifies the reference product sponsor under 
                        subparagraph (A), the subsection (k) applicant 
                        and the reference product sponsor shall 
                        simultaneously exchange--
                                    ``(I) the list of patents that the 
                                subsection (k) applicant believes 
                                should be the subject of an action for 
                                patent infringement under paragraph 
                                (6); and
                                    ``(II) the list of patents, in 
                                accordance with clause (ii), that the 
                                reference product sponsor believes 
                                should be the subject of an action for 
                                patent infringement under paragraph 
                                (6).
                            ``(ii) Number of patents listed by 
                        reference product sponsor.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the number of patents 
                                listed by the reference product sponsor 
                                under clause (i)(II) may not exceed the 
                                number of patents listed by the 
                                subsection (k) applicant under clause 
                                (i)(I).
                                    ``(II) Exception.--If a subsection 
                                (k) applicant does not list any patent 
                                under clause (i)(I), the reference 
                                product sponsor may list 1 patent under 
                                clause (i)(II).
            ``(6) Immediate patent infringement action.--
                    ``(A) Action if agreement on patent list.--If the 
                subsection (k) applicant and the reference product 
                sponsor agree on patents as described in paragraph (4), 
                not later than 30 days after such agreement, the 
                reference product sponsor shall bring an action for 
                patent infringement with respect to each such patent.
                    ``(B) Action if no agreement on patent list.--If 
                the provisions of paragraph (5) apply to the parties as 
                described in paragraph (4)(B), not later than 30 days 
                after the exchange of lists under paragraph (5)(B), the 
                reference product sponsor shall bring an action for 
                patent infringement with respect to each patent that is 
                included on such lists.
                    ``(C) Notification and publication of complaint.--
                            ``(i) Notification to secretary.--Not later 
                        than 30 days after a complaint is served to a 
                        subsection (k) applicant in an action for 
                        patent infringement described under this 
                        paragraph, the subsection (k) applicant shall 
                        provide the Secretary with notice and a copy of 
                        such complaint.
                            ``(ii) Publication by secretary.--The 
                        Secretary shall publish in the Federal Register 
                        notice of a complaint received under clause 
                        (i).
            ``(7) Newly issued or licensed patents.--In the case of a 
        patent that--
                    ``(A) is issued to, or exclusively licensed by, the 
                reference product sponsor after the date that the 
                reference product sponsor provided the list to the 
                subsection (k) applicant under paragraph (3)(A); and
                    ``(B) the reference product sponsor reasonably 
                believes that, due to the issuance of such patent, a 
                claim of patent infringement could reasonably be 
                asserted by the reference product sponsor if a person 
                not licensed by the reference product sponsor engaged 
                in the making, using, offering to sell, selling, or 
                importing into the United States of the biological 
                product that is the subject of the subsection (k) 
                application,
        not later than 30 days after such issuance or licensing, the 
        reference product sponsor shall provide to the subsection (k) 
        applicant a supplement to the list provided by the reference 
        product sponsor under paragraph (3)(A) that includes such 
        patent, not later than 30 days after such supplement is 
        provided, the subsection (k) applicant shall provide a 
        statement to the reference product sponsor in accordance with 
        paragraph (3)(B), and such patent shall be subject to paragraph 
        (8).
            ``(8) Notice of commercial marketing and preliminary 
        injunction.--
                    ``(A) Notice of commercial marketing.--The 
                subsection (k) applicant shall provide notice to the 
                reference product sponsor not later than 180 days 
                before the date of the first commercial marketing of 
                the biological product licensed under subsection (k).
                    ``(B) Preliminary injunction.--After receiving the 
                notice under subparagraph (A) and before such date of 
                the first commercial marketing of such biological 
                product, the reference product sponsor may seek a 
                preliminary injunction prohibiting the subsection (k) 
                applicant from engaging in the commercial manufacture 
                or sale of such biological product until the court 
                decides the issue of patent validity, enforcement, and 
                infringement with respect to any patent that is--
                            ``(i) included in the list provided by the 
                        reference product sponsor under paragraph 
                        (3)(A) or in the list provided by the 
                        subsection (k) applicant under paragraph 
                        (3)(B); and
                            ``(ii) not included, as applicable, on--
                                    ``(I) the list of patents described 
                                in paragraph (4); or
                                    ``(II) the lists of patents 
                                described in paragraph (5)(B).
                    ``(C) Reasonable cooperation.--If the reference 
                product sponsor has sought a preliminary injunction 
                under subparagraph (B), the reference product sponsor 
                and the subsection (k) applicant shall reasonably 
                cooperate to expedite such further discovery as is 
                needed in connection with the preliminary injunction 
                motion.
            ``(9) Limitation on declaratory judgment action.--
                    ``(A) Subsection (k) application provided.--If a 
                subsection (k) applicant provides the application and 
                information required under paragraph (2)(A), neither 
                the reference product sponsor nor the subsection (k) 
                applicant may, prior to the date notice is received 
                under paragraph (8)(A), bring any action under section 
                2201 of title 28, United States Code, for a declaration 
                of infringement, validity, or enforceability of any 
                patent that is described in clauses (i) and (ii) of 
                paragraph (8)(B).
                    ``(B) Subsequent failure to act by subsection (k) 
                applicant.--If a subsection (k) applicant fails to 
                complete an action required of the subsection (k) 
                applicant under paragraph (3)(B)(ii), paragraph (5), 
                paragraph (6)(C)(i), paragraph (7), or paragraph 
                (8)(A), the reference product sponsor, but not the 
                subsection (k) applicant, may bring an action under 
                section 2201 of title 28, United States Code, for a 
                declaration of infringement, validity, or 
                enforceability of any patent included in the list 
                described in paragraph (3)(A), including as provided 
                under paragraph (7).
                    ``(C) Subsection (k) application not provided.--If 
                a subsection (k) applicant fails to provide the 
                application and information required under paragraph 
                (2)(A), the reference product sponsor, but not the 
                subsection (k) applicant, may bring an action under 
                section 2201 of title 28, United States Code, for a 
                declaration of infringement, validity, or 
                enforceability of any patent that claims the biological 
                product or a use of the biological product.''.
    (b) Definitions.--Section 351(i) of the Public Health Service Act 
(42 U.S.C. 262(i)) is amended--
            (1) by striking ``In this section, the term `biological 
        product' means'' and inserting the following: ``In this 
        section:
            ``(1) The term `biological product' means'';
            (2) in paragraph (1), as so designated, by inserting 
        ``protein (except any chemically synthesized polypeptide),'' 
        after ``allergenic product,''; and
            (3) by adding at the end the following:
            ``(2) The term `biosimilar' or `biosimilarity', in 
        reference to a biological product that is the subject of an 
        application under subsection (k), means--
                    ``(A) that the biological product is highly similar 
                to the reference product notwithstanding minor 
                differences in clinically inactive components; and
                    ``(B) there are no clinically meaningful 
                differences between the biological product and the 
                reference product in terms of the safety, purity, and 
                potency of the product.
            ``(3) The term `interchangeable' or `interchangeability', 
        in reference to a biological product that is shown to meet the 
        standards described in subsection (k)(4), means that the 
        biological product may be substituted for the reference product 
        without the intervention of the health care provider who 
        prescribed the reference product.
            ``(4) The term `reference product' means the single 
        biological product licensed under subsection (a) against which 
        a biological product is evaluated in an application submitted 
        under subsection (k).''.
    (c) Conforming Amendments Relating to Patents.--
            (1) Patents.--Section 271(e) of title 35, United States 
        Code, is amended--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (B), by adding ``or'' 
                        at the end; and
                            (iii) by inserting after subparagraph (B) 
                        the following:
            ``(C)(i) with respect to a patent that is identified in the 
        list of patents described in section 351(l)(3) of the Public 
        Health Service Act (including as provided under section 
        351(l)(7) of such Act), an application seeking approval of a 
        biological product, or
            ``(ii) if the applicant for the application fails to 
        provide the application and information required under section 
        351(l)(2)(A) of such Act, an application seeking approval of a 
        biological product for a patent that could be identified 
        pursuant to section 351(l)(3)(A)(i) of such Act,''; and
                            (iv) in the matter following subparagraph 
                        (C) (as added by clause (iii)), by striking 
                        ``or veterinary biological product'' and 
                        inserting ``, veterinary biological product, or 
                        biological product'';
                    (B) in paragraph (4)--
                            (i) in subparagraph (B), by--
                                    (I) striking ``or veterinary 
                                biological product'' and inserting ``, 
                                veterinary biological product, or 
                                biological product''; and
                                    (II) striking ``and'' at the end;
                            (ii) in subparagraph (C), by--
                                    (I) striking ``or veterinary 
                                biological product'' and inserting ``, 
                                veterinary biological product, or 
                                biological product''; and
                                    (II) striking the period and 
                                inserting ``, and'';
                            (iii) by inserting after subparagraph (C) 
                        the following:
            ``(D) the court shall order a permanent injunction 
        prohibiting any infringement of the patent by the biological 
        product involved in the infringement until a date which is not 
        earlier than the date of the expiration of the patent that has 
        been infringed under paragraph (2)(C), provided the patent is 
        the subject of a final court decision, as defined in section 
        351(k)(6) of the Public Health Service Act, in an action for 
        infringement of the patent under section 351(l)(6) of such Act, 
        and the biological product has not yet been approved because of 
        section 351(k)(7) of such Act.''; and
                            (iv) in the matter following subparagraph 
                        (D) (as added by clause (iii)), by striking 
                        ``and (C)'' and inserting ``(C), and (D)''; and
                    (C) by adding at the end the following:
    ``(6)(A) Subparagraph (B) applies, in lieu of paragraph (4), in the 
case of a patent--
            ``(i) that is identified, as applicable, in the list of 
        patents described in section 351(l)(4) of the Public Health 
        Service Act or the lists of patents described in section 
        351(l)(5)(B) of such Act with respect to a biological product; 
        and
            ``(ii) for which an action for infringement of the patent 
        with respect to the biological product--
                    ``(I) was brought after the expiration of the 30-
                day period described in subparagraph (A) or (B), as 
                applicable, of section 351(l)(6) of such Act; or
                    ``(II) was brought before the expiration of the 30-
                day period described in subclause (I), but which was 
                dismissed without prejudice or was not prosecuted to 
                judgment in good faith.
    ``(B) In an action for infringement of a patent described in 
subparagraph (A), the sole and exclusive remedy that may be granted by 
a court, upon a finding that the making, using, offering to sell, 
selling, or importation into the United States of the biological 
product that is the subject of the action infringed the patent, shall 
be a reasonable royalty.
    ``(C) The owner of a patent that should have been included in the 
list described in section 351(l)(3)(A) of the Public Health Service 
Act, including as provided under section 351(l)(7) of such Act for a 
biological product, but was not timely included in such list, may not 
bring an action under this section for infringement of the patent with 
respect to the biological product.''.
            (2) Conforming amendment under title 28.--Section 2201(b) 
        of title 28, United States Code, is amended by inserting before 
        the period the following: ``, or section 351 of the Public 
        Health Service Act''.
    (d) Conforming Amendments Under the Federal Food, Drug, and 
Cosmetic Act.--
            (1) Content and review of applications.--Section 
        505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355(b)(5)(B)) is amended by inserting before the period 
        at the end of the first sentence the following: ``or, with 
        respect to an applicant for approval of a biological product 
        under section 351(k) of the Public Health Service Act, any 
        necessary clinical study or studies''.
            (2) New active ingredient.--Section 505B of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by 
        adding at the end the following:
    ``(n) New Active Ingredient.--
            ``(1) Non-interchangeable biosimilar biological product.--A 
        biological product that is biosimilar to a reference product 
        under section 351 of the Public Health Service Act, and that 
        the Secretary has not determined to meet the standards 
        described in subsection (k)(4) of such section for 
        interchangeability with the reference product, shall be 
        considered to have a new active ingredient under this section.
            ``(2) Interchangeable biosimilar biological product.--A 
        biological product that is interchangeable with a reference 
        product under section 351 of the Public Health Service Act 
        shall not be considered to have a new active ingredient under 
        this section.''.
    (e) Products Previously Approved Under Section 505.--
            (1) Requirement to follow section 351.--Except as provided 
        in paragraph (2), an application for a biological product shall 
        be submitted under section 351 of the Public Health Service Act 
        (42 U.S.C. 262) (as amended by this Act).
            (2) Exception.--An application for a biological product may 
        be submitted under section 505 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355) if--
                    (A) such biological product is in a product class 
                for which a biological product in such product class is 
                the subject of an application approved under such 
                section 505 not later than the date of enactment of 
                this Act; and
                    (B) such application--
                            (i) has been submitted to the Secretary of 
                        Health and Human Services (referred to in this 
                        subtitle as the ``Secretary'') before the date 
                        of enactment of this Act; or
                            (ii) is submitted to the Secretary not 
                        later than the date that is 10 years after the 
                        date of enactment of this Act.
            (3) Limitation.--Notwithstanding paragraph (2), an 
        application for a biological product may not be submitted under 
        section 505 of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355) if there is another biological product approved 
        under subsection (a) of section 351 of the Public Health 
        Service Act that could be a reference product with respect to 
        such application (within the meaning of such section 351) if 
        such application were submitted under subsection (k) of such 
        section 351.
            (4) Deemed approved under section 351.--An approved 
        application for a biological product under section 505 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) shall be 
        deemed to be a license for the biological product under such 
        section 351 on the date that is 10 years after the date of 
        enactment of this Act.
            (5) Definitions.--For purposes of this subsection, the term 
        ``biological product'' has the meaning given such term under 
        section 351 of the Public Health Service Act (42 U.S.C. 262) 
        (as amended by this Act).
    (f) Follow-on Biologics User Fees.--
            (1) Development of user fees for biosimilar biological 
        products.--
                    (A) In general.--Beginning not later than October 
                1, 2010, the Secretary shall develop recommendations to 
                present to Congress with respect to the goals, and 
                plans for meeting the goals, for the process for the 
                review of biosimilar biological product applications 
                submitted under section 351(k) of the Public Health 
                Service Act (as added by this Act) for the first 5 
                fiscal years after fiscal year 2012. In developing such 
                recommendations, the Secretary shall consult with--
                            (i) the Committee on Health, Education, 
                        Labor, and Pensions of the Senate;
                            (ii) the Committee on Energy and Commerce 
                        of the House of Representatives;
                            (iii) scientific and academic experts;
                            (iv) health care professionals;
                            (v) representatives of patient and consumer 
                        advocacy groups; and
                            (vi) the regulated industry.
                    (B) Public review of recommendations.--After 
                negotiations with the regulated industry, the Secretary 
                shall--
                            (i) present the recommendations developed 
                        under subparagraph (A) to the Congressional 
                        committees specified in such subparagraph;
                            (ii) publish such recommendations in the 
                        Federal Register;
                            (iii) provide for a period of 30 days for 
                        the public to provide written comments on such 
                        recommendations;
                            (iv) hold a meeting at which the public may 
                        present its views on such recommendations; and
                            (v) after consideration of such public 
                        views and comments, revise such recommendations 
                        as necessary.
                    (C) Transmittal of recommendations.--Not later than 
                January 15, 2012, the Secretary shall transmit to 
                Congress the revised recommendations under subparagraph 
                (B), a summary of the views and comments received under 
                such subparagraph, and any changes made to the 
                recommendations in response to such views and comments.
            (2) Establishment of user fee program.--It is the sense of 
        the Senate that, based on the recommendations transmitted to 
        Congress by the Secretary pursuant to paragraph (1)(C), 
        Congress should authorize a program, effective on October 1, 
        2012, for the collection of user fees relating to the 
        submission of biosimilar biological product applications under 
        section 351(k) of the Public Health Service Act (as added by 
        this Act).
            (3) Transitional provisions for user fees for biosimilar 
        biological products.--
                    (A) Application of the prescription drug user fee 
                provisions.--Section 735(1)(B) of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 379g(1)(B)) is 
                amended by striking ``section 351'' and inserting 
                ``subsection (a) or (k) of section 351''.
                    (B) Evaluation of costs of reviewing biosimilar 
                biological product applications.--During the period 
                beginning on the date of enactment of this Act and 
                ending on October 1, 2010, the Secretary shall collect 
                and evaluate data regarding the costs of reviewing 
                applications for biological products submitted under 
                section 351(k) of the Public Health Service Act (as 
                added by this Act) during such period.
                    (C) Audit.--
                            (i) In general.--On the date that is 2 
                        years after first receiving a user fee 
                        applicable to an application for a biological 
                        product under section 351(k) of the Public 
                        Health Service Act (as added by this Act), and 
                        on a biennial basis thereafter until October 1, 
                        2013, the Secretary shall perform an audit of 
                        the costs of reviewing such applications under 
                        such section 351(k). Such an audit shall 
                        compare--
                                    (I) the costs of reviewing such 
                                applications under such section 351(k) 
                                to the amount of the user fee 
                                applicable to such applications; and
                                    (II)(aa) such ratio determined 
                                under subclause (I); to
                                    (bb) the ratio of the costs of 
                                reviewing applications for biological 
                                products under section 351(a) of such 
                                Act (as amended by this Act) to the 
                                amount of the user fee applicable to 
                                such applications under such section 
                                351(a).
                            (ii) Alteration of user fee.--If the audit 
                        performed under clause (i) indicates that the 
                        ratios compared under subclause (II) of such 
                        clause differ by more than 5 percent, then the 
                        Secretary shall alter the user fee applicable 
                        to applications submitted under such section 
                        351(k) to more appropriately account for the 
                        costs of reviewing such applications.
                            (iii) Accounting standards.--The Secretary 
                        shall perform an audit under clause (i) in 
                        conformance with the accounting principles, 
                        standards, and requirements prescribed by the 
                        Comptroller General of the United States under 
                        section 3511 of title 31, United State Code, to 
                        ensure the validity of any potential 
                        variability.
            (4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection such sums as 
        may be necessary for each of fiscal years 2010 through 2012.
    (g) Pediatric Studies of Biological Products.--
            (1) In general.--Section 351 of the Public Health Service 
        Act (42 U.S.C. 262) is amended by adding at the end the 
        following:
    ``(m) Pediatric Studies.--
            ``(1) Application of certain provisions.--The provisions of 
        subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and 
        (q) of section 505A of the Federal Food, Drug, and Cosmetic Act 
        shall apply with respect to the extension of a period under 
        paragraphs (2) and (3) to the same extent and in the same 
        manner as such provisions apply with respect to the extension 
        of a period under subsection (b) or (c) of section 505A of the 
        Federal Food, Drug, and Cosmetic Act.
            ``(2) Market exclusivity for new biological products.--If, 
        prior to approval of an application that is submitted under 
        subsection (a), the Secretary determines that information 
        relating to the use of a new biological product in the 
        pediatric population may produce health benefits in that 
        population, the Secretary makes a written request for pediatric 
        studies (which shall include a timeframe for completing such 
        studies), the applicant agrees to the request, such studies are 
        completed using appropriate formulations for each age group for 
        which the study is requested within any such timeframe, and the 
        reports thereof are submitted and accepted in accordance with 
        section 505A(d)(3) of the Federal Food, Drug, and Cosmetic 
        Act--
                    ``(A) the periods for such biological product 
                referred to in subsection (k)(7) are deemed to be 4 
                years and 6 months rather than 4 years and 12 years and 
                6 months rather than 12 years; and
                    ``(B) if the biological product is designated under 
                section 526 for a rare disease or condition, the period 
                for such biological product referred to in section 
                527(a) is deemed to be 7 years and 6 months rather than 
                7 years.
            ``(3) Market exclusivity for already-marketed biological 
        products.--If the Secretary determines that information 
        relating to the use of a licensed biological product in the 
        pediatric population may produce health benefits in that 
        population and makes a written request to the holder of an 
        approved application under subsection (a) for pediatric studies 
        (which shall include a timeframe for completing such studies), 
        the holder agrees to the request, such studies are completed 
        using appropriate formulations for each age group for which the 
        study is requested within any such timeframe, and the reports 
        thereof are submitted and accepted in accordance with section 
        505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
                    ``(A) the periods for such biological product 
                referred to in subsection (k)(7) are deemed to be 4 
                years and 6 months rather than 4 years and 12 years and 
                6 months rather than 12 years; and
                    ``(B) if the biological product is designated under 
                section 526 for a rare disease or condition, the period 
                for such biological product referred to in section 
                527(a) is deemed to be 7 years and 6 months rather than 
                7 years.
            ``(4) Exception.--The Secretary shall not extend a period 
        referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if 
        the determination under section 505A(d)(3) is made later than 9 
        months prior to the expiration of such period.''.
            (2) Studies regarding pediatric research.--
                    (A) Program for pediatric study of drugs.--
                Subsection (a)(1) of section 409I of the Public Health 
                Service Act (42 U.S.C. 284m) is amended by inserting 
                ``, biological products,'' after ``including drugs''.
                    (B) Institute of medicine study.--Section 505A(p) 
                of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                355b(p)) is amended by striking paragraphs (4) and (5) 
                and inserting the following:
            ``(4) review and assess the number and importance of 
        biological products for children that are being tested as a 
        result of the amendments made by the Biologics Price 
        Competition and Innovation Act of 2009 and the importance for 
        children, health care providers, parents, and others of 
        labeling changes made as a result of such testing;
            ``(5) review and assess the number, importance, and 
        prioritization of any biological products that are not being 
        tested for pediatric use; and
            ``(6) offer recommendations for ensuring pediatric testing 
        of biological products, including consideration of any 
        incentives, such as those provided under this section or 
        section 351(m) of the Public Health Service Act.''.
    (h) Orphan Products.--If a reference product, as defined in section 
351 of the Public Health Service Act (42 U.S.C. 262) (as amended by 
this Act) has been designated under section 526 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or 
condition, a biological product seeking approval for such disease or 
condition under subsection (k) of such section 351 as biosimilar to, or 
interchangeable with, such reference product may be licensed by the 
Secretary only after the expiration for such reference product of the 
later of--
            (1) the 7-year period described in section 527(a) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and
            (2) the 12-year period described in subsection (k)(7) of 
        such section 351.

SEC. 7003. SAVINGS.

    (a) Determination.--The Secretary of the Treasury, in consultation 
with the Secretary of Health and Human Services, shall for each fiscal 
year determine the amount of savings to the Federal Government as a 
result of the enactment of this subtitle.
    (b) Use.--Notwithstanding any other provision of this subtitle (or 
an amendment made by this subtitle), the savings to the Federal 
Government generated as a result of the enactment of this subtitle 
shall be used for deficit reduction.

  Subtitle B--More Affordable Medicines for Children and Underserved 
                              Communities

SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
Section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 
256b(a)(4)) is amended by adding at the end the following:
                    ``(M) A children's hospital excluded from the 
                Medicare prospective payment system pursuant to section 
                1886(d)(1)(B)(iii) of the Social Security Act, or a 
                free-standing cancer hospital excluded from the 
                Medicare prospective payment system pursuant to section 
                1886(d)(1)(B)(v) of the Social Security Act, that would 
                meet the requirements of subparagraph (L), including 
                the disproportionate share adjustment percentage 
                requirement under clause (ii) of such subparagraph, if 
                the hospital were a subsection (d) hospital as defined 
                by section 1886(d)(1)(B) of the Social Security Act.
                    ``(N) An entity that is a critical access hospital 
                (as determined under section 1820(c)(2) of the Social 
                Security Act), and that meets the requirements of 
                subparagraph (L)(i).
                    ``(O) An entity that is a rural referral center, as 
                defined by section 1886(d)(5)(C)(i) of the Social 
                Security Act, or a sole community hospital, as defined 
                by section 1886(d)(5)(C)(iii) of such Act, and that 
                both meets the requirements of subparagraph (L)(i) and 
                has a disproportionate share adjustment percentage 
                equal to or greater than 8 percent.''.
    (b) Extension of Discount to Inpatient Drugs.--Section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended--
            (1) in paragraphs (2), (5), (7), and (9) of subsection (a), 
        by striking ``outpatient'' each place it appears; and
            (2) in subsection (b)--
                    (A) by striking ``Other Definition'' and all that 
                follows through ``In this section'' and inserting the 
                following: ``Other Definitions.--
            ``(1) In general.--In this section''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Covered drug.--In this section, the term `covered 
        drug'--
                    ``(A) means a covered outpatient drug (as defined 
                in section 1927(k)(2) of the Social Security Act); and
                    ``(B) includes, notwithstanding paragraph (3)(A) of 
                section 1927(k) of such Act, a drug used in connection 
                with an inpatient or outpatient service provided by a 
                hospital described in subparagraph (L), (M), (N), or 
                (O) of subsection (a)(4) that is enrolled to 
                participate in the drug discount program under this 
                section.''.
    (c) Prohibition on Group Purchasing Arrangements.--Section 340B(a) 
of the Public Health Service Act (42 U.S.C. 256b(a)) is amended--
            (1) in paragraph (4)(L)--
                    (A) in clause (i), by adding ``and'' at the end;
                    (B) in clause (ii), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking clause (iii); and
            (2) in paragraph (5), as amended by subsection (b)--
                    (A) by redesignating subparagraphs (C) and (D) as 
                subparagraphs (D) and (E); respectively; and
                    (B) by inserting after subparagraph (B), the 
                following:
                    ``(C) Prohibition on group purchasing 
                arrangements.--
                            ``(i) In general.--A hospital described in 
                        subparagraph (L), (M), (N), or (O) of paragraph 
                        (4) shall not obtain covered outpatient drugs 
                        through a group purchasing organization or 
                        other group purchasing arrangement, except as 
                        permitted or provided for pursuant to clauses 
                        (ii) or (iii).
                            ``(ii) Inpatient drugs.--Clause (i) shall 
                        not apply to drugs purchased for inpatient use.
                            ``(iii) Exceptions.--The Secretary shall 
                        establish reasonable exceptions to clause (i)--
                                    ``(I) with respect to a covered 
                                outpatient drug that is unavailable to 
                                be purchased through the program under 
                                this section due to a drug shortage 
                                problem, manufacturer noncompliance, or 
                                any other circumstance beyond the 
                                hospital's control;
                                    ``(II) to facilitate generic 
                                substitution when a generic covered 
                                outpatient drug is available at a lower 
                                price; or
                                    ``(III) to reduce in other ways the 
                                administrative burdens of managing both 
                                inventories of drugs subject to this 
                                section and inventories of drugs that 
                                are not subject to this section, so 
                                long as the exceptions do not create a 
                                duplicate discount problem in violation 
                                of subparagraph (A) or a diversion 
                                problem in violation of subparagraph 
                                (B).
                            ``(iv) Purchasing arrangements for 
                        inpatient drugs.--The Secretary shall ensure 
                        that a hospital described in subparagraph (L), 
                        (M), (N), or (O) of subsection (a)(4) that is 
                        enrolled to participate in the drug discount 
                        program under this section shall have multiple 
                        options for purchasing covered drugs for 
                        inpatients, including by utilizing a group 
                        purchasing organization or other group 
                        purchasing arrangement, establishing and 
                        utilizing its own group purchasing program, 
                        purchasing directly from a manufacturer, and 
                        any other purchasing arrangements that the 
                        Secretary determines is appropriate to ensure 
                        access to drug discount pricing under this 
                        section for inpatient drugs taking into account 
                        the particular needs of small and rural 
                        hospitals.''.
    (d) Medicaid Credits on Inpatient Drugs.--Section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended by striking 
subsection (c) and inserting the following:
    ``(c) Medicaid Credit.--Not later than 90 days after the date of 
filing of the hospital's most recently filed Medicare cost report, the 
hospital shall issue a credit as determined by the Secretary to the 
State Medicaid program for inpatient covered drugs provided to Medicaid 
recipients.''.
    (e) Effective Dates.--
            (1) In general.--The amendments made by this section and 
        section 7102 shall take effect on January 1, 2010, and shall 
        apply to drugs purchased on or after January 1, 2010.
            (2) Effectiveness.--The amendments made by this section and 
        section 7102 shall be effective and shall be taken into account 
        in determining whether a manufacturer is deemed to meet the 
        requirements of section 340B(a) of the Public Health Service 
        Act (42 U.S.C. 256b(a)), notwithstanding any other provision of 
        law.

SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

    (a) Integrity Improvements.--Subsection (d) of section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended to read as 
follows:
    ``(d) Improvements in Program Integrity.--
            ``(1) Manufacturer compliance.--
                    ``(A) In general.--From amounts appropriated under 
                paragraph (4), the Secretary shall provide for 
                improvements in compliance by manufacturers with the 
                requirements of this section in order to prevent 
                overcharges and other violations of the discounted 
                pricing requirements specified in this section.
                    ``(B) Improvements.--The improvements described in 
                subparagraph (A) shall include the following:
                            ``(i) The development of a system to enable 
                        the Secretary to verify the accuracy of ceiling 
                        prices calculated by manufacturers under 
                        subsection (a)(1) and charged to covered 
                        entities, which shall include the following:
                                    ``(I) Developing and publishing 
                                through an appropriate policy or 
                                regulatory issuance, precisely defined 
                                standards and methodology for the 
                                calculation of ceiling prices under 
                                such subsection.
                                    ``(II) Comparing regularly the 
                                ceiling prices calculated by the 
                                Secretary with the quarterly pricing 
                                data that is reported by manufacturers 
                                to the Secretary.
                                    ``(III) Performing spot checks of 
                                sales transactions by covered entities.
                                    ``(IV) Inquiring into the cause of 
                                any pricing discrepancies that may be 
                                identified and either taking, or 
                                requiring manufacturers to take, such 
                                corrective action as is appropriate in 
                                response to such price discrepancies.
                            ``(ii) The establishment of procedures for 
                        manufacturers to issue refunds to covered 
                        entities in the event that there is an 
                        overcharge by the manufacturers, including the 
                        following:
                                    ``(I) Providing the Secretary with 
                                an explanation of why and how the 
                                overcharge occurred, how the refunds 
                                will be calculated, and to whom the 
                                refunds will be issued.
                                    ``(II) Oversight by the Secretary 
                                to ensure that the refunds are issued 
                                accurately and within a reasonable 
                                period of time, both in routine 
                                instances of retroactive adjustment to 
                                relevant pricing data and exceptional 
                                circumstances such as erroneous or 
                                intentional overcharging for covered 
                                drugs.
                            ``(iii) The provision of access through the 
                        Internet website of the Department of Health 
                        and Human Services to the applicable ceiling 
                        prices for covered drugs as calculated and 
                        verified by the Secretary in accordance with 
                        this section, in a manner (such as through the 
                        use of password protection) that limits such 
                        access to covered entities and adequately 
                        assures security and protection of privileged 
                        pricing data from unauthorized re-disclosure.
                            ``(iv) The development of a mechanism by 
                        which--
                                    ``(I) rebates and other discounts 
                                provided by manufacturers to other 
                                purchasers subsequent to the sale of 
                                covered drugs to covered entities are 
                                reported to the Secretary; and
                                    ``(II) appropriate credits and 
                                refunds are issued to covered entities 
                                if such discounts or rebates have the 
                                effect of lowering the applicable 
                                ceiling price for the relevant quarter 
                                for the drugs involved.
                            ``(v) Selective auditing of manufacturers 
                        and wholesalers to ensure the integrity of the 
                        drug discount program under this section.
                            ``(vi) The imposition of sanctions in the 
                        form of civil monetary penalties, which--
                                    ``(I) shall be assessed according 
                                to standards established in regulations 
                                to be promulgated by the Secretary not 
                                later than 180 days after the date of 
                                enactment of the Patient Protection and 
                                Affordable Care Act;
                                    ``(II) shall not exceed $5,000 for 
                                each instance of overcharging a covered 
                                entity that may have occurred; and
                                    ``(III) shall apply to any 
                                manufacturer with an agreement under 
                                this section that knowingly and 
                                intentionally charges a covered entity 
                                a price for purchase of a drug that 
                                exceeds the maximum applicable price 
                                under subsection (a)(1).
            ``(2) Covered entity compliance.--
                    ``(A) In general.--From amounts appropriated under 
                paragraph (4), the Secretary shall provide for 
                improvements in compliance by covered entities with the 
                requirements of this section in order to prevent 
                diversion and violations of the duplicate discount 
                provision and other requirements specified under 
                subsection (a)(5).
                    ``(B) Improvements.--The improvements described in 
                subparagraph (A) shall include the following:
                            ``(i) The development of procedures to 
                        enable and require covered entities to 
                        regularly update (at least annually) the 
                        information on the Internet website of the 
                        Department of Health and Human Services 
                        relating to this section.
                            ``(ii) The development of a system for the 
                        Secretary to verify the accuracy of information 
                        regarding covered entities that is listed on 
                        the website described in clause (i).
                            ``(iii) The development of more detailed 
                        guidance describing methodologies and options 
                        available to covered entities for billing 
                        covered drugs to State Medicaid agencies in a 
                        manner that avoids duplicate discounts pursuant 
                        to subsection (a)(5)(A).
                            ``(iv) The establishment of a single, 
                        universal, and standardized identification 
                        system by which each covered entity site can be 
                        identified by manufacturers, distributors, 
                        covered entities, and the Secretary for 
                        purposes of facilitating the ordering, 
                        purchasing, and delivery of covered drugs under 
                        this section, including the processing of 
                        chargebacks for such drugs.
                            ``(v) The imposition of sanctions, in 
                        appropriate cases as determined by the 
                        Secretary, additional to those to which covered 
                        entities are subject under subsection 
                        (a)(5)(E), through one or more of the following 
                        actions:
                                    ``(I) Where a covered entity 
                                knowingly and intentionally violates 
                                subsection (a)(5)(B), the covered 
                                entity shall be required to pay a 
                                monetary penalty to a manufacturer or 
                                manufacturers in the form of interest 
                                on sums for which the covered entity is 
                                found liable under subsection 
                                (a)(5)(E), such interest to be 
                                compounded monthly and equal to the 
                                current short term interest rate as 
                                determined by the Federal Reserve for 
                                the time period for which the covered 
                                entity is liable.
                                    ``(II) Where the Secretary 
                                determines a violation of subsection 
                                (a)(5)(B) was systematic and egregious 
                                as well as knowing and intentional, 
                                removing the covered entity from the 
                                drug discount program under this 
                                section and disqualifying the entity 
                                from re-entry into such program for a 
                                reasonable period of time to be 
                                determined by the Secretary.
                                    ``(III) Referring matters to 
                                appropriate Federal authorities within 
                                the Food and Drug Administration, the 
                                Office of Inspector General of 
                                Department of Health and Human 
                                Services, or other Federal agencies for 
                                consideration of appropriate action 
                                under other Federal statutes, such as 
                                the Prescription Drug Marketing Act (21 
                                U.S.C. 353).
            ``(3) Administrative dispute resolution process.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of the Patient Protection and 
                Affordable Care Act, the Secretary shall promulgate 
                regulations to establish and implement an 
                administrative process for the resolution of claims by 
                covered entities that they have been overcharged for 
                drugs purchased under this section, and claims by 
                manufacturers, after the conduct of audits as 
                authorized by subsection (a)(5)(D), of violations of 
                subsections (a)(5)(A) or (a)(5)(B), including 
                appropriate procedures for the provision of remedies 
                and enforcement of determinations made pursuant to such 
                process through mechanisms and sanctions described in 
                paragraphs (1)(B) and (2)(B).
                    ``(B) Deadlines and procedures.--Regulations 
                promulgated by the Secretary under subparagraph (A) 
                shall--
                            ``(i) designate or establish a decision-
                        making official or decision-making body within 
                        the Department of Health and Human Services to 
                        be responsible for reviewing and finally 
                        resolving claims by covered entities that they 
                        have been charged prices for covered drugs in 
                        excess of the ceiling price described in 
                        subsection (a)(1), and claims by manufacturers 
                        that violations of subsection (a)(5)(A) or 
                        (a)(5)(B) have occurred;
                            ``(ii) establish such deadlines and 
                        procedures as may be necessary to ensure that 
                        claims shall be resolved fairly, efficiently, 
                        and expeditiously;
                            ``(iii) establish procedures by which a 
                        covered entity may discover and obtain such 
                        information and documents from manufacturers 
                        and third parties as may be relevant to 
                        demonstrate the merits of a claim that charges 
                        for a manufacturer's product have exceeded the 
                        applicable ceiling price under this section, 
                        and may submit such documents and information 
                        to the administrative official or body 
                        responsible for adjudicating such claim;
                            ``(iv) require that a manufacturer conduct 
                        an audit of a covered entity pursuant to 
                        subsection (a)(5)(D) as a prerequisite to 
                        initiating administrative dispute resolution 
                        proceedings against a covered entity;
                            ``(v) permit the official or body 
                        designated under clause (i), at the request of 
                        a manufacturer or manufacturers, to consolidate 
                        claims brought by more than one manufacturer 
                        against the same covered entity where, in the 
                        judgment of such official or body, 
                        consolidation is appropriate and consistent 
                        with the goals of fairness and economy of 
                        resources; and
                            ``(vi) include provisions and procedures to 
                        permit multiple covered entities to jointly 
                        assert claims of overcharges by the same 
                        manufacturer for the same drug or drugs in one 
                        administrative proceeding, and permit such 
                        claims to be asserted on behalf of covered 
                        entities by associations or organizations 
                        representing the interests of such covered 
                        entities and of which the covered entities are 
                        members.
                    ``(C) Finality of administrative resolution.--The 
                administrative resolution of a claim or claims under 
                the regulations promulgated under subparagraph (A) 
                shall be a final agency decision and shall be binding 
                upon the parties involved, unless invalidated by an 
                order of a court of competent jurisdiction.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        such sums as may be necessary for fiscal year 2010 and each 
        succeeding fiscal year.''.
    (b) Conforming Amendments.--Section 340B(a) of the Public Health 
Service Act (42 U.S.C. 256b(a)) is amended--
            (1) in subsection (a)(1), by adding at the end the 
        following: ``Each such agreement shall require that the 
        manufacturer furnish the Secretary with reports, on a quarterly 
        basis, of the price for each covered drug subject to the 
        agreement that, according to the manufacturer, represents the 
        maximum price that covered entities may permissibly be required 
        to pay for the drug (referred to in this section as the 
        `ceiling price'), and shall require that the manufacturer offer 
        each covered entity covered drugs for purchase at or below the 
        applicable ceiling price if such drug is made available to any 
        other purchaser at any price.''; and
            (2) in the first sentence of subsection (a)(5)(E), as 
        redesignated by section 7101(c), by inserting ``after audit as 
        described in subparagraph (D) and'' after ``finds,''.

SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING THE 340B 
              PROGRAM.

    (a) Report.--Not later than 18 months after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
to Congress a report that examines whether those individuals served by 
the covered entities under the program under section 340B of the Public 
Health Service Act (42 U.S.C. 256b) (referred to in this section as the 
``340B program'') are receiving optimal health care services.
    (b) Recommendations.--The report under subsection (a) shall include 
recommendations on the following:
            (1) Whether the 340B program should be expanded since it is 
        anticipated that the 47,000,000 individuals who are uninsured 
        as of the date of enactment of this Act will have health care 
        coverage once this Act is implemented.
            (2) Whether mandatory sales of certain products by the 340B 
        program could hinder patients access to those therapies through 
        any provider.
            (3) Whether income from the 340B program is being used by 
        the covered entities under the program to further the program 
        objectives.

                         TITLE VIII--CLASS ACT

SEC. 8001. SHORT TITLE OF TITLE.

    This title may be cited as the ``Community Living Assistance 
Services and Supports Act'' or the ``CLASS Act''.

SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR 
              PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND 
              SUPPORT.

    (a) Establishment of CLASS Program.--
            (1) In general.--The Public Health Service Act (42 U.S.C. 
        201 et seq.), as amended by section 4302(a), is amended by 
        adding at the end the following:

    ``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

``SEC. 3201. PURPOSE.

    ``The purpose of this title is to establish a national voluntary 
insurance program for purchasing community living assistance services 
and supports in order to--
            ``(1) provide individuals with functional limitations with 
        tools that will allow them to maintain their personal and 
        financial independence and live in the community through a new 
        financing strategy for community living assistance services and 
        supports;
            ``(2) establish an infrastructure that will help address 
        the Nation's community living assistance services and supports 
        needs;
            ``(3) alleviate burdens on family caregivers; and
            ``(4) address institutional bias by providing a financing 
        mechanism that supports personal choice and independence to 
        live in the community.

``SEC. 3202. DEFINITIONS.

    ``In this title:
            ``(1) Active enrollee.--The term `active enrollee' means an 
        individual who is enrolled in the CLASS program in accordance 
        with section 3204 and who has paid any premiums due to maintain 
        such enrollment.
            ``(2) Actively employed.--The term `actively employed' 
        means an individual who--
                    ``(A) is reporting for work at the individual's 
                usual place of employment or at another location to 
                which the individual is required to travel because of 
                the individual's employment (or in the case of an 
                individual who is a member of the uniformed services, 
                is on active duty and is physically able to perform the 
                duties of the individual's position); and
                    ``(B) is able to perform all the usual and 
                customary duties of the individual's employment on the 
                individual's regular work schedule.
            ``(3) Activities of daily living.--The term `activities of 
        daily living' means each of the following activities specified 
        in section 7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                    ``(A) Eating.
                    ``(B) Toileting.
                    ``(C) Transferring.
                    ``(D) Bathing.
                    ``(E) Dressing.
                    ``(F) Continence.
            ``(4) CLASS program.--The term `CLASS program' means the 
        program established under this title.
            ``(5) Eligibility assessment system.--The term `Eligibility 
        Assessment System' means the entity established by the 
        Secretary under section 3205(a)(2) to make functional 
        eligibility determinations for the CLASS program.
            ``(6) Eligible beneficiary.--
                    ``(A) In general.--The term `eligible beneficiary' 
                means any individual who is an active enrollee in the 
                CLASS program and, as of the date described in 
                subparagraph (B)--
                            ``(i) has paid premiums for enrollment in 
                        such program for at least 60 months;
                            ``(ii) has earned, with respect to at least 
                        3 calendar years that occur during the first 60 
                        months for which the individual has paid 
                        premiums for enrollment in the program, at 
                        least an amount equal to the amount of wages 
                        and self-employment income which an individual 
                        must have in order to be credited with a 
                        quarter of coverage under section 213(d) of the 
                        Social Security Act for the year; and
                            ``(iii) has paid premiums for enrollment in 
                        such program for at least 24 consecutive 
                        months, if a lapse in premium payments of more 
                        than 3 months has occurred during the period 
                        that begins on the date of the individual's 
                        enrollment and ends on the date of such 
                        determination.
                    ``(B) Date described.--For purposes of subparagraph 
                (A), the date described in this subparagraph is the 
                date on which the individual is determined to have a 
                functional limitation described in section 
                3203(a)(1)(C) that is expected to last for a continuous 
                period of more than 90 days.
                    ``(C) Regulations.--The Secretary shall promulgate 
                regulations specifying exceptions to the minimum 
                earnings requirements under subparagraph (A)(ii) for 
                purposes of being considered an eligible beneficiary 
                for certain populations.
            ``(7) Hospital; nursing facility; intermediate care 
        facility for the mentally retarded; institution for mental 
        diseases.--The terms `hospital', `nursing facility', 
        `intermediate care facility for the mentally retarded', and 
        `institution for mental diseases' have the meanings given such 
        terms for purposes of Medicaid.
            ``(8) CLASS independence advisory council.--The term `CLASS 
        Independence Advisory Council' or `Council' means the Advisory 
        Council established under section 3207 to advise the Secretary.
            ``(9) CLASS independence benefit plan.--The term `CLASS 
        Independence Benefit Plan' means the benefit plan developed and 
        designated by the Secretary in accordance with section 3203.
            ``(10) CLASS independence fund.--The term `CLASS 
        Independence Fund' or `Fund' means the fund established under 
        section 3206.
            ``(11) Medicaid.--The term `Medicaid' means the program 
        established under title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
            ``(12) Poverty line.--The term `poverty line' has the 
        meaning given that term in section 2110(c)(5) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(5)).
            ``(13) Protection and advocacy system.--The term 
        `Protection and Advocacy System' means the system for each 
        State established under section 143 of the Developmental 
        Disabilities Assistance and Bill of Rights Act of 2000 (42 
        U.S.C. 15043).

``SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN.

    ``(a) Process for Development.--
            ``(1) In general.--The Secretary, in consultation with 
        appropriate actuaries and other experts, shall develop at least 
        3 actuarially sound benefit plans as alternatives for 
        consideration for designation by the Secretary as the CLASS 
        Independence Benefit Plan under which eligible beneficiaries 
        shall receive benefits under this title. Each of the plan 
        alternatives developed shall be designed to provide eligible 
        beneficiaries with the benefits described in section 3205 
        consistent with the following requirements:
                    ``(A) Premiums.--
                            ``(i) In general.--Beginning with the first 
                        year of the CLASS program, and for each year 
                        thereafter, subject to clauses (ii) and (iii), 
                        the Secretary shall establish all premiums to 
                        be paid by enrollees for the year based on an 
                        actuarial analysis of the 75-year costs of the 
                        program that ensures solvency throughout such 
                        75-year period.
                            ``(ii) Nominal premium for poorest 
                        individuals and full-time students.--
                                    ``(I) In general.--The monthly 
                                premium for enrollment in the CLASS 
                                program shall not exceed the applicable 
                                dollar amount per month determined 
                                under subclause (II) for--
                                            ``(aa) any individual whose 
                                        income does not exceed the 
                                        poverty line; and
                                            ``(bb) any individual who 
                                        has not attained age 22, and is 
                                        actively employed during any 
                                        period in which the individual 
                                        is a full-time student (as 
                                        determined by the Secretary).
                                    ``(II) Applicable dollar amount.--
                                The applicable dollar amount described 
                                in this subclause is the amount equal 
                                to $5, increased by the percentage 
                                increase in the consumer price index 
                                for all urban consumers (U.S. city 
                                average) for each year occurring after 
                                2009 and before such year.
                            ``(iii) Class independence fund reserves.--
                        At such time as the CLASS program has been in 
                        operation for 10 years, the Secretary shall 
                        establish all premiums to be paid by enrollees 
                        for the year based on an actuarial analysis 
                        that accumulated reserves in the CLASS 
                        Independence Fund would not decrease in that 
                        year. At such time as the Secretary determines 
                        the CLASS program demonstrates a sustained 
                        ability to finance expected yearly expenses 
                        with expected yearly premiums and interest 
                        credited to the CLASS Independence Fund, the 
                        Secretary may decrease the required amount of 
                        CLASS Independence Fund reserves.
                    ``(B) Vesting period.--A 5-year vesting period for 
                eligibility for benefits.
                    ``(C) Benefit triggers.--A benefit trigger for 
                provision of benefits that requires a determination 
                that an individual has a functional limitation, as 
                certified by a licensed health care practitioner, 
                described in any of the following clauses that is 
                expected to last for a continuous period of more than 
                90 days:
                            ``(i) The individual is determined to be 
                        unable to perform at least the minimum number 
                        (which may be 2 or 3) of activities of daily 
                        living as are required under the plan for the 
                        provision of benefits without substantial 
                        assistance (as defined by the Secretary) from 
                        another individual.
                            ``(ii) The individual requires substantial 
                        supervision to protect the individual from 
                        threats to health and safety due to substantial 
                        cognitive impairment.
                            ``(iii) The individual has a level of 
                        functional limitation similar (as determined 
                        under regulations prescribed by the Secretary) 
                        to the level of functional limitation described 
                        in clause (i) or (ii).
                    ``(D) Cash benefit.--Payment of a cash benefit that 
                satisfies the following requirements:
                            ``(i) Minimum required amount.--The benefit 
                        amount provides an eligible beneficiary with 
                        not less than an average of $50 per day (as 
                        determined based on the reasonably expected 
                        distribution of beneficiaries receiving 
                        benefits at various benefit levels).
                            ``(ii) Amount scaled to functional 
                        ability.--The benefit amount is varied based on 
                        a scale of functional ability, with not less 
                        than 2, and not more than 6, benefit level 
                        amounts.
                            ``(iii) Daily or weekly.--The benefit is 
                        paid on a daily or weekly basis.
                            ``(iv) No lifetime or aggregate limit.--The 
                        benefit is not subject to any lifetime or 
                        aggregate limit.
                    ``(E) Coordination with supplemental coverage 
                obtained through the exchange.--The benefits allow for 
                coordination with any supplemental coverage purchased 
                through an Exchange established under section 1311 of 
                the Patient Protection and Affordable Care Act.
            ``(2) Review and recommendation by the class independence 
        advisory council.--The CLASS Independence Advisory Council 
        shall--
                    ``(A) evaluate the alternative benefit plans 
                developed under paragraph (1); and
                    ``(B) recommend for designation as the CLASS 
                Independence Benefit Plan for offering to the public 
                the plan that the Council determines best balances 
                price and benefits to meet enrollees' needs in an 
                actuarially sound manner, while optimizing the 
                probability of the long-term sustainability of the 
                CLASS program.
            ``(3) Designation by the secretary.--Not later than October 
        1, 2012, the Secretary, taking into consideration the 
        recommendation of the CLASS Independence Advisory Council under 
        paragraph (2)(B), shall designate a benefit plan as the CLASS 
        Independence Benefit Plan. The Secretary shall publish such 
        designation, along with details of the plan and the reasons for 
        the selection by the Secretary, in a final rule that allows for 
        a period of public comment.
    ``(b) Additional Premium Requirements.--
            ``(1) Adjustment of premiums.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B), (C), (D), and (E), the amount of the 
                monthly premium determined for an individual upon such 
                individual's enrollment in the CLASS program shall 
                remain the same for as long as the individual is an 
                active enrollee in the program.
                    ``(B) Recalculated premium if required for program 
                solvency.--
                            ``(i) In general.--Subject to clause (ii), 
                        if the Secretary determines, based on the most 
                        recent report of the Board of Trustees of the 
                        CLASS Independence Fund, the advice of the 
                        CLASS Independence Advisory Council, and the 
                        annual report of the Inspector General of the 
                        Department of Health and Human Services, and 
                        waste, fraud, and abuse, or such other 
                        information as the Secretary determines 
                        appropriate, that the monthly premiums and 
                        income to the CLASS Independence Fund for a 
                        year are projected to be insufficient with 
                        respect to the 20-year period that begins with 
                        that year, the Secretary shall adjust the 
                        monthly premiums for individuals enrolled in 
                        the CLASS program as necessary (but maintaining 
                        a nominal premium for enrollees whose income is 
                        below the poverty line or who are full-time 
                        students actively employed).
                            ``(ii) Exemption from increase.--Any 
                        increase in a monthly premium imposed as result 
                        of a determination described in clause (i) 
                        shall not apply with respect to the monthly 
                        premium of any active enrollee who--
                                    ``(I) has attained age 65;
                                    ``(II) has paid premiums for 
                                enrollment in the program for at least 
                                20 years; and
                                    ``(III) is not actively employed.
                    ``(C) Recalculated premium if reenrollment after 
                more than a 3-month lapse.--
                            ``(i) In general.--The reenrollment of an 
                        individual after a 90-day period during which 
                        the individual failed to pay the monthly 
                        premium required to maintain the individual's 
                        enrollment in the CLASS program shall be 
                        treated as an initial enrollment for purposes 
                        of age-adjusting the premium for enrollment in 
                        the program.
                            ``(ii) Credit for prior months if 
                        reenrolled within 5 years.--An individual who 
                        reenrolls in the CLASS program after such a 90-
                        day period and before the end of the 5-year 
                        period that begins with the first month for 
                        which the individual failed to pay the monthly 
                        premium required to maintain the individual's 
                        enrollment in the program shall be--
                                    ``(I) credited with any months of 
                                paid premiums that accrued prior to the 
                                individual's lapse in enrollment; and
                                    ``(II) notwithstanding the total 
                                amount of any such credited months, 
                                required to satisfy section 
                                3202(6)(A)(ii) before being eligible to 
                                receive benefits.
                    ``(D) No longer status as a full-time student.--An 
                individual subject to a nominal premium on the basis of 
                being described in subsection (a)(1)(A)(ii)(I)(bb) who 
                ceases to be described in that subsection, beginning 
                with the first month following the month in which the 
                individual ceases to be so described, shall be subject 
                to the same monthly premium as the monthly premium that 
                applies to an individual of the same age who first 
                enrolls in the program under the most similar 
                circumstances as the individual (such as the first year 
                of eligibility for enrollment in the program or in a 
                subsequent year).
                    ``(E) Penalty for reenollment after 5-year lapse.--
                In the case of an individual who reenrolls in the CLASS 
                program after the end of the 5-year period described in 
                subparagraph (C)(ii), the monthly premium required for 
                the individual shall be the age-adjusted premium that 
                would be applicable to an initially enrolling 
                individual who is the same age as the reenrolling 
                individual, increased by the greater of--
                            ``(i) an amount that the Secretary 
                        determines is actuarially sound for each month 
                        that occurs during the period that begins with 
                        the first month for which the individual failed 
                        to pay the monthly premium required to maintain 
                        the individual's enrollment in the CLASS 
                        program and ends with the month preceding the 
                        month in which the reenollment is effective; or
                            ``(ii) 1 percent of the applicable age-
                        adjusted premium for each such month occurring 
                        in such period.
            ``(2) Administrative expenses.--In determining the monthly 
        premiums for the CLASS program the Secretary may factor in 
        costs for administering the program, not to exceed for any year 
        in which the program is in effect under this title, an amount 
        equal to 3 percent of all premiums paid during the year.
            ``(3) No underwriting requirements.--No underwriting (other 
        than on the basis of age in accordance with subparagraphs (D) 
        and (E) of paragraph (1)) shall be used to--
                    ``(A) determine the monthly premium for enrollment 
                in the CLASS program; or
                    ``(B) prevent an individual from enrolling in the 
                program.
    ``(c) Self-attestation and Verification of Income.--The Secretary 
shall establish procedures to--
            ``(1) permit an individual who is eligible for the nominal 
        premium required under subsection (a)(1)(A)(ii), as part of 
        their automatic enrollment in the CLASS program, to self-attest 
        that their income does not exceed the poverty line or that 
        their status as a full-time student who is actively employed;
            ``(2) verify, using procedures similar to the procedures 
        used by the Commissioner of Social Security under section 
        1631(e)(1)(B)(ii) of the Social Security Act and consistent 
        with the requirements applicable to the conveyance of data and 
        information under section 1942 of such Act, the validity of 
        such self-attestation; and
            ``(3) require an individual to confirm, on at least an 
        annual basis, that their income does not exceed the poverty 
        line or that they continue to maintain such status.

``SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS.

    ``(a) Automatic Enrollment.--
            ``(1) In general.--Subject to paragraph (2), the Secretary, 
        in coordination with the Secretary of the Treasury, shall 
        establish procedures under which each individual described in 
        subsection (c) may be automatically enrolled in the CLASS 
        program by an employer of such individual in the same manner as 
        an employer may elect to automatically enroll employees in a 
        plan under section 401(k), 403(b), or 457 of the Internal 
        Revenue Code of 1986.
            ``(2) Alternative enrollment procedures.--The procedures 
        established under paragraph (1) shall provide for an 
        alternative enrollment process for an individual described in 
        subsection (c) in the case of such an individual--
                    ``(A) who is self-employed;
                    ``(B) who has more than 1 employer; or
                    ``(C) whose employer does not elect to participate 
                in the automatic enrollment process established by the 
                Secretary.
            ``(3) Administration.--
                    ``(A) In general.--The Secretary and the Secretary 
                of the Treasury shall, by regulation, establish 
                procedures to ensure that an individual is not 
                automatically enrolled in the CLASS program by more 
                than 1 employer.
                    ``(B) Form.--Enrollment in the CLASS program shall 
                be made in such manner as the Secretary may prescribe 
                in order to ensure ease of administration.
    ``(b) Election to Opt-out.--An individual described in subsection 
(c) may elect to waive enrollment in the CLASS program at any time in 
such form and manner as the Secretary and the Secretary of the Treasury 
shall prescribe.
    ``(c) Individual Described.--For purposes of enrolling in the CLASS 
program, an individual described in this paragraph is an individual--
            ``(1) who has attained age 18;
            ``(2) who--
                    ``(A) receives wages on which there is imposed a 
                tax under section 3201(a) of the Internal Revenue Code 
                of 1986; or
                    ``(B) derives self-employment income on which there 
                is imposed a tax under section 1401(a) of the Internal 
                Revenue Code of 1986;
            ``(3) who is actively employed; and
            ``(4) who is not--
                    ``(A) a patient in a hospital or nursing facility, 
                an intermediate care facility for the mentally 
                retarded, or an institution for mental diseases and 
                receiving medical assistance under Medicaid; or
                    ``(B) confined in a jail, prison, other penal 
                institution or correctional facility, or by court order 
                pursuant to conviction of a criminal offense or in 
                connection with a verdict or finding described in 
                section 202(x)(1)(A)(ii) of the Social Security Act (42 
                U.S.C. 402(x)(1)(A)(ii)).
    ``(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to satisfy 
subparagraph (B) or (C) of subsection (c)(1) in order to maintain 
enrollment in the CLASS program.
    ``(e) Payment.--
            ``(1) Payroll deduction.--An amount equal to the monthly 
        premium for the enrollment in the CLASS program of an 
        individual shall be deducted from the wages or self-employment 
        income of such individual in accordance with such procedures as 
        the Secretary, in coordination with the Secretary of the 
        Treasury, shall establish for employers who elect to deduct and 
        withhold such premiums on behalf of enrolled employees.
            ``(2) Alternative payment mechanism.--The Secretary, in 
        coordination with the Secretary of the Treasury, shall 
        establish alternative procedures for the payment of monthly 
        premiums by an individual enrolled in the CLASS program--
                    ``(A) who does not have an employer who elects to 
                deduct and withhold premiums in accordance with 
                subparagraph (A); or
                    ``(B) who does not earn wages or derive self-
                employment income.
    ``(f) Transfer of Premiums Collected.--
            ``(1) In general.--During each calendar year the Secretary 
        of the Treasury shall deposit into the CLASS Independence Fund 
        a total amount equal, in the aggregate, to 100 percent of the 
        premiums collected during that year.
            ``(2) Transfers based on estimates.--The amount deposited 
        pursuant to paragraph (1) shall be transferred in at least 
        monthly payments to the CLASS Independence Fund on the basis of 
        estimates by the Secretary and certified to the Secretary of 
        the Treasury of the amounts collected in accordance with 
        subparagraphs (A) and (B) of paragraph (5). Proper adjustments 
        shall be made in amounts subsequently transferred to the Fund 
        to the extent prior estimates were in excess of, or were less 
        than, actual amounts collected.
    ``(g) Other Enrollment and Disenrollment Opportunities.--The 
Secretary, in coordination with the Secretary of the Treasury, shall 
establish procedures under which--
            ``(1) an individual who, in the year of the individual's 
        initial eligibility to enroll in the CLASS program, has elected 
        to waive enrollment in the program, is eligible to elect to 
        enroll in the program, in such form and manner as the 
        Secretaries shall establish, only during an open enrollment 
        period established by the Secretaries that is specific to the 
        individual and that may not occur more frequently than 
        biennially after the date on which the individual first elected 
        to waive enrollment in the program; and
            ``(2) an individual shall only be permitted to disenroll 
        from the program (other than for nonpayment of premiums) during 
        an annual disenrollment period established by the Secretaries 
        and in such form and manner as the Secretaries shall establish.

``SEC. 3205. BENEFITS.

    ``(a) Determination of Eligibility.--
            ``(1) Application for receipt of benefits.--The Secretary 
        shall establish procedures under which an active enrollee shall 
        apply for receipt of benefits under the CLASS Independence 
        Benefit Plan.
            ``(2) Eligibility assessments.--
                    ``(A) In general.--Not later than January 1, 2012, 
                the Secretary shall--
                            ``(i) establish an Eligibility Assessment 
                        System (other than a service with which the 
                        Commissioner of Social Security has entered 
                        into an agreement, with respect to any State, 
                        to make disability determinations for purposes 
                        of title II or XVI of the Social Security Act) 
                        to provide for eligibility assessments of 
                        active enrollees who apply for receipt of 
                        benefits;
                            ``(ii) enter into an agreement with the 
                        Protection and Advocacy System for each State 
                        to provide advocacy services in accordance with 
                        subsection (d); and
                            ``(iii) enter into an agreement with public 
                        and private entities to provide advice and 
                        assistance counseling in accordance with 
                        subsection (e).
                    ``(B) Regulations.--The Secretary shall promulgate 
                regulations to develop an expedited nationally 
                equitable eligibility determination process, as 
                certified by a licensed health care practitioner, an 
                appeals process, and a redetermination process, as 
                certified by a licensed health care practitioner, 
                including whether an active enrollee is eligible for a 
                cash benefit under the program and if so, the amount of 
                the cash benefit (in accordance the sliding scale 
                established under the plan).
                    ``(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to discharge.--An 
                active enrollee shall be deemed presumptively eligible 
                if the enrollee--
                            ``(i) has applied for, and attests is 
                        eligible for, the maximum cash benefit 
                        available under the sliding scale established 
                        under the CLASS Independence Benefit Plan;
                            ``(ii) is a patient in a hospital (but only 
                        if the hospitalization is for long-term care), 
                        nursing facility, intermediate care facility 
                        for the mentally retarded, or an institution 
                        for mental diseases; and
                            ``(iii) is in the process of, or about to 
                        begin the process of, planning to discharge 
                        from the hospital, facility, or institution, or 
                        within 60 days from the date of discharge from 
                        the hospital, facility, or institution.
                    ``(D) Appeals.--The Secretary shall establish 
                procedures under which an applicant for benefits under 
                the CLASS Independence Benefit Plan shall be guaranteed 
                the right to appeal an adverse determination.
    ``(b) Benefits.--An eligible beneficiary shall receive the 
following benefits under the CLASS Independence Benefit Plan:
            ``(1) Cash benefit.--A cash benefit established by the 
        Secretary in accordance with the requirements of section 
        3203(a)(1)(D) that--
                    ``(A) the first year in which beneficiaries receive 
                the benefits under the plan, is not less than the 
                average dollar amount specified in clause (i) of such 
                section; and
                    ``(B) for any subsequent year, is not less than the 
                average per day dollar limit applicable under this 
                subparagraph for the preceding year, increased by the 
                percentage increase in the consumer price index for all 
                urban consumers (U.S. city average) over the previous 
                year.
            ``(2) Advocacy services.--Advocacy services in accordance 
        with subsection (d).
            ``(3) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection (e).
            ``(4) Administrative expenses.--Advocacy services and 
        advise and assistance counseling services under paragraphs (2) 
        and (3) of this subsection shall be included as administrative 
        expenses under section 3203(b)(3).
    ``(c) Payment of Benefits.--
            ``(1) Life independence account.--
                    ``(A) In general.--The Secretary shall establish 
                procedures for administering the provision of benefits 
                to eligible beneficiaries under the CLASS Independence 
                Benefit Plan, including the payment of the cash benefit 
                for the beneficiary into a Life Independence Account 
                established by the Secretary on behalf of each eligible 
                beneficiary.
                    ``(B) Use of cash benefits.--Cash benefits paid 
                into a Life Independence Account of an eligible 
                beneficiary shall be used to purchase nonmedical 
                services and supports that the beneficiary needs to 
                maintain his or her independence at home or in another 
                residential setting of their choice in the community, 
                including (but not limited to) home modifications, 
                assistive technology, accessible transportation, 
                homemaker services, respite care, personal assistance 
                services, home care aides, and nursing support. Nothing 
                in the preceding sentence shall prevent an eligible 
                beneficiary from using cash benefits paid into a Life 
                Independence Account for obtaining assistance with 
                decision making concerning medical care, including the 
                right to accept or refuse medical or surgical treatment 
                and the right to formulate advance directives or other 
                written instructions recognized under State law, such 
                as a living will or durable power of attorney for 
                health care, in the case that an injury or illness 
                causes the individual to be unable to make health care 
                decisions.
                    ``(C) Electronic management of funds.--The 
                Secretary shall establish procedures for--
                            ``(i) crediting an account established on 
                        behalf of a beneficiary with the beneficiary's 
                        cash daily benefit;
                            ``(ii) allowing the beneficiary to access 
                        such account through debit cards; and
                            ``(iii) accounting for withdrawals by the 
                        beneficiary from such account.
                    ``(D) Primary payor rules for beneficiaries who are 
                enrolled in medicaid.--In the case of an eligible 
                beneficiary who is enrolled in Medicaid, the following 
                payment rules shall apply:
                            ``(i) Institutionalized beneficiary.--If 
                        the beneficiary is a patient in a hospital, 
                        nursing facility, intermediate care facility 
                        for the mentally retarded, or an institution 
                        for mental diseases, the beneficiary shall 
                        retain an amount equal to 5 percent of the 
                        beneficiary's daily or weekly cash benefit (as 
                        applicable) (which shall be in addition to the 
                        amount of the beneficiary's personal needs 
                        allowance provided under Medicaid), and the 
                        remainder of such benefit shall be applied 
                        toward the facility's cost of providing the 
                        beneficiary's care, and Medicaid shall provide 
                        secondary coverage for such care.
                            ``(ii) Beneficiaries receiving home and 
                        community-based services.--
                                    ``(I) 50 percent of benefit 
                                retained by beneficiary.--Subject to 
                                subclause (II), if a beneficiary is 
                                receiving medical assistance under 
                                Medicaid for home and community based 
                                services, the beneficiary shall retain 
                                an amount equal to 50 percent of the 
                                beneficiary's daily or weekly cash 
                                benefit (as applicable), and the 
                                remainder of the daily or weekly cash 
                                benefit shall be applied toward the 
                                cost to the State of providing such 
                                assistance (and shall not be used to 
                                claim Federal matching funds under 
                                Medicaid), and Medicaid shall provide 
                                secondary coverage for the remainder of 
                                any costs incurred in providing such 
                                assistance.
                                    ``(II) Requirement for state 
                                offset.--A State shall be paid the 
                                remainder of a beneficiary's daily or 
                                weekly cash benefit under subclause (I) 
                                only if the State home and community-
                                based waiver under section 1115 of the 
                                Social Security Act (42 U.S.C. 1315) or 
                                subsection (c) or (d) of section 1915 
                                of such Act (42 U.S.C. 1396n), or the 
                                State plan amendment under subsection 
                                (i) of such section does not include a 
                                waiver of the requirements of section 
                                1902(a)(1) of the Social Security Act 
                                (relating to statewideness) or of 
                                section 1902(a)(10)(B) of such Act 
                                (relating to comparability) and the 
                                State offers at a minimum case 
                                management services, personal care 
                                services, habilitation services, and 
                                respite care under such a waiver or 
                                State plan amendment.
                                    ``(III) Definition of home and 
                                community-based services.--In this 
                                clause, the term `home and community-
                                based services' means any services 
                                which may be offered under a home and 
                                community-based waiver authorized for a 
                                State under section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) or 
                                subsection (c) or (d) of section 1915 
                                of such Act (42 U.S.C. 1396n) or under 
                                a State plan amendment under subsection 
                                (i) of such section.
                            ``(iii) Beneficiaries enrolled in programs 
                        of all-inclusive care for the elderly (pace).--
                                    ``(I) In general.--Subject to 
                                subclause (II), if a beneficiary is 
                                receiving medical assistance under 
                                Medicaid for PACE program services 
                                under section 1934 of the Social 
                                Security Act (42 U.S.C. 1396u-4), the 
                                beneficiary shall retain an amount 
                                equal to 50 percent of the 
                                beneficiary's daily or weekly cash 
                                benefit (as applicable), and the 
                                remainder of the daily or weekly cash 
                                benefit shall be applied toward the 
                                cost to the State of providing such 
                                assistance (and shall not be used to 
                                claim Federal matching funds under 
                                Medicaid), and Medicaid shall provide 
                                secondary coverage for the remainder of 
                                any costs incurred in providing such 
                                assistance.
                                    ``(II) Institutionalized recipients 
                                of pace program services.--If a 
                                beneficiary receiving assistance under 
                                Medicaid for PACE program services is a 
                                patient in a hospital, nursing 
                                facility, intermediate care facility 
                                for the mentally retarded, or an 
                                institution for mental diseases, the 
                                beneficiary shall be treated as in 
                                institutionalized beneficiary under 
                                clause (i).
            ``(2) Authorized representatives.--
                    ``(A) In general.--The Secretary shall establish 
                procedures to allow access to a beneficiary's cash 
                benefits by an authorized representative of the 
                eligible beneficiary on whose behalf such benefits are 
                paid.
                    ``(B) Quality assurance and protection against 
                fraud and abuse.--The procedures established under 
                subparagraph (A) shall ensure that authorized 
                representatives of eligible beneficiaries comply with 
                standards of conduct established by the Secretary, 
                including standards requiring that such representatives 
                provide quality services on behalf of such 
                beneficiaries, do not have conflicts of interest, and 
                do not misuse benefits paid on behalf of such 
                beneficiaries or otherwise engage in fraud or abuse.
            ``(3) Commencement of benefits.--Benefits shall be paid to, 
        or on behalf of, an eligible beneficiary beginning with the 
        first month in which an application for such benefits is 
        approved.
            ``(4) Rollover option for lump-sum payment.--An eligible 
        beneficiary may elect to--
                    ``(A) defer payment of their daily or weekly 
                benefit and to rollover any such deferred benefits from 
                month-to-month, but not from year-to-year; and
                    ``(B) receive a lump-sum payment of such deferred 
                benefits in an amount that may not exceed the lesser 
                of--
                            ``(i) the total amount of the accrued 
                        deferred benefits; or
                            ``(ii) the applicable annual benefit.
            ``(5) Period for determination of annual benefits.--
                    ``(A) In general.--The applicable period for 
                determining with respect to an eligible beneficiary the 
                applicable annual benefit and the amount of any accrued 
                deferred benefits is the 12-month period that commences 
                with the first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                    ``(B) Inclusion of increased benefits.--The 
                Secretary shall establish procedures under which cash 
                benefits paid to an eligible beneficiary that increase 
                or decrease as a result of a change in the functional 
                status of the beneficiary before the end of a 12-month 
                benefit period shall be included in the determination 
                of the applicable annual benefit paid to the eligible 
                beneficiary.
                    ``(C) Recoupment of unpaid, accrued benefits.--
                            ``(i) In general.--The Secretary, in 
                        coordination with the Secretary of the 
                        Treasury, shall recoup any accrued benefits in 
                        the event of--
                                    ``(I) the death of a beneficiary; 
                                or
                                    ``(II) the failure of a beneficiary 
                                to elect under paragraph (4)(B) to 
                                receive such benefits as a lump-sum 
                                payment before the end of the 12-month 
                                period in which such benefits accrued.
                            ``(ii) Payment into class independence 
                        fund.--Any benefits recouped in accordance with 
                        clause (i) shall be paid into the CLASS 
                        Independence Fund and used in accordance with 
                        section 3206.
            ``(6) Requirement to recertify eligibility for receipt of 
        benefits.--An eligible beneficiary shall periodically, as 
        determined by the Secretary--
                    ``(A) recertify by submission of medical evidence 
                the beneficiary's continued eligibility for receipt of 
                benefits; and
                    ``(B) submit records of expenditures attributable 
                to the aggregate cash benefit received by the 
                beneficiary during the preceding year.
            ``(7) Supplement, not supplant other health care 
        benefits.--Subject to the Medicaid payment rules under 
        paragraph (1)(D), benefits received by an eligible beneficiary 
        shall supplement, but not supplant, other health care benefits 
        for which the beneficiary is eligible under Medicaid or any 
        other Federally funded program that provides health care 
        benefits or assistance.
    ``(d) Advocacy Services.--An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and Advocacy 
System for the State to--
            ``(1) assign, as needed, an advocacy counselor to each 
        eligible beneficiary that is covered by such agreement and who 
        shall provide an eligible beneficiary with--
                    ``(A) information regarding how to access the 
                appeals process established for the program;
                    ``(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (c)(6); and
                    ``(C) such other assistance with obtaining services 
                as the Secretary, by regulation, shall require; and
            ``(2) ensure that the System and such counselors comply 
        with the requirements of subsection (h).
    ``(e) Advice and Assistance Counseling.--An agreement entered into 
under subsection (a)(2)(A)(iii) shall require the entity to assign, as 
requested by an eligible beneficiary that is covered by such agreement, 
an advice and assistance counselor who shall provide an eligible 
beneficiary with information regarding--
            ``(1) accessing and coordinating long-term services and 
        supports in the most integrated setting;
            ``(2) possible eligibility for other benefits and services;
            ``(3) development of a service and support plan;
            ``(4) information about programs established under the 
        Assistive Technology Act of 1998 and the services offered under 
        such programs;
            ``(5) available assistance with decision making concerning 
        medical care, including the right to accept or refuse medical 
        or surgical treatment and the right to formulate advance 
        directives or other written instructions recognized under State 
        law, such as a living will or durable power of attorney for 
        health care, in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; and
            ``(6) such other services as the Secretary, by regulation, 
        may require.
    ``(f) No Effect on Eligibility for Other Benefits.--Benefits paid 
to an eligible beneficiary under the CLASS program shall be disregarded 
for purposes of determining or continuing the beneficiary's eligibility 
for receipt of benefits under any other Federal, State, or locally 
funded assistance program, including benefits paid under titles II, 
XVI, XVIII, XIX, or XXI of the Social Security Act (42 U.S.C. 401 et 
seq., 1381 et seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under 
the laws administered by the Secretary of Veterans Affairs, under low-
income housing assistance programs, or under the supplemental nutrition 
assistance program established under the Food and Nutrition Act of 2008 
(7 U.S.C. 2011 et seq.).
    ``(g) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS Independence 
Benefit Plan from being used to compensate a family caregiver for 
providing community living assistance services and supports to an 
eligible beneficiary.
    ``(h) Protection Against Conflict of Interests.--The Secretary 
shall establish procedures to ensure that the Eligibility Assessment 
System, the Protection and Advocacy System for a State, advocacy 
counselors for eligible beneficiaries, and any other entities that 
provide services to active enrollees and eligible beneficiaries under 
the CLASS program comply with the following:
            ``(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that fosters 
        the best interests of the active enrollee or beneficiary.
            ``(2) The entity has established operating procedures that 
        are designed to avoid or minimize conflicts of interest between 
        the entity and an active enrollee or beneficiary.
            ``(3) The entity provides information about all services 
        and options available to the active enrollee or beneficiary, to 
        the best of its knowledge, including services available through 
        other entities or providers.
            ``(4) The entity assists the active enrollee or beneficiary 
        to access desired services, regardless of the provider.
            ``(5) The entity reports the number of active enrollees and 
        beneficiaries provided with assistance by age, disability, and 
        whether such enrollees and beneficiaries received services from 
        the entity or another entity.
            ``(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that the 
        entity has in a service provider.
            ``(7) The entity provides an active enrollee or beneficiary 
        with a list of available service providers that can meet the 
        needs of the active enrollee or beneficiary.

``SEC. 3206. CLASS INDEPENDENCE FUND.

    ``(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund to be 
known as the `CLASS Independence Fund'. The Secretary of the Treasury 
shall serve as Managing Trustee of such Fund. The Fund shall consist of 
all amounts derived from payments into the Fund under sections 3204(f) 
and 3205(c)(5)(C)(ii), and remaining after investment of such amounts 
under subsection (b), including additional amounts derived as income 
from such investments. The amounts held in the Fund are appropriated 
and shall remain available without fiscal year limitation--
            ``(1) to be held for investment on behalf of individuals 
        enrolled in the CLASS program;
            ``(2) to pay the administrative expenses related to the 
        Fund and to investment under subsection (b); and
            ``(3) to pay cash benefits to eligible beneficiaries under 
        the CLASS Independence Benefit Plan.
    ``(b) Investment of Fund Balance.--The Secretary of the Treasury 
shall invest and manage the CLASS Independence Fund in the same manner, 
and to the same extent, as the Federal Supplementary Medical Insurance 
Trust Fund may be invested and managed under subsections (c), (d), and 
(e) of section 1841(d) of the Social Security Act (42 U.S.C. 1395t).
    ``(c) Board of Trustees.--
            ``(1) In general.--With respect to the CLASS Independence 
        Fund, there is hereby created a body to be known as the Board 
        of Trustees of the CLASS Independence Fund (hereinafter in this 
        section referred to as the `Board of Trustees') composed of the 
        Secretary of the Treasury, the Secretary of Labor, and the 
        Secretary of Health and Human Services, all ex officio, and of 
        two members of the public (both of whom may not be from the 
        same political party), who shall be nominated by the President 
        for a term of 4 years and subject to confirmation by the 
        Senate. A member of the Board of Trustees serving as a member 
        of the public and nominated and confirmed to fill a vacancy 
        occurring during a term shall be nominated and confirmed only 
        for the remainder of such term. An individual nominated and 
        confirmed as a member of the public may serve in such position 
        after the expiration of such member's term until the earlier of 
        the time at which the member's successor takes office or the 
        time at which a report of the Board is first issued under 
        paragraph (2) after the expiration of the member's term. The 
        Secretary of the Treasury shall be the Managing Trustee of the 
        Board of Trustees. The Board of Trustees shall meet not less 
        frequently than once each calendar year. A person serving on 
        the Board of Trustees shall not be considered to be a fiduciary 
        and shall not be personally liable for actions taken in such 
        capacity with respect to the Trust Fund.
            ``(2) Duties.--
                    ``(A) In general.--It shall be the duty of the 
                Board of Trustees to do the following:
                            ``(i) Hold the CLASS Independence Fund.
                            ``(ii) Report to the Congress not later 
                        than the first day of April of each year on the 
                        operation and status of the CLASS Independence 
                        Fund during the preceding fiscal year and on 
                        its expected operation and status during the 
                        current fiscal year and the next 2 fiscal 
                        years.
                            ``(iii) Report immediately to the Congress 
                        whenever the Board is of the opinion that the 
                        amount of the CLASS Independence Fund is not 
                        actuarially sound in regards to the projection 
                        under section 3203(b)(1)(B)(i).
                            ``(iv) Review the general policies followed 
                        in managing the CLASS Independence Fund, and 
                        recommend changes in such policies, including 
                        necessary changes in the provisions of law 
                        which govern the way in which the CLASS 
                        Independence Fund is to be managed.
                    ``(B) Report.--The report provided for in 
                subparagraph (A)(ii) shall--
                            ``(i) include--
                                    ``(I) a statement of the assets of, 
                                and the disbursements made from, the 
                                CLASS Independence Fund during the 
                                preceding fiscal year;
                                    ``(II) an estimate of the expected 
                                income to, and disbursements to be made 
                                from, the CLASS Independence Fund 
                                during the current fiscal year and each 
                                of the next 2 fiscal years;
                                    ``(III) a statement of the 
                                actuarial status of the CLASS 
                                Independence Fund for the current 
                                fiscal year, each of the next 2 fiscal 
                                years, and as projected over the 75-
                                year period beginning with the current 
                                fiscal year; and
                                    ``(IV) an actuarial opinion by the 
                                Chief Actuary of the Centers for 
                                Medicare & Medicaid Services certifying 
                                that the techniques and methodologies 
                                used are generally accepted within the 
                                actuarial profession and that the 
                                assumptions and cost estimates used are 
                                reasonable; and
                            ``(ii) be printed as a House document of 
                        the session of the Congress to which the report 
                        is made.
                    ``(C) Recommendations.--If the Board of Trustees 
                determines that enrollment trends and expected future 
                benefit claims on the CLASS Independence Fund are not 
                actuarially sound in regards to the projection under 
                section 3203(b)(1)(B)(i) and are unlikely to be 
                resolved with reasonable premium increases or through 
                other means, the Board of Trustees shall include in the 
                report provided for in subparagraph (A)(ii) 
                recommendations for such legislative action as the 
                Board of Trustees determine to be appropriate, 
                including whether to adjust monthly premiums or impose 
                a temporary moratorium on new enrollments.

``SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL.

    ``(a) Establishment.--There is hereby created an Advisory Committee 
to be known as the `CLASS Independence Advisory Council'.
    ``(b) Membership.--
            ``(1) In general.--The CLASS Independence Advisory Council 
        shall be composed of not more than 15 individuals, not 
        otherwise in the employ of the United States--
                    ``(A) who shall be appointed by the President 
                without regard to the civil service laws and 
                regulations; and
                    ``(B) a majority of whom shall be representatives 
                of individuals who participate or are likely to 
                participate in the CLASS program, and shall include 
                representatives of older and younger workers, 
                individuals with disabilities, family caregivers of 
                individuals who require services and supports to 
                maintain their independence at home or in another 
                residential setting of their choice in the community, 
                individuals with expertise in long-term care or 
                disability insurance, actuarial science, economics, and 
                other relevant disciplines, as determined by the 
                Secretary.
            ``(2) Terms.--
                    ``(A) In general.--The members of the CLASS 
                Independence Advisory Council shall serve overlapping 
                terms of 3 years (unless appointed to fill a vacancy 
                occurring prior to the expiration of a term, in which 
                case the individual shall serve for the remainder of 
                the term).
                    ``(B) Limitation.--A member shall not be eligible 
                to serve for more than 2 consecutive terms.
            ``(3) Chair.--The President shall, from time to time, 
        appoint one of the members of the CLASS Independence Advisory 
        Council to serve as the Chair.
    ``(c) Duties.--The CLASS Independence Advisory Council shall advise 
the Secretary on matters of general policy in the administration of the 
CLASS program established under this title and in the formulation of 
regulations under this title including with respect to--
            ``(1) the development of the CLASS Independence Benefit 
        Plan under section 3203;
            ``(2) the determination of monthly premiums under such 
        plan; and
            ``(3) the financial solvency of the program.
    ``(d) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.), other than section 14 of that Act, shall apply to the 
CLASS Independence Advisory Council.
    ``(e) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        to the CLASS Independence Advisory Council to carry out its 
        duties under this section, such sums as may be necessary for 
        fiscal year 2011 and for each fiscal year thereafter.
            ``(2) Availability.--Any sums appropriated under the 
        authorization contained in this section shall remain available, 
        without fiscal year limitation, until expended.

``SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; ANNUAL 
              REPORT.

    ``(a) Solvency.--The Secretary shall regularly consult with the 
Board of Trustees of the CLASS Independence Fund and the CLASS 
Independence Advisory Council, for purposes of ensuring that enrollees 
premiums are adequate to ensure the financial solvency of the CLASS 
program, both with respect to fiscal years occurring in the near-term 
and fiscal years occurring over 20- and 75- year periods, taking into 
account the projections required for such periods under subsections 
(a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.
    ``(b) No Taxpayer Funds Used to Pay Benefits.--No taxpayer funds 
shall be used for payment of benefits under a CLASS Independent Benefit 
Plan. For purposes of this subsection, the term `taxpayer funds' means 
any Federal funds from a source other than premiums deposited by CLASS 
program participants in the CLASS Independence Fund and any associated 
interest earnings.
    ``(c) Regulations.--The Secretary shall promulgate such regulations 
as are necessary to carry out the CLASS program in accordance with this 
title. Such regulations shall include provisions to prevent fraud and 
abuse under the program.
    ``(d) Annual Report.--Beginning January 1, 2014, the Secretary 
shall submit an annual report to Congress on the CLASS program. Each 
report shall include the following:
            ``(1) The total number of enrollees in the program.
            ``(2) The total number of eligible beneficiaries during the 
        fiscal year.
            ``(3) The total amount of cash benefits provided during the 
        fiscal year.
            ``(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
            ``(5) Recommendations for such administrative or 
        legislative action as the Secretary determines is necessary to 
        improve the program, ensure the solvency of the program, or to 
        prevent the occurrence of fraud or abuse.

``SEC. 3209. INSPECTOR GENERAL'S REPORT.

    ``The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and Congress 
relating to the overall progress of the CLASS program and of the 
existence of waste, fraud, and abuse in the CLASS program. Each such 
report shall include findings in the following areas:
            ``(1) The eligibility determination process.
            ``(2) The provision of cash benefits.
            ``(3) Quality assurance and protection against waste, 
        fraud, and abuse.
            ``(4) Recouping of unpaid and accrued benefits.

``SEC. 3210. TAX TREATMENT OF PROGRAM.

    ``The CLASS program shall be treated for purposes of the Internal 
Revenue Code of 1986 in the same manner as a qualified long-term care 
insurance contract for qualified long-term care services.''.
            (2) Conforming amendments to medicaid.--Section 1902(a) of 
        the Social Security Act (42 U.S.C. 1396a(a)), as amended by 
        section 6505, is amended by inserting after paragraph (80) the 
        following:
            ``(81) provide that the State will comply with such 
        regulations regarding the application of primary and secondary 
        payor rules with respect to individuals who are eligible for 
        medical assistance under this title and are eligible 
        beneficiaries under the CLASS program established under title 
        XXXII of the Public Health Service Act as the Secretary shall 
        establish; and''.
    (b) Assurance of Adequate Infrastructure for the Provision of 
Personal Care Attendant Workers.--Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), is 
amended by inserting after paragraph (81) the following:
            ``(82) provide that, not later than 2 years after the date 
        of enactment of the Community Living Assistance Services and 
        Supports Act, each State shall--
                    ``(A) assess the extent to which entities such as 
                providers of home care, home health services, home and 
                community service providers, public authorities created 
                to provide personal care services to individuals 
                eligible for medical assistance under the State plan, 
                and nonprofit organizations, are serving or have the 
                capacity to serve as fiscal agents for, employers of, 
                and providers of employment-related benefits for, 
                personal care attendant workers who provide personal 
                care services to individuals receiving benefits under 
                the CLASS program established under title XXXII of the 
                Public Health Service Act, including in rural and 
                underserved areas;
                    ``(B) designate or create such entities to serve as 
                fiscal agents for, employers of, and providers of 
                employment-related benefits for, such workers to ensure 
                an adequate supply of the workers for individuals 
                receiving benefits under the CLASS program, including 
                in rural and underserved areas; and
                    ``(C) ensure that the designation or creation of 
                such entities will not negatively alter or impede 
                existing programs, models, methods, or administration 
                of service delivery that provide for consumer 
                controlled or self-directed home and community services 
                and further ensure that such entities will not impede 
                the ability of individuals to direct and control their 
                home and community services, including the ability to 
                select, manage, dismiss, co-employ, or employ such 
                workers or inhibit such individuals from relying on 
                family members for the provision of personal care 
                services.''.
    (c) Personal Care Attendants Workforce Advisory Panel.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this Act, the Secretary of Health and Human 
        Services shall establish a Personal Care Attendants Workforce 
        Advisory Panel for the purpose of examining and advising the 
        Secretary and Congress on workforce issues related to personal 
        care attendant workers, including with respect to the adequacy 
        of the number of such workers, the salaries, wages, and 
        benefits of such workers, and access to the services provided 
        by such workers.
            (2) Membership.--In appointing members to the Personal Care 
        Attendants Workforce Advisory Panel, the Secretary shall ensure 
        that such members include the following:
                    (A) Individuals with disabilities of all ages.
                    (B) Senior individuals.
                    (C) Representatives of individuals with 
                disabilities.
                    (D) Representatives of senior individuals.
                    (E) Representatives of workforce and labor 
                organizations.
                    (F) Representatives of home and community-based 
                service providers.
                    (G) Representatives of assisted living providers.
    (d) Inclusion of Information on Supplemental Coverage in the 
National Clearinghouse for Long-term Care Information; Extension of 
Funding.--Section 6021(d) of the Deficit Reduction Act of 2005 (42 
U.S.C. 1396p note) is amended--
            (1) in paragraph (2)(A)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(iv) include information regarding the 
                        CLASS program established under title XXXII of 
                        the Public Health Service Act and coverage 
                        available for purchase through a Exchange 
                        established under section 1311 of the Patient 
                        Protection and Affordable Care Act that is 
                        supplemental coverage to the benefits provided 
                        under a CLASS Independence Benefit Plan under 
                        that program, and information regarding how 
                        benefits provided under a CLASS Independence 
                        Benefit Plan differ from disability insurance 
                        benefits.''; and
            (2) in paragraph (3), by striking ``2010'' and inserting 
        ``2015''.
    (e) Effective Date.--The amendments made by subsections (a), (b), 
and (d) take effect on January 1, 2011.
    (f) Rule of Construction.--Nothing in this title or the amendments 
made by this title are intended to replace or displace public or 
private disability insurance benefits, including such benefits that are 
for income replacement.

                      TITLE IX--REVENUE PROVISIONS

                 Subtitle A--Revenue Offset Provisions

SEC. 9001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986, 
as amended by section 1513, is amended by adding at the end the 
following:

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

    ``(a) Imposition of Tax.--If--
            ``(1) an employee is covered under any applicable employer-
        sponsored coverage of an employer at any time during a taxable 
        period, and
            ``(2) there is any excess benefit with respect to the 
        coverage,
there is hereby imposed a tax equal to 40 percent of the excess 
benefit.
    ``(b) Excess Benefit.--For purposes of this section--
            ``(1) In general.--The term `excess benefit' means, with 
        respect to any applicable employer-sponsored coverage made 
        available by an employer to an employee during any taxable 
        period, the sum of the excess amounts determined under 
        paragraph (2) for months during the taxable period.
            ``(2) Monthly excess amount.--The excess amount determined 
        under this paragraph for any month is the excess (if any) of--
                    ``(A) the aggregate cost of the applicable 
                employer-sponsored coverage of the employee for the 
                month, over
                    ``(B) an amount equal to \1/12\ of the annual 
                limitation under paragraph (3) for the calendar year in 
                which the month occurs.
            ``(3) Annual limitation.--For purposes of this subsection--
                    ``(A) In general.--The annual limitation under this 
                paragraph for any calendar year is the dollar limit 
                determined under subparagraph (C) for the calendar 
                year.
                    ``(B) Applicable annual limitation.--The annual 
                limitation which applies for any month shall be 
                determined on the basis of the type of coverage (as 
                determined under subsection (f)(1)) provided to the 
                employee by the employer as of the beginning of the 
                month.
                    ``(C) Applicable dollar limit.--Except as provided 
                in subparagraph (D)--
                            ``(i) 2013.--In the case of 2013, the 
                        dollar limit under this subparagraph is--
                                    ``(I) in the case of an employee 
                                with self-only coverage, $8,500, and
                                    ``(II) in the case of an employee 
                                with coverage other than self-only 
                                coverage, $23,000.
                            ``(ii) Exception for certain individuals.--
                        In the case of an individual who is a qualified 
                        retiree or who participates in a plan sponsored 
                        by an employer the majority of whose employees 
                        are engaged in a high-risk profession or 
                        employed to repair or install electrical or 
                        telecommunications lines--
                                    ``(I) the dollar amount in clause 
                                (i)(I) (determined after the 
                                application of subparagraph (D)) shall 
                                be increased by $1,350, and
                                    ``(II) the dollar amount in clause 
                                (i)(II) (determined after the 
                                application of subparagraph (D)) shall 
                                be increased by $3,000.
                            ``(iii) Subsequent years.--In the case of 
                        any calendar year after 2013, each of the 
                        dollar amounts under clauses (i) and (ii) shall 
                        be increased to the amount equal to such amount 
                        as in effect for the calendar year preceding 
                        such year, increased by an amount equal to the 
                        product of--
                                    ``(I) such amount as so in effect, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such year (determined by 
                                substituting the calendar year that is 
                                2 years before such year for `1992' in 
                                subparagraph (B) thereof), increased by 
                                1 percentage point.
                        If any amount determined under this clause is 
                        not a multiple of $50, such amount shall be 
                        rounded to the nearest multiple of $50.
                    ``(D) Transition rule for states with highest 
                coverage costs.--
                            ``(i) In general.--If an employee is a 
                        resident of a high cost State on the first day 
                        of any month beginning in 2013, 2014, or 2015, 
                        the annual limitation under this paragraph for 
                        such month with respect to such employee shall 
                        be an amount equal to the applicable percentage 
                        of the annual limitation (determined without 
                        regard to this subparagraph or subparagraph 
                        (C)(ii)).
                            ``(ii) Applicable percentage.--The 
                        applicable percentage is 120 percent for 2013, 
                        110 percent for 2014, and 105 percent for 2015.
                            ``(iii) High cost state.--The term `high 
                        cost State' means each of the 17 States which 
                        the Secretary of Health and Human Services, in 
                        consultation with the Secretary, estimates had 
                        the highest average cost during 2012 for 
                        employer-sponsored coverage under health plans. 
                        The Secretary's estimate shall be made on the 
                        basis of aggregate premiums paid in the State 
                        for such health plans, determined using the 
                        most recent data available as of August 31, 
                        2012.
    ``(c) Liability to Pay Tax.--
            ``(1) In general.--Each coverage provider shall pay the tax 
        imposed by subsection (a) on its applicable share of the excess 
        benefit with respect to an employee for any taxable period.
            ``(2) Coverage provider.--For purposes of this subsection, 
        the term `coverage provider' means each of the following:
                    ``(A) Health insurance coverage.--If the applicable 
                employer-sponsored coverage consists of coverage under 
                a group health plan which provides health insurance 
                coverage, the health insurance issuer.
                    ``(B) HSA and msa contributions.--If the applicable 
                employer-sponsored coverage consists of coverage under 
                an arrangement under which the employer makes 
                contributions described in subsection (b) or (d) of 
                section 106, the employer.
                    ``(C) Other coverage.--In the case of any other 
                applicable employer-sponsored coverage, the person that 
                administers the plan benefits.
            ``(3) Applicable share.--For purposes of this subsection, a 
        coverage provider's applicable share of an excess benefit for 
        any taxable period is the amount which bears the same ratio to 
        the amount of such excess benefit as--
                    ``(A) the cost of the applicable employer-sponsored 
                coverage provided by the provider to the employee 
                during such period, bears to
                    ``(B) the aggregate cost of all applicable 
                employer-sponsored coverage provided to the employee by 
                all coverage providers during such period.
            ``(4) Responsibility to calculate tax and applicable 
        shares.--
                    ``(A) In general.--Each employer shall--
                            ``(i) calculate for each taxable period the 
                        amount of the excess benefit subject to the tax 
                        imposed by subsection (a) and the applicable 
                        share of such excess benefit for each coverage 
                        provider, and
                            ``(ii) notify, at such time and in such 
                        manner as the Secretary may prescribe, the 
                        Secretary and each coverage provider of the 
                        amount so determined for the provider.
                    ``(B) Special rule for multiemployer plans.--In the 
                case of applicable employer-sponsored coverage made 
                available to employees through a multiemployer plan (as 
                defined in section 414(f)), the plan sponsor shall make 
                the calculations, and provide the notice, required 
                under subparagraph (A).
    ``(d) Applicable Employer-Sponsored Coverage; Cost.--For purposes 
of this section--
            ``(1) Applicable employer-sponsored coverage.--
                    ``(A) In general.--The term `applicable employer-
                sponsored coverage' means, with respect to any 
                employee, coverage under any group health plan made 
                available to the employee by an employer which is 
                excludable from the employee's gross income under 
                section 106, or would be so excludable if it were 
                employer-provided coverage (within the meaning of such 
                section 106).
                    ``(B) Exceptions.--The term `applicable employer-
                sponsored coverage' shall not include--
                            ``(i) any coverage (whether through 
                        insurance or otherwise) described in section 
                        9832(c)(1)(A) or for long-term care, or
                            ``(ii) any coverage described in section 
                        9832(c)(3) the payment for which is not 
                        excludable from gross income and for which a 
                        deduction under section 162(l) is not 
                        allowable.
                    ``(C) Coverage includes employee paid portion.--
                Coverage shall be treated as applicable employer-
                sponsored coverage without regard to whether the 
                employer or employee pays for the coverage.
                    ``(D) Self-employed individual.--In the case of an 
                individual who is an employee within the meaning of 
                section 401(c)(1), coverage under any group health plan 
                providing health insurance coverage shall be treated as 
                applicable employer-sponsored coverage if a deduction 
                is allowable under section 162(l) with respect to all 
                or any portion of the cost of the coverage.
                    ``(E) Governmental plans included.--Applicable 
                employer-sponsored coverage shall include coverage 
                under any group health plan established and maintained 
                primarily for its civilian employees by the Government 
                of the United States, by the government of any State or 
                political subdivision thereof, or by any agency or 
                instrumentality of any such government.
            ``(2) Determination of cost.--
                    ``(A) In general.--The cost of applicable employer-
                sponsored coverage shall be determined under rules 
                similar to the rules of section 4980B(f)(4), except 
                that in determining such cost, any portion of the cost 
                of such coverage which is attributable to the tax 
                imposed under this section shall not be taken into 
                account and the amount of such cost shall be calculated 
                separately for self-only coverage and other coverage. 
                In the case of applicable employer-sponsored coverage 
                which provides coverage to retired employees, the plan 
                may elect to treat a retired employee who has not 
                attained the age of 65 and a retired employee who has 
                attained the age of 65 as similarly situated 
                beneficiaries.
                    ``(B) Health fsas.--In the case of applicable 
                employer-sponsored coverage consisting of coverage 
                under a flexible spending arrangement (as defined in 
                section 106(c)(2)), the cost of the coverage shall be 
                equal to the sum of--
                            ``(i) the amount of employer contributions 
                        under any salary reduction election under the 
                        arrangement, plus
                            ``(ii) the amount determined under 
                        subparagraph (A) with respect to any 
                        reimbursement under the arrangement in excess 
                        of the contributions described in clause (i).
                    ``(C) Archer msas and hsas.--In the case of 
                applicable employer-sponsored coverage consisting of 
                coverage under an arrangement under which the employer 
                makes contributions described in subsection (b) or (d) 
                of section 106, the cost of the coverage shall be equal 
                to the amount of employer contributions under the 
                arrangement.
                    ``(D) Allocation on a monthly basis.--If cost is 
                determined on other than a monthly basis, the cost 
                shall be allocated to months in a taxable period on 
                such basis as the Secretary may prescribe.
    ``(e) Penalty for Failure to Properly Calculate Excess Benefit.--
            ``(1) In general.--If, for any taxable period, the tax 
        imposed by subsection (a) exceeds the tax determined under such 
        subsection with respect to the total excess benefit calculated 
        by the employer or plan sponsor under subsection (c)(4)--
                    ``(A) each coverage provider shall pay the tax on 
                its applicable share (determined in the same manner as 
                under subsection (c)(4)) of the excess, but no penalty 
                shall be imposed on the provider with respect to such 
                amount, and
                    ``(B) the employer or plan sponsor shall, in 
                addition to any tax imposed by subsection (a), pay a 
                penalty in an amount equal to such excess, plus 
                interest at the underpayment rate determined under 
                section 6621 for the period beginning on the due date 
                for the payment of tax imposed by subsection (a) to 
                which the excess relates and ending on the date of 
                payment of the penalty.
            ``(2) Limitations on penalty.--
                    ``(A) Penalty not to apply where failure not 
                discovered exercising reasonable diligence.--No penalty 
                shall be imposed by paragraph (1)(B) on any failure to 
                properly calculate the excess benefit during any period 
                for which it is established to the satisfaction of the 
                Secretary that the employer or plan sponsor neither 
                knew, nor exercising reasonable diligence would have 
                known, that such failure existed.
                    ``(B) Penalty not to apply to failures corrected 
                within 30 days.--No penalty shall be imposed by 
                paragraph (1)(B) on any such failure if--
                            ``(i) such failure was due to reasonable 
                        cause and not to willful neglect, and
                            ``(ii) such failure is corrected during the 
                        30-day period beginning on the 1st date that 
                        the employer knew, or exercising reasonable 
                        diligence would have known, that such failure 
                        existed.
                    ``(C) Waiver by secretary.--In the case of any such 
                failure which is due to reasonable cause and not to 
                willful neglect, the Secretary may waive part or all of 
                the penalty imposed by paragraph (1), to the extent 
                that the payment of such penalty would be excessive or 
                otherwise inequitable relative to the failure involved.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Coverage determinations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an employee shall be treated as 
                having self-only coverage with respect to any 
                applicable employer-sponsored coverage of an employer.
                    ``(B) Minimum essential coverage.--An employee 
                shall be treated as having coverage other than self-
                only coverage only if the employee is enrolled in 
                coverage other than self-only coverage in a group 
                health plan which provides minimum essential coverage 
                (as defined in section 5000A(f)) to the employee and at 
                least one other beneficiary, and the benefits provided 
                under such minimum essential coverage do not vary based 
                on whether any individual covered under such coverage 
                is the employee or another beneficiary.
            ``(2) Qualified retiree.--The term `qualified retiree' 
        means any individual who--
                    ``(A) is receiving coverage by reason of being a 
                retiree,
                    ``(B) has attained age 55, and
                    ``(C) is not entitled to benefits or eligible for 
                enrollment under the Medicare program under title XVIII 
                of the Social Security Act.
            ``(3) Employees engaged in high-risk profession.--The term 
        `employees engaged in a high-risk profession' means law 
        enforcement officers (as such term is defined in section 1204 
        of the Omnibus Crime Control and Safe Streets Act of 1968), 
        employees in fire protection activities (as such term is 
        defined in section 3(y) of the Fair Labor Standards Act of 
        1938), individuals who provide out-of-hospital emergency 
        medical care (including emergency medical technicians, 
        paramedics, and first-responders), and individuals engaged in 
        the construction, mining, agriculture (not including food 
        processing), forestry, and fishing industries. Such term 
        includes an employee who is retired from a high-risk profession 
        described in the preceding sentence, if such employee satisfied 
        the requirements of such sentence for a period of not less than 
        20 years during the employee's employment.
            ``(4) Group health plan.--The term `group health plan' has 
        the meaning given such term by section 5000(b)(1).
            ``(5) Health insurance coverage; health insurance issuer.--
                    ``(A) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning given such term by 
                section 9832(b)(1) (applied without regard to 
                subparagraph (B) thereof, except as provided by the 
                Secretary in regulations).
                    ``(B) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning given such term by 
                section 9832(b)(2).
            ``(6) Person that administers the plan benefits.--The term 
        `person that administers the plan benefits' shall include the 
        plan sponsor if the plan sponsor administers benefits under the 
        plan.
            ``(7) Plan sponsor.--The term `plan sponsor' has the 
        meaning given such term in section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974.
            ``(8) Taxable period.--The term `taxable period' means the 
        calendar year or such shorter period as the Secretary may 
        prescribe. The Secretary may have different taxable periods for 
        employers of varying sizes.
            ``(9) Aggregation rules.--All employers treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        shall be treated as a single employer.
            ``(10) Denial of deduction.--For denial of a deduction for 
        the tax imposed by this section, see section 275(a)(6).
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code, as amended by section 1513, is amended by adding at the end 
the following new item:

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

SEC. 9002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH COVERAGE ON 
              W-2.

    (a) In General.--Section 6051(a) of the Internal Revenue Code of 
1986 (relating to receipts for employees) is amended by striking 
``and'' at the end of paragraph (12), by striking the period at the end 
of paragraph (13) and inserting ``, and'', and by adding after 
paragraph (13) the following new paragraph:
            ``(14) the aggregate cost (determined under rules similar 
        to the rules of section 4980B(f)(4)) of applicable employer-
        sponsored coverage (as defined in section 4980I(d)(1)), except 
        that this paragraph shall not apply to--
                    ``(A) coverage to which paragraphs (11) and (12) 
                apply, or
                    ``(B) the amount of any salary reduction 
                contributions to a flexible spending arrangement 
                (within the meaning of section 125).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED 
              DRUG OR INSULIN.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``Such term shall include an amount paid for medicine or a drug only if 
such medicine or drug is a prescribed drug (determined without regard 
to whether such drug is available without a prescription) or is 
insulin.''.
    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following: ``Such term shall include an amount paid for medicine or a 
drug only if such medicine or drug is a prescribed drug (determined 
without regard to whether such drug is available without a 
prescription) or is insulin.''.
    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs 
and Insulin.--For purposes of this section and section 105, 
reimbursement for expenses incurred for a medicine or a drug shall be 
treated as a reimbursement for medical expenses only if such medicine 
or drug is a prescribed drug (determined without regard to whether such 
drug is available without a prescription) or is insulin.''.
    (d) Effective Dates.--
            (1) Distributions from savings accounts.--The amendments 
        made by subsections (a) and (b) shall apply to amounts paid 
        with respect to taxable years beginning after December 31, 
        2010.
            (2) Reimbursements.--The amendment made by subsection (c) 
        shall apply to expenses incurred with respect to taxable years 
        beginning after December 31, 2010.

SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM HSAS AND 
              ARCHER MSAS NOT USED FOR QUALIFIED MEDICAL EXPENSES.

    (a) HSAs.--Section 223(f)(4)(A) of the Internal Revenue Code of 
1986 is amended by striking ``10 percent'' and inserting ``20 
percent''.
    (b) Archer MSAs.--Section 220(f)(4)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``15 percent'' and inserting ``20 
percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2010.

SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER 
              CAFETERIA PLANS.

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

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

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

SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.

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

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

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

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

SEC. 9008. IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION 
              PHARMACEUTICAL MANUFACTURERS AND IMPORTERS.

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

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

            (3) Secretarial determination.--The Secretary of the 
        Treasury shall calculate the amount of each covered entity's 
        fee for any calendar year under paragraph (1). In calculating 
        such amount, the Secretary of the Treasury shall determine such 
        covered entity's branded prescription drug sales on the basis 
        of reports submitted under subsection (g) and through the use 
        of any other source of information available to the Secretary 
        of the Treasury.
    (c) Transfer of Fees to Medicare Part B Trust Fund.--There is 
hereby appropriated to the Federal Supplementary Medical Insurance 
Trust Fund established under section 1841 of the Social Security Act an 
amount equal to the fees received by the Secretary of the Treasury 
under subsection (a).
    (d) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any manufacturer or importer with 
        gross receipts from branded prescription drug sales.
            (2) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of 
                section 414 of such Code shall be treated as a single 
                covered entity.
                    (B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 of such Code to this section, 
                section 1563 of such Code shall be applied without 
                regard to subsection (b)(2)(C) thereof.
    (e) Branded Prescription Drug Sales.--For purposes of this 
section--
            (1) In general.--The term ``branded prescription drug 
        sales'' means sales of branded prescription drugs to any 
        specified government program or pursuant to coverage under any 
        such program.
            (2) Branded prescription drugs.--
                    (A) In general.--The term ``branded prescription 
                drug'' means--
                            (i) any prescription drug the application 
                        for which was submitted under section 505(b) of 
                        the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 355(b)), or
                            (ii) any biological product the license for 
                        which was submitted under section 351(a) of the 
                        Public Health Service Act (42 U.S.C. 262(a)).
                    (B) Prescription drug.--For purposes of 
                subparagraph (A)(i), the term ``prescription drug'' 
                means any drug which is subject to section 503(b) of 
                the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                353(b)).
            (3) Exclusion of orphan drug sales.--The term ``branded 
        prescription drug sales'' shall not include sales of any drug 
        or biological product with respect to which a credit was 
        allowed for any taxable year under section 45C of the Internal 
        Revenue Code of 1986. The preceding sentence shall not apply 
        with respect to any such drug or biological product after the 
        date on which such drug or biological product is approved by 
        the Food and Drug Administration for marketing for any 
        indication other than the treatment of the rare disease or 
        condition with respect to which such credit was allowed.
            (4) Specified government program.--The term ``specified 
        government program'' means--
                    (A) the Medicare Part D program under part D of 
                title XVIII of the Social Security Act,
                    (B) the Medicare Part B program under part B of 
                title XVIII of the Social Security Act,
                    (C) the Medicaid program under title XIX of the 
                Social Security Act,
                    (D) any program under which branded prescription 
                drugs are procured by the Department of Veterans 
                Affairs,
                    (E) any program under which branded prescription 
                drugs are procured by the Department of Defense, or
                    (F) the TRICARE retail pharmacy program under 
                section 1074g of title 10, United States Code.
    (f) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code, shall be 
        considered to be a tax described in section 275(a)(6).
    (g) Reporting Requirement.--Not later than the date determined by 
the Secretary of the Treasury following the end of any calendar year, 
the Secretary of Health and Human Services, the Secretary of Veterans 
Affairs, and the Secretary of Defense shall report to the Secretary of 
the Treasury, in such manner as the Secretary of the Treasury 
prescribes, the total branded prescription drug sales for each covered 
entity with respect to each specified government program under such 
Secretary's jurisdiction using the following methodology:
            (1) Medicare part d program.--The Secretary of Health and 
        Human Services shall report, for each covered entity and for 
        each branded prescription drug of the covered entity covered by 
        the Medicare Part D program, the product of--
                    (A) the per-unit ingredient cost, as reported to 
                the Secretary of Health and Human Services by 
                prescription drug plans and Medicare Advantage 
                prescription drug plans, minus any per-unit rebate, 
                discount, or other price concession provided by the 
                covered entity, as reported to the Secretary of Health 
                and Human Services by the prescription drug plans and 
                Medicare Advantage prescription drug plans, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicare Part D program.
            (2) Medicare part b program.--The Secretary of Health and 
        Human Services shall report, for each covered entity and for 
        each branded prescription drug of the covered entity covered by 
        the Medicare Part B program under section 1862(a) of the Social 
        Security Act, the product of--
                    (A) the per-unit average sales price (as defined in 
                section 1847A(c) of the Social Security Act) or the 
                per-unit Part B payment rate for a separately paid 
                branded prescription drug without a reported average 
                sales price, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicare Part B program.
        The Centers for Medicare and Medicaid Services shall establish 
        a process for determining the units and the allocated price for 
        purposes of this section for those branded prescription drugs 
        that are not separately payable or for which National Drug 
        Codes are not reported.
            (3) Medicaid program.--The Secretary of Health and Human 
        Services shall report, for each covered entity and for each 
        branded prescription drug of the covered entity covered under 
        the Medicaid program, the product of--
                    (A) the per-unit ingredient cost paid to pharmacies 
                by States for the branded prescription drug dispensed 
                to Medicaid beneficiaries, minus any per-unit rebate 
                paid by the covered entity under section 1927 of the 
                Social Security Act and any State supplemental rebate, 
                and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicaid program.
            (4) Department of veterans affairs programs.--The Secretary 
        of Veterans Affairs shall report, for each covered entity and 
        for each branded prescription drug of the covered entity the 
        total amount paid for each such branded prescription drug 
        procured by the Department of Veterans Affairs for its 
        beneficiaries.
            (5) Department of defense programs and tricare.--The 
        Secretary of Defense shall report, for each covered entity and 
        for each branded prescription drug of the covered entity, the 
        sum of--
                    (A) the total amount paid for each such branded 
                prescription drug procured by the Department of Defense 
                for its beneficiaries, and
                    (B) for each such branded prescription drug 
                dispensed under the TRICARE retail pharmacy program, 
                the product of--
                            (i) the per-unit ingredient cost, minus any 
                        per-unit rebate paid by the covered entity, and
                            (ii) the number of units of the branded 
                        prescription drug dispensed under such program.
    (h) Secretary.--For purposes of this section, the term 
``Secretary'' includes the Secretary's delegate.
    (i) Guidance.--The Secretary of the Treasury shall publish guidance 
necessary to carry out the purposes of this section.
    (j) Application of Section.--This section shall apply to any 
branded prescription drug sales after December 31, 2008.
    (k) Conforming Amendment.--Section 1841(a) of the Social Security 
Act is amended by inserting ``or section 9008(c) of the Patient 
Protection and Affordable Care Act of 2009'' after ``this part''.

SEC. 9009. IMPOSITION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS AND 
              IMPORTERS.

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

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

            (3) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's gross 
        receipts from medical device sales on the basis of reports 
        submitted by the covered entity under subsection (f) and 
        through the use of any other source of information available to 
        the Secretary.
    (c) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any manufacturer or importer with 
        gross receipts from medical device sales.
            (2) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of 
                section 414 of such Code shall be treated as a single 
                covered entity.
                    (B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 of such Code to this section, 
                section 1563 of such Code shall be applied without 
                regard to subsection (b)(2)(C) thereof.
    (d) Medical Device Sales.--For purposes of this section--
            (1) In general.--The term ``medical device sales'' means 
        sales for use in the United States of any medical device, other 
        than the sales of a medical device that--
                    (A) has been classified in class II under section 
                513 of the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C. 360c) and is primarily sold to consumers at 
                retail for not more than $100 per unit, or
                    (B) has been classified in class I under such 
                section.
            (2) United states.--For purposes of paragraph (1), the term 
        ``United States'' means the several States, the District of 
        Columbia, the Commonwealth of Puerto Rico, and the possessions 
        of the United States.
            (3) Medical device.--For purposes of paragraph (1), the 
        term ``medical device'' means any device (as defined in section 
        201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        321(h))) intended for humans.
    (e) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code, shall be 
        considered to be a tax described in section 275(a)(6).
    (f) Reporting Requirement.--
            (1) In general.--Not later than the date determined by the 
        Secretary following the end of any calendar year, each covered 
        entity shall report to the Secretary, in such manner as the 
        Secretary prescribes, the gross receipts from medical device 
        sales of such covered entity during such calendar year.
            (2) Penalty for failure to report.--
                    (A) In general.--In the case of any failure to make 
                a report containing the information required by 
                paragraph (1) on the date prescribed therefor 
                (determined with regard to any extension of time for 
                filing), unless it is shown that such failure is due to 
                reasonable cause, there shall be paid by the covered 
                entity failing to file such report, an amount equal 
                to--
                            (i) $10,000, plus
                            (ii) the lesser of--
                                    (I) an amount equal to $1,000, 
                                multiplied by the number of days during 
                                which such failure continues, or
                                    (II) the amount of the fee imposed 
                                by this section for which such report 
                                was required.
                    (B) Treatment of penalty.--The penalty imposed 
                under subparagraph (A)--
                            (i) shall be treated as a penalty for 
                        purposes of subtitle F of the Internal Revenue 
                        Code of 1986,
                            (ii) shall be paid on notice and demand by 
                        the Secretary and in the same manner as tax 
                        under such Code, and
                            (iii) with respect to which only civil 
                        actions for refund under procedures of such 
                        subtitle F shall apply.
    (g) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.
    (h) Guidance.--The Secretary shall publish guidance necessary to 
carry out the purposes of this section, including identification of 
medical devices described in subsection (d)(1)(A) and with respect to 
the treatment of gross receipts from sales of medical devices to 
another covered entity or to another entity by reason of the 
application of subsection (c)(2).
    (i) Application of Section.--This section shall apply to any 
medical device sales after December 31, 2008.

SEC. 9010. IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS.

    (a) Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the 
        business of providing health insurance shall pay to the 
        Secretary not later than the annual payment date of each 
        calendar year beginning after 2009 a fee in an amount 
        determined under subsection (b).
            (2) Annual payment date.--For purposes of this section, the 
        term ``annual payment date'' means with respect to any calendar 
        year the date determined by the Secretary, but in no event 
        later than September 30 of such calendar year.
    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $6,700,000,000 as--
                    (A) the sum of--
                            (i) the covered entity's net premiums 
                        written with respect to health insurance for 
                        any United States health risk that are taken 
                        into account during the preceding calendar 
                        year, plus
                            (ii) 200 percent of the covered entity's 
                        third party administration agreement fees that 
                        are taken into account during the preceding 
                        calendar year, bears to
                    (B) the sum of--
                            (i) the aggregate net premiums written with 
                        respect to such health insurance of all covered 
                        entities that are taken into account during 
                        such preceding calendar year, plus
                            (ii) 200 percent of the aggregate third 
                        party administration agreement fees of all 
                        covered entities that are taken into account 
                        during such preceding calendar year.
            (2) Amounts taken into account.--For purposes of paragraph 
        (1)--
                    (A) Net premiums written.--The net premiums written 
                with respect to health insurance for any United States 
                health risk that are taken into account during any 
                calendar year with respect to any covered entity shall 
                be determined in accordance with the following table:

 
 With respect to a covered entity's net   The percentage of net premiums
  premiums written during the calendar     written that are taken into
             year that are:                        account is:
 
  Not more than $25,000,000............  0 percent
  More than $25,000,000 but not more     50 percent
   than $50,000,000.
  More than $50,000,000................  100 percent.
 

                    (B) Third party administration agreement fees.--The 
                third party administration agreement fees that are 
                taken into account during any calendar year with 
                respect to any covered entity shall be determined in 
                accordance with the following table:

 
   With respect to a covered entity's     The percentage of third party
  third party administration agreement    administration agreement fees
fees during the calendar year that are:  that are taken into account is:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $10,000,000.
  More than $10,000,000................  100 percent.
 

            (3) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's net 
        premiums written with respect to any United States health risk 
        and third party administration agreement fees on the basis of 
        reports submitted by the covered entity under subsection (g) 
        and through the use of any other source of information 
        available to the Secretary.
    (c) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any entity which provides health 
        insurance for any United States health risk.
            (2) Exclusion.--Such term does not include--
                    (A) any employer to the extent that such employer 
                self-insures its employees' health risks, or
                    (B) any governmental entity (except to the extent 
                such an entity provides health insurance coverage 
                through the community health insurance option under 
                section 1323).
            (3) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of 
                section 414 of such Code shall be treated as a single 
                covered entity (or employer for purposes of paragraph 
                (2)).
                    (B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 of such Code to this section, 
                section 1563 of such Code shall be applied without 
                regard to subsection (b)(2)(C) thereof.
    (d) United States Health Risk.--For purposes of this section, the 
term ``United States health risk'' means the health risk of any 
individual who is--
            (1) a United States citizen,
            (2) a resident of the United States (within the meaning of 
        section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or
            (3) located in the United States, with respect to the 
        period such individual is so located.
    (e) Third Party Administration Agreement Fees.--For purposes of 
this section, the term ``third party administration agreement fees'' 
means, with respect to any covered entity, amounts received from an 
employer which are in excess of payments made by such covered entity 
for health benefits under an arrangement under which such employer 
self-insures the United States health risk of its employees.
    (f) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code shall be 
        considered to be a tax described in section 275(a)(6).
    (g) Reporting Requirement.--
            (1) In general.--Not later than the date determined by the 
        Secretary following the end of any calendar year, each covered 
        entity shall report to the Secretary, in such manner as the 
        Secretary prescribes, the covered entity's net premiums written 
        with respect to health insurance for any United States health 
        risk and third party administration agreement fees for such 
        calendar year.
            (2) Penalty for failure to report.--
                    (A) In general.--In the case of any failure to make 
                a report containing the information required by 
                paragraph (1) on the date prescribed therefor 
                (determined with regard to any extension of time for 
                filing), unless it is shown that such failure is due to 
                reasonable cause, there shall be paid by the covered 
                entity failing to file such report, an amount equal 
                to--
                            (i) $10,000, plus
                            (ii) the lesser of--
                                    (I) an amount equal to $1,000, 
                                multiplied by the number of days during 
                                which such failure continues, or
                                    (II) the amount of the fee imposed 
                                by this section for which such report 
                                was required.
                    (B) Treatment of penalty.--The penalty imposed 
                under subparagraph (A)--
                            (i) shall be treated as a penalty for 
                        purposes of subtitle F of the Internal Revenue 
                        Code of 1986,
                            (ii) shall be paid on notice and demand by 
                        the Secretary and in the same manner as tax 
                        under such Code, and
                            (iii) with respect to which only civil 
                        actions for refund under procedures of such 
                        subtitle F shall apply.
    (h) Additional Definitions.--For purposes of this section--
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (2) United states.--The term ``United States'' means the 
        several States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and the possessions of the United States.
            (3) Health insurance.--The term ``health insurance'' shall 
        not include insurance for long-term care or disability.
    (i) Guidance.--The Secretary shall publish guidance necessary to 
carry out the purposes of this section.
    (j) Application of Section.--This section shall apply to any net 
premiums written after December 31, 2008, with respect to health 
insurance for any United States health risk, and any third party 
administration agreement fees received after such date.

SEC. 9011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH CARE.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study on the effect (if any) of the provisions of sections 9008, 9009, 
and 9010 on--
            (1) the cost of medical care provided to veterans, and
            (2) veterans' access to medical devices and branded 
        prescription drugs.
    (b) Report.--The Secretary of Veterans Affairs shall report the 
results of the study under subsection (a) to the Committee on Ways and 
Means of the House of Representatives and to the Committee on Finance 
of the Senate not later than December 31, 2012.

SEC. 9012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE 
              PART D SUBSIDY.

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

SEC. 9013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL EXPENSES.

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

SEC. 9014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY CERTAIN HEALTH 
              INSURANCE PROVIDERS.

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

SEC. 9015. ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME TAXPAYERS.

    (a) FICA.--
            (1) In general.--Section 3101(b) of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by striking ``In addition'' and inserting the 
                following:
            ``(1) In general.--In addition'',
                    (B) by striking ``the following percentages of 
                the'' and inserting ``1.45 percent of the'',
                    (C) by striking ``(as defined in section 3121(b))--
                '' and all that follows and inserting ``(as defined in 
                section 3121(b)).'', and
                    (D) by adding at the end the following new 
                paragraph:
            ``(2) Additional tax.--In addition to the tax imposed by 
        paragraph (1) and the preceding subsection, there is hereby 
        imposed on every taxpayer (other than a corporation, estate, or 
        trust) a tax equal to 0.5 percent of wages which are received 
        with respect to employment (as defined in section 3121(b)) 
        during any taxable year beginning after December 31, 2012, and 
        which are in excess of--
                    ``(A) in the case of a joint return, $250,000, and
                    ``(B) in any other case, $200,000.''.
            (2) Collection of tax.--Section 3102 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new subsection:
    ``(f) Special Rules for Additional Tax.--
            ``(1) In general.--In the case of any tax imposed by 
        section 3101(b)(2), subsection (a) shall only apply to the 
        extent to which the taxpayer receives wages from the employer 
        in excess of $200,000, and the employer may disregard the 
        amount of wages received by such taxpayer's spouse.
            ``(2) Collection of amounts not withheld.--To the extent 
        that the amount of any tax imposed by section 3101(b)(2) is not 
        collected by the employer, such tax shall be paid by the 
        employee.
            ``(3) Tax paid by recipient.--If an employer, in violation 
        of this chapter, fails to deduct and withhold the tax imposed 
        by section 3101(b)(2) and thereafter the tax is paid by the 
        employee, the tax so required to be deducted and withheld shall 
        not be collected from the employer, but this paragraph shall in 
        no case relieve the employer from liability for any penalties 
        or additions to tax otherwise applicable in respect of such 
        failure to deduct and withhold.''.
    (b) SECA.--
            (1) In general.--Section 1401(b) of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by striking ``In addition'' and inserting the 
                following:
            ``(1) In general.--In addition'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Additional tax.--
                    ``(A) In general.--In addition to the tax imposed 
                by paragraph (1) and the preceding subsection, there is 
                hereby imposed on every taxpayer (other than a 
                corporation, estate, or trust) for each taxable year 
                beginning after December 31, 2012, a tax equal to 0.5 
                percent of the self-employment income for such taxable 
                year which is in excess of--
                            ``(i) in the case of a joint return, 
                        $250,000, and
                            ``(ii) in any other case, $200,000.
                    ``(B) Coordination with fica.--The amounts under 
                clauses (i) and (ii) of subparagraph (A) shall be 
                reduced (but not below zero) by the amount of wages 
                taken into account in determining the tax imposed under 
                section 3121(b)(2) with respect to the taxpayer.''.
            (2) No deduction for additional tax.--
                    (A) In general.--Section 164(f) of such Code is 
                amended by inserting ``(other than the taxes imposed by 
                section 1401(b)(2))'' after ``section 1401)''.
                    (B) Deduction for net earnings from self-
                employment.--Subparagraph (B) of section 1402(a)(12) is 
                amended by inserting ``(determined without regard to 
                the rate imposed under paragraph (2) of section 
                1401(b))'' after ``for such year''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to remuneration received, and taxable years 
beginning, after December 31, 2012.

SEC. 9016. MODIFICATION OF SECTION 833 TREATMENT OF CERTAIN HEALTH 
              ORGANIZATIONS.

    (a) In General.--Subsection (c) of section 833 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(5) Nonapplication of section in case of low medical loss 
        ratio.--Notwithstanding the preceding paragraphs, this section 
        shall not apply to any organization unless such organization's 
        percentage of total premium revenue expended on reimbursement 
        for clinical services provided to enrollees under its policies 
        during such taxable year (as reported under section 2718 of the 
        Public Health Service Act) is not less than 85 percent.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2009.

SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES.

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

           ``CHAPTER 49--ELECTIVE COSMETIC MEDICAL PROCEDURES

``Sec. 5000B. Imposition of tax on elective cosmetic medical 
                            procedures.

``SEC. 5000B. IMPOSITION OF TAX ON ELECTIVE COSMETIC MEDICAL 
              PROCEDURES.

    ``(a) In General.--There is hereby imposed on any cosmetic surgery 
and medical procedure a tax equal to 5 percent of the amount paid for 
such procedure (determined without regard to this section), whether 
paid by insurance or otherwise.
    ``(b) Cosmetic Surgery and Medical Procedure.--For purposes of this 
section, the term `cosmetic surgery and medical procedure' means any 
cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar 
procedure which--
            ``(1) is performed by a licensed medical professional, and
            ``(2) is not necessary to ameliorate a deformity arising 
        from, or directly related to, a congenital abnormality, a 
        personal injury resulting from an accident or trauma, or 
        disfiguring disease.
    ``(c) Payment of Tax.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by the individual on whom the procedure is performed.
            ``(2) Collection.--Every person receiving a payment for 
        procedures on which a tax is imposed under subsection (a) shall 
        collect the amount of the tax from the individual on whom the 
        procedure is performed and remit such tax quarterly to the 
        Secretary at such time and in such manner as provided by the 
        Secretary.
            ``(3) Secondary liability.--Where any tax imposed by 
        subsection (a) is not paid at the time payments for cosmetic 
        surgery and medical procedures are made, then to the extent 
        that such tax is not collected, such tax shall be paid by the 
        person who performs the procedure.''.
    (b) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986, as amended by this Act, is amended 
by inserting after the item relating to chapter 48 the following new 
item:

         ``Chapter 49--Elective Cosmetic Medical Procedures''.

    (c) Effective Date.--The amendments made by this section shall 
apply to procedures performed on or after January 1, 2010.

                      Subtitle B--Other Provisions

SEC. 9021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN TRIBAL 
              GOVERNMENTS.

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

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

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

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

SEC. 9022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL 
              BUSINESSES.

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

SEC. 9023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

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

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

    ``(a) In General.--For purposes of section 46, the qualifying 
therapeutic discovery project credit for any taxable year is an amount 
equal to 50 percent of the qualified investment for such taxable year 
with respect to any qualifying therapeutic discovery project of an 
eligible taxpayer.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the aggregate 
        amount of the costs paid or incurred in such taxable year for 
        expenses necessary for and directly related to the conduct of a 
        qualifying therapeutic discovery project.
            ``(2) Limitation.--The amount which is treated as qualified 
        investment for all taxable years with respect to any qualifying 
        therapeutic discovery project shall not exceed the amount 
        certified by the Secretary as eligible for the credit under 
        this section.
            ``(3) Exclusions.--The qualified investment for any taxable 
        year with respect to any qualifying therapeutic discovery 
        project shall not take into account any cost--
                    ``(A) for remuneration for an employee described in 
                section 162(m)(3),
                    ``(B) for interest expenses,
                    ``(C) for facility maintenance expenses,
                    ``(D) which is identified as a service cost under 
                section 1.263A-1(e)(4) of title 26, Code of Federal 
                Regulations, or
                    ``(E) for any other expense as determined by the 
                Secretary as appropriate to carry out the purposes of 
                this section.
            ``(4) Certain progress expenditure rules made applicable.--
        In the case of costs described in paragraph (1) that are paid 
        for property of a character subject to an allowance for 
        depreciation, rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the date 
        of the enactment of the Revenue Reconciliation Act of 1990) 
        shall apply for purposes of this section.
            ``(5) Application of subsection.--An investment shall be 
        considered a qualified investment under this subsection only if 
        such investment is made in a taxable year beginning in 2009 or 
        2010.
    ``(c) Definitions.--
            ``(1) Qualifying therapeutic discovery project.--The term 
        `qualifying therapeutic discovery project' means a project 
        which is designed--
                    ``(A) to treat or prevent diseases or conditions by 
                conducting pre-clinical activities, clinical trials, 
                and clinical studies, or carrying out research 
                protocols, for the purpose of securing approval of a 
                product under section 505(b) of the Federal Food, Drug, 
                and Cosmetic Act or section 351(a) of the Public Health 
                Service Act,
                    ``(B) to diagnose diseases or conditions or to 
                determine molecular factors related to diseases or 
                conditions by developing molecular diagnostics to guide 
                therapeutic decisions, or
                    ``(C) to develop a product, process, or technology 
                to further the delivery or administration of 
                therapeutics.
            ``(2) Eligible taxpayer.--
                    ``(A) In general.--The term `eligible taxpayer' 
                means a taxpayer which employs not more than 250 
                employees in all businesses of the taxpayer at the time 
                of the submission of the application under subsection 
                (d)(2).
                    ``(B) Aggregation rules.--All persons treated as a 
                single employer under subsection (a) or (b) of section 
                52, or subsection (m) or (o) of section 414, shall be 
                so treated for purposes of this paragraph.
            ``(3) Facility maintenance expenses.--The term `facility 
        maintenance expenses' means costs paid or incurred to maintain 
        a facility, including--
                    ``(A) mortgage or rent payments,
                    ``(B) insurance payments,
                    ``(C) utility and maintenance costs, and
                    ``(D) costs of employment of maintenance personnel.
    ``(d) Qualifying Therapeutic Discovery Project Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Not later than 60 days after the 
                date of the enactment of this section, the Secretary, 
                in consultation with the Secretary of Health and Human 
                Services, shall establish a qualifying therapeutic 
                discovery project program to consider and award 
                certifications for qualified investments eligible for 
                credits under this section to qualifying therapeutic 
                discovery project sponsors.
                    ``(B) Limitation.--The total amount of credits that 
                may be allocated under the program shall not exceed 
                $1,000,000,000 for the 2-year period beginning with 
                2009.
            ``(2) Certification.--
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application containing such information as the 
                Secretary may require during the period beginning on 
                the date the Secretary establishes the program under 
                paragraph (1).
                    ``(B) Time for review of applications.--The 
                Secretary shall take action to approve or deny any 
                application under subparagraph (A) within 30 days of 
                the submission of such application.
                    ``(C) Multi-year applications.--An application for 
                certification under subparagraph (A) may include a 
                request for an allocation of credits for more than 1 of 
                the years described in paragraph (1)(B).
            ``(3) Selection criteria.--In determining the qualifying 
        therapeutic discovery projects with respect to which qualified 
        investments may be certified under this section, the 
        Secretary--
                    ``(A) shall take into consideration only those 
                projects that show reasonable potential--
                            ``(i) to result in new therapies--
                                    ``(I) to treat areas of unmet 
                                medical need, or
                                    ``(II) to prevent, detect, or treat 
                                chronic or acute diseases and 
                                conditions,
                            ``(ii) to reduce long-term health care 
                        costs in the United States, or
                            ``(iii) to significantly advance the goal 
                        of curing cancer within the 30-year period 
                        beginning on the date the Secretary establishes 
                        the program under paragraph (1), and
                    ``(B) shall take into consideration which projects 
                have the greatest potential--
                            ``(i) to create and sustain (directly or 
                        indirectly) high quality, high-paying jobs in 
                        the United States, and
                            ``(ii) to advance United States 
                        competitiveness in the fields of life, 
                        biological, and medical sciences.
            ``(4) Disclosure of allocations.--The Secretary shall, upon 
        making a certification under this subsection, publicly disclose 
        the identity of the applicant and the amount of the credit with 
        respect to such applicant.
    ``(e) Special Rules.--
            ``(1) Basis adjustment.--For purposes of this subtitle, if 
        a credit is allowed under this section for an expenditure 
        related to property of a character subject to an allowance for 
        depreciation, the basis of such property shall be reduced by 
        the amount of such credit.
            ``(2) Denial of double benefit.--
                    ``(A) Bonus depreciation.--A credit shall not be 
                allowed under this section for any investment for which 
                bonus depreciation is allowed under section 168(k), 
                1400L(b)(1), or 1400N(d)(1).
                    ``(B) Deductions.--No deduction under this subtitle 
                shall be allowed for the portion of the expenses 
                otherwise allowable as a deduction taken into account 
                in determining the credit under this section for the 
                taxable year which is equal to the amount of the credit 
                determined for such taxable year under subsection (a) 
                attributable to such portion. This subparagraph shall 
                not apply to expenses related to property of a 
                character subject to an allowance for depreciation the 
                basis of which is reduced under paragraph (1), or which 
                are described in section 280C(g).
                    ``(C) Credit for research activities.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), any expenses taken into account 
                        under this section for a taxable year shall not 
                        be taken into account for purposes of 
                        determining the credit allowable under section 
                        41 or 45C for such taxable year.
                            ``(ii) Expenses included in determining 
                        base period research expenses.--Any expenses 
                        for any taxable year which are qualified 
                        research expenses (within the meaning of 
                        section 41(b)) shall be taken into account in 
                        determining base period research expenses for 
                        purposes of applying section 41 to subsequent 
                        taxable years.
    ``(f) Coordination With Department of Treasury Grants.--In the case 
of any investment with respect to which the Secretary makes a grant 
under section 9023(e) of the Patient Protection and Affordable Care Act 
of 2009--
            ``(1) Denial of credit.--No credit shall be determined 
        under this section with respect to such investment for the 
        taxable year in which such grant is made or any subsequent 
        taxable year.
            ``(2) Recapture of credits for progress expenditures made 
        before grant.--If a credit was determined under this section 
        with respect to such investment for any taxable year ending 
        before such grant is made--
                    ``(A) the tax imposed under subtitle A on the 
                taxpayer for the taxable year in which such grant is 
                made shall be increased by so much of such credit as 
                was allowed under section 38,
                    ``(B) the general business carryforwards under 
                section 39 shall be adjusted so as to recapture the 
                portion of such credit which was not so allowed, and
                    ``(C) the amount of such grant shall be determined 
                without regard to any reduction in the basis of any 
                property of a character subject to an allowance for 
                depreciation by reason of such credit.
            ``(3) Treatment of grants.--Any such grant shall not be 
        includible in the gross income of the taxpayer.''.
    (b) Inclusion as Part of Investment Credit.--Section 46 of the 
Internal Revenue Code of 1986 is amended--
            (1) by adding a comma at the end of paragraph (2),
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``, and'', and
            (3) by adding at the end the following new paragraph:
            ``(6) the qualifying therapeutic discovery project 
        credit.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
        1986 is amended--
                    (A) by striking ``and'' at the end of clause (iv),
                    (B) by striking the period at the end of clause (v) 
                and inserting ``, and'', and
                    (C) by adding at the end the following new clause:
                            ``(vi) the basis of any property to which 
                        paragraph (1) of section 48D(e) applies which 
                        is part of a qualifying therapeutic discovery 
                        project under such section 48D.''.
            (2) Section 280C of such Code is amended by adding at the 
        end the following new subsection:
    ``(g) Qualifying Therapeutic Discovery Project Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified investment (as defined in section 
        48D(b)) otherwise allowable as a deduction for the taxable year 
        which--
                    ``(A) would be qualified research expenses (as 
                defined in section 41(b)), basic research expenses (as 
                defined in section 41(e)(2)), or qualified clinical 
                testing expenses (as defined in section 45C(b)) if the 
                credit under section 41 or section 45C were allowed 
                with respect to such expenses for such taxable year, 
                and
                    ``(B) is equal to the amount of the credit 
                determined for such taxable year under section 48D(a), 
                reduced by--
                            ``(i) the amount disallowed as a deduction 
                        by reason of section 48D(e)(2)(B), and
                            ``(ii) the amount of any basis reduction 
                        under section 48D(e)(1).
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--In the case of expenses described in 
        paragraph (1)(A) taken into account in determining the credit 
        under section 48D for the taxable year, if--
                    ``(A) the amount of the portion of the credit 
                determined under such section with respect to such 
                expenses, exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for such expenses (determined without 
                regard to paragraph (1)),
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such 
        excess.
            ``(3) Controlled groups.--Paragraph (3) of subsection (b) 
        shall apply for purposes of this subsection.''.
    (d) Clerical Amendment.--The table of sections for subpart E of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 48C the 
following new item:

``Sec. 48D. Qualifying therapeutic discovery project credit.''.
    (e) Grants for Qualified Investments in Therapeutic Discovery 
Projects in Lieu of Tax Credits.--
            (1) In general.--Upon application, the Secretary of the 
        Treasury shall, subject to the requirements of this subsection, 
        provide a grant to each person who makes a qualified investment 
        in a qualifying therapeutic discovery project in the amount of 
        50 percent of such investment. No grant shall be made under 
        this subsection with respect to any investment unless such 
        investment is made during a taxable year beginning in 2009 or 
        2010.
            (2) Application.--
                    (A) In general.--At the stated election of the 
                applicant, an application for certification under 
                section 48D(d)(2) of the Internal Revenue Code of 1986 
                for a credit under such section for the taxable year of 
                the applicant which begins in 2009 shall be considered 
                to be an application for a grant under paragraph (1) 
                for such taxable year.
                    (B) Taxable years beginning in 2010.--An 
                application for a grant under paragraph (1) for a 
                taxable year beginning in 2010 shall be submitted--
                            (i) not earlier than the day after the last 
                        day of such taxable year, and
                            (ii) not later than the due date (including 
                        extensions) for filing the return of tax for 
                        such taxable year.
                    (C) Information to be submitted.--An application 
                for a grant under paragraph (1) shall include such 
                information and be in such form as the Secretary may 
                require to state the amount of the credit allowable 
                (but for the receipt of a grant under this subsection) 
                under section 48D for the taxable year for the 
                qualified investment with respect to which such 
                application is made.
            (3) Time for payment of grant.--
                    (A) In general.--The Secretary of the Treasury 
                shall make payment of the amount of any grant under 
                paragraph (1) during the 30-day period beginning on the 
                later of--
                            (i) the date of the application for such 
                        grant, or
                            (ii) the date the qualified investment for 
                        which the grant is being made is made.
                    (B) Regulations.--In the case of investments of an 
                ongoing nature, the Secretary shall issue regulations 
                to determine the date on which a qualified investment 
                shall be deemed to have been made for purposes of this 
                paragraph.
            (4) Qualified investment.--For purposes of this subsection, 
        the term ``qualified investment'' means a qualified investment 
        that is certified under section 48D(d) of the Internal Revenue 
        Code of 1986 for purposes of the credit under such section 48D.
            (5) Application of certain rules.--
                    (A) In general.--In making grants under this 
                subsection, the Secretary of the Treasury shall apply 
                rules similar to the rules of section 50 of the 
                Internal Revenue Code of 1986. In applying such rules, 
                any increase in tax under chapter 1 of such Code by 
                reason of an investment ceasing to be a qualified 
                investment shall be imposed on the person to whom the 
                grant was made.
                    (B) Special rules.--
                            (i) Recapture of excessive grant amounts.--
                        If the amount of a grant made under this 
                        subsection exceeds the amount allowable as a 
                        grant under this subsection, such excess shall 
                        be recaptured under subparagraph (A) as if the 
                        investment to which such excess portion of the 
                        grant relates had ceased to be a qualified 
                        investment immediately after such grant was 
                        made.
                            (ii) Grant information not treated as 
                        return information.--In no event shall the 
                        amount of a grant made under paragraph (1), the 
                        identity of the person to whom such grant was 
                        made, or a description of the investment with 
                        respect to which such grant was made be treated 
                        as return information for purposes of section 
                        6103 of the Internal Revenue Code of 1986.
            (6) Exception for certain non-taxpayers.--The Secretary of 
        the Treasury shall not make any grant under this subsection 
        to--
                    (A) any Federal, State, or local government (or any 
                political subdivision, agency, or instrumentality 
                thereof),
                    (B) any organization described in section 501(c) of 
                the Internal Revenue Code of 1986 and exempt from tax 
                under section 501(a) of such Code,
                    (C) any entity referred to in paragraph (4) of 
                section 54(j) of such Code, or
                    (D) any partnership or other pass-thru entity any 
                partner (or other holder of an equity or profits 
                interest) of which is described in subparagraph (A), 
                (B) or (C).
        In the case of a partnership or other pass-thru entity 
        described in subparagraph (D), partners and other holders of 
        any equity or profits interest shall provide to such 
        partnership or entity such information as the Secretary of the 
        Treasury may require to carry out the purposes of this 
        paragraph.
            (7) Secretary.--Any reference in this subsection to the 
        Secretary of the Treasury shall be treated as including the 
        Secretary's delegate.
            (8) Other terms.--Any term used in this subsection which is 
        also used in section 48D of the Internal Revenue Code of 1986 
        shall have the same meaning for purposes of this subsection as 
        when used in such section.
            (9) Denial of double benefit.--No credit shall be allowed 
        under section 46(6) of the Internal Revenue Code of 1986 by 
        reason of section 48D of such Code for any investment for which 
        a grant is awarded under this subsection.
            (10) Appropriations.--There is hereby appropriated to the 
        Secretary of the Treasury such sums as may be necessary to 
        carry out this subsection.
            (11) Termination.--The Secretary of the Treasury shall not 
        make any grant to any person under this subsection unless the 
        application of such person for such grant is received before 
        January 1, 2013.
    (f) Effective Date.--The amendments made by subsections (a) through 
(d) of this section shall apply to amounts paid or incurred after 
December 31, 2008, in taxable years beginning after such date.
                           Amendment No. 2786

                               H.R. 3590
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