I 

111TH CONGRESS 

1ST SESSION H. R. 3970 

To protect the doctor-patient relationship, improve the quality of health care 

services, lower the costs of health care services, expand access to health 

care services, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 29, 2009 

Mr. KIRK (for himself, Mr. BURGESS, Mrs. BIGGERT, Mr. LEE of New York, 

Mr. LANCE, Mr. SCHOCK, Mr. MICA, Mrs. CAPITO, Mr. FRELINGHUYSEN, 

and Mr. MACK) introduced the following bill; which was referred to the 

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

on the Judiciary, Ways and Means, Education and Labor, Appropriations, and Financial Services, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To protect the doctor-patient relationship, improve the quality of health care services, lower the costs of health 

care services, expand access to health care services, and 

for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medical Rights and 

5 Reform Act of 2009’’. 


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1 SEC. 2. TABLE OF CONTENTS. 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—PROTECTING THE DOCTOR-PATIENT RELATIONSHIP 

Sec. 101. Prohibition on restrictions on the practice of medicine and other 

health care professions. 

Sec. 102. Right to contract for health care services and health insurance. 

Sec. 103. Prohibition on mandating State restrictions. 

Sec. 104. Clarification. 

Sec. 105. Conforming amendment. 

Sec. 106. Definitions. 

Sec. 107. Effective date. 

TITLE II—IMPROVING QUALITY AND LOWERING THE COST OF 

HEALTH CARE 

Subtitle A—Equity for Our Nation’s Self-Employed 

Sec. 201. SECA tax deduction for health insurance costs. 

Subtitle B—Help Efficient, Accessible, Low-cost, Timely Healthcare 

Sec. 211. Findings and purpose. 

Sec. 212. Encouraging speedy resolution of claims. 

Sec. 213. Compensating patient injury. 

Sec. 214. Maximizing patient recovery. 

Sec. 215. Additional HEALTH benefits. 

Sec. 216. Punitive damages. 

Sec. 217. Authorization of payment of future damages to claimants in 

HEALTH care lawsuits. 

Sec. 218. Definitions. 

Sec. 219. Effect on other laws. 

Sec. 220. State flexibility and protection Sf states’ rights. 

Sec. 221. Applicability; effective date. 

Sec. 222. Sense of Congress. 

Subtitle C—Accelerating the Deployment of Health Information Technology 

PART 1—ENHANCED COORDINATION AND ADOPTION OF HEALTH

INFORMATION TECHNOLOGY

Sec. 231. Strategic plan for coordinating implementation of Medicare and Medicaid health information technology incentive payments. 

Sec. 232. Procedures to ensure timely updating of standards that enable electronic exchanges. 

Sec. 233. Study to improve preservation and protection of security and confidentiality of health information. 

Sec. 234. Assisting Doctors to Obtain Proficient and Transmissible Health Information Technology. 

Sec. 235. Expansion of Stark and anti-kickback exceptions for electronic health 

records arrangements. 

Sec. 236. Application of Medicare EHR incentives and adjustments to additional providers. 


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PART 2—TELEHEALTH ENHANCEMENT

SUBPART A—MEDICARE PROGRAM

Sec. 241. Expansion and improvement of telehealth services. 

Sec. 242. Increase in number of types of originating sites; clarification. 

Sec. 243. Expansion of eligible telehealth providers and credentialing of telemedicine practitioners. 

Sec. 244. Access to telehealth services in the home. 

Sec. 245. Coverage of home health remote patient management services for 

chronic health conditions. 

Sec. 246. Sense of Congress on the use of remote patient management services. 

Sec. 247. Telehealth Advisory Committee. 

SUBPART B—HRSA GRANT PROGRAM

Sec. 250. Grant program for the development of telehealth networks. 

Sec. 251. Reauthorization of telehealth network and telehealth resource centers 

grant programs. 

Subtitle D—Eliminating Waste, Fraud, and Abuse 

Sec. 261. Site inspections; background checks; denial and suspension of billing 

privileges. 

Sec. 262. Registration and background checks of billing agencies and individuals. 

Sec. 263. Expanded access to the healthcare integrity and protection data bank 

(HIPDB). 

Sec. 264. Liability of Medicare administrative contractors for claims submitted 

by excluded providers. 

Sec. 265. Community mental health centers. 

Sec. 266. Limiting the discharge of debts in bankruptcy proceedings in cases 

where a health care provider or a supplier engages in fraudulent activity. 

Sec. 267. Illegal distribution of a Medicare or Medicaid beneficiary identification or billing privileges. 

Sec. 268. Treatment of certain Social Security Act crimes as Federal health 

care offenses. 

Sec. 269. Authority of Office of Inspector General of the Department of Health 

and Human Services. 

Sec. 270. Universal product numbers on claims forms for reimbursement under 

the Medicare Program. 

Subtitle E—Promoting Health and Preventing Chronic Disease Through 

Prevention and Wellness Programs 

Sec. 281. Findings. 

Sec. 282. Tax credit to employers for costs of implementing prevention and 

wellness programs. 

Sec. 283. Grants to increase physical activity and emotional wellness, improve 

nutrition, and promote healthy eating behaviors. 

Sec. 284. Prevention and wellness programs for individuals and families. 

TITLE III—EXPANDING ACCESS TO HEALTH CARE 

Subtitle A—State Innovation Program 

Sec. 301. Ensuring affordability and access through universal access programs. 


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Sec. 302. Enhanced Federal funding and reduced red-tape for State efforts to 

improve access to health insurance coverage. 

Sec. 303. State innovation program described. 

Sec. 304. State transparency program described. 

Sec. 305. Health plan finder. 

Sec. 306. Small business health plans. 

Sec. 307. Interstate compacts on health insurance regulation. 

Sec. 308. Definitions. 

Sec. 309. Authorization for appropriations. 

Subtitle B—Interstate Market for Health Insurance 

Sec. 311. Specification of constitutional authority for enactment of law. 

Sec. 312. Findings. 

Sec. 313. Cooperative governing of individual health insurance coverage. 

Sec. 314. Severability. 

Subtitle C—Young Adult Healthcare Coverage 

Sec. 321. Requiring the option of extension of dependent coverage for certain 

unmarried, uninsured young adults. 

TITLE IV—OFFSETS 

Sec. 401. Transfer of unobilgated stimulus funds. 

1 TITLE I—PROTECTING THE DOC2 TOR-PATIENT RELATIONSHIP 

3 SEC. 101. PROHIBITION ON RESTRICTIONS ON THE PRAC4 TICE OF MEDICINE AND OTHER HEALTH 

5 CARE PROFESSIONS. 

6 (a) IN GENERAL.—Subject to subsection (b), no Fed7 eral funds shall be used to permit any Federal officer or 

8 employee to exercise any supervision or control over— 

9 (1) the practice of medicine, the practice of 

10 other health care professions, or the manner in 

11 which health care services are provided; 

12 (2) the provision, by a physician or a health 

13 care practitioner, of advice to a patient about the 


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1 patient’s health status or recommended treatment 

2 for a condition or disease; 

3 (3) the selection, tenure, or compensation of 

4 any officer, employee, or contractor of any institu5 tion, business, non-Federal agency, or individual 

6 providing health care services; or 

7 (4) the administration or operation of any such 

8 institution, business, non-Federal agency, or indi9 vidual, with respect to the provision of health care 

10 services to a patient. 

11 (b) PRESERVING CERTAIN CURRENT PROGRAMS.— 

12 Subsection (a) shall not prohibit the Federal Government 

13 from operating, managing, supervising employees of, or 

14 defining the scope of services provided by Federal entities 

15 when directly providing health care services and products, 

16 only with respect to the following: 

17 (1) The Veterans Health Administration— 

18 (A) in the case of directly providing health 

19 care services through its own facilities and by 

20 its own employees; or 

21 (B) in the case of coordinating health care 

22 services not described in subparagraph (A) and 

23 paid for with Federal funds under programs op24 erated by the Veterans Health Administration. 

25 (2) The Department of Defense— 


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1 (A) in the case of directly providing health 

2 care services through military treatment facili3 ties; 

4 (B) in the case of paying for health care 

5 services for active-duty members of the Armed 

6 Forces or members of the Reserve component 

7 when called to active duty; 

8 (C) in the case of directly providing health 

9 care services to the public in the event of emer10 gency or under other lawful circumstances; or 

11 (D) when necessary to determine whether 

12 health care services provided to those who are 

13 not active-duty members of the Armed Forces 

14 are eligible for payment with Federal funds or 

15 to coordinate health care services for patients 

16 who are served by both non-Federal entities and 

17 military treatment facilities. 

18 (3) The United States Public Health Service— 

19 (A) in the case of providing health care 

20 services through its own facilities or by its offi21 cers or civilian Federal employees; 

22 (B) in the case of providing or paying for 

23 health care services to active-duty members of 

24 uniformed services or to Reserve members of 

25 such services when called to active duty; or 


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1 (C) when necessary to determine whether 

2 health care services provided to those who are 

3 not active-duty members of uniformed services 

4 are eligible for payment with Federal funds or 

5 to coordinate health care services for patients 

6 who are served by both non-Federal entities and 

7 Public Health Service treatment facilities. 

8 (4) The Indian Health Service— 

9 (A) in the case of directly providing health 

10 care services through its own facilities or Fed11 eral employees; or 

12 (B) in the case of providing care by non13 Federal entities, to the extent necessary to ad14 minister contracts and grants pursuant to the 

15 Indian Health Care Improvement Act. 

16 (5) The National Institutes of Health— 

17 (A) in the case of providing direct patient 

18 care incident to medical research; or 

19 (B) in the case of administering grants for 

20 medical research, but in no case shall a non21 Federal entity be required or requested to waive 

22 the protections of subsection (a) for health care 

23 services not incident to medical research funded 

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1 tion of receiving research grant funding from 

2 the National Institutes of Health. 

3 (6) The Health Resources and Services Admin4 istration— 

5 (A) in the case of certifying federally quali6 fied health centers, as defined by section 

7 1905(l)(2)(B) of the Social Security Act (42 

8 U.S.C. 1396d(l)(2)(B)), certifying FQHC look9 alike status, as defined in section 413.65(n) of 

10 title 45 of the Code of Federal Regulations, or 

11 providing grants under section 330 of the Pub12 lic Health Service Act (42 U.S.C. 254b), but 

13 only to the extent necessary to determine eligi14 bility for such certification and grant funding 

15 and the appropriate amounts of such funding; 

16 or 

17 (B) in the case of operating the nation’s 

18 human organ, bone marrow, and umbilical cord 

19 blood donation and transplantation systems, as 

20 and to the extent authorized by law and nec21 essary for the operation of those programs. 

22 SEC. 102. RIGHT TO CONTRACT FOR HEALTH CARE SERV23 ICES AND HEALTH INSURANCE. 

24 (a) RECEIPT OF HEALTH SERVICES.—No Federal 

25 funds shall be used by any Federal officer or employee 


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1 to prohibit any individual from receiving health care serv2 ices from any provider of health care services— 

3 (1) under terms and conditions mutually ac4 ceptable to the patient and the provider; or 

5 (2) under terms and conditions mutually ac6 ceptable to the patient, the provider, and any group 

7 health plan or health insurance issuer that is obli8 gated to provide health insurance coverage to the pa9 tient or any other entity indemnifying the patient’s 

10 consumption of health care services; 

11 provided that any such agreement shall be subject to the 

12 requirements of section 1802(b) of the Social Security Act 

13 (42 U.S.C. 1395a(b)), as amended by section 105. 

14 (b) HEALTH INSURANCE COVERAGE.—No Federal 

15 funds shall be used by any Federal officer or employee 

16 to prohibit any person from entering into a contract with 

17 any group health plan, health insurance issuer, or other 

18 business, for the provision of, or payment to other parties 

19 for, health care services to be determined and provided 

20 subsequent to the effective date of the contract, according 

21 to terms, conditions, and procedures specified in such con22 tract. 

23 (c) ELIGIBILITY FOR FEDERAL BENEFITS.—No per24 son’s eligibility for benefits under any program operated 

25 by or funded wholly or partly by the Federal Government 


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1 shall be adversely affected as a result of having received 

2 services in a manner described by subsection (a) or having 

3 entered into a contract described in subsection (b). 

4 (d) FEDERAL PROGRAM PARTICIPATION.—No pro5 vider of health care services— 

6 (1) shall be denied participation in a Federal 

7 program for which it would otherwise be eligible as 

8 a result of having provided services in a manner de9 scribed in subsection (a); or 

10 (2) shall be denied payment for services other11 wise eligible for payment under a Federal program 

12 as a result of having provided services in a manner 

13 described in subsection (a), except to the extent re14 quired by subsection (a)(1). 

15 SEC. 103. PROHIBITION ON MANDATING STATE RESTRIC16 TIONS. 

17 (a) IN GENERAL.—No Federal funds shall be used 

18 by any Federal officer or employee to induce or encourage 

19 any State or other jurisdiction of the United States to 

20 enact any restriction or prohibition prohibited to the Fed21 eral Government by this title. 

22 (b) PROTECTING STATE ELIGIBILITY FOR FEDERAL

23 FUNDS.—No State’s eligibility for participation in any 

24 program operated by or funded wholly or partly by the 

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1 eral Government shall be conditioned on that State enact2 ing any restriction or prohibition prohibited to the Federal 

3 Government by this title, nor adversely affected by that 

4 State’s failure to enact any restriction or prohibition pro5 hibited to the Federal Government by this title. 

6 SEC. 104. CLARIFICATION. 

7 Nothing in this subtitle shall be construed to permit 

8 the expenditure of funds otherwise prohibited by law. 

9 SEC. 105. CONFORMING AMENDMENT. 

10 Section 1802(b)(3) of the Social Security Act (42 

11 U.S.C. 1395a(b)(3)) is hereby repealed. 

12 SEC. 106. DEFINITIONS. 

13 For purposes of this title: 

14 (1) HEALTH CARE SERVICES.—The term 

15 ‘‘health care services’’ means any lawful service in16 tended to diagnose, cure, prevent, or mitigate the 

17 adverse effects of any disease, injury, infirmity, or 

18 physical or mental disability, including the provision 

19 of any lawful product the use of which is so in20 tended. 

21 (2) PHYSICIAN.—The term ‘‘physician’’ 

22 means— 

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1 gery by the State in which he performs such 

2 practice and surgery; 

3 (B) a doctor of dental surgery or of dental 

4 medicine who is legally authorized to practice 

5 dentistry by the State in which he performs 

6 such function and who is acting within the 

7 scope of his license when he performs such 

8 functions; 

9 (C) a doctor of podiatric medicine but only 

10 with respect to functions which he is legally au11 thorized to perform as such by the State in 

12 which he performs them; 

13 (D) a doctor of optometry with respect to 

14 the provision of items or services which he is le15 gally authorized to perform as a doctor of op16 tometry by the State in which he performs 

17 them; or 

18 (E) a chiropractor who is licensed as such 

19 by the State (or in a State which does not li20 cense chiropractors as such, is legally author21 ized to perform the services of a chiropractor in 

22 the jurisdiction in which he performs such serv23 ices), but only with respect to treatment which 

24 he is legally authorized to perform by the State 


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1 or jurisdiction in which such treatment is pro2 vided. 

3 (3) PRACTICE OF MEDICINE.—The term ‘‘prac4 tice of medicine’’ means— 

5 (A) health care services that are performed 

6 by physicians; and 

7 (B) services and supplies furnished as an 

8 incident to a physician’s professional service. 

9 (4) HEALTH CARE PRACTITIONER.—The term 

10 ‘‘health care practitioner’’ means a physician assist11 ant, registered nurse, nurse practitioner, psycholo12 gist, clinical social worker, midwife, or other indi13 vidual (other than a physician) licensed or legally 

14 authorized to perform health care services in the 

15 State in which the individual performs such services. 

16 (5) PRACTICE OF OTHER HEALTH CARE PRO17 FESSIONS.—The term ‘‘practice of other health care 

18 professions’’ means— 

19 (A) health care services performed by a 

20 health care practitioner; and 

21 (B) services and supplies furnished as an 

22 incident to a health care practitioner’s profes23 sional service. 

24 (6) GROUP HEALTH PLAN.—The term ‘‘group 

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


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1 section 733(a)(1) of the Employee Retirement In2 come Security Act of 1974 (29 U.S.C. 1191b(a)(1)). 

3 (7) HEALTH INSURANCE ISSUER.—The term 

4 ‘‘health insurance issuer’’ has the meaning given 

5 such term in section 733(b)(2) of the Employee Re6 tirement Income Security Act of 1974 (29 U.S.C. 

7 1191b(b)(2)). 

8 (8) BUSINESS.—The term ‘‘business’’ means 

9 any sole proprietorship, partnership, for-profit cor10 poration, or not-for-profit corporation. 

11 (9) STATE.—The term ‘‘State’’ means any of 

12 the United States, the Commonwealth of Puerto 

13 Rico, the Commonwealth of the Northern Mariana 

14 Islands, the United States Virgin Islands, Guam, 

15 American Samoa, or the District of Columbia. 

16 SEC. 107. EFFECTIVE DATE. 

17 The provisions of this title shall apply to Federal enti18 ties, including employees and officials of such entities, be19 ginning on January 1, 2009. 


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1 TITLE II—IMPROVING QUALITY 

2 AND LOWERING THE COST OF 

3 HEALTH CARE 

4 Subtitle A—Equity for Our Nation’s 

5 Self-Employed 

6 SEC. 201. SECA TAX DEDUCTION FOR HEALTH INSURANCE 

7 COSTS. 

8 (a) IN GENERAL.—Subsection (l) of section 162 of 

9 the Internal Revenue Code of 1986 (relating to special 

10 rules for health insurance costs of self-employed individ11 uals) is amended by striking paragraph (4) and by redes12 ignating paragraph (5) as paragraph (4). 

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

14 this section shall apply to taxable years beginning after 

15 the date of the enactment of this subtitle. 

16 Subtitle B—Help Efficient, Acces17 sible, Low-cost, Timely 

18 Healthcare 

19 SEC. 211. FINDINGS AND PURPOSE. 

20 (a) FINDINGS.— 

21 (1) EFFECT ON HEALTH CARE ACCESS AND

22 COSTS.—Congress finds that our current civil justice 

23 system is adversely affecting patient access to health 

24 care services, better patient care, and cost-efficient 

25 health care, in that the health care liability system 


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1 is a costly and ineffective mechanism for resolving 

2 claims of health care liability and compensating in3 jured patients, and is a deterrent to the sharing of 

4 information among health care professionals which 

5 impedes efforts to improve patient safety and quality 

6 of care. 

7 (2) EFFECT ON INTERSTATE COMMERCE.— 

8 Congress finds that the health care and insurance 

9 industries are industries affecting interstate com10 merce and the health care liability litigation systems 

11 existing throughout the United States are activities 

12 that affect interstate commerce by contributing to 

13 the high costs of health care and premiums for 

14 health care liability insurance purchased by health 

15 care system providers. 

16 (3) EFFECT ON FEDERAL SPENDING.—Con17 gress finds that the health care liability litigation 

18 systems existing throughout the United States have 

19 a significant effect on the amount, distribution, and 

20 use of Federal funds because of— 

21 (A) the large number of individuals who 

22 receive health care benefits under programs op23 erated or financed by the Federal Government; 

24 (B) the large number of individuals who 

25 benefit because of the exclusion from Federal 


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1 taxes of the amounts spent to provide them 

2 with health insurance benefits; and 

3 (C) the large number of health care pro4 viders who provide items or services for which 

5 the Federal Government makes payments. 

6 (b) PURPOSE.—It is the purpose of this subtitle to 

7 implement reasonable, comprehensive, and effective health 

8 care liability reforms designed to— 

9 (1) improve the availability of health care serv10 ices in cases in which health care liability actions 

11 have been shown to be a factor in the decreased 

12 availability of services; 

13 (2) reduce the incidence of ‘‘defensive medi14 cine’’ and lower the cost of health care liability in15 surance, all of which contribute to the escalation of 

16 health care costs; 

17 (3) ensure that persons with meritorious health 

18 care injury claims receive fair and adequate com19 pensation, including reasonable noneconomic dam20 ages; 

21 (4) improve the fairness and cost-effectiveness 

22 of our current health care liability system to resolve 

23 disputes over, and provide compensation for, health 

24 care liability by reducing uncertainty in the amount 

25 of compensation provided to injured individuals; and 


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1 (5) provide an increased sharing of information 

2 in the health care system which will reduce unin3 tended injury and improve patient care. 

4 SEC. 212. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 

5 The time for the commencement of a health care law6 suit shall be 3 years after the date of manifestation of 

7 injury or 1 year after the claimant discovers, or through 

8 the use of reasonable diligence should have discovered, the 

9 injury, whichever occurs first. In no event shall the time 

10 for commencement of a health care lawsuit exceed 3 years 

11 after the date of manifestation of injury unless tolled for 

12 any of the following— 

13 (1) upon proof of fraud; 

14 (2) intentional concealment; or 

15 (3) the presence of a foreign body, which has no 

16 therapeutic or diagnostic purpose or effect, in the 

17 person of the injured person. 

18 Actions by a minor shall be commenced within 3 years 

19 from the date of the alleged manifestation of injury except 

20 that actions by a minor under the full age of 6 years shall 

21 be commenced within 3 years of manifestation of injury 

22 or prior to the minor’s 8th birthday, whichever provides 

23 a longer period. Such time limitation shall be tolled for 

24 minors for any period during which a parent or guardian 

25 and a health care provider or health care organization 


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1 have committed fraud or collusion in the failure to bring 

2 an action on behalf of the injured minor. 

3 SEC. 213. COMPENSATING PATIENT INJURY. 

4 (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL

5 ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 

6 health care lawsuit, nothing in this subtitle shall limit a 

7 claimant’s recovery of the full amount of the available eco8 nomic damages, notwithstanding the limitation in sub9 section (b). 

10 (b) ADDITIONAL NONECONOMIC DAMAGES.—In any 

11 health care lawsuit, the amount of noneconomic damages, 

12 if available, may be as much as $250,000, regardless of 

13 the number of parties against whom the action is brought 

14 or the number of separate claims or actions brought with 

15 respect to the same injury. 

16 (c) NO DISCOUNT OF AWARD FOR NONECONOMIC

17 DAMAGES.—For purposes of applying the limitation in 

18 subsection (b), future noneconomic damages shall not be 

19 discounted to present value. The jury shall not be in20 formed about the maximum award for noneconomic dam21 ages. An award for noneconomic damages in excess of 

22 $250,000 shall be reduced either before the entry of judg23 ment, or by amendment of the judgment after entry of 

24 judgment, and such reduction shall be made before ac25 counting for any other reduction in damages required by 


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1 law. If separate awards are rendered for past and future 

2 noneconomic damages and the combined awards exceed 

3 $250,000, the future noneconomic damages shall be re4 duced first. 

5 (d) FAIR SHARE RULE.—In any health care lawsuit, 

6 each party shall be liable for that party’s several share 

7 of any damages only and not for the share of any other 

8 person. Each party shall be liable only for the amount of 

9 damages allocated to such party in direct proportion to 

10 such party’s percentage of responsibility. Whenever a 

11 judgment of liability is rendered as to any party, a sepa12 rate judgment shall be rendered against each such party 

13 for the amount allocated to such party. For purposes of 

14 this section, the trier of fact shall determine the propor15 tion of responsibility of each party for the claimant’s 

16 harm. 

17 SEC. 214. MAXIMIZING PATIENT RECOVERY. 

18 (a) COURT SUPERVISION OF SHARE OF DAMAGES

19 ACTUALLY PAID TO CLAIMANTS.—In any health care law20 suit, the court shall supervise the arrangements for pay21 ment of damages to protect against conflicts of interest 

22 that may have the effect of reducing the amount of dam23 ages awarded that are actually paid to claimants. In par24 ticular, in any health care lawsuit in which the attorney 

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1 tue of a contingent fee, the court shall have the power 

2 to restrict the payment of a claimant’s damage recovery 

3 to such attorney, and to redirect such damages to the 

4 claimant based upon the interests of justice and principles 

5 of equity. In no event shall the total of all contingent fees 

6 for representing all claimants in a health care lawsuit ex7 ceed the following limits: 

8 (1) 40 percent of the first $50,000 recovered by 

9 the claimant(s). 

(2) 331 10 ⁄3 percent of the next $50,000 recovered 

11 by the claimant(s). 

12 (3) 25 percent of the next $500,000 recovered 

13 by the claimant(s). 

14 (4) 15 percent of any amount by which the re15 covery by the claimant(s) is in excess of $600,000. 

16 (b) APPLICABILITY.—The limitations in this section 

17 shall apply whether the recovery is by judgment, settle18 ment, mediation, arbitration, or any other form of alter19 native dispute resolution. In a health care lawsuit involv20 ing a minor or incompetent person, a court retains the 

21 authority to authorize or approve a fee that is less than 

22 the maximum permitted under this section. The require23 ment for court supervision in the first two sentences of 

24 subsection (a) applies only in civil actions. 


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1 SEC. 215. ADDITIONAL HEALTH BENEFITS. 

2 In any health care lawsuit involving injury or wrong3 ful death, any party may introduce evidence of collateral 

4 source benefits. If a party elects to introduce such evi5 dence, any opposing party may introduce evidence of any 

6 amount paid or contributed or reasonably likely to be paid 

7 or contributed in the future by or on behalf of the oppos8 ing party to secure the right to such collateral source bene9 fits. No provider of collateral source benefits shall recover 

10 any amount against the claimant or receive any lien or 

11 credit against the claimant’s recovery or be equitably or 

12 legally subrogated to the right of the claimant in a health 

13 care lawsuit involving injury or wrongful death. This sec14 tion shall apply to any health care lawsuit that is settled 

15 as well as a health care lawsuit that is resolved by a fact 

16 finder. This section shall not apply to section 1862(b) (42 

17 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C. 

18 1396a(a)(25)) of the Social Security Act. 

19 SEC. 216. PUNITIVE DAMAGES. 

20 (a) IN GENERAL.—Punitive damages may, if other21 wise permitted by applicable State or Federal law, be 

22 awarded against any person in a health care lawsuit only 

23 if it is proven by clear and convincing evidence that such 

24 person acted with malicious intent to injure the claimant, 

25 or that such person deliberately failed to avoid unneces26 sary injury that such person knew the claimant was subVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 stantially certain to suffer. In any health care lawsuit 

2 where no judgment for compensatory damages is rendered 

3 against such person, no punitive damages may be awarded 

4 with respect to the claim in such lawsuit. No demand for 

5 punitive damages shall be included in a health care lawsuit 

6 as initially filed. A court may allow a claimant to file an 

7 amended pleading for punitive damages only upon a mo8 tion by the claimant and after a finding by the court, upon 

9 review of supporting and opposing affidavits or after a 

10 hearing, after weighing the evidence, that the claimant has 

11 established by a substantial probability that the claimant 

12 will prevail on the claim for punitive damages. At the re13 quest of any party in a health care lawsuit, the trier of 

14 fact shall consider in a separate proceeding— 

15 (1) whether punitive damages are to be award16 ed and the amount of such award; and 

17 (2) the amount of punitive damages following a 

18 determination of punitive liability. 

19 If a separate proceeding is requested, evidence relevant 

20 only to the claim for punitive damages, as determined by 

21 applicable State law, shall be inadmissible in any pro22 ceeding to determine whether compensatory damages are 

23 to be awarded. 

24 (b) DETERMINING AMOUNT OF PUNITIVE DAM25 AGES.— 


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1 (1) FACTORS CONSIDERED.—In determining 

2 the amount of punitive damages, if awarded, in a 

3 health care lawsuit, the trier of fact shall consider 

4 only the following— 

5 (A) the severity of the harm caused by the 

6 conduct of such party; 

7 (B) the duration of the conduct or any 

8 concealment of it by such party; 

9 (C) the profitability of the conduct to such 

10 party; 

11 (D) the number of products sold or med12 ical procedures rendered for compensation, as 

13 the case may be, by such party, of the kind 

14 causing the harm complained of by the claim15 ant; 

16 (E) any criminal penalties imposed on such 

17 party, as a result of the conduct complained of 

18 by the claimant; and 

19 (F) the amount of any civil fines assessed 

20 against such party as a result of the conduct 

21 complained of by the claimant. 

22 (2) MAXIMUM AWARD.—The amount of punitive 

23 damages, if awarded, in a health care lawsuit may 

24 be as much as $250,000 or as much as two times 

25 the amount of economic damages awarded, whichVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 ever is greater. The jury shall not be informed of 

2 this limitation. 

3 (c) NO PUNITIVE DAMAGES FOR PRODUCTS THAT

4 COMPLY WITH FDA STANDARDS.— 

5 (1) IN GENERAL.— 

6 (A) No punitive damages may be awarded 

7 against the manufacturer or distributor of a 

8 medical product, or a supplier of any compo9 nent or raw material of such medical product, 

10 based on a claim that such product caused the 

11 claimant’s harm where— 

12 (i)(I) such medical product was sub13 ject to premarket approval, clearance, or li14 censure by the Food and Drug Administra15 tion with respect to the safety of the for16 mulation or performance of the aspect of 

17 such medical product which caused the 

18 claimant’s harm or the adequacy of the 

19 packaging or labeling of such medical 

20 product; and 

21 (II) such medical product was so ap22 proved, cleared, or licensed; or 

23 (ii) such medical product is generally 

24 recognized among qualified experts as safe 

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1 lished by the Food and Drug Administra2 tion and applicable Food and Drug Admin3 istration regulations, including without 

4 limitation those related to packaging and 

5 labeling, unless the Food and Drug Admin6 istration has determined that such medical 

7 product was not manufactured or distrib8 uted in substantial compliance with appli9 cable Food and Drug Administration stat10 utes and regulations. 

11 (B) RULE OF CONSTRUCTION.—Subpara12 graph (A) may not be construed as establishing 

13 the obligation of the Food and Drug Adminis14 tration to demonstrate affirmatively that a 

15 manufacturer, distributor, or supplier referred 

16 to in such subparagraph meets any of the con17 ditions described in such subparagraph. 

18 (2) LIABILITY OF HEALTH CARE PROVIDERS.— 

19 A health care provider who prescribes, or who dis20 penses pursuant to a prescription, a medical product 

21 approved, licensed, or cleared by the Food and Drug 

22 Administration shall not be named as a party to a 

23 product liability lawsuit involving such product and 

24 shall not be liable to a claimant in a class action 

25 lawsuit against the manufacturer, distributor, or 


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1 seller of such product. Nothing in this paragraph 

2 prevents a court from consolidating cases involving 

3 health care providers and cases involving products li4 ability claims against the manufacturer, distributor, 

5 or product seller of such medical product. 

6 (3) PACKAGING.—In a health care lawsuit for 

7 harm which is alleged to relate to the adequacy of 

8 the packaging or labeling of a drug which is required 

9 to have tamper-resistant packaging under regula10 tions of the Secretary of Health and Human Serv11 ices (including labeling regulations related to such 

12 packaging), the manufacturer or product seller of 

13 the drug shall not be held liable for punitive dam14 ages unless such packaging or labeling is found by 

15 the trier of fact by clear and convincing evidence to 

16 be substantially out of compliance with such regula17 tions. 

18 (4) EXCEPTION.—Paragraph (1) shall not 

19 apply in any health care lawsuit in which— 

20 (A) a person, before or after premarket ap21 proval, clearance, or licensure of such medical 

22 product, knowingly misrepresented to or with23 held from the Food and Drug Administration 

24 information that is required to be submitted 

25 under the Federal Food, Drug, and Cosmetic 


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1 Act (21 U.S.C. 301 et seq.) or section 351 of 

2 the Public Health Service Act (42 U.S.C. 262) 

3 that is material and is causally related to the 

4 harm which the claimant allegedly suffered; or 

5 (B) a person made an illegal payment to 

6 an official of the Food and Drug Administra7 tion for the purpose of either securing or main8 taining approval, clearance, or licensure of such 

9 medical product. 

10 SEC. 217. AUTHORIZATION OF PAYMENT OF FUTURE DAM11 AGES TO CLAIMANTS IN HEALTH CARE LAW12 SUITS. 

13 (a) IN GENERAL.—In any health care lawsuit, if an 

14 award of future damages, without reduction to present 

15 value, equaling or exceeding $50,000 is made against a 

16 party with sufficient insurance or other assets to fund a 

17 periodic payment of such a judgment, the court shall, at 

18 the request of any party, enter a judgment ordering that 

19 the future damages be paid by periodic payments. In any 

20 health care lawsuit, the court may be guided by the Uni21 form Periodic Payment of Judgments Act promulgated by 

22 the National Conference of Commissioners on Uniform 

23 State Laws. 


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1 (b) APPLICABILITY.—This section applies to all ac2 tions which have not been first set for trial or retrial be3 fore the effective date of this subtitle. 

4 SEC. 218. DEFINITIONS. 

5 In this subtitle: 

6 (1) ALTERNATIVE DISPUTE RESOLUTION SYS7 TEM; ADR.—The term ‘‘alternative dispute resolution 

8 system’’ or ‘‘ADR’’ means a system that provides 

9 for the resolution of health care lawsuits in a man10 ner other than through a civil action brought in a 

11 State or Federal court. 

12 (2) CLAIMANT.—The term ‘‘claimant’’ means 

13 any person who brings a health care lawsuit, includ14 ing a person who asserts or claims a right to legal 

15 or equitable contribution, indemnity, or subrogation, 

16 arising out of a health care liability claim or action, 

17 and any person on whose behalf such a claim is as18 serted or such an action is brought, whether de19 ceased, incompetent, or a minor. 

20 (3) COLLATERAL SOURCE BENEFITS.—The 

21 term ‘‘collateral source benefits’’ means any amount 

22 paid or reasonably likely to be paid in the future to 

23 or on behalf of the claimant, or any service, product, 

24 or other benefit provided or reasonably likely to be 

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1 ant, as a result of the injury or wrongful death, pur2 suant to— 

3 (A) any State or Federal health, sickness, 

4 income-disability, accident, or workers’ com5 pensation law; 

6 (B) any health, sickness, income-disability, 

7 or accident insurance that provides health bene8 fits or income-disability coverage; 

9 (C) any contract or agreement of any 

10 group, organization, partnership, or corporation 

11 to provide, pay for, or reimburse the cost of 

12 medical, hospital, dental, or income-disability 

13 benefits; and 

14 (D) any other publicly or privately funded 

15 program. 

16 (4) COMPENSATORY DAMAGES.—The term 

17 ‘‘compensatory damages’’ means objectively 

18 verifiable monetary losses incurred as a result of the 

19 provision of, use of, or payment for (or failure to 

20 provide, use, or pay for) health care services or med21 ical products, such as past and future medical ex22 penses, loss of past and future earnings, cost of ob23 taining domestic services, loss of employment, and 

24 loss of business or employment opportunities, dam25 ages for physical and emotional pain, suffering, inVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 convenience, physical impairment, mental anguish, 

2 disfigurement, loss of enjoyment of life, loss of soci3 ety and companionship, loss of consortium (other 

4 than loss of domestic service), hedonic damages, in5 jury to reputation, and all other nonpecuniary losses 

6 of any kind or nature. The term ‘‘compensatory 

7 damages’’ includes economic damages and non8 economic damages, as such terms are defined in this 

9 section. 

10 (5) CONTINGENT FEE.—The term ‘‘contingent 

11 fee’’ includes all compensation to any person or per12 sons which is payable only if a recovery is effected 

13 on behalf of one or more claimants. 

14 (6) ECONOMIC DAMAGES.—The term ‘‘economic 

15 damages’’ means objectively verifiable monetary 

16 losses incurred as a result of the provision of, use 

17 of, or payment for (or failure to provide, use, or pay 

18 for) health care services or medical products, such as 

19 past and future medical expenses, loss of past and 

20 future earnings, cost of obtaining domestic services, 

21 loss of employment, and loss of business or employ22 ment opportunities. 

23 (7) HEALTH CARE LAWSUIT.—The term 

24 ‘‘health care lawsuit’’ means any health care liability 

25 claim concerning the provision of health care goods 


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1 or services or any medical product affecting inter2 state commerce, or any health care liability action 

3 concerning the provision of health care goods or 

4 services or any medical product affecting interstate 

5 commerce, brought in a State or Federal court or 

6 pursuant to an alternative dispute resolution system, 

7 against a health care provider, a health care organi8 zation, or the manufacturer, distributor, supplier, 

9 marketer, promoter, or seller of a medical product, 

10 regardless of the theory of liability on which the 

11 claim is based, or the number of claimants, plain12 tiffs, defendants, or other parties, or the number of 

13 claims or causes of action, in which the claimant al14 leges a health care liability claim. Such term does 

15 not include a claim or action which is based on 

16 criminal liability; which seeks civil fines or penalties 

17 paid to Federal, State, or local government; or which 

18 is grounded in antitrust. 

19 (8) HEALTH CARE LIABILITY ACTION.—The 

20 term ‘‘health care liability action’’ means a civil ac21 tion brought in a State or Federal court or pursuant 

22 to an alternative dispute resolution system, against 

23 a health care provider, a health care organization, or 

24 the manufacturer, distributor, supplier, marketer, 

25 promoter, or seller of a medical product, regardless 


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1 of the theory of liability on which the claim is based, 

2 or the number of plaintiffs, defendants, or other par3 ties, or the number of causes of action, in which the 

4 claimant alleges a health care liability claim. 

5 (9) HEALTH CARE LIABILITY CLAIM.—The 

6 term ‘‘health care liability claim’’ means a demand 

7 by any person, whether or not pursuant to ADR, 

8 against a health care provider, health care organiza9 tion, or the manufacturer, distributor, supplier, mar10 keter, promoter, or seller of a medical product, in11 cluding, but not limited to, third-party claims, cross12 claims, counter-claims, or contribution claims, which 

13 are based upon the provision of, use of, or payment 

14 for (or the failure to provide, use, or pay for) health 

15 care services or medical products, regardless of the 

16 theory of liability on which the claim is based, or the 

17 number of plaintiffs, defendants, or other parties, or 

18 the number of causes of action. 

19 (10) HEALTH CARE ORGANIZATION.—The term 

20 ‘‘health care organization’’ means any person or en21 tity which is obligated to provide or pay for health 

22 benefits under any health plan, including any person 

23 or entity acting under a contract or arrangement 

24 with a health care organization to provide or admin25 ister any health benefit. 


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1 (11) HEALTH CARE PROVIDER.—The term 

2 ‘‘health care provider’’ means any person or entity 

3 required by State or Federal laws or regulations to 

4 be licensed, registered, or certified to provide health 

5 care services, and being either so licensed, reg6 istered, or certified, or exempted from such require7 ment by other statute or regulation. 

8 (12) HEALTH CARE GOODS OR SERVICES.—The 

9 term ‘‘health care goods or services’’ means any 

10 goods or services provided by a health care organiza11 tion, provider, or by any individual working under 

12 the supervision of a health care provider, that relates 

13 to the diagnosis, prevention, or treatment of any 

14 human disease or impairment, or the assessment or 

15 care of the health of human beings. 

16 (13) MALICIOUS INTENT TO INJURE.—The 

17 term ‘‘malicious intent to injure’’ means inten18 tionally causing or attempting to cause physical in19 jury other than providing health care goods or serv20 ices. 

21 (14) MEDICAL PRODUCT.—The term ‘‘medical 

22 product’’ means a drug, device, or biological product 

23 intended for humans, and the terms ‘‘drug’’, ‘‘de24 vice’’, and ‘‘biological product’’ have the meanings 

25 given such terms in sections 201(g)(1) and 201(h) 


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1 of the Federal Food, Drug and Cosmetic Act (21 

2 U.S.C. 321(g)(1) and (h)) and section 351(a) of the 

3 Public Health Service Act (42 U.S.C. 262(a)), re4 spectively, including any component or raw material 

5 used therein, but excluding health care services. 

6 (15) NONECONOMIC DAMAGES.—The term 

7 ‘‘noneconomic damages’’ means damages for phys8 ical and emotional pain, suffering, inconvenience, 

9 physical impairment, mental anguish, disfigurement, 

10 loss of enjoyment of life, loss of society and compan11 ionship, loss of consortium (other than loss of do12 mestic service), hedonic damages, injury to reputa13 tion, and all other nonpecuniary losses of any kind 

14 or nature. 

15 (16) PUNITIVE DAMAGES.—The term ‘‘punitive 

16 damages’’ means damages awarded, for the purpose 

17 of punishment or deterrence, and not solely for com18 pensatory purposes, against a health care provider, 

19 health care organization, or a manufacturer, dis20 tributor, or supplier of a medical product. Punitive 

21 damages are neither economic nor noneconomic 

22 damages. 

23 (17) RECOVERY.—The term ‘‘recovery’’ means 

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1 tion or settlement of the claim, including all costs 

2 paid or advanced by any person. Costs of health care 

3 incurred by the plaintiff and the attorneys’ office 

4 overhead costs or charges for legal services are not 

5 deductible disbursements or costs for such purpose. 

6 (18) STATE.—The term ‘‘State’’ means each of 

7 the several States, the District of Columbia, the 

8 Commonwealth of Puerto Rico, the Virgin Islands, 

9 Guam, American Samoa, the Northern Mariana Is10 lands, the Trust Territory of the Pacific Islands, and 

11 any other territory or possession of the United 

12 States, or any political subdivision thereof. 

13 SEC. 219. EFFECT ON OTHER LAWS. 

14 (a) VACCINE INJURY.— 

15 (1) To the extent that title XXI of the Public 

16 Health Service Act establishes a Federal rule of law 

17 applicable to a civil action brought for a vaccine-re18 lated injury or death— 

19 (A) this subtitle does not affect the appli20 cation of the rule of law to such an action; and 

21 (B) any rule of law prescribed by this sub22 title in conflict with a rule of law of such title 

23 XXI shall not apply to such action. 

24 (2) If there is an aspect of a civil action 

25 brought for a vaccine-related injury or death to 


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1 which a Federal rule of law under title XXI of the 

2 Public Health Service Act does not apply, then this 

3 subtitle or otherwise applicable law (as determined 

4 under this subtitle) will apply to such aspect of such 

5 action. 

6 (b) OTHER FEDERAL LAW.—Except as provided in 

7 this section, nothing in this subtitle shall be deemed to 

8 affect any defense available to a defendant in a health care 

9 lawsuit or action under any other provision of Federal law. 

10 SEC. 220. STATE FLEXIBILITY AND PROTECTION OF 

11 STATES’ RIGHTS. 

12 (a) HEALTH CARE LAWSUITS.—The provisions gov13 erning health care lawsuits set forth in this subtitle pre14 empt, subject to subsections (b) and (c), State law to the 

15 extent that State law prevents the application of any pro16 visions of law established by or under this subtitle. The 

17 provisions governing health care lawsuits set forth in this 

18 subtitle supersede chapter 171 of title 28, United States 

19 Code, to the extent that such chapter— 

20 (1) provides for a greater amount of damages 

21 or contingent fees, a longer period in which a health 

22 care lawsuit may be commenced, or a reduced appli23 cability or scope of periodic payment of future dam24 ages, than provided in this subtitle; or 


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1 (2) prohibits the introduction of evidence re2 garding collateral source benefits, or mandates or 

3 permits subrogation or a lien on collateral source 

4 benefits. 

5 (b) PROTECTION OF STATES’ RIGHTS AND OTHER

6 LAWS.—(1) Any issue that is not governed by any provi7 sion of law established by or under this subtitle (including 

8 State standards of negligence) shall be governed by other9 wise applicable State or Federal law. 

10 (2) This subtitle shall not preempt or supersede any 

11 State or Federal law that imposes greater procedural or 

12 substantive protections for health care providers and 

13 health care organizations from liability, loss, or damages 

14 than those provided by this subtitle or create a cause of 

15 action. 

16 (c) STATE FLEXIBILITY.—No provision of this sub17 title shall be construed to preempt— 

18 (1) any State law (whether effective before, on, 

19 or after the date of the enactment of this subtitle) 

20 that specifies a particular monetary amount of com21 pensatory or punitive damages (or the total amount 

22 of damages) that may be awarded in a health care 

23 lawsuit, regardless of whether such monetary 

24 amount is greater or lesser than is provided for 

25 under this subtitle, notwithstanding section 4(a); or 


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1 (2) any defense available to a party in a health 

2 care lawsuit under any other provision of State or 

3 Federal law. 

4 SEC. 221. APPLICABILITY; EFFECTIVE DATE. 

5 This subtitle shall apply to any health care lawsuit 

6 brought in a Federal or State court, or subject to an alter7 native dispute resolution system, that is initiated on or 

8 after the date of the enactment of this subtitle, except that 

9 any health care lawsuit arising from an injury occurring 

10 prior to the date of the enactment of this subtitle shall 

11 be governed by the applicable statute of limitations provi12 sions in effect at the time the injury occurred. 

13 SEC. 222. SENSE OF CONGRESS. 

14 It is the sense of Congress that a health insurer 

15 should be liable for damages for harm caused when it 

16 makes a decision as to what care is medically necessary 

17 and appropriate. 


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1 Subtitle C—Accelerating the De2 ployment of Health Information 

3 Technology 

4 PART 1—ENHANCED COORDINATION AND ADOP5 TION OF HEALTH INFORMATION TECH6 NOLOGY 

7 SEC. 231. STRATEGIC PLAN FOR COORDINATING IMPLE8 MENTATION OF MEDICARE AND MEDICAID 

9 HEALTH INFORMATION TECHNOLOGY INCEN10 TIVE PAYMENTS. 

11 Section 3001(c) of the Public Health Service Act (42 

12 U.S.C. 300jj–11(c)) is amended by adding at the end the 

13 following new paragraph: 

14 ‘‘(9) STRATEGIC PLAN FOR MEDICARE AND

15 MEDICAID EHR PAYMENT INCENTIVES AND ADJUST16 MENTS.—Not later than 90 days after the date of 

17 the enactment of the Medical Rights and Reform 

18 Act of 2009, the National Coordinator shall publish 

19 a strategic plan including— 

20 ‘‘(A) timelines for applying the incentive 

21 payments and incentive adjustments applicable 

22 to eligible providers, eligible hospitals, and eligi23 ble professionals under sections 1848(a), 

24 1848(o), 1853(l), 1853(m), 1886(n), 

25 1814(l)(3), 1886(b)(3)(B)(ix), and 


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1 1903(a)(3)(F) during the 18-month period fol2 lowing such date of enactment, including speci3 fying specific steps by date that providers and 

4 hospitals must take to be eligible for such in5 centive payments; and 

6 ‘‘(B) a specific plan to educate health care 

7 providers, consumers, and vendors of health in8 formation technology about how eligible pro9 viders, eligible hospitals, and eligible profes10 sionals may become compliant with require11 ments under such sections for purposes of eligi12 bility for incentive payments under such sec13 tions.’’. 

14 SEC. 232. PROCEDURES TO ENSURE TIMELY UPDATING OF 

15 STANDARDS THAT ENABLE ELECTRONIC EX16 CHANGES. 

17 Section 1174(b) of the Social Security Act (42 U.S.C. 

18 1320d–3(b)) is amended— 

19 (1) in paragraph (1)— 

20 (A) in the first sentence, by inserting ‘‘and 

21 in accordance with paragraph (3)’’ before the 

22 period; and 

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

24 sentence: ‘‘For purposes of this subsection and 


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1 section 1173(c)(2), the term ‘modification’ in2 cludes a new version or a version upgrade’’; and 

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

4 paragraph: 

5 ‘‘(3) EXPEDITED PROCEDURES FOR ADOPTION

6 OF ADDITIONS AND MODIFICATIONS TO STAND7 ARDS.— 

8 ‘‘(A) IN GENERAL.—For purposes of para9 graph (1), the Secretary shall provide for an ex10 pedited upgrade program (in this paragraph re11 ferred to as the ‘upgrade program’), in accord12 ance with this paragraph, to develop and ap13 prove additions and modifications to the stand14 ards adopted under section 1173(a) to improve 

15 the quality of such standards or to extend the 

16 functionality of such standards to meet evolving 

17 requirements in health care. 

18 ‘‘(B) PUBLICATION OF NOTICES.—Under 

19 the upgrade program: 

20 ‘‘(i) VOLUNTARY NOTICE OF INITI21 ATION OF PROCESS.—Not later than 30 

22 days after the date the Secretary receives 

23 a notice from a standard setting organiza24 tion that the organization is initiating a 

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1 tion to a standard adopted under section 

2 1173(a), the Secretary shall publish a no3 tice in the Federal Register that— 

4 ‘‘(I) identifies the subject matter 

5 of the addition or modification; 

6 ‘‘(II) provides a description of 

7 how persons may participate in the 

8 development process; and 

9 ‘‘(III) invites public participation 

10 in such process. 

11 ‘‘(ii) VOLUNTARY NOTICE OF PRE12 LIMINARY DRAFT OF ADDITIONS OR MODI13 FICATIONS TO STANDARDS.—Not later 

14 than 30 days after the date the Secretary 

15 receives a notice from a standard setting 

16 organization that the organization has pre17 pared a preliminary draft of an addition or 

18 modification to a standard adopted by sec19 tion 1173(a), the Secretary shall publish a 

20 notice in the Federal Register that— 

21 ‘‘(I) identifies the subject matter 

22 of (and summarizes) the addition or 

23 modification; 

24 ‘‘(II) specifies the procedure for 

25 obtaining the draft; 


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1 ‘‘(III) provides a description of 

2 how persons may submit comments in 

3 writing and at any public hearing or 

4 meeting held by the organization on 

5 the addition or modification; and 

6 ‘‘(IV) invites submission of such 

7 comments and participation in such 

8 hearing or meeting without requiring 

9 the public to pay a fee to participate. 

10 ‘‘(iii) NOTICE OF PROPOSED ADDITION

11 OR MODIFICATION TO STANDARDS.—Not 

12 later than 30 days after the date the Sec13 retary receives a notice from a standard 

14 setting organization that the organization 

15 has a proposed addition or modification to 

16 a standard adopted under section 1173(a) 

17 that the organization intends to submit 

18 under subparagraph (D)(iii), the Secretary 

19 shall publish a notice in the Federal Reg20 ister that contains, with respect to the pro21 posed addition or modification, the infor22 mation required in the notice under clause 

23 (ii) with respect to the addition or modi24 fication. 


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1 ‘‘(iv) CONSTRUCTION.—Nothing in 

2 this paragraph shall be construed as re3 quiring a standard setting organization to 

4 request the notices described in clauses (i) 

5 and (ii) with respect to an addition or 

6 modification to a standard in order to 

7 qualify for an expedited determination 

8 under subparagraph (C) with respect to a 

9 proposal submitted to the Secretary for 

10 adoption of such addition or modification. 

11 ‘‘(C) PROVISION OF EXPEDITED DETER12 MINATION.—Under the upgrade program and 

13 with respect to a proposal by a standard setting 

14 organization for an addition or modification to 

15 a standard adopted under section 1173(a), if 

16 the Secretary determines that the standard set17 ting organization developed such addition or 

18 modification in accordance with the require19 ments of subparagraph (D) and the National 

20 Committee on Vital and Health Statistics rec21 ommends approval of such addition or modifica22 tion under subparagraph (E), the Secretary 

23 shall provide for expedited treatment of such 

24 proposal in accordance with subparagraph (F). 


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1 ‘‘(D) REQUIREMENTS.—The requirements 

2 under this subparagraph with respect to a pro3 posed addition or modification to a standard by 

4 a standard setting organization are the fol5 lowing: 

6 ‘‘(i) REQUEST FOR PUBLICATION OF

7 NOTICE.—The standard setting organiza8 tion submits to the Secretary a request for 

9 publication in the Federal Register of a no10 tice described in subparagraph (B)(iii) for 

11 the proposed addition or modification. 

12 ‘‘(ii) PROCESS FOR RECEIPT AND

13 CONSIDERATION OF PUBLIC COMMENT.— 

14 The standard setting organization provides 

15 for a process through which, after the pub16 lication of the notice referred to under 

17 clause (i), the organization— 

18 ‘‘(I) receives and responds to 

19 public comments submitted on a time20 ly basis on the proposed addition or 

21 modification before submitting such 

22 proposed addition or modification to 

23 the National Committee on Vital and 

24 Health Statistics under clause (iii); 


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1 ‘‘(II) makes publicly available a 

2 written explanation for its response in 

3 the proposed addition or modification 

4 to comments submitted on a timely 

5 basis; and 

6 ‘‘(III) makes public comments re7 ceived under clause (I) available, or 

8 provides access to such comments, to 

9 the Secretary. 

10 ‘‘(iii) SUBMITTAL OF FINAL PRO11 POSED ADDITION OR MODIFICATION TO

12 NCVHS.—After completion of the process 

13 under clause (ii), the standard setting or14 ganization submits the proposed addition 

15 or modification to the National Committee 

16 on Vital and Health Statistics for review 

17 and consideration under subparagraph (E). 

18 Such submission shall include information 

19 on the organization’s compliance with the 

20 notice and comment requirements (and re21 sponses to those comments) under clause 

22 (ii). 

23 ‘‘(E) HEARING AND RECOMMENDATIONS

24 BY NATIONAL COMMITTEE ON VITAL AND

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1 gram, upon receipt of a proposal submitted by 

2 a standard setting organization under subpara3 graph (D)(iii) for the adoption of an addition or 

4 modification to a standard, the National Com5 mittee on Vital and Health Statistics shall pro6 vide notice to the public and a reasonable op7 portunity for public testimony at a hearing on 

8 such addition or modification. The Secretary 

9 may participate in such hearing in such capac10 ity (including presiding ex officio) as the Sec11 retary shall determine appropriate. Not later 

12 than 90 days after the date of receipt of the 

13 proposal, the Committee shall submit to the 

14 Secretary its recommendation to adopt (or not 

15 adopt) the proposed addition or modification. 

16 ‘‘(F) DETERMINATION BY SECRETARY TO

17 ACCEPT OR REJECT NATIONAL COMMITTEE ON

18 VITAL AND HEALTH STATISTICS RECOMMENDA19 TION.— 

20 ‘‘(i) TIMELY DETERMINATION.— 

21 Under the upgrade program, if the Na22 tional Committee on Vital and Health Sta23 tistics submits to the Secretary a rec24 ommendation under subparagraph (E) to 

25 adopt a proposed addition or modification, 


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1 not later than 90 days after the date of re2 ceipt of such recommendation the Sec3 retary shall make a determination to ac4 cept or reject the recommendation and 

5 shall publish notice of such determination 

6 in the Federal Register not later than 30 

7 days after the date of the determination. 

8 ‘‘(ii) CONTENTS OF NOTICE.—If the 

9 determination is to reject the recommenda10 tion, such notice shall include the reasons 

11 for the rejection. If the determination is to 

12 accept the recommendation, as part of 

13 such notice the Secretary shall promulgate 

14 the modified standard (including the ac15 cepted proposed addition or modification 

16 accepted). 

17 ‘‘(iii) LIMITATION ON CONSIDER18 ATION.—The Secretary shall not consider a 

19 proposal under this subparagraph unless 

20 the Secretary determines that the require21 ments of subparagraph (D) (including pub22 lication of notice and opportunity for pub23 lic comment) have been met with respect to 

24 the proposal. 


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1 ‘‘(G) EXEMPTION FROM PAPERWORK RE2 DUCTION ACT.—Chapter 35 of title 44, United 

3 States Code, shall not apply to a final rule pro4 mulgated under subparagraph (F).’’. 

5 SEC. 233. STUDY TO IMPROVE PRESERVATION AND PRO6 TECTION OF SECURITY AND CONFIDEN7 TIALITY OF HEALTH INFORMATION. 

8 (a) IN GENERAL.—The Secretary of Health and 

9 Human Services shall conduct a study of the following: 

10 (1) Current Federal security and confidentiality 

11 standards to determine the strengths and weak12 nesses of such standards for purposes of protecting 

13 the security and confidentiality of individually identi14 fiable health information while taking into account 

15 the need for timely and efficient exchanges of health 

16 information to improve quality of care and ensure 

17 the availability of health information necessary to 

18 make medical decisions at the location in which the 

19 medical care involved is provided. 

20 (2) The extent to which current security and 

21 confidentiality standards and State laws relating to 

22 security and confidentiality of individually identifi23 able health information should be reconciled to 

24 produce uniform standards, especially in the case of 

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1 tient care and other activities across State borders 

2 that would often result in more than one set of such 

3 standards that would apply. 

4 (b) REPORT.—Not later than 9 months after the date 

5 of the enactment of this subtitle, the Secretary of Health 

6 and Human Services shall submit to Congress a report 

7 on the study under subsection (a) and shall include in such 

8 report recommendations for improving the current Federal 

9 security and confidentiality standards, including rec10 ommendations for a mechanism to track breaches to the 

11 security or confidentiality of individually identifiable 

12 health information and for appropriate penalties to apply 

13 in the case of such a breach and including proposals to 

14 address issues examined in subsection (a)(2). 

15 (c) PRESERVATION OF CURRENT SECURITY AND

16 CONFIDENTIALITY STANDARDS BEFORE SUBMITTAL OF

17 REPORT.—None of the provisions of this subtitle or 

18 amendments made by this subtitle may limit, or require 

19 issuance of a regulation that would limit, the effect of a 

20 current Federal security and confidentiality standard be21 fore the date of the submittal of the report under sub22 section (b). 

23 (d) CURRENT FEDERAL SECURITY AND CONFIDEN24 TIALITY STANDARDS DEFINED.—For purposes of this sec25 tion, the term ‘‘current Federal security and confidenVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 tiality standards’’ means the Federal privacy standards es2 tablished pursuant to section 264(c) of the Health Insur3 ance Portability and Accountability Act of 1996 (42 

4 U.S.C. 1320d–2 note) and security standards established 

5 under section 1173(d) of the Social Security Act. 

6 SEC. 234. ASSISTING DOCTORS TO OBTAIN PROFICIENT 

7 AND TRANSMISSIBLE HEALTH INFORMATION 

8 TECHNOLOGY. 

9 (a) IN GENERAL.—Section 179 of the Internal Rev10 enue Code of 1986 (relating to election to expense certain 

11 depreciable assets) is amended by adding at the end the 

12 following new subsection: 

13 ‘‘(f) HEALTH CARE INFORMATION TECHNOLOGY.— 

14 ‘‘(1) IN GENERAL.—In the case of qualified 

15 health care information technology purchased by a 

16 medical care provider and placed in service during a 

17 taxable year— 

18 ‘‘(A) subsection (b)(1) shall be applied by 

19 substituting ‘$250,000’ for ‘$125,000’; 

20 ‘‘(B) subsection (b)(2) shall be applied by 

21 substituting ‘$600,000’ for ‘$500,000’; and 

22 ‘‘(C) subsection (b)(5)(A) shall be applied 

23 by substituting ‘$250,000 and $600,000’ for 

24 ‘$125,000 and $500,000’. 


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1 ‘‘(2) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) QUALIFIED HEALTH CARE INFORMA4 TION TECHNOLOGY.—The term ‘qualified health 

5 care information technology’ means section 179 

6 property which— 

7 ‘‘(i) has been certified pursuant to 

8 section 3001(c)(3) of the Public Health 

9 Service Act; and 

10 ‘‘(ii) is used primarily for the elec11 tronic creation, maintenance, and exchange 

12 of medical care information to provide or 

13 improve the quality or efficiency of medical 

14 care. 

15 ‘‘(B) MEDICAL CARE PROVIDER.—The 

16 term ‘medical care provider’ means any person 

17 engaged in the trade or business of providing 

18 medical care. 

19 ‘‘(C) MEDICAL CARE.—The term ‘medical 

20 care’ has the meaning given such term by sec21 tion 213(d).’’. 

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

23 this section shall apply to property placed in service after 

24 December 31, 2009. 


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1 SEC. 235. EXPANSION OF STARK AND ANTI-KICKBACK EX2 CEPTIONS FOR ELECTRONIC HEALTH 

3 RECORDS ARRANGEMENTS. 

4 (a) STARK EXCEPTION.—In applying section 1877(e) 

5 of the Social Security Act (42 U.S.C. 1395(e)), with re6 spect to a regulation implementing such section by pro7 viding an exception to the prohibition against making cer8 tain physician referrals in the case of the offering or pay9 ment of nonmonetary remuneration (consisting of items 

10 and services in the form of software or information tech11 nology and training services) necessary and used predomi12 nantly to create, maintain, transmit, or receive electronic 

13 health records, the Secretary of Health and Human Serv14 ices shall— 

15 (1) not limit the period in which such an excep16 tion under such a regulation applies; 

17 (2) not require the physician to pay any per18 centage of the cost of such nonmonetary remunera19 tion; and 

20 (3) apply the exception to such items and serv21 ices in the form of hardware and maintenance serv22 ices, in addition to such items and services in the 

23 form of software or information technology and 

24 training services. 

25 (b) ANTI-KICKBACK EXCEPTION.—In applying sec26 tion 1128B(b)(3)(E) of the Social Security Act (42 U.S.C. 


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1 1320a–7b(b)(3)(E)), with respect to a regulation imple2 menting such section by providing an exception to the pro3 hibition against offering, paying, soliciting, or receiving re4 muneration in order to induce or reward referrals making 

5 certain physician referrals in the case of the offering, pay6 ment, solicitation, or receipt of remuneration (consisting 

7 of certain arrangements involving interoperable electronic 

8 health records software or information technology and 

9 training services) necessary and used predominantly to 

10 create, maintain, transmit, or receive electronic health 

11 records, the Secretary of Health and Human Services 

12 shall— 

13 (1) not limit the period in which such an excep14 tion under such a regulation applies; 

15 (2) not require the recipient of such remunera16 tion to pay any percentage of the cost of such remu17 neration; and 

18 (3) apply the exception to such arrangements 

19 involving interoperable electronic health records 

20 hardware and maintenance services, in addition to 

21 software or information technology and training 

22 services. 


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1 SEC. 236. APPLICATION OF MEDICARE EHR INCENTIVES 

2 AND ADJUSTMENTS TO ADDITIONAL PRO3 VIDERS. 

4 (a) APPLICATION OF EHR MEDICARE INCENTIVE

5 PAYMENTS AND ADJUSTMENTS TO NURSE PRACTI6 TIONER, PHYSICIAN ASSISTANTS, AND CLINICAL NURSE

7 SPECIALISTS.— 

8 (1) INCENTIVE PAYMENT.—Section 

9 1848(o)(5)(C) of the Social Security Act is amended 

10 by inserting ‘‘, and a practitioner described in sec11 tion 1842(b)(18)(C)(i)’’ after ‘‘1861(r)’’. 

12 (2) INCENTIVE ADJUSTMENT.—Section 

13 1848(a)(7)(E)(iii) of such Act is amended by insert14 ing ‘‘, and a practitioner described in section 

15 1842(b)(18)(C)(i)’’ after ‘‘1861(r)’’. 

16 (b) APPLICATION OF EHR MEDICARE INCENTIVE

17 PAYMENTS AND ADJUSTMENTS TO SNFS, HOME HEALTH

18 AGENCIES, IRFS, LTCHS, ASCS, AND LONG-TERM CARE

19 PHARMACIES.— 

20 (1) IN GENERAL.—The Secretary of Health and 

21 Human Services shall establish a methodology to— 

22 (A) determine eligible entities described in 

23 paragraph (2) that are to be considered mean24 ingful EHR users in a manner similar to how 

25 eligible hospitals are determined to be meaning26 ful EHR users for purposes of sections 1886(n) 


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1 and 1886(b)(3)(B)(ix) of the Social Security 

2 Act; and 

3 (B) apply the provisions of such sections to 

4 such eligible entities in a similar manner as 

5 they apply to hospitals under such section. 

6 (2) ELIGIBLE ENTITIES DESCRIBED.—Eligible 

7 entities described in this paragraph are the fol8 lowing: 

9 (A) Skilled nursing facilities. 

10 (B) Home health agencies. 

11 (C) Inpatient rehabilitation facilities . 

12 (D) Ambulatory surgical centers. 

13 (E) Long-term care pharmacies. 

14 (F) Long-term care hospitals. 

15 PART 2—TELEHEALTH ENHANCEMENT 

16 Subpart A—Medicare Program 

17 SEC. 241. EXPANSION AND IMPROVEMENT OF TELEHEALTH 

18 SERVICES. 

19 (a) EXPANDING ACCESS TO TELEHEALTH SERVICES

20 TO ALL AREAS.—Section 1834(m)(4)(C)(i) of the Social 

21 Security Act (42 U.S.C. 1395m(m)(4)(C)(i)) is amended 

22 in paragraph (4)(C)(i) by striking ‘‘and only if such site 

23 is located’’ and all that follows and inserting ‘‘without re24 gard to the geographic area within the United States 

25 where the site is located.’’. 


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1 (b) EXPANSION OF USE OF STORE-AND-FORWARD

2 TECHNOLOGY.—The second sentence of section 

3 1834(m)(1) of such Act (42 U.S.C. 1395m(m)(1)) is 

4 amended by inserting ‘‘and any telehealth program that 

5 has been the recipient of any Federal support from the 

6 Centers for Medicare & Medicaid Services, the Indian 

7 Health Service, or the Health Services and Resources Ad8 ministration’’ after ‘‘Alaska or Hawaii’’. 

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

10 this section shall apply to services furnished on or after 

11 January 1, 2010. 

12 SEC. 242. INCREASE IN NUMBER OF TYPES OF ORIGI13 NATING SITES; CLARIFICATION. 

14 (a) INCREASE.—Paragraph (4)(C)(ii) of section 

15 1834(m) of the Social Security Act (42 U.S.C. 1395m(m)) 

16 is amended by adding at the end the following new sub17 clause: 

18 ‘‘(IX) A renal dialysis facility.’’. 

19 (b) CLARIFICATION OF INTENT OF THE TERM ORIGI20 NATING SITE.—Such section is further amended by add21 ing at the end the following new paragraph: 

22 ‘‘(5) CONSTRUCTION.—In applying the term 

23 ‘originating site’ under this subsection, the Secretary 

24 shall apply the term only for the purpose of deter25 mining whether a site is eligible to receive a facility 


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1 fee. Nothing in the application of such term under 

2 this subsection shall be construed as affecting the 

3 ability of an eligible practitioner to submit claims for 

4 telehealth services that are provided to other sites 

5 that have telehealth systems and capabilities.’’. 

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

7 this section shall apply to services furnished on or after 

8 January 1, 2010. 

9 SEC. 243. EXPANSION OF ELIGIBLE TELEHEALTH PRO10 VIDERS AND CREDENTIALING OF TELEMEDI11 CINE PRACTITIONERS. 

12 (a) EXPANSION OF ELIGIBLE TELEHEALTH PRO13 VIDERS.—Section 1834(m)(1) of the Social Security Act 

14 (42 U.S.C. 1395m(m)(1)) is amended— 

15 (1) in paragraph (1)— 

16 (A) by striking ‘‘or a practitioner’’ and in17 serting ‘‘, a practitioner’’; 

18 (B) by inserting ‘‘, or other telehealth pro19 vider’’ after ‘‘1842(b)(18)(C))’’; and 

20 (C) by striking ‘‘or practitioner’’ and in21 serting ‘‘, practitioner, or provider’’; 

22 (2) in paragraphs (2), (3)(A), and (4), by strik23 ing ‘‘or practitioner’’ and inserting ‘‘, practitioner, 

24 or other telehealth provider’’ each place it appears; 

25 and 


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1 (3) in paragraph (4), by adding at the end the 

2 following new subparagraph: 

3 ‘‘(G) TELEHEALTH PROVIDER.—The term 

4 ‘telehealth provider’ means any supplier or pro5 vider of services (other than a physician or 

6 practitioner) that is eligible to provide other 

7 health services under this title.’’. 

8 (b) CREDENTIALING TELEMEDICINE PRACTI9 TIONERS.—Section 1834(m) of such Act is amended by 

10 adding at the end the following new paragraph: 

11 ‘‘(5) HOSPITAL CREDENTIALING OF TELEMEDI12 CINE PRACTITIONERS.—A telemedicine practitioner 

13 that is credentialed by a hospital in compliance with 

14 the Joint Commission Standards for Telemedicine 

15 shall be considered in compliance with Medicare con16 dition of participation and reimbursement 

17 credentialing requirements for telemedicine serv18 ices.’’. 

19 SEC. 244. ACCESS TO TELEHEALTH SERVICES IN THE 

20 HOME. 

21 (a) IN GENERAL.—Section 1895 of the Social Secu22 rity Act (42 U.S.C. 1395fff(e)) is amended by adding at 

23 the end the following new subsection: 

24 ‘‘(f) COVERAGE OF TELEHEALTH SERVICES.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall include 

2 telehealth services that are furnished via a tele3 communication system by a home health agency to 

4 an individual receiving home health services under 

5 section 1814(a)(2)(C) or 1835(a)(2)(A) as a home 

6 health visit for purposes of eligibility and payment 

7 under this title if the telehealth services— 

8 ‘‘(A) are ordered as part of a plan of care 

9 certified by a physician pursuant to section 

10 1814(a)(2)(C) or 1835(a)(2)(A); 

11 ‘‘(B) do not substitute for in-person home 

12 health services ordered as part of a plan of care 

13 certified by a physician pursuant to such re14 spective section; and 

15 ‘‘(C) are considered the equivalent of a 

16 visit under criteria developed by the Secretary 

17 under paragraph (3). 

18 ‘‘(2) PHYSICIAN CERTIFICATION.—Nothing in 

19 this section shall be construed as waiving the re20 quirement for a physician certification under section 

21 1814(a)(2)(C) or 1835(a)(2)(A) for the payment for 

22 home health services, whether or not furnished via 

23 a telecommunication system. 

24 ‘‘(3) CRITERIA FOR VISIT EQUIVALENCY.— 


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1 ‘‘(A) STANDARDS.—The Secretary shall es2 tablish standards and qualifications for catego3 rizing and coding under HCPCS codes tele4 health services under this subsection as equiva5 lent to an in-person visit for purposes of eligi6 bility and payment for home health services 

7 under this title. In establishing the standards 

8 and qualifications, the Secretary may distin9 guish between varying modes and modalities of 

10 telehealth services and shall consider— 

11 ‘‘(i) the nature and amount of service 

12 time involved; and 

13 ‘‘(ii) the functions of the telecommuni14 cations. 

15 ‘‘(B) LIMITATION.—A telecommunication 

16 that consists solely of a telephone audio con17 versation, facsimile, electronic text mail, or con18 sultation between two health care practitioners 

19 is not considered a visit under this subsection. 

20 ‘‘(4) TELEHEALTH SERVICE.— 

21 ‘‘(A) DEFINITION.—For purposes of this 

22 subsection, the term ‘telehealth service’ means 

23 technology-based professional consultations, pa24 tient monitoring, patient training services, clin25 ical observation, assessment, or treatment, and 


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1 any additional services that utilize technologies 

2 specified by the Secretary as HCPCS codes de3 veloped under paragraph (3). 

4 ‘‘(B) UPDATE OF HCPCS CODES.—The 

5 Secretary shall establish a process for the up6 dating, not less frequently than annually, of 

7 HCPCS codes for telehealth services. 

8 ‘‘(5) CONDITIONS FOR PAYMENT AND COV9 ERAGE.—Nothing in this subsection shall be con10 strued as waiving any condition of payment under 

11 sections 1814(a)(2)(C) or 1835(a)(2)(A) or exclu12 sion of coverage under section 1862(a)(1). 

13 ‘‘(6) COST REPORTING.—Notwithstanding any 

14 provision to the contrary, the Secretary shall provide 

15 that the costs of telehealth services under this sub16 section shall be reported as a reimbursable cost cen17 ter on any cost report submitted by a home health 

18 agency to the Secretary.’’. 

19 (b) EFFECTIVE DATE.— 

20 (1) The amendment made by subsection (a) 

21 shall apply to telehealth services furnished on or 

22 after October 1, 2010. The Secretary of Health and 

23 Human Services shall develop and implement cri24 teria and standards under section 1895(f)(3) of the 


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1 Social Security Act, as amended by subsection (a), 

2 by no later than July 1, 2010. 

3 (2) In the event that the Secretary has not 

4 complied with these deadlines, beginning October 1, 

5 2010, a home health visit for purpose of eligibility 

6 and payment under title XVIII of the Social Secu7 rity Act shall include telehealth services under sec8 tion 1895(f) of such Act with the aggregate of tele9 communication encounters in a 24-hour period con10 sidered the equivalent of one in-person visit. 

11 SEC. 245. COVERAGE OF HOME HEALTH REMOTE PATIENT 

12 MANAGEMENT SERVICES FOR CHRONIC 

13 HEALTH CONDITIONS. 

14 (a) MEDICARE COVERAGE.— 

15 (1) IN GENERAL.—Section 1861(s)(2) of the 

16 Social Security Act (42 U.S.C. 1395x(s)(2)) is 

17 amended— 

18 (A) in subparagraph (DD), by striking 

19 ‘‘and’’ at the end; 

20 (B) in subparagraph (EE), by adding 

21 ‘‘and’’ at the end; and 

22 (C) by inserting after subparagraph (EE) 

23 the following new subparagraph: 

24 ‘‘(FF) home health remote patient management 

25 services (as defined in subsection (hhh));’’. 


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1 (2) SERVICES DESCRIBED.—Section 1861 of 

2 such Act (42 U.S.C. 1395x) is amended by adding 

3 at the end the following new subsection: 

4 ‘‘(hhh) HOME HEALTH REMOTE PATIENT MANAGE5 MENT SERVICES FOR CHRONIC HEALTH CONDITIONS.— 

6 (1) The term ‘remote patient management services’ means 

7 the remote monitoring, evaluation, and management of an 

8 individual with a covered chronic health condition (as de9 fined in paragraph (2)) through the utilization of a system 

10 of technology that allows a remote interface to collect and 

11 transmit clinical data between the individual and a home 

12 health agency, in accordance with a plan of care estab13 lished by a physician, for the purposes of clinical review 

14 or response by the home health agency. Such term, with 

15 respect to an individual, does not include any remote mon16 itoring, evaluation, or management of the individual if 

17 such remote monitoring, evaluation, or management, re18 spectively, is included as a home health visit under section 

19 1895(f) for purposes of payment under this title. 

20 ‘‘(2) For purposes of paragraph (1), the term ‘cov21 ered chronic health condition’ means any chronic health 

22 condition specified by the Secretary.’’. 

23 (b) PAYMENT.— 


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1 (1) IN GENERAL.—Section 1834 of such Act 

2 (42 U.S.C. 1395l) is amended by adding at the end 

3 the following new subsection: 

4 ‘‘(n) HOME HEALTH REMOTE PATIENT MANAGE5 MENT SERVICES.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall estab7 lish a fee schedule for home health remote patient 

8 management services (as defined in section 

9 1861(hhh)) for which payment is made under this 

10 part. The fee schedule shall be designed in a manner 

11 so that, on an annual basis, the aggregate payment 

12 amounts under this title for such services approxi13 mates 50 percent of the savings amount described in 

14 paragraph (2) for such year. 

15 ‘‘(2) SAVINGS DESCRIBED.— 

16 ‘‘(A) IN GENERAL.—For purposes of para17 graph (1), the savings amount described in this 

18 paragraph for a year is the amount (if any), as 

19 estimated by the Secretary before the beginning 

20 of the year, by which— 

21 ‘‘(i) the product described in subpara22 graph (B) for the year, exceeds 

23 ‘‘(ii) the total payments under this 

24 part and part A for items and services fur25 nished to individuals receiving home health 


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1 remote patient management services at any 

2 time during the year. 

3 ‘‘(B) PRODUCT DESCRIBED.—The product 

4 described in this subparagraph for a year is the 

5 product of— 

6 ‘‘(i) the average per capita total pay7 ments under this part and part A for items 

8 and services furnished during the year to 

9 individuals not described in subparagraph 

10 (A)(ii), adjusted to remove case mix dif11 ferences between such individuals not de12 scribed in such subparagraph and the indi13 viduals described in such subparagraph; 

14 and 

15 ‘‘(ii) the number of individuals under 

16 subparagraph (A)(ii) for the year. 

17 ‘‘(3) LIMITATION.—In no case may payments 

18 under this subsection result in the aggregate expend19 itures under this title (including payments under 

20 this subsection) exceeding the amount that the Sec21 retary estimates would have been expended if cov22 erage under this title for home health patient man23 agement services was not provided. 

24 ‘‘(4) CLARIFICATION.—Payments under the fee 

25 schedule under this subsection, with respect to an 


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1 individual, shall be in addition to any other pay2 ments that a home health agency would otherwise 

3 receive under this title for items and services fur4 nished to such individual and shall have no effect on 

5 the amount of such other payments. 

6 ‘‘(5) PAYMENT TRANSFER.—There shall be 

7 transferred from the Federal Hospital Insurance 

8 Trust Fund under section 1817 to the Federal Sup9 plementary Medical Insurance Trust Fund under 

10 section 1841 each year an amount equivalent to the 

11 product of— 

12 ‘‘(A) expenditures under this subsection 

13 for the year, and 

14 ‘‘(B) the ratio of the portion of the savings 

15 described in paragraph (2) for the year that are 

16 attributable to part A, to the total savings de17 scribed in such paragraph for the year.’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 1833(a)(1) of such Act (42 U.S.C. 1395l(1)) is 

20 amended— 

21 (A) by striking ‘‘and (W)’’ and inserting 

22 ‘‘(W)’’; and 

23 (B) by inserting before the semicolon at 

24 the end the following: ‘‘, (X) with respect to 

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1 ices (as defined in section 1861(hhh)), the 

2 amounts paid shall be the amount determined 

3 under the fee schedule established under section 

4 1834(n)’’. 

5 (c) EXPANSION OF HOME HEALTH REMOTE PA6 TIENT MANAGEMENT SERVICES COVERAGE TO ADDI7 TIONAL CHRONIC HEALTH CONDITIONS.—The Secretary 

8 of Health and Human Services is authorized to carry out 

9 pilot projects for purposes of determining the extent to 

10 which the coverage under title XVIII of the Social Security 

11 Act of home health remote patient management services 

12 (as defined in paragraph (1) of section 1861(hhh) of such 

13 Act, as added by subsection (a)) should be extended to 

14 individuals with chronic health conditions other than those 

15 initially specified by the Secretary under paragraph (2) 

16 of such section. 

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

18 subsections (a), (b), and (c) shall apply to services fur19 nished on or after January 1, 2010. 

20 SEC. 246. SENSE OF CONGRESS ON THE USE OF REMOTE 

21 PATIENT MANAGEMENT SERVICES. 

22 (a) FINDINGS.—Congress finds as follows: 

23 (1) Remote patient management services can 

24 make chronic disease management more effective 


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1 and efficient for patients and for the health care sys2 tem. 

3 (2) By collecting, analyzing, and transmitting 

4 clinical health information to a health care provider, 

5 remote patient management services allow patients 

6 and providers to manage the medical condition of 

7 patients in a consistent and real time fashion. 

8 (3) Utilization of remote patient management 

9 services not only improves the quality of care given 

10 to patients, it also reduces the need for frequent of11 fice appointments, costly emergency room visits, and 

12 unnecessary hospitalizations. 

13 (4) Management the medical condition or dis14 ease of a patient from the patient’s home reduces 

15 the need for face to face provider interactions. Use 

16 of remote patient management services minimizes 

17 unnecessary travel and missed work and provides 

18 particular value to patients residing in rural or un19 derserved communities who would otherwise face po20 tentially significant access barriers to receiving need21 ed care. 

22 (5) Among the areas in which remote patient 

23 management services are emerging in health care 

24 are the treatment of congestive heart failure, diabe25 tes, cardiac arrhythmia, epilepsy, and sleep apnea. 


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1 Prompt transmission of clinical data on each of 

2 these conditions, to the health care provider or the 

3 patient as appropriate, is essential to providing time4 ly and appropriate therapeutic interventions which 

5 can then reduce expensive hospitalizations. 

6 (6) Despite these benefits, remote patient man7 agement services have failed to diffuse rapidly. A 

8 significant barrier to wider adoption is the relative 

9 lack of payment mechanisms in fee for service Medi10 care to reimburse for remote, non face to face pa11 tient management. 

12 (7) Elimination of this barrier to new remote 

13 patient management services should be encouraged 

14 by requiring reimbursement under the Medicare pro15 gram for providers’ time spent analyzing and re16 sponding to patient data transmitted by remote 

17 technologies. 

18 (8) Reimbursement under the Medicare pro19 gram for health care providers’ time spent analyzing 

20 and responding to data transmitted to providers by 

21 remote technologies should be made on a separate 

22 basis and should not be combined with payments for 

23 others services (also referred to as ‘‘bundled pay24 ments’’). 


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1 (9) Payment codes used for reporting and bill2 ing for payment for providers’ remote patient man3 agement services should be revised or adjusted, as 

4 appropriate, to encourage the application of such 

5 services for other medical conditions. 

6 (b) SENSE OF CONGRESS.—It is the sense of the 

7 Congress that— 

8 (1) remote patient management services are in9 tegral to improvement in the delivery, care, and effi10 ciency of health care services furnished in the 

11 United States; and 

12 (2) the Administrator of the Centers for Medi13 care & Medicaid Services should be encouraged to— 

14 (A) expand the types of medical conditions 

15 for which the use of remote patient manage16 ment services are reimbursed under the Medi17 care program; 

18 (B) provide for separate, non-bundled pay19 ment under the Medicare program for remote 

20 patient management services; and 

21 (C) create, revise and adjust, as appro22 priate, codes for the accurate reporting and bill23 ing for payment for remote patient manage24 ment services. 


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1 SEC. 247. TELEHEALTH ADVISORY COMMITTEE. 

2 (a) IN GENERAL.—Section 1834(m)(4)(F)(ii) of the 

3 Social Security Act (42 U.S.C. 1395m(m)(4)(F)(ii)) is 

4 amended by adding at the end the following sentences: 

5 ‘‘Such process shall require the Secretary to take into ac6 count the recommendations of the Telehealth Advisory 

7 Committee (as established under section 247(b) of the 

8 Medical Rights and Reform Act of 2009) when adding or 

9 deleting services (and HCPCS codes) and in establishing 

10 policies of the Centers for Medicare & Medicaid Services 

11 regarding the delivery of telehealth services. If the Sec12 retary does not implement a recommendation of the Tele13 health Advisory Committee, the Secretary shall publish in 

14 the Federal Register a statement regarding the reason 

15 such recommendation was not implemented.’’. 

16 (b) TELEHEALTH ADVISORY COMMITTEE.— 

17 (1) ESTABLISHMENT.—On and after the date 

18 that is 6 months after the date of enactment of this 

19 subtitle, the Secretary of Health and Human Serv20 ices (in this subsection referred to as the ‘‘Sec21 retary’’) shall have in place a Telehealth Advisory 

22 Committee (in this subsection referred to as the 

23 ‘‘Advisory Committee’’) to make recommendations to 

24 the Secretary on— 


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1 (A) policies of the Centers for Medicare & 

2 Medicaid Services regarding the delivery of tele3 health services; and 

4 (B) the appropriate addition or deletion of 

5 services (and HCPCS codes) to those specified 

6 in paragraph (4)(F)(i) of section 1834(m) of 

7 the Social Security Act (42 U.S.C. 1395m(m)) 

8 for authorized payment under paragraph (1) of 

9 such section. 

10 (2) MEMBERSHIP; TERMS.— 

11 (A) MEMBERSHIP.— 

12 (i) IN GENERAL.—The Advisory Com13 mittee shall be composed of 9 members, to 

14 be appointed by the Secretary, of whom— 

15 (I) five shall be practicing physi16 cians; 

17 (II) two shall be practicing non18 physician health care providers; and 

19 (III) two shall be administrators 

20 of telehealth programs. 

21 (ii) REQUIREMENTS FOR APPOINTING

22 MEMBERS.—In appointing members of the 

23 Advisory Committee, the Secretary shall— 


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1 (I) ensure that each member has 

2 prior experience with the practice of 

3 telemedicine or telehealth; 

4 (II) give preference to individuals 

5 who are currently providing telemedi6 cine or telehealth services or who are 

7 involved in telemedicine or telehealth 

8 programs; 

9 (III) ensure that the membership 

10 of the Advisory Committee represents 

11 a balance of specialties and geo12 graphic regions; and 

13 (IV) take into account the rec14 ommendations of stakeholders. 

15 (B) TERMS.—The members of the Advi16 sory Committee shall serve for such term as the 

17 Secretary may specify. 

18 (C) CONFLICTS OF INTEREST.—An advi19 sory committee member may not participate 

20 with respect to a particular matter considered 

21 in an advisory committee meeting if such mem22 ber (or an immediate family member of such 

23 member) has a financial interest that could be 

24 affected by the advice given to the Secretary 

25 with respect to such matter. 


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1 (3) MEETINGS.—The Advisory Committee shall 

2 meet twice per year and at such other times as the 

3 Advisory Committee may provide. 

4 (4) PERMANENT COMMITTEE.—Section 14 of 

5 the Federal Advisory Committee Act (5 U.S.C. 

6 App.) shall not apply to the Advisory Committee. 

7 (5) WAIVER OF ADMINISTRATIVE LIMITA8 TION.—The Secretary shall establish the Advisory 

9 Committee notwithstanding any limitation that may 

10 apply to the number of advisory committees that 

11 may be established (within the Department of 

12 Health and Human Services or otherwise). 

13 Subpart B—HRSA Grant Program 

14 SEC. 250. GRANT PROGRAM FOR THE DEVELOPMENT OF 

15 TELEHEALTH NETWORKS. 

16 (a) IN GENERAL.—The Secretary of Health and 

17 Human Services (in this section referred to as the ‘‘Sec18 retary’’), acting through the Director of the Office for the 

19 Advancement of Telehealth (of the Health Resources and 

20 Services Administration), shall make grants to eligible en21 tities (as described in subsection (b)(2)) for the purpose 

22 of expanding access to health care services for individuals 

23 in rural areas, frontier areas, and urban medically under24 served areas through the use of telehealth. 

25 (b) ELIGIBLE ENTITIES.— 


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1 (1) APPLICATION.—To be eligible to receive a 

2 grant under this section, an eligible entity described 

3 in paragraph (2) shall, in consultation with the 

4 State office of rural health or other appropriate 

5 State entity, prepare and submit to the Secretary an 

6 application, at such time, in such manner, and con7 taining such information as the Secretary may re8 quire, including the following: 

9 (A) A description of the anticipated need 

10 for the grant. 

11 (B) A description of the activities which 

12 the entity intends to carry out using amounts 

13 provided under the grant. 

14 (C) A plan for continuing the project after 

15 Federal support under this section is ended. 

16 (D) A description of the manner in which 

17 the activities funded under the grant will meet 

18 health care needs of underserved rural popu19 lations within the State. 

20 (E) A description of how the local commu21 nity or region to be served by the network or 

22 proposed network will be involved in the devel23 opment and ongoing operations of the network. 

24 (F) The source and amount of non-Federal 

25 funds the entity would pledge for the project. 


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1 (G) A showing of the long-term viability of 

2 the project and evidence of health care provider 

3 commitment to the network. 

4 The application should demonstrate the manner in 

5 which the project will promote the integration of 

6 telehealth in the community so as to avoid redun7 dancy of technology and achieve economies of scale. 

8 (2) ELIGIBLE ENTITIES.— 

9 (A) IN GENERAL.—An eligible entity de10 scribed in this paragraph is a hospital or other 

11 health care provider in a health care network of 

12 community-based health care providers that in13 cludes at least— 

14 (i) two of the organizations described 

15 in subparagraph (B); and 

16 (ii) one of the institutions and entities 

17 described in subparagraph (C), 

18 if the institution or entity is able to dem19 onstrate use of the network for purposes of 

20 education or economic development (as required 

21 by the Secretary). 

22 (B) ORGANIZATIONS DESCRIBED.—The or23 ganizations described in this subparagraph are 

24 the following: 


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1 (i) Community or migrant health cen2 ters. 

3 (ii) Local health departments. 

4 (iii) Nonprofit hospitals. 

5 (iv) Private practice health profes6 sionals, including community and rural 

7 health clinics. 

8 (v) Other publicly funded health or so9 cial services agencies. 

10 (vi) Skilled nursing facilities. 

11 (vii) County mental health and other 

12 publicly funded mental health facilities. 

13 (viii) Providers of home health serv14 ices. 

15 (ix) Renal dialysis facilities. 

16 (C) INSTITUTIONS AND ENTITIES DE17 SCRIBED.—The institutions and entities de18 scribed in this subparagraph are the following: 

19 (i) A public school. 

20 (ii) A public library. 

21 (iii) A university or college. 

22 (iv) A local government entity. 

23 (v) A local health entity. 

24 (vi) A health-related nonprofit founda25 tion. 


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1 (vii) An academic health center. 

2 An eligible entity may include for-profit entities so 

3 long as the recipient of the grant is a not-for-profit 

4 entity. 

5 (c) PREFERENCE.—The Secretary shall establish pro6 cedures to prioritize financial assistance under this section 

7 based upon the following considerations: 

8 (1) The applicant is a health care provider in 

9 a health care network or a health care provider that 

10 proposes to form such a network that furnishes or 

11 proposes to furnish services in a medically under12 served area, health professional shortage area, or 

13 mental health professional shortage area. 

14 (2) The applicant is able to demonstrate broad 

15 geographic coverage in the rural or medically under16 served areas of the State, or States in which the ap17 plicant is located. 

18 (3) The applicant proposes to use Federal 

19 funds to develop plans for, or to establish, telehealth 

20 systems that will link rural hospitals and rural 

21 health care providers to other hospitals, health care 

22 providers, and patients. 

23 (4) The applicant will use the amounts provided 

24 for a range of health care applications and to proVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 mote greater efficiency in the use of health care re2 sources. 

3 (5) The applicant is able to demonstrate the 

4 long-term viability of projects through cost participa5 tion (cash or in-kind). 

6 (6) The applicant is able to demonstrate finan7 cial, institutional, and community support for the 

8 long-term viability of the network. 

9 (7) The applicant is able to provide a detailed 

10 plan for coordinating system use by eligible entities 

11 so that health care services are given a priority over 

12 non-clinical uses. 

13 (d) MAXIMUM AMOUNT OF ASSISTANCE TO INDI14 VIDUAL RECIPIENTS.—The Secretary shall establish, by 

15 regulation, the terms and conditions of the grant and the 

16 maximum amount of a grant award to be made available 

17 to an individual recipient for each fiscal year under this 

18 section. The Secretary shall cause to have published in the 

19 Federal Register or the ‘‘HRSA Preview’’ notice of the 

20 terms and conditions of a grant under this section and 

21 the maximum amount of such a grant for a fiscal year. 

22 (e) USE OF AMOUNTS.—The recipient of a grant 

23 under this section may use sums received under such 

24 grant for the acquisition of telehealth equipment and 


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1 modifications or improvements of telecommunications fa2 cilities including the following: 

3 (1) The development and acquisition through 

4 lease or purchase of computer hardware and soft5 ware, audio and video equipment, computer network 

6 equipment, interactive equipment, data terminal 

7 equipment, and other facilities and equipment that 

8 would further the purposes of this section. 

9 (2) The provision of technical assistance and in10 struction for the development and use of such pro11 gramming equipment or facilities. 

12 (3) The development and acquisition of instruc13 tional programming. 

14 (4) Demonstration projects for teaching or 

15 training medical students, residents, and other 

16 health profession students in rural or medically un17 derserved training sites about the application of tele18 health. 

19 (5) The provision of telenursing services de20 signed to enhance care coordination and promote pa21 tient self-management skills. 

22 (6) The provision of services designed to pro23 mote patient understanding and adherence to na24 tional guidelines for common chronic diseases, such 

25 as congestive heart failure or diabetes. 


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1 (7) Transmission costs, maintenance of equip2 ment, and compensation of specialists and referring 

3 health care providers, when no other form of reim4 bursement is available. 

5 (8) Development of projects to use telehealth to 

6 facilitate collaboration between health care providers. 

7 (9) Electronic archival of patient records. 

8 (10) Collection and analysis of usage statistics 

9 and data that can be used to document the cost-ef10 fectiveness of the telehealth services. 

11 (11) Such other uses that are consistent with 

12 achieving the purposes of this section as approved by 

13 the Secretary. 

14 (f) PROHIBITED USES.—Sums received under a 

15 grant under this section may not be used for any of the 

16 following: 

17 (1) To acquire real property. 

18 (2) Expenditures to purchase or lease equip19 ment to the extent the expenditures would exceed 

20 more than 40 percent of the total grant funds. 

21 (3) To purchase or install transmission equip22 ment off the premises of the telehealth site and any 

23 transmission costs not directly related to the grant. 


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1 (4) For construction, except that such funds 

2 may be expended for minor renovations relating to 

3 the installation of equipment. 

4 (5) Expenditures for indirect costs (as deter5 mined by the Secretary) to the extent the expendi6 tures would exceed more than 15 percent of the total 

7 grant. 

8 (g) ADMINISTRATION.— 

9 (1) NONDUPLICATION.—The Secretary shall en10 sure that facilities constructed using grants provided 

11 under this section do not duplicate adequately estab12 lished telehealth networks. 

13 (2) COORDINATION WITH OTHER AGENCIES.— 

14 The Secretary shall coordinate, to the extent prac15 ticable, with other Federal and State agencies and 

16 not-for-profit organizations, operating similar grant 

17 programs to pool resources for funding meritorious 

18 proposals. 

19 (3) INFORMATIONAL EFFORTS.—The Secretary 

20 shall establish and implement procedures to carry 

21 out outreach activities to advise potential end users 

22 located in rural and medically underserved areas of 

23 each State about the program authorized by this 

24 section. 


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1 (h) PROMPT IMPLEMENTATION.—The Secretary shall 

2 take such actions as are necessary to carry out the grant 

3 program as expeditiously as possible. 

4 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated to carry out this section 

6 $10,000,000 for fiscal year 2010, and such sums as may 

7 be necessary for each of the fiscal years 2011 through 

8 2014. 

9 SEC. 251. REAUTHORIZATION OF TELEHEALTH NETWORK 

10 AND TELEHEALTH RESOURCE CENTERS 

11 GRANT PROGRAMS. 

12 Subsection (s) of section 330I of the Public Health 

13 Service Act (42 U.S.C. 254c–14) is amended— 

14 (1) in paragraph (1)— 

15 (A) by striking ‘‘and’’ before ‘‘such sums’’; 

16 and 

17 (B) by inserting ‘‘$10,000,000 for fiscal 

18 year 2010, and such sums as may be necessary 

19 for each of fiscal years 2011 through 2014’’ be20 fore the semicolon; and 

21 (2) in paragraph (2)— 

22 (A) by striking ‘‘and’’ before ‘‘such sums’’; 

23 and 

24 (B) by inserting ‘‘$10,000,000 for fiscal 

25 year 2010, and such sums as may be necessary 


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1 for each of fiscal years 2011 through 2014’’ be2 fore the semicolon. 

3 Subtitle D—Eliminating Waste, 

4 Fraud, and Abuse 

5 SEC. 261. SITE INSPECTIONS; BACKGROUND CHECKS; DE6 NIAL AND SUSPENSION OF BILLING PRIVI7 LEGES. 

8 (a) SITE INSPECTIONS FOR DME SUPPLIERS, COM9 MUNITY MENTAL HEALTH CENTERS, AND OTHER PRO10 VIDER GROUPS.—Title XVIII of the Social Security Act 

11 (42 U.S.C. 1395 et seq.) is amended by adding at the end 

12 the following: 

13 ‘‘SITE INSPECTIONS FOR DME SUPPLIERS, COMMUNITY

14 MENTAL HEALTH CENTERS, AND OTHER PROVIDER

15 GROUPS

16 ‘‘SEC. 1898. (a) SITE INSPECTIONS.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall con18 duct a site inspection for each applicable provider 

19 (as defined in paragraph (2)) that applies to enroll 

20 under this title in order to provide items or services 

21 under this title. Such site inspection shall be in addi22 tion to any other site inspection that the Secretary 

23 would otherwise conduct with regard to an applica24 ble provider. 

25 ‘‘(2) APPLICABLE PROVIDER DEFINED.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), in this section the term ‘ap3 plicable provider’ means— 

4 ‘‘(i) a supplier of durable medical 

5 equipment (including items described in 

6 section 1834(a)(13)); 

7 ‘‘(ii) a supplier of prosthetics, 

8 orthotics, or supplies (including items de9 scribed in paragraphs (8) and (9) of sec10 tion 1861(s)); 

11 ‘‘(iii) a community mental health cen12 ter; or 

13 ‘‘(iv) any other provider group, as de14 termined by the Secretary (including sup15 pliers, both participating suppliers and 

16 non-participating suppliers, as such terms 

17 are defined for purposes of section 1842). 

18 ‘‘(B) EXCEPTION.—In this section, the 

19 term ‘applicable provider’ does not include— 

20 ‘‘(i) a physician that provides durable 

21 medical equipment (as described in sub22 paragraph (A)(i)) or prosthetics, orthotics, 

23 or supplies (as described in subparagraph 

24 (A)(ii)) to an individual as incident to an 

25 office visit by such individual; or 


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1 ‘‘(ii) a hospital that provides durable 

2 medical equipment (as described in sub3 paragraph (A)(i)) or prosthetics, orthotics, 

4 or supplies (as described in subparagraph 

5 (A)(ii)) to an individual as incident to an 

6 emergency room visit by such individual. 

7 ‘‘(b) STANDARDS AND REQUIREMENTS.—In con8 ducting the site inspection pursuant to subsection (a), the 

9 Secretary shall ensure that the site being inspected is in 

10 full compliance with all the conditions and standards of 

11 participation and requirements for obtaining billing privi12 leges under this title. 

13 ‘‘(c) TIME.—The Secretary shall conduct the site in14 spection for an applicable provider prior to the issuance 

15 of billing privileges under this title to such provider. 

16 ‘‘(d) TIMELY REVIEW.—The Secretary shall provide 

17 for procedures to ensure that the site inspection required 

18 under this section does not unreasonably delay the 

19 issuance of billing privileges under this title to an applica20 ble provider.’’. 

21 (b) BACKGROUND CHECKS.—Title XVIII of the So22 cial Security Act (42 U.S.C. 1395 et seq.) (as amended 

23 by subsection (a)) is amended by adding at the end the 

24 following new section: 


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1 ‘‘BACKGROUND CHECKS; DENIAL AND SUSPENSION OF

2 BILLING PRIVILEGES

3 ‘‘SEC. 1899. (a) BACKGROUND CHECK REQUIRED.— 

4 Except as provided in subsection (b), the Secretary shall 

5 conduct a background check on any individual or entity 

6 that enrolls under this title for the purpose of furnishing 

7 any item or service under this title, including any indi8 vidual or entity that is a supplier, a person with an owner9 ship or control interest, a managing employee (as defined 

10 in section 1126(b)), or an authorized or delegated official 

11 of the individual or entity. In performing the background 

12 check, the Secretary shall— 

13 ‘‘(1) conduct the background check before au14 thorizing billing privileges under this title to the in15 dividual or entity, respectively; 

16 ‘‘(2) include a search of criminal records in the 

17 background check; 

18 ‘‘(3) provide for procedures that ensure the 

19 background check does not unreasonably delay the 

20 authorization of billing privileges under this title to 

21 an eligible individual or entity, respectively; and 

22 ‘‘(4) establish criteria for targeted reviews when 

23 the individual or entity renews participation under 

24 this title, with respect to the background check of 

25 the individual or entity, respectively, to detect 


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1 changes in ownership, bankruptcies, or felonies by 

2 the individual or entity. 

3 ‘‘(b) USE OF STATE LICENSING PROCEDURE.—The 

4 Secretary may use the results of a State licensing proce5 dure as a background check under subsection (a) if the 

6 State licensing procedure meets the requirements of such 

7 subsection. 

8 ‘‘(c) ATTORNEY GENERAL REQUIRED TO PROVIDE

9 INFORMATION.— 

10 ‘‘(1) IN GENERAL.—Upon request of the Sec11 retary, the Attorney General shall provide the crimi12 nal background check information referred to in sub13 section (a)(2) to the Secretary. 

14 ‘‘(2) RESTRICTION ON USE OF DISCLOSED IN15 FORMATION.—The Secretary may only use the infor16 mation disclosed under subsection (a) for the pur17 pose of carrying out the Secretary’s responsibilities 

18 under this title. 

19 ‘‘(d) REFUSAL TO AUTHORIZE BILLING PRIVI20 LEGES.— 

21 ‘‘(1) AUTHORITY.—In addition to any other 

22 remedy available to the Secretary, the Secretary may 

23 refuse to authorize billing privileges under this title 

24 to an individual or entity if the Secretary deter25 mines, after a background check conducted under 


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1 this section, that such individual or entity, respec2 tively, has a history of acts that indicate authoriza3 tion of billing privileges under this title to such indi4 vidual or entity, respectively, would be detrimental 

5 to the best interests of the program or program 

6 beneficiaries. Such acts may include— 

7 ‘‘(A) any bankruptcy; 

8 ‘‘(B) any act resulting in a civil judgment 

9 against such individual or entity; or 

10 ‘‘(C) any felony conviction under Federal 

11 or State law. 

12 ‘‘(2) REPORTING OF REFUSAL TO AUTHORIZE

13 BILLING PRIVILEGES TO THE HEALTHCARE INTEG14 RITY AND PROTECTION DATA BANK (HIPDB).— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), a determination under paragraph 

17 (1) to refuse to authorize billing privileges 

18 under this title to an individual or entity as a 

19 result of a background check conducted under 

20 this section shall be reported to the healthcare 

21 integrity and protection data bank established 

22 under section 1128E in accordance with the 

23 procedures for reporting final adverse actions 

24 taken against a health care provider, supplier, 

25 or practitioner under that section. 


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1 ‘‘(B) EXCEPTION.—Any determination de2 scribed in subparagraph (A) that the Secretary 

3 specifies is not appropriate for inclusion in the 

4 healthcare integrity and protection data bank 

5 established under section 1128E shall not be 

6 reported to such data bank.’’. 

7 (c) DENIAL AND SUSPENSION OF BILLING PRIVI8 LEGES.—Section 1899 of the Social Security Act, as 

9 added by subsection (b), is amended by adding at the end 

10 the following new subsection: 

11 ‘‘(e) AUTHORITY TO SUSPEND BILLING PRIVILEGES

12 OR REFUSE TO AUTHORIZE ADDITIONAL BILLING PRIVI13 LEGES.— 

14 ‘‘(1) IN GENERAL.—The Secretary may suspend 

15 any billing privilege under this title authorized for 

16 an individual or entity or refuse to authorize any ad17 ditional billing privilege under this title to such indi18 vidual or entity if— 

19 ‘‘(A) such individual or entity, respectively, 

20 has an outstanding overpayment due to the 

21 Secretary under this title; 

22 ‘‘(B) payments under this title to such in23 dividual or entity, respectively, have been sus24 pended; or 


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1 ‘‘(C) 100 percent of the payment claims 

2 under this title for such individual or entity, re3 spectively, are reviewed on a pre-payment basis. 

4 ‘‘(2) APPLICATION TO RESTRUCTURED ENTI5 TIES.—In the case that an individual or entity is 

6 subject to a suspension or refusal of billing privileges 

7 under this section, if the Secretary determines that 

8 the ownership or management of a new entity is 

9 under the control or management of such an indi10 vidual or entity subject to such a suspension or re11 fusal, the new entity shall be subject to any such ap12 plicable suspension or refusal in the same manner 

13 and to the same extent as the initial individual or 

14 entity involved had been subject to such applicable 

15 suspension or refusal. 

16 ‘‘(3) DURATION OF SUSPENSION.—A suspen17 sion of billing privileges under this subsection, with 

18 respect to an individual or entity, shall be in effect 

19 beginning on the date of the Secretary’s determina20 tion that the offense was committed and ending not 

21 earlier than such date on which all applicable over22 payments and other applicable outstanding debts 

23 have been paid and all applicable payment suspen24 sions have been lifted.’’. 

25 (d) REGULATIONS; EFFECTIVE DATE.— 


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1 (1) REGULATIONS.—Not later than one year 

2 after the date of the enactment of this Act, the Sec3 retary of Health and Human Services shall promul4 gate such regulations as are necessary to implement 

5 the amendments made by subsections (a), (b), and 

6 (c). 

7 (2) EFFECTIVE DATES.— 

8 (A) SITE INSPECTIONS AND BACKGROUND

9 CHECKS.—The amendments made by sub10 sections (a) and (b) shall apply to applications 

11 to enroll under title XVIII of the Social Secu12 rity Act received by the Secretary of Health and 

13 Human Services on or after the first day of the 

14 first year beginning after the date of the enact15 ment of this Act. 

16 (B) DENIALS AND SUSPENSIONS OF BILL17 ING PRIVILEGES.—The amendment made by 

18 subsection (c) shall apply to overpayments or 

19 debts in existence on or after the date of the 

20 enactment of this Act, regardless of whether the 

21 final determination, with respect to such over22 payment or debt, was made before, on, or after 

23 such date. 

24 (e) USE OF MEDICARE INTEGRITY PROGRAM

25 FUNDS.—The Secretary of Health and Human Services 


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1 may use funds appropriated or transferred for purposes 

2 of carrying out the Medicare integrity program established 

3 under section 1893 of the Social Security Act (42 U.S.C. 

4 1395ddd) to carry out the provisions of sections 1898 and 

5 1899 of that Act (as added by subsections (a) and (b)). 

6 SEC. 262. REGISTRATION AND BACKGROUND CHECKS OF 

7 BILLING AGENCIES AND INDIVIDUALS. 

8 (a) IN GENERAL.—Title XVIII of the Social Security 

9 Act (42 U.S.C. 1395 et seq.) (as amended by section 2(b)) 

10 is amended by adding at the end the following new section: 

11 ‘‘REGISTRATION AND BACKGROUND CHECKS OF BILLING

12 AGENCIES AND INDIVIDUALS; IDENTIFICATION NUM13 BERS REQUIRED FOR PROVIDERS AND SUPPLIERS

14 ‘‘SEC. 1899A. (a) REGISTRATION.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall estab16 lish procedures, including modifying the Provider 

17 Enrollment and Chain Ownership System (PECOS) 

18 administered by the Centers for Medicare & Med19 icaid Services, to provide for the registration of all 

20 applicable persons in accordance with this section. 

21 ‘‘(2) REQUIRED APPLICATION.—Each applicable 

22 person shall submit a registration application to the 

23 Secretary at such time, in such manner, and accom24 panied by such information as the Secretary may re25 quire. 


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1 ‘‘(3) IDENTIFICATION NUMBER.—If the Sec2 retary approves an application submitted under sub3 section (b), the Secretary shall assign a unique iden4 tification number to the applicable person. 

5 ‘‘(4) REQUIREMENT.—Every claim for reim6 bursement under this title that is compiled or sub7 mitted by an applicable person shall contain the 

8 identification number that is assigned to the applica9 ble person pursuant to subsection (c). 

10 ‘‘(5) TIMELY REVIEW.—The Secretary shall 

11 provide for procedures that ensure the timely consid12 eration and determination regarding approval of ap13 plications under this subsection. 

14 ‘‘(6) DEFINITION OF APPLICABLE PERSON.—In 

15 this section, the term ‘applicable person’ means any 

16 individual or entity that compiles or submits claims 

17 for reimbursement under this title to the Secretary 

18 on behalf of any individual or entity. 

19 ‘‘(b) BACKGROUND CHECKS.— 

20 ‘‘(1) IN GENERAL.—Except as provided in paragraph 

21 (2), the Secretary shall conduct a background check on 

22 any applicable person that registers under subsection (a). 

23 In performing the background check, the Secretary 

24 shall— 


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1 ‘‘(A) conduct the background check before 

2 issuing a unique identification number to the appli3 cable person; 

4 ‘‘(B) include a search of criminal records in the 

5 background check; 

6 ‘‘(C) provide for procedures that ensure the 

7 background check does not unreasonably delay the 

8 issuance of the unique identification number to an 

9 eligible applicable person; and 

10 ‘‘(D) establish criteria for periodic targeted re11 views with respect to the background check of the 

12 applicable person. 

13 ‘‘(2) USE OF STATE LICENSING PROCEDURE.—The 

14 Secretary may use the results of a State licensing proce15 dure as a background check under paragraph (1) if the 

16 State licensing procedure meets the requirements of such 

17 paragraph. 

18 ‘‘(3) ATTORNEY GENERAL REQUIRED TO PROVIDE

19 INFORMATION.— 

20 ‘‘(A) IN GENERAL.—Upon request of the Sec21 retary, the Attorney General shall provide the crimi22 nal background check information referred to in 

23 paragraph (1)(B) to the Secretary. 

24 ‘‘(B) RESTRICTION ON USE OF DISCLOSED IN25 FORMATION.—The Secretary may only use the inforVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00097 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 mation disclosed under paragraph (1) for the pur2 pose of carrying out the Secretary’s responsibilities 

3 under this title. 

4 ‘‘(4) REFUSAL TO ISSUE UNIQUE IDENTIFICATION

5 NUMBER.—In addition to any other remedy available to 

6 the Secretary, the Secretary may refuse to issue a unique 

7 identification number described in subsection (a)(3) to an 

8 applicable person if the Secretary determines, after a 

9 background check conducted under this subsection, that 

10 such person has a history of acts that indicate issuance 

11 of such number under this title to such person would be 

12 detrimental to the best interests of the program or pro13 gram beneficiaries. Such acts may include— 

14 ‘‘(A) any bankruptcy; 

15 ‘‘(B) any act resulting in a civil judgment 

16 against such person; or 

17 ‘‘(C) any felony conviction under Federal or 

18 State law. 

19 ‘‘(c) IDENTIFICATION NUMBERS FOR PROVIDERS

20 AND SUPPLIERS.—The Secretary shall establish proce21 dures to ensure that each provider of services and each 

22 supplier that submits claims for reimbursement under this 

23 title to the Secretary is assigned a unique identification 

24 number.’’. 


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1 (b) PERMISSIVE EXCLUSION.—Section 1128(b) of 

2 the Social Security Act (42 U.S.C. 1320a–7(b)) is amend3 ed by adding at the end the following: 

4 ‘‘(16) FRAUD BY APPLICABLE PERSON.—An ap5 plicable person (as defined in section 1899A(a)(6)) 

6 that the Secretary determines knowingly submitted 

7 or caused to be submitted a claim for reimbursement 

8 under title XVIII that the applicable person knows 

9 or should know is false or fraudulent.’’. 

10 (c) REGULATIONS; EFFECTIVE DATE.— 

11 (1) REGULATIONS.—Not later than one year 

12 after the date of the enactment of this Act, the Sec13 retary of Health and Human Services shall promul14 gate such regulations as are necessary to implement 

15 the amendments made by subsections (a) and (b). 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by subsections (a) and (b) shall apply to applicable 

18 persons and other entities on and after the first day 

19 of the first year beginning after the date of the en20 actment of this Act. 

21 SEC. 263. EXPANDED ACCESS TO THE HEALTHCARE INTEG22 RITY AND PROTECTION DATA BANK (HIPDB). 

23 (a) IN GENERAL.—Section 1128E(d)(1) of the Social 

24 Security Act (42 U.S.C. 1320a–7e(d)(1)) is amended to 

25 read as follows: 


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1 ‘‘(1) AVAILABILITY.—The information in the 

2 data bank maintained under this section shall be 

3 available to— 

4 ‘‘(A) Federal and State government agen5 cies and health plans, and any health care pro6 vider, supplier, or practitioner entering an em7 ployment or contractual relationship with an in8 dividual or entity who could potentially be the 

9 subject of a final adverse action, where the con10 tract involves the furnishing of items or services 

11 reimbursed by one or more Federal health care 

12 programs (regardless of whether the individual 

13 or entity is paid by the programs directly, or 

14 whether the items or services are reimbursed di15 rectly or indirectly through the claims of a di16 rect provider); and 

17 ‘‘(B) utilization and quality control peer 

18 review organizations and accreditation entities 

19 as defined by the Secretary, including but not 

20 limited to organizations described in part B of 

21 this title and in section 1154(a)(4)(C).’’. 

22 (b) NO FEES FOR USE OF HIPDB BY ENTITIES

23 CONTRACTING WITH MEDICARE.—Section 1128E(d)(2) 

24 of the Social Security Act (42 U.S.C. 1320a–7e(d)(2)) is 

25 amended by striking ‘‘Federal agencies’’ and inserting 


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1 ‘‘Federal agencies or other entities, such as fiscal inter2 mediaries and carriers, acting under contract on behalf of 

3 such agencies’’. 

4 (c) CRIMINAL PENALTY FOR MISUSE OF INFORMA5 TION.—Section 1128B(b) of the Social Security Act (42 

6 U.S.C. 1320a–7b(b)) is amended by adding at the end the 

7 following: 

8 ‘‘(4) Whoever knowingly uses information maintained 

9 in the healthcare integrity and protection data bank main10 tained in accordance with section 1128E for a purpose 

11 other than a purpose authorized under that section shall 

12 be imprisoned for not more than three years or fined 

13 under title 18, United States Code, or both.’’. 

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

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

16 of this Act. 

17 SEC. 264. LIABILITY OF MEDICARE ADMINISTRATIVE CON18 TRACTORS FOR CLAIMS SUBMITTED BY EX19 CLUDED PROVIDERS. 

20 (a) REIMBURSEMENT TO THE SECRETARY FOR

21 AMOUNTS PAID TO EXCLUDED PROVIDERS.—Section 

22 1874A(b) of the Social Security Act (42 U.S.C. 

23 1395kk(b)) is amended by adding at the end the following 

24 new paragraph: 


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1 ‘‘(6) REIMBURSEMENTS TO SECRETARY FOR

2 AMOUNTS PAID TO EXCLUDED PROVIDERS.—The 

3 Secretary shall not enter into a contract with a 

4 Medicare administrative contractor under this sec5 tion unless the contractor agrees to reimburse the 

6 Secretary for any amounts paid by the contractor 

7 for a service under this title which is furnished by 

8 an individual or entity during any period for which 

9 the individual or entity is excluded, pursuant to sec10 tion 1128, 1128A, or 1156, from participation in the 

11 health care program under this title if the amounts 

12 are paid after the 60-day period beginning on the 

13 date the Secretary provides notice of the exclusion to 

14 the contractor, unless the payment was made as a 

15 result of incorrect information provided by the Sec16 retary or the individual or entity excluded from par17 ticipation has concealed or altered their identity.’’. 

18 (b) CONFORMING REPEAL OF MANDATORY PAYMENT

19 RULE.—Section 1862(e) of the Social Security Act (42 

20 U.S.C. 1395y(e)) is amended— 

21 (1) in paragraph (1)(B), by striking ‘‘and when 

22 the person’’ and all that follows through ‘‘person)’’; 

23 and 

24 (2) by amending paragraph (2) to read as fol25 lows: 


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1 ‘‘(2) No individual or entity may bill (or collect any 

2 amount from) any individual for any item or service for 

3 which payment is denied under paragraph (1). No indi4 vidual is liable for payment of any amounts billed for such 

5 an item or service in violation of the preceding sentence.’’. 

6 (c) EFFECTIVE DATE.— 

7 (1) IN GENERAL.—The amendments made by 

8 this section shall apply to claims for payment sub9 mitted on or after the date of the enactment of this 

10 Act. 

11 (2) CONTRACT MODIFICATION.—The Secretary 

12 of Health and Human Services shall take such steps 

13 as may be necessary to modify contracts entered 

14 into, renewed, or extended prior to the date of the 

15 enactment of this Act to conform such contracts to 

16 the provisions of this section. 

17 SEC. 265. COMMUNITY MENTAL HEALTH CENTERS. 

18 (a) IN GENERAL.—Section 1861(ff)(3)(B) of the So19 cial Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amended 

20 by striking ‘‘entity that—’’ and all that follows and insert21 ing the following: ‘‘entity that— 

22 ‘‘(i) provides the community mental health serv23 ices specified in paragraph (1) of section 1913(c) of 

24 the Public Health Service Act; 


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1 ‘‘(ii) meets applicable certification or licensing 

2 requirements for community mental health centers 

3 in the State in which it is located; 

4 ‘‘(iii) provides a significant share of its services 

5 to individuals who are not eligible for benefits under 

6 this title; and 

7 ‘‘(iv) meets such additional standards or re8 quirements for obtaining billing privileges under this 

9 title as the Secretary may specify to ensure— 

10 ‘‘(I) the health and safety of beneficiaries 

11 receiving such services; or 

12 ‘‘(II) the furnishing of such services in an 

13 effective and efficient manner.’’. 

14 (b) RESTRICTION.—Section 1861(ff)(3)(A) of such 

15 Act (42 U.S.C. 1395x(ff)(3)(A)) is amended by inserting 

16 ‘‘other than in an individual’s home or in an inpatient or 

17 residential setting’’ before the period. 

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

19 this section shall apply to items and services furnished on 

20 or after the first day of the sixth month that begins after 

21 the date of the enactment of this Act. 


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1 SEC. 266. LIMITING THE DISCHARGE OF DEBTS IN BANK2 RUPTCY PROCEEDINGS IN CASES WHERE A 

3 HEALTH CARE PROVIDER OR A SUPPLIER EN4 GAGES IN FRAUDULENT ACTIVITY. 

5 (a) IN GENERAL.— 

6 (1) CIVIL MONETARY PENALTIES.—Section 

7 1128A(a) of the Social Security Act (42 U.S.C. 

8 1320a–7a(a)) is amended by adding at the end the 

9 following: ‘‘Notwithstanding any other provision of 

10 law, amounts made payable under this section are 

11 not dischargeable under section 727, 944, 1141, 

12 1228, or 1328 of title 11, United States Code, or 

13 any other provision of such title.’’. 

14 (2) RECOVERY OF OVERPAYMENT TO PRO15 VIDERS OF SERVICES UNDER PART A OF MEDI16 CARE.—Section 1815(d) of the Social Security Act 

17 (42 U.S.C. 1395g(d)) is amended— 

18 (A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 

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

20 ‘‘(2) Notwithstanding any other provision of law, 

21 amounts due to the Secretary under this section are not 

22 dischargeable under section 727, 944, 1141, 1228, or 

23 1328 of title 11, United States Code, or any other provi24 sion of such title if the overpayment was the result of 

25 fraudulent activity, as may be defined by the Secretary.’’. 


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1 (3) RECOVERY OF OVERPAYMENT OF BENEFITS

2 UNDER PART b OF MEDICARE.—Section 1833(j) of 

3 the Social Security Act (42 U.S.C. 1395l(j)) is 

4 amended— 

5 (A) by inserting ‘‘(1)’’ after ‘‘(j)’’; and 

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

7 ‘‘(2) Notwithstanding any other provision of law, 

8 amounts due to the Secretary under this section are not 

9 dischargeable under section 727, 944, 1141, 1228, or 

10 1328 of title 11, United States Code, or any other provi11 sion of such title if the overpayment was the result of 

12 fraudulent activity, as may be defined by the Secretary.’’. 

13 (4) COLLECTION OF PAST-DUE OBLIGATIONS

14 ARISING FROM BREACH OF SCHOLARSHIP AND LOAN

15 CONTRACT.—Section 1892(a) of the Social Security 

16 Act (42 U.S.C. 1395ccc(a)) is amended by adding at 

17 the end the following: 

18 ‘‘(5) Notwithstanding any other provision of 

19 law, amounts due to the Secretary under this section 

20 are not dischargeable under section 727, 944, 1141, 

21 1228, or 1328 of title 11, United States Code, or 

22 any other provision of such title.’’. 

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

24 subsection (a) shall apply to bankruptcy petitions filed 

25 after the date of the enactment of this Act. 


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1 SEC. 267. ILLEGAL DISTRIBUTION OF A MEDICARE OR MED2 ICAID BENEFICIARY IDENTIFICATION OR 

3 BILLING PRIVILEGES. 

4 Section 1128B(b) of the Social Security Act (42 

5 U.S.C. 1320a–7b(b)), as amended by section 4(c), is 

6 amended by adding at the end the following: 

7 ‘‘(5) Whoever knowingly, intentionally, and with the 

8 intent to defraud purchases, sells or distributes, or ar9 ranges for the purchase, sale, or distribution of two or 

10 more Medicare or Medicaid beneficiary identification num11 bers or billing privileges under title XVIII or title XIX 

12 shall be imprisoned for not more than three years or fined 

13 under title 18, United States Code (or, if greater, an 

14 amount equal to the monetary loss to the Federal and any 

15 State government as a result of such acts), or both.’’. 

16 SEC. 268. TREATMENT OF CERTAIN SOCIAL SECURITY ACT 

17 CRIMES AS FEDERAL HEALTH CARE OF18 FENSES. 

19 (a) IN GENERAL.—Section 24(a) of title 18, United 

20 States Code, is amended— 

21 (1) by striking the period at the end of para22 graph (2) and inserting ‘‘; or’’; and 

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

24 ‘‘(3) section 1128B of the Social Security Act 

25 (42 U.S.C. 1320a–7b).’’. 


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

2 subsection (a) shall take effect on the date of the enact3 ment of this Act and apply to acts committed on or after 

4 the date of the enactment of this Act. 

5 SEC. 269. AUTHORITY OF OFFICE OF INSPECTOR GENERAL 

6 OF THE DEPARTMENT OF HEALTH AND 

7 HUMAN SERVICES. 

8 (a) AUTHORITY.—Notwithstanding any other provi9 sion of law, upon designation by the Inspector General of 

10 the Department of Health and Human Services, any 

11 criminal investigator of the Office of Inspector General of 

12 such department may, in accordance with guidelines 

13 issued by the Secretary of Health and Human Services 

14 and approved by the Attorney General, while engaged in 

15 activities within the lawful jurisdiction of such Inspector 

16 General— 

17 (1) obtain and execute any warrant or other 

18 process issued under the authority of the United 

19 States; 

20 (2) make an arrest without a warrant for— 

21 (A) any offense against the United States 

22 committed in the presence of such investigator; 

23 or 

24 (B) any felony offense against the United 

25 States, if such investigator has reasonable cause 


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1 to believe that the person to be arrested has 

2 committed or is committing that felony offense; 

3 and 

4 (3) exercise any other authority necessary to 

5 carry out the authority described in paragraphs (1) 

6 and (2). 

7 (b) FUNDS.—The Office of Inspector General of the 

8 Department of Health and Human Services may receive 

9 and expend funds that represent the equitable share from 

10 the forfeiture of property in investigations in which the 

11 Office of Inspector General participated, and that are 

12 transferred to the Office of Inspector General by the De13 partment of Justice, the Department of the Treasury, or 

14 the United States Postal Service. Such equitable sharing 

15 funds shall be deposited in a separate account and shall 

16 remain available until expended. 

17 SEC. 270. UNIVERSAL PRODUCT NUMBERS ON CLAIMS 

18 FORMS FOR REIMBURSEMENT UNDER THE 

19 MEDICARE PROGRAM. 

20 (a) UPNS ON CLAIMS FORMS FOR REIMBURSEMENT

21 UNDER THE MEDICARE PROGRAM.— 

22 (1) ACCOMMODATION OF UPNS ON MEDICARE

23 CLAIMS FORMS.—Not later than February 1, 2011, 

24 all claims forms developed or used by the Secretary 

25 of Health and Human Services for reimbursement 


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1 under the Medicare program under title XVIII of 

2 the Social Security Act (42 U.S.C. 1395 et seq.) 

3 shall accommodate the use of universal product 

4 numbers for a UPN covered item. 

5 (2) REQUIREMENT FOR PAYMENT OF CLAIMS.— 

6 Title XVIII of the Social Security Act (42 U.S.C. 

7 1395 et seq.), as amended by sections 2 and 3, is 

8 amended by adding at the end the following new sec9 tion: 

10 ‘‘USE OF UNIVERSAL PRODUCT NUMBERS

11 ‘‘SEC. 1899B. (a) IN GENERAL.—No payment shall 

12 be made under this title for any claim for reimbursement 

13 for any UPN covered item unless the claim contains the 

14 universal product number of the UPN covered item. 

15 ‘‘(b) DEFINITIONS.—In this section: 

16 ‘‘(1) UPN COVERED ITEM.— 

17 ‘‘(A) IN GENERAL.—Except as provided in 

18 subparagraph (B), the term ‘UPN covered 

19 item’ means— 

20 ‘‘(i) a covered item as that term is de21 fined in section 1834(a)(13); 

22 ‘‘(ii) an item described in paragraph 

23 (8) or (9) of section 1861(s); 

24 ‘‘(iii) an item described in paragraph 

25 (5) of section 1861(s); and 


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1 ‘‘(iv) any other item for which pay2 ment is made under this title that the Sec3 retary determines to be appropriate. 

4 ‘‘(B) EXCLUSION.—The term ‘UPN cov5 ered item’ does not include a customized item 

6 for which payment is made under this title. 

7 ‘‘(2) UNIVERSAL PRODUCT NUMBER.—The 

8 term ‘universal product number’ means a number 

9 that is— 

10 ‘‘(A) affixed by the manufacturer to each 

11 individual UPN covered item that uniquely 

12 identifies the item at each packaging level; and 

13 ‘‘(B) based on commercially acceptable 

14 identification standards such as, but not limited 

15 to, standards established by the Uniform Code 

16 Council-International Article Numbering Sys17 tem or the Health Industry Business Commu18 nication Council.’’. 

19 (3) DEVELOPMENT AND IMPLEMENTATION OF

20 PROCEDURES.— 

21 (A) INFORMATION INCLUDED IN UPN.— 

22 The Secretary of Health and Human Services, 

23 in consultation with manufacturers and entities 

24 with appropriate expertise, shall determine the 

25 relevant descriptive information appropriate for 


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1 inclusion in a universal product number for a 

2 UPN covered item. 

3 (B) REVIEW OF PROCEDURE.—From the 

4 information obtained by the use of universal 

5 product numbers on claims for reimbursement 

6 under the Medicare program, the Secretary of 

7 Health and Human Services, in consultation 

8 with interested parties, shall periodically review 

9 the UPN covered items billed under the Health 

10 Care Financing Administration Common Proce11 dure Coding System and adjust such coding 

12 system to ensure that functionally equivalent 

13 UPN covered items are billed and reimbursed 

14 under the same codes. 

15 (4) EFFECTIVE DATE.—The amendment made 

16 by paragraph (2) shall apply to claims for reim17 bursement submitted on and after February 1, 

18 2011. 

19 (b) STUDY AND REPORTS TO CONGRESS.— 

20 (1) STUDY.—The Secretary of Health and 

21 Human Services shall conduct a study on the results 

22 of the implementation of the provisions in para23 graphs (1) and (3) of subsection (a) and the amend24 ment to the Social Security Act in paragraph (2) of 

25 such subsection. 


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1 (2) REPORTS.— 

2 (A) PROGRESS REPORT.—Not later than 

3 six months after the date of the enactment of 

4 this Act, the Secretary of Health and Human 

5 Services shall submit to Congress a report that 

6 contains a detailed description of the progress 

7 of the matters studied pursuant to paragraph 

8 (1). 

9 (B) IMPLEMENTATION.—Not later than 18 

10 months after the date of the enactment of this 

11 Act, and annually thereafter for three years, the 

12 Secretary of Health and Human Services shall 

13 submit to Congress a report that contains a de14 tailed description of the results of the study 

15 conducted pursuant to paragraph (1), together 

16 with the Secretary’s recommendations regard17 ing the use of universal product numbers and 

18 the use of data obtained from the use of such 

19 numbers. 

20 (c) DEFINITIONS.—In this section: 

21 (1) UPN COVERED ITEM.—The term ‘‘UPN 

22 covered item’’ has the meaning given such term in 

23 section 1899B(b)(1) of the Social Security Act (as 

24 added by subsection (a)(2)). 


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1 (2) UNIVERSAL PRODUCT NUMBER.—The term 

2 ‘‘universal product number’’ has the meaning given 

3 such term in section 1899B(b)(2) of the Social Secu4 rity Act (as added by subsection (a)(2)). 

5 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated such sums as may be 

7 necessary for the purpose of carrying out the provisions 

8 in paragraphs (1) and (3) of subsection (a), subsection 

9 (b), and section 1899B of the Social Security Act (as 

10 added by subsection (a)(2)). 

11 Subtitle E—Promoting Health and 

12 Preventing Chronic Disease 

13 Through Prevention and 

14 Wellness Programs 

15 SEC. 281. FINDINGS. 

16 Congress finds the following: 

17 (1) Keeping people healthy and preventing dis18 ease must be an important part of improving our 

19 Federal health system. 

20 (2) More than 133 million Americans, which ac21 counts for 45 percent of the U.S. population, have 

22 at least one chronic condition. 

23 (3) With the growth in obesity, especially 

24 among younger Americans, the diagnosis of child25 hood chronic diseases has almost quadrupled over 


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1 the past four decades and is expected to continue to 

2 rise. 

3 (4) Chronic diseases are the leading causes of 

4 preventable death and disability in the United 

5 States, accounting for 7 out of every 10 deaths and 

6 killing more than 1,700,000 people in the United 

7 States every year. 

8 (5) Two-thirds of the increase in health care 

9 spending is due to increased prevalence of treated 

10 chronic disease. 

11 (6) Seventy-five percent of the nation’s aggre12 gate health care spending is on treating patients 

13 with chronic disease, and the vast majority of these 

14 diseases are preventable. Unfortunately, less than 

15 one percent of total health care spending goes to16 ward prevention. 

17 (7) According to a recent study, treatment of 

18 the seven most common chronic diseases, coupled 

19 with productivity losses, cost the U.S. economy more 

20 than $1 trillion dollars annually. It has been esti21 mated that modest reductions in unhealthy behaviors 

22 could prevent or delay 40 million cases of chronic ill23 ness per year. 

24 (8) Chronic diseases are burdensome to Amer25 ican businesses. Not only does a sicker American 


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1 workforce have higher health care costs, but it is 

2 also less productive. Chronic illnesses lead to absen3 teeism and decreased effectiveness while at work due 

4 to illness. 

5 (9) Prevention not only saves lives, it is highly 

6 cost-effective. One study concluded that an invest7 ment of $10 per person per year in proven commu8 nity-based programs to increase physical activity, 

9 improve nutrition, and prevent smoking and other 

10 tobacco use could save the country more than $16 

11 billion annually within five years. This is a return of 

12 $5.60 for every $1 spent. 

13 SEC. 282. TAX CREDIT TO EMPLOYERS FOR COSTS OF IM14 PLEMENTING PREVENTION AND WELLNESS 

15 PROGRAMS. 

16 (a) IN GENERAL.—Subpart D of part IV of sub17 chapter A of chapter 1 of the Internal Revenue Code of 

18 1986 (relating to business related credits) is amended by 

19 adding at the end the following: 

20 ‘‘SEC. 45R. PREVENTION AND WELLNESS PROGRAM CRED21 IT. 

22 ‘‘(a) ALLOWANCE OF CREDIT.— 

23 ‘‘(1) IN GENERAL.—For purposes of section 38, 

24 the prevention and wellness credit determined under 

25 this section for any taxable year during the credit 


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1 period with respect to an employer is an amount 

2 equal to 50 percent of the costs paid or incurred by 

3 the employer in connection with a qualified preven4 tion and wellness during the taxable year. For pur5 poses of the preceding sentence, in the case of any 

6 qualified prevention and wellness offered as part of 

7 an employer-provided group health plan, including 

8 health insurance offered in connection with such 

9 plan, only costs attributable to the qualified preven10 tion and wellness and not to the group health plan 

11 or health insurance coverage may be taken into ac12 count.

13 ‘‘(2) LIMITATION.—The amount of credit al14 lowed under paragraph (1) for any taxable year shall 

15 not exceed the sum of— 

16 ‘‘(A) the product of $200 and the number 

17 of employees of the employer not in excess of 

18 200 employees, plus 

19 ‘‘(B) the product of $100 and the number 

20 of employees of the employer in excess of 200 

21 employees. 

22 ‘‘(b) QUALIFIED PREVENTION AND WELLNESS.—For 

23 purposes of this section— 


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1 ‘‘(1) QUALIFIED PREVENTION AND

2 WELLNESS.—The term ‘qualified prevention and 

3 wellness’ means a program which— 

4 ‘‘(A) consists of any 3 of the prevention 

5 and wellness components described in sub6 section (c), and 

7 ‘‘(B) which is certified by the Secretary of 

8 Health and Human Services, in coordination 

9 with the Director of the Center for Disease 

10 Control and Prevention, as a qualified preven11 tion and wellness under this section. 

12 ‘‘(2) PROGRAMS MUST BE CONSISTENT WITH

13 RESEARCH AND BEST PRACTICES.— 

14 ‘‘(A) IN GENERAL.—The Secretary of 

15 Health and Human Services shall not certify a 

16 program as a qualified prevention and wellness 

17 unless the program— 

18 ‘‘(i) is consistent with evidence-based 

19 research and best practices, as identified 

20 by persons with expertise in employer 

21 health promotion and prevention and 

22 wellness, 

23 ‘‘(ii) includes multiple, evidence-based 

24 strategies which are based on the existing 

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1 entific reviews, including the Guide to 

2 Community Preventive Services, the Guide 

3 to Clinical Preventive Services, and the 

4 National Registry for Effective Programs, 

5 and 

6 ‘‘(iii) includes strategies which focus 

7 on employee populations with a dispropor8 tionate burden of health problems. 

9 ‘‘(B) PERIODIC UPDATING AND REVIEW.— 

10 The Secretary of Health and Human Services 

11 shall establish procedures for periodic review of 

12 programs under this subsection. Such proce13 dures shall require revisions of programs if nec14 essary to ensure compliance with the require15 ments of this section and require updating of 

16 the programs to the extent the Secretary, in co17 ordination with the Director of the Centers for 

18 Disease Control and Prevention, determines 

19 necessary to reflect new scientific findings. 

20 ‘‘(3) HEALTH LITERACY.—The Secretary of 

21 Health and Human Services shall, as part of the 

22 certification process, encourage employees to make 

23 the programs culturally competent and to meet the 

24 health literacy needs of the employees covered by the 

25 programs. 


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1 ‘‘(c) PREVENTION AND WELLNESS PROGRAM COM2 PONENTS.—For purposes of this section, the prevention 

3 and wellness components described in this subsection are 

4 the following: 

5 ‘‘(1) HEALTH AWARENESS COMPONENT.—A 

6 health awareness component which provides for the 

7 following: 

8 ‘‘(A) HEALTH EDUCATION.—The dissemi9 nation of health information which addresses 

10 the specific needs and health risks of employees. 

11 ‘‘(B) HEALTH SCREENINGS.—The oppor12 tunity for periodic screenings for health prob13 lems and referrals for appropriate follow up 

14 measures. 

15 ‘‘(2) EMPLOYEE ENGAGEMENT COMPONENT.— 

16 An employee engagement component which provides 

17 for— 

18 ‘‘(A) the establishment of a committee to 

19 actively engage employees in worksite preven20 tion and wellness through worksite assessments 

21 and program planning, delivery, evaluation, and 

22 improvement efforts, and 

23 ‘‘(B) the tracking of employee participa24 tion. 


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1 ‘‘(3) BEHAVIORAL CHANGE COMPONENT.—A 

2 behavioral change component which provides for al3 tering employee lifestyles to encourage healthy living 

4 through counseling, seminars, on-line programs, or 

5 self-help materials which provide technical assistance 

6 and problem solving skills. Such component may in7 clude programs relating to— 

8 ‘‘(A) tobacco use, 

9 ‘‘(B) obesity, 

10 ‘‘(C) stress management, 

11 ‘‘(D) physical fitness, 

12 ‘‘(E) nutrition, 

13 ‘‘(F) substance abuse, 

14 ‘‘(G) depression, and 

15 ‘‘(H) mental health promotion (including 

16 anxiety). 

17 ‘‘(4) SUPPORTIVE ENVIRONMENT COMPO18 NENT.—A supportive environment component which 

19 includes the following: 

20 ‘‘(A) ON-SITE POLICIES.—Policies and 

21 services at the worksite which promote a 

22 healthy lifestyle, including policies relating to— 

23 ‘‘(i) tobacco use at the worksite, 


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1 ‘‘(ii) the nutrition of food available at 

2 the worksite through cafeterias and vend3 ing options, 

4 ‘‘(iii) minimizing stress and promoting 

5 positive mental health in the workplace, 

6 ‘‘(iv) where applicable, accessible and 

7 attractive stairs, and 

8 ‘‘(v) the encouragement of physical 

9 activity before, during, and after work 

10 hours. 

11 ‘‘(B) PARTICIPATION INCENTIVES.— 

12 ‘‘(i) IN GENERAL.—Qualified incentive 

13 benefits for each employee who participates 

14 in the health screenings described in para15 graph (1)(B) or the behavioral change pro16 grams described in paragraph (3). 

17 ‘‘(ii) QUALIFIED INCENTIVE BEN18 EFIT.—For purposes of clause (i), the 

19 term ‘qualified incentive benefit’ means 

20 any benefit which is approved by the Sec21 retary of Health and Human Services, in 

22 coordination with the Director of the Cen23 ters for Disease Control and Prevention. 

24 ‘‘(C) EMPLOYEE INPUT.—The opportunity 

25 for employees to participate in the management 


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1 of any qualified prevention and wellness to 

2 which this section applies. 

3 ‘‘(d) PARTICIPATION REQUIREMENT.— 

4 ‘‘(1) IN GENERAL.—No credit shall be allowed 

5 under subsection (a) unless the Secretary of Health 

6 and Human Services, in coordination with the Direc7 tor of the Centers for Disease Control and Preven8 tion, certifies, as a part of any certification described 

9 in subsection (b), that each prevention and wellness 

10 component of the qualified prevention and wellness 

11 applies to all qualified employees of the employer. 

12 The Secretary of Health and Human Services shall 

13 prescribe rules under which an employer shall not be 

14 treated as failing to meet the requirements of this 

15 subsection merely because the employer provides 

16 specialized programs for employees with specific 

17 health needs or unusual employment requirements or 

18 provides a pilot program to test new wellness strate19 gies. 

20 ‘‘(2) QUALIFIED EMPLOYEE.—For purposes of 

21 paragraph (1), the term ‘qualified employee’ 

22 means— 

23 ‘‘(A) for employers offering health insur24 ance coverage, an employee who is eligible for 

25 such coverage, or 


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1 ‘‘(B) for employers not offering health in2 surance coverage, an employee who works an 

3 average of not less than 25 hours per week dur4 ing the taxable year. 

5 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 

6 For purposes of this section— 

7 ‘‘(1) EMPLOYEE AND EMPLOYER.— 

8 ‘‘(A) PARTNERS AND PARTNERSHIPS.— 

9 The term ‘employee’ includes a partner and the 

10 term ‘employer’ includes a partnership. 

11 ‘‘(B) CERTAIN RULES TO APPLY.—Rules 

12 similar to the rules of section 52 shall apply. 

13 ‘‘(2) CERTAIN COSTS NOT INCLUDED.—Costs 

14 paid or incurred by an employer for food or health 

15 insurance shall not be taken into account under sub16 section (a). 

17 ‘‘(3) NO CREDIT WHERE GRANT AWARDED.— 

18 No credit shall be allowable under subsection (a) 

19 with respect to any qualified prevention and wellness 

20 of any taxpayer (other than an eligible employer de21 scribed in subsection (f)(2)(A)) who receives a grant 

22 provided by the United States, a State, or a political 

23 subdivision of a State for use in connection with 

24 such program. The Secretary shall prescribe rules 

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1 spect to any grant which does not constitute a sig2 nificant portion of the funding for the qualified pre3 vention and wellness. 

4 ‘‘(4) CREDIT PERIOD.— 

5 ‘‘(A) IN GENERAL.—The term ‘credit pe6 riod’ means the period of 10 consecutive taxable 

7 years beginning with the taxable year in which 

8 the qualified prevention and wellness is first 

9 certified under this section. 

10 ‘‘(B) SPECIAL RULE FOR EXISTING PRO11 GRAMS.—In the case of an employer (or prede12 cessor) which operates a prevention and 

13 wellness for its employees on the date of the en14 actment of this section, subparagraph (A) shall 

15 be applied by substituting ‘3 consecutive taxable 

16 years’ for ‘10 consecutive taxable years’. The 

17 Secretary shall prescribe rules under which this 

18 subsection shall not apply if an employer is re19 quired to make substantial modifications in the 

20 existing prevention and wellness in order to 

21 qualify such program for certification as a 

22 qualified prevention and wellness. 

23 ‘‘(C) CONTROLLED GROUPS.—For pur24 poses of this paragraph, all persons treated as 

25 a single employer under subsection (b), (c), 


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1 (m), or (o) of section 414 shall be treated as a 

2 single employer. 

3 ‘‘(f) PORTION OF CREDIT MADE REFUNDABLE.— 

4 ‘‘(1) IN GENERAL.—In the case of an eligible 

5 employer of an employee, the aggregate credits al6 lowed to a taxpayer under subpart C shall be in7 creased by the lesser of— 

8 ‘‘(A) the credit which would be allowed 

9 under this section without regard to this sub10 section and the limitation under section 38(c), 

11 or 

12 ‘‘(B) the amount by which the aggregate 

13 amount of credits allowed by this subpart (de14 termined without regard to this subsection) 

15 would increase if the limitation imposed by sec16 tion 38(c) for any taxable year were increased 

17 by the amount of employer payroll taxes im18 posed on the taxpayer during the calendar year 

19 in which the taxable year begins. 

20 The amount of the credit allowed under this sub21 section shall not be treated as a credit allowed under 

22 this subpart and shall reduce the amount of the 

23 credit otherwise allowable under subsection (a) with24 out regard to section 38(c). 


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1 ‘‘(2) ELIGIBLE EMPLOYER.—For purposes of 

2 this subsection, the term ‘eligible employer’ means 

3 an employer which is— 

4 ‘‘(A) a State or political subdivision there5 of, the District of Columbia, a possession of the 

6 United States, or an agency or instrumentality 

7 of any of the foregoing, or 

8 ‘‘(B) any organization described in section 

9 501(c) of the Internal Revenue Code of 1986 

10 which is exempt from taxation under section 

11 501(a) of such Code. 

12 ‘‘(3) EMPLOYER PAYROLL TAXES.—For pur13 poses of this subsection— 

14 ‘‘(A) IN GENERAL.—The term ‘employer 

15 payroll taxes’ means the taxes imposed by— 

16 ‘‘(i) section 3111(b), and 

17 ‘‘(ii) sections 3211(a) and 3221(a) 

18 (determined at a rate equal to the rate 

19 under section 3111(b)). 

20 ‘‘(B) SPECIAL RULE.—A rule similar to 

21 the rule of section 24(d)(2)(C) shall apply for 

22 purposes of subparagraph (A). 

23 ‘‘(g) TERMINATION.—This section shall not apply to 

24 any amount paid or incurred after December 31, 2017.’’. 


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1 (b) TREATMENT AS GENERAL BUSINESS CREDIT.— 

2 Subsection (b) of section 38 of the Internal Revenue Code 

3 of 1986 (relating to general business credit) is amended 

4 by striking ‘‘plus’’ at the end of paragraph (34), by strik5 ing the period at the end of paragraph (35) and inserting 

6 ‘‘, plus’’, and by adding at the end the following: 

7 ‘‘(36) the prevention and wellness credit deter8 mined under section 45R.’’. 

9 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

10 the Internal Revenue Code of 1986 (relating to certain 

11 expenses for which credits are allowable) is amended by 

12 adding at the end the following new subsection: 

13 ‘‘(g) PREVENTION AND WELLNESS PROGRAM CRED14 IT.— 

15 ‘‘(1) IN GENERAL.—No deduction shall be al16 lowed for that portion of the costs paid or incurred 

17 for a qualified prevention and wellness (within the 

18 meaning of section 45R) allowable as a deduction for 

19 the taxable year which is equal to the amount of the 

20 credit allowable for the taxable year under section 

21 45R. 

22 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP23 ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 

24 ‘‘(A) the amount of the credit determined 

25 for the taxable year under section 45R, exceeds 


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1 ‘‘(B) the amount allowable as a deduction 

2 for such taxable year for a qualified prevention 

3 and wellness, 

4 the amount chargeable to capital account for the 

5 taxable year for such expenses shall be reduced by 

6 the amount of such excess. 

7 ‘‘(3) CONTROLLED GROUPS.—In the case of a 

8 corporation which is a member of a controlled group 

9 of corporations (within the meaning of section 

10 41(f)(5)) or a trade or business which is treated as 

11 being under common control with other trades or 

12 business (within the meaning of section 

13 41(f)(1)(B)), this subsection shall be applied under 

14 rules prescribed by the Secretary similar to the rules 

15 applicable under subparagraphs (A) and (B) of sec16 tion 41(f)(1).’’. 

17 (d) CLERICAL AMENDMENT.—The table of sections 

18 for subpart D of part IV of subchapter A of chapter 1 

19 of the Internal Revenue Code of 1986 is amended by add20 ing at the end the following: 

‘‘Sec. 45R. Prevention and wellness program credit.’’. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2009. 

24 (f) OUTREACH.— 


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1 (1) IN GENERAL.—The Secretary of the Treas2 ury, in conjunction with the Director of the Centers 

3 for Disease Control and members of the business 

4 community, shall institute an outreach program to 

5 inform businesses about the availability of the pre6 vention and wellness credit under section 45R of the 

7 Internal Revenue Code of 1986 as well as to educate 

8 businesses on how to develop programs according to 

9 recognized and promising practices and on how to 

10 measure the success of implemented programs. 

11 (2) AUTHORIZATION OF APPROPRIATIONS.— 

12 There are authorized to be appropriated such sums 

13 as are necessary to carry out the outreach program 

14 described in paragraph (1). 

15 SEC. 283. GRANTS TO INCREASE PHYSICAL ACTIVITY AND 

16 EMOTIONAL WELLNESS, IMPROVE NUTRI17 TION, AND PROMOTE HEALTHY EATING BE18 HAVIORS. 

19 Part Q of title III of the Public Health Service Act 

20 (42 U.S.C. 280h et seq.) is amended by striking section 

21 399W and inserting the following: 


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1 ‘‘SEC. 399W. GRANTS TO INCREASE PHYSICAL ACTIVITY 

2 AND EMOTIONAL WELLNESS, IMPROVE NU3 TRITION, AND PROMOTE HEALTHY EATING 

4 BEHAVIORS AND HEALTHY LIVING. 

5 ‘‘(a) ESTABLISHMENT.— 

6 ‘‘(1) IN GENERAL.—The Secretary, acting 

7 through the Director of the Centers for Disease 

8 Control and Prevention and in coordination with the 

9 Administrator of the Health Resources and Services 

10 Administration, the Director of the Indian Health 

11 Service, the Secretary of Education, the Secretary of 

12 Agriculture, the Secretary of the Interior, the Direc13 tor of the National Institutes of Health, the Director 

14 of the Office of Women’s Health, and the heads of 

15 other appropriate agencies, shall award competitive 

16 grants to eligible entities to plan and implement pre17 vention and wellness programs that promote health 

18 and wellness and prevent chronic disease. Such 

19 grants may be awarded to target at-risk populations 

20 including youth, health disparity populations (as de21 fined in section 485E(d)), and the underserved. 

22 ‘‘(2) TERM.—The Secretary shall award grants 

23 under this subsection for a period not to exceed 4 

24 years. 

25 ‘‘(b) AWARD OF GRANTS.—An eligible entity desiring 

26 a grant under this section shall submit an application to 


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1 the Secretary at such time, in such manner, and con2 taining such information as the Secretary may require, in3 cluding— 

4 ‘‘(1) a plan describing a comprehensive pro5 gram of approaches to encourage healthy living, 

6 emotional wellness, healthy eating behaviors, and 

7 healthy levels of physical activity; 

8 ‘‘(2) the manner in which the eligible entity will 

9 coordinate with appropriate State and local authori10 ties and community-based organizations, including 

11 but not limited to— 

12 ‘‘(A) State and local educational agencies; 

13 ‘‘(B) departments of health; 

14 ‘‘(C) State directors of programs under 

15 section 17 of the Child Nutrition Act of 1966 

16 (42 U.S.C. 1786); and 

17 ‘‘(D) community-based organizations serv18 ing youth; and 

19 ‘‘(3) the manner in which the applicant will 

20 evaluate the effectiveness of the program carried out 

21 under this section. 

22 ‘‘(c) COORDINATION.—In awarding grants under this 

23 section, the Secretary shall ensure that the proposed pro24 grams show a history of addressing these issues, have pro25 gram evaluations that show success, and are coordinated 


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1 in substance and format with programs currently funded 

2 through other Federal agencies and operating within the 

3 community. 

4 ‘‘(d) ELIGIBLE ENTITY.—In this section, the term 

5 ‘eligible entity’ means— 

6 ‘‘(1) a city, county, tribe, territory, or State; 

7 ‘‘(2) a State educational agency; 

8 ‘‘(3) a tribal educational agency; 

9 ‘‘(4) a local educational agency; 

10 ‘‘(5) a federally qualified health center (as de11 fined in section 1861(aa)(4) of the Social Security 

12 Act); 

13 ‘‘(6) a rural health clinic; 

14 ‘‘(7) a health department; 

15 ‘‘(8) an Indian Health Service hospital or clinic; 

16 ‘‘(9) an Indian tribal health facility; 

17 ‘‘(10) an urban Indian facility; 

18 ‘‘(11) any health provider; 

19 ‘‘(12) an accredited university or college; 

20 ‘‘(13) a youth serving organization; 

21 ‘‘(14) a community-based organization; or 

22 ‘‘(15) any other entity determined appropriate 

23 by the Secretary. 

24 ‘‘(e) USE OF FUNDS.—An eligible entity that receives 

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1 able through the grant to plan and implement prevention 

2 and wellness programs that promote health and wellness 

3 and prevent chronic disease. 

4 ‘‘(f) MATCHING FUNDS.—In awarding grants under 

5 subsection (a), the Secretary may give priority to eligible 

6 entities who provide matching contributions. Such non7 Federal contributions may be cash or in-kind, fairly evalu8 ated, including plant, equipment, training, curriculum, or 

9 a preexisting evaluation framework. 

10 ‘‘(g) TECHNICAL ASSISTANCE.—The Secretary may 

11 set aside an amount not to exceed 10 percent of the total 

12 amount appropriated for a fiscal year under subsection (j) 

13 to permit the Director of the Centers for Disease Control 

14 and Prevention to provide grantees with technical support 

15 in the development, implementation, and evaluation of pre16 vention and wellness programs under this section and to 

17 disseminate information about effective strategies and 

18 interventions in promoting health and wellness and pre19 venting chronic disease. 

20 ‘‘(h) LIMITATION ON ADMINISTRATIVE COSTS.—An 

21 eligible entity awarded a grant under this section may not 

22 use more than 10 percent of funds awarded under such 

23 grant for administrative expenses. 

24 ‘‘(i) REPORT.—Not later than 6 years after the date 

25 of enactment of this section the Director of the Centers 


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1 for Disease Control and Prevention shall review the results 

2 of the grants awarded under this section and other related 

3 research and identify prevention and wellness programs 

4 that have demonstrated effectiveness in promoting health 

5 and wellness and preventing chronic disease. Such review 

6 shall include an identification of model curricula, best 

7 practices, and lessons learned, as well as recommendations 

8 for next steps to promote health and wellness and prevent 

9 chronic disease. Information derived from such review, in10 cluding model prevention and wellness program curricula, 

11 shall be disseminated to the public. 

12 ‘‘(j) DEFINITION.—In this section, the term ‘preven13 tion and wellness program’ means a program that consists 

14 of a combination of activities that are designed to increase 

15 awareness, assess risks, educate, and promote voluntary 

16 behavior change to improve the health of an individual, 

17 modify his or her consumer health behavior, enhance his 

18 or her personal well-being and productivity, and prevent 

19 illness and injury. 

20 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated to carry out this section, 

22 $60,000,000 for fiscal year 2010, and such sums as may 

23 be necessary for each of fiscal years 2011 through 2014.’’. 


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1 SEC. 284. PREVENTION AND WELLNESS PROGRAMS FOR IN2 DIVIDUALS AND FAMILIES. 

3 (a) IN GENERAL.—The Secretary of Health and 

4 Human Services shall encourage States to work with in5 surance companies on ways to promote and incentivize the 

6 participation of individuals and families in prevention and 

7 wellness programs, such as through insurance premium 

8 reductions. 

9 (b) DEFINITION.—In this section, the term ‘‘preven10 tion and wellness program’’ means a program that con11 sists of a combination of activities that are designed to 

12 increase awareness, assess risks, educate, and promote 

13 voluntary behavior change to improve the health of an in14 dividual, modify his or her consumer health behavior, en15 hance his or her personal well-being and productivity, and 

16 prevent illness and injury. 

17 TITLE III—EXPANDING ACCESS 

18 TO HEALTH CARE 

19 Subtitle A—State Innovation 

20 Program 

21 SEC. 301. ENSURING AFFORDABILITY AND ACCESS 

22 THROUGH UNIVERSAL ACCESS PROGRAMS. 

23 (a) STATE REQUIREMENT.— 

24 (1) IN GENERAL.—Not later than 2 years after 

25 the date of the enactment of this Act, in order to 

26 qualify for preferences and increased flexibility 


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1 under section 412(a), each State shall implement at 

2 least one of the following programs for the purposes 

3 of mitigating the cost to insurers of providing insur4 ance to high risk individuals in the State: 

5 (A) a qualified State reinsurance program 

6 defined in subsection (b); or 

7 (B) a subsection (c) qualified State high 

8 risk pool program defined in subsection (c)(1). 

9 (2) FUNDING.—As a condition of qualifying for 

10 preferences and increased flexibility under section 

11 412(a), a State shall— 

12 (A) make available non-Federal contribu13 tions, as specified by the Secretary, to ensure 

14 the continuing stability of any program imple15 mented by the State under paragraph (1); and 

16 (B) at the time of application, submit to 

17 the Secretary of Health and Human Services a 

18 budget plan, including assurances that the 

19 State has in place a method to satisfy the re20 quirement under subparagraph (A). 

21 (b) QUALIFIED STATE REINSURANCE PROGRAM.— 

22 (1) QUALIFIED STATE REINSURANCE PROGRAM

23 DEFINED.—For purposes of this section, the term 

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1 thorized by the State to provide reinsurance for 

2 health insurance coverage offered in the individual 

3 or small group market. 

4 (2) FORM OF PROGRAM.—A qualified State re5 insurance program may provide reinsurance— 

6 (A) on a prospective or retrospective basis; 

7 (B) that protects health insurance issuers 

8 against the annual aggregate spending of their 

9 enrollees; and 

10 (C) that provides purchase protection 

11 against individual catastrophic costs. 

12 (3) SATISFACTION OF HIPAA REQUIREMENT.— 

13 Section 2745(g)(1) of the Public Health Service Act 

14 is amended by adding at the end the following new 

15 subparagraph: 

16 ‘‘(B) TREATMENT OF CERTAIN REINSUR17 ANCE PROGRAMS.—For purposes of subpara18 graph (A), the term ‘qualified high risk pool’ 

19 includes a qualified State reinsurance program 

20 under the Medical Rights and Reform Act of 

21 2009.’’. 

22 (c) SUBSECTION (C) QUALIFYING STATE HIGH RISK

23 POOL.— 

24 (1) DEFINED.—For purposes of this section, 

25 the term ‘‘subsection (c) qualified State high risk 


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1 pool program’’ means a program that operates a 

2 high risk pool that— 

3 (A) is a qualified high risk pool under sec4 tion 2745(g)(1)(A) of the Public Health Service 

5 Act; and 

6 (B) meets all of the following require7 ments: 

8 (i) The high risk pool provides a vari9 ety of types of coverage, including at least 

10 one high deductible health plan that may 

11 be coupled with a health savings account. 

12 (ii) The high risk pool is funded with 

13 a stable funding source that is not solely 

14 dependent on an appropriation from the 

15 State legislature. 

16 (iii) The high risk pool has no waiting 

17 list and no pre-existing condition exclu18 sionary periods so that all eligible residents 

19 who are seeking coverage through the pool 

20 can receive coverage through the pool. 

21 (iv) The high risk pool allows for cov22 erage of individuals who, but for the 24- 

23 month disability waiting period under sec24 tion 226(b) of the Social Security Act, 


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1 would be eligible for Medicare during the 

2 period of such waiting period. 

3 (v) The high risk pool does not charge 

4 participants a premium that is more than 

5 150 percent of the average premium for 

6 coverage in the individual market in that 

7 State. 

8 (vi) The high risk pool conducts edu9 cation and outreach initiatives so that resi10 dents and insurance brokers understand 

11 that the pool is available to eligible resi12 dents. 

13 (2) RELATION TO SECTION 2745.—Section 

14 2745(g)(1) of the Public Health Service Act is fur15 ther amended— 

16 (A) in subparagraph (A), by striking ‘‘The 

17 term’’ and inserting ‘‘Subject to subparagraph 

18 (C), the term’’; and 

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

20 subparagraph: 

21 ‘‘(C) UPDATED DEFINITION.—Beginning 

22 on the last day of the 2-year period beginning 

23 in the date of the enactment of the Medical 

24 Rights and Reform Act of 2009, the term 

25 ‘qualified high risk pool’ means a pool that 


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1 meets the requirements of subparagraph (A) of 

2 this paragraph and the requirements of section 

3 411(c)(1) of such Act.’’. 

4 (3) RELATION TO CURRENT QUALIFIED HIGH

5 RISK POOL PROGRAM OPERATING A QUALIFIED HIGH

6 RISK POOL.—In the case of a State that is operating 

7 a qualified high risk pool under section 2745 of the 

8 Public Health Service Act as of the date of the en9 actment of this Act, the State may use current fund10 ing sources to transition from the operation of such 

11 a pool to— 

12 (A) the operation of a qualified State rein13 surance program described in subsection (b); or 

14 (B) a qualified high risk pool under section 

15 2745(g)(1)(C) of the Public Health Service Act. 

16 (d) WAIVERS.—In order to accommodate new and in17 novative programs, the Secretary may waive such require18 ments of this section for qualified State reinsurance pro19 grams and for subsection (c) qualifying State high risk 

20 pools as the Secretary deems appropriate. 

21 SEC. 302. ENHANCED FEDERAL FUNDING AND REDUCED 

22 RED-TAPE FOR STATE EFFORTS TO IMPROVE 

23 ACCESS TO HEALTH INSURANCE COVERAGE. 

24 (a) BENEFITS OF OPERATING A UNIVERSAL ACCESS

25 PROGRAM.— 


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1 (1) INCREASED FLEXIBILITY FOR STATES.—In 

2 the case of a State that conducts an universal access 

3 program described in section 301(a), the require4 ments of section 1115 of the Social Security Act (42 

5 U.S.C. 1315) shall not apply to activities conducted 

6 by a State through a State innovation program de7 scribed in section 303. 

8 (2) PREFERENCE FOR COMPETITIVE GRANTS.— 

9 Beginning 3 years after the date of the enactment 

10 of this Act, in the case of a competitive grant for 

11 which the only eligible entities are States, the Sec12 retary, in awarding such grant to a State, shall give 

13 preference to any State with a program that meets 

14 the requirements of paragraphs (1) and (2) of sec15 tion section 301(a). 

16 (b) STATE INCENTIVES FOR STATES IMPLEMENTING

17 A STATE INNOVATION PROGRAM.— 

18 (1) ONE-TIME PAYMENT FOR STATES IMPLE19 MENTING A STATE INNOVATION PROGRAM.—The 

20 Secretary shall make a one-time payment to a State 

21 that establishes a State innovation program under 

22 section 303. 

23 (2) ADDITIONAL PAYMENTS FOR STATES IM24 PLEMENTING A STATE INNOVATION PROGRAM.— 

25 (A) ANNUAL PAYMENTS.— 


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1 (i) IN GENERAL.—The Secretary shall 

2 make annual payments to a State that 

3 meets the requirements under subpara4 graph (B). 

5 (ii) LIMITATION.—The Secretary may 

6 make payments under clause (i) to a State 

7 for no more than a total period of 5 years, 

8 after which period such payments shall be 

9 subject to review by the Secretary. 

10 (B) REQUIREMENTS FOR ADDITIONAL PAY11 MENTS.—A State meets the requirements of 

12 this paragraph if the State— 

13 (i) operates a State innovation pro14 gram; 

15 (ii) conducts activities under at least 

16 2 of the paragraphs in section 303; 

17 (iii) operates a State transparency 

18 program described in section 304; and 

19 (iv) reduces the number of uninsured 

20 individuals in the State without signifi21 cantly expanding programs that increase 

22 direct spending for the Federal government 

23 and State budgets. 

24 (C) USE OF FUNDS.—The State shall use 

25 funds from a payment under subparagraph (A) 


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1 to improve the State’s universal access pro2 gram. 

3 SEC. 303. STATE INNOVATION PROGRAM DESCRIBED. 

4 For purposes of this subtitle, a State innovation pro5 gram is a program operated by a State that consists of 

6 any of the following: 

7 (1) A health plan finder described in section 

8 305. 

9 (2) Assistance for small businesses jointly pur10 chasing health insurance coverage through small 

11 business health plans under section 306. 

12 (3) An interstate compact on health insurance 

13 regulation under section 307. 

14 (4) The offering in the State of a basic cata15 strophic health benefit plan as defined in section 

16 308(1). 

17 SEC. 304. STATE TRANSPARENCY PROGRAM DESCRIBED. 

18 For purposes of this subtitle, a State transparency 

19 program is a program through which the State— 

20 (1) partners with private groups (including 

21 State medical associations) and, through such part22 nerships, obtains pricing and quality information re23 lated to health care services that are provided in the 

24 State; and 


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1 (2) provides members of the public with access 

2 to such information. 

3 SEC. 305. HEALTH PLAN FINDER. 

4 A health plan finder described under this section is 

5 a program, operated by a State (or a State acting in co6 operation with other States) that— 

7 (1) provides consumers with information about 

8 the health insurance coverage available to such con9 sumer (including information about basic cata10 strophic health benefit plans described in section 

11 303(5)); 

12 (2) connects consumers with health insurance 

13 specialists who provide advice to such consumers on 

14 which health insurance coverage would best serve the 

15 individual needs of each such consumer (taking into 

16 account the quality of the health care providers par17 ticipating in such in coverage); and 

18 (3) may, at the option of the State, enroll indi19 viduals— 

20 (A) who are eligible for the Medicaid pro21 gram under title XIX of the Social Security Act 

22 in such program; and 

23 (B) who are eligible for the State Chil24 dren’s Health Insurance Program under title 

25 XXI of such Act in such program. 


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1 SEC. 306. SMALL BUSINESS HEALTH PLANS. 

2 For purposes of a State innovation program under 

3 this subtitle, a State may assist small businesses in jointly 

4 purchasing health insurance coverage through small busi5 ness health plans that allow such businesses to combine 

6 purchasing and negotiating power and to pool risk in order 

7 to obtain more affordable health care benefits for the em8 ployees of such businesses. 

9 SEC. 307. INTERSTATE COMPACTS ON HEALTH INSURANCE 

10 REGULATION. 

11 For purposes of a State innovation program under 

12 this subtitle, a State may establish an interstate compact 

13 with one or more States to establish a common regulatory 

14 system for health insurance coverage for the purpose of 

15 increasing the availability and diversity of health insur16 ance coverage in the State, including provisions allowing 

17 small businesses to form small business health plans (as 

18 described in section 306) and permitting individuals to 

19 purchase insurance across State lines. 

20 SEC. 308. DEFINITIONS. 

21 For purposes of this subtitle: 

22 (1) BASIC CATASTROPHIC HEALTH BENEFIT

23 PLAN.—The term ‘‘basic catastrophic health benefits 

24 plan’’ means health insurance coverage— 


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1 (A) that is a high deductible plan (as de2 fined under section 223(c)(2) of the Internal 

3 Revenue Code of 1986); and 

4 (B) that is not subject to benefit mandates 

5 otherwise applicable under State law. 

6 (2) HEALTH INSURANCE COVERAGE.—The term 

7 ‘‘health insurance coverage’’ has the meaning given 

8 such term under section 2791(b)(1) of the Public 

9 Health Service Act. 

10 (3) SECRETARY.—The term ‘‘Secretary’’ means 

11 the Secretary of Health and Human Services. 

12 (4) STATE.—The term ‘‘State’’ means the sev13 eral States, the District of Columbia, Guam, the 

14 Commonwealth of Puerto Rico, the Northern Mar15 iana Islands, the Virgin Islands, American Samoa, 

16 and the Trust Territory of the Pacific Islands. 

17 (5) STATE INNOVATION PROGRAM.—The term 

18 ‘‘State innovation program’’ means a program de19 scribed in section 303. 

20 (6) UNIVERSAL ACCESS PROGRAM.—The term 

21 ‘‘universal access program’’ means a program de22 scribed in section 301. 

23 SEC. 309. AUTHORIZATION FOR APPROPRIATIONS. 

24 There is authorized to be appropriated such sums as 

25 are necessary to carry out the provisions of this subtitle. 


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1 Subtitle B—Interstate Market for 

2 Health Insurance 

3 SEC. 311. SPECIFICATION OF CONSTITUTIONAL AUTHORITY 

4 FOR ENACTMENT OF LAW. 

5 This subtitle is enacted pursuant to the power grant6 ed Congress under article I, section 8, clause 3, of the 

7 United States Constitution. 

8 SEC. 312. FINDINGS. 

9 Congress finds the following: 

10 (1) The application of numerous and significant 

11 variations in State law impacts the ability of insur12 ers to offer, and individuals to obtain, affordable in13 dividual health insurance coverage, thereby impeding 

14 commerce in individual health insurance coverage. 

15 (2) Individual health insurance coverage is in16 creasingly offered through the Internet, other elec17 tronic means, and by mail, all of which are inher18 ently part of interstate commerce. 

19 (3) In response to these issues, it is appropriate 

20 to encourage increased efficiency in the offering of 

21 individual health insurance coverage through a col22 laborative approach by the States in regulating this 

23 coverage. 

24 (4) The establishment of risk-retention groups 

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1 ance across State lines, as the acts establishing 

2 those groups allow insurance to be sold in multiple 

3 States but regulated by a single State. 

4 SEC. 313. COOPERATIVE GOVERNING OF INDIVIDUAL 

5 HEALTH INSURANCE COVERAGE. 

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

7 Service Act (42 U.S.C. 300gg et seq.) is amended by add8 ing at the end the following new part: 

9 ‘‘PART D—COOPERATIVE GOVERNING OF 

10 INDIVIDUAL HEALTH INSURANCE COVERAGE 

11 ‘‘SEC. 2795. DEFINITIONS. 

12 ‘‘In this part: 

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

14 State’ means, with respect to individual health insur15 ance coverage offered by a health insurance issuer, 

16 the State designated by the issuer as the State 

17 whose covered laws shall govern the health insurance 

18 issuer in the sale of such coverage under this part. 

19 An issuer, with respect to a particular policy, may 

20 only designate one such State as its primary State 

21 with respect to all such coverage it offers. Such an 

22 issuer may not change the designated primary State 

23 with respect to individual health insurance coverage 

24 once the policy is issued, except that such a change 

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1 spect to such designated State, the issuer is deemed 

2 to be doing business in that State. 

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

4 State’ means, with respect to individual health insur5 ance coverage offered by a health insurance issuer, 

6 any State that is not the primary State. In the case 

7 of a health insurance issuer that is selling a policy 

8 in, or to a resident of, a secondary State, the issuer 

9 is deemed to be doing business in that secondary 

10 State. 

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

12 ‘health insurance issuer’ has the meaning given such 

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

14 issuer must be licensed in the primary State and be 

15 qualified to sell individual health insurance coverage 

16 in that State. 

17 ‘‘(4) INDIVIDUAL HEALTH INSURANCE COV18 ERAGE.—The term ‘individual health insurance cov19 erage’ means health insurance coverage offered in 

20 the individual market, as defined in section 

21 2791(e)(1). 

22 ‘‘(5) APPLICABLE STATE AUTHORITY.—The 

23 term ‘applicable State authority’ means, with respect 

24 to a health insurance issuer in a State, the State in25 surance commissioner or official or officials desVerDate Nov 24 2008 20:23 Nov 02, 2009 Jkt 089200 PO 00000 Frm 00150 Fmt 6652 Sfmt 6201 E:\BILLS\H3970.IH H3970

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1 ignated by the State to enforce the requirements of 

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

3 ‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 

4 term ‘hazardous financial condition’ means that, 

5 based on its present or reasonably anticipated finan6 cial condition, a health insurance issuer is unlikely 

7 to be able— 

8 ‘‘(A) to meet obligations to policyholders 

9 with respect to known claims and reasonably 

10 anticipated claims; or 

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

12 course of business. 

13 ‘‘(7) COVERED LAWS.— 

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

15 laws’ means the laws, rules, regulations, agree16 ments, and orders governing the insurance busi17 ness pertaining to— 

18 ‘‘(i) individual health insurance cov19 erage issued by a health insurance issuer; 

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

21 medical underwriting), renewal, and 

22 issuance of individual health insurance cov23 erage to an individual; 

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

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1 erage of health care and insurance related 

2 services; 

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

4 relation to individual health insurance cov5 erage of management, operations, and in6 vestment activities of a health insurance 

7 issuer; and 

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

9 relation to individual health insurance cov10 erage of loss control and claims adminis11 tration for a health insurance issuer with 

12 respect to liability for which the issuer pro13 vides insurance. 

14 ‘‘(B) EXCEPTION.—Such term does not in15 clude any law, rule, regulation, agreement, or 

16 order governing the use of care or cost manage17 ment techniques, including any requirement re18 lated to provider contracting, network access or 

19 adequacy, health care data collection, or quality 

20 assurance. 

21 ‘‘(8) STATE.—The term ‘State’ means the 50 

22 States and includes the District of Columbia, Puerto 

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

24 and the Northern Mariana Islands. 


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1 ‘‘(9) UNFAIR CLAIMS SETTLEMENT PRAC2 TICES.—The term ‘unfair claims settlement prac3 tices’ means only the following practices: 

4 ‘‘(A) Knowingly misrepresenting to claim5 ants and insured individuals relevant facts or 

6 policy provisions relating to coverage at issue. 

7 ‘‘(B) Failing to acknowledge with reason8 able promptness pertinent communications with 

9 respect to claims arising under policies. 

10 ‘‘(C) Failing to adopt and implement rea11 sonable standards for the prompt investigation 

12 and settlement of claims arising under policies. 

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

14 and equitable settlement of claims submitted in 

15 which liability has become reasonably clear. 

16 ‘‘(E) Refusing to pay claims without con17 ducting a reasonable investigation. 

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

19 claims within a reasonable period of time after 

20 having completed an investigation related to 

21 those claims. 

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

23 insured individuals or their beneficiaries to in24 stitute suits to recover amounts due under its 

25 policies by offering substantially less than the 


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1 amounts ultimately recovered in suits brought 

2 by them. 

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

4 to settle or settling claims for less than the 

5 amount that a reasonable person would believe 

6 the insured individual or his or her beneficiary 

7 was entitled by reference to written or printed 

8 advertising material accompanying or made 

9 part of an application. 

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

11 on the basis of an application that was materi12 ally altered without notice to, or knowledge or 

13 consent of, the insured. 

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

15 present claims within 15 calendar days of a re16 quests with reasonable explanations regarding 

17 their use. 

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

19 time than that prescribed in the policy or by the 

20 law of the primary State. 

21 ‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 

22 and abuse’ means an act or omission committed by 

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

24 commits, or conceals any material information con25 cerning, one or more of the following: 


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

2 or preparing with knowledge or belief that it 

3 will be presented to or by an insurer, a rein4 surer, broker or its agent, false information as 

5 part of, in support of or concerning a fact ma6 terial to one or more of the following: 

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

8 renewal of an insurance policy or reinsur9 ance contract. 

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

11 or reinsurance contract. 

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

13 pursuant to an insurance policy or reinsur14 ance contract. 

15 ‘‘(iv) Premiums paid on an insurance 

16 policy or reinsurance contract. 

17 ‘‘(v) Payments made in accordance 

18 with the terms of an insurance policy or 

19 reinsurance contract. 

20 ‘‘(vi) A document filed with the com21 missioner or the chief insurance regulatory 

22 official of another jurisdiction. 

23 ‘‘(vii) The financial condition of an in24 surer or reinsurer. 


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1 ‘‘(viii) The formation, acquisition, 

2 merger, reconsolidation, dissolution or 

3 withdrawal from one or more lines of in4 surance or reinsurance in all or part of a 

5 State by an insurer or reinsurer. 

6 ‘‘(ix) The issuance of written evidence 

7 of insurance. 

8 ‘‘(x) The reinstatement of an insur9 ance policy. 

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

11 renewal insurance risks on behalf of an insurer 

12 reinsurer or other person engaged in the busi13 ness of insurance by a person who knows or 

14 should know that the insurer or other person 

15 responsible for the risk is insolvent at the time 

16 of the transaction. 

17 ‘‘(C) Transaction of the business of insur18 ance in violation of laws requiring a license, cer19 tificate of authority or other legal authority for 

20 the transaction of the business of insurance. 

21 ‘‘(D) Attempt to commit, aiding or abet22 ting in the commission of, or conspiracy to com23 mit the acts or omissions specified in this para24 graph. 


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1 ‘‘SEC. 2796. APPLICATION OF LAW. 

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

3 State shall apply to individual health insurance coverage 

4 offered by a health insurance issuer in the primary State 

5 and in any secondary State, but only if the coverage and 

6 issuer comply with the conditions of this section with re7 spect to the offering of coverage in any secondary State. 

8 ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC9 ONDARY STATE.—Except as provided in this section, a 

10 health insurance issuer with respect to its offer, sale, rat11 ing (including medical underwriting), renewal, and 

12 issuance of individual health insurance coverage in any 

13 secondary State is exempt from any covered laws of the 

14 secondary State (and any rules, regulations, agreements, 

15 or orders sought or issued by such State under or related 

16 to such covered laws) to the extent that such laws would— 

17 ‘‘(1) make unlawful, or regulate, directly or in18 directly, the operation of the health insurance issuer 

19 operating in the secondary State, except that any 

20 secondary State may require such an issuer— 

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

22 applicable premium and other taxes (including 

23 high risk pool assessments) which are levied on 

24 insurers and surplus lines insurers, brokers, or 

25 policyholders under the laws of the State; 


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

2 State insurance commissioner as its agent solely 

3 for the purpose of receiving service of legal doc4 uments or process; 

5 ‘‘(C) to submit to an examination of its fi6 nancial condition by the State insurance com7 missioner in any State in which the issuer is 

8 doing business to determine the issuer’s finan9 cial condition, if— 

10 ‘‘(i) the State insurance commissioner 

11 of the primary State has not done an ex12 amination within the period recommended 

13 by the National Association of Insurance 

14 Commissioners; and 

15 ‘‘(ii) any such examination is con16 ducted in accordance with the examiners’ 

17 handbook of the National Association of 

18 Insurance Commissioners and is coordi19 nated to avoid unjustified duplication and 

20 unjustified repetition; 

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

22 issued— 

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1 cial impairment under subparagraph (C); 

2 or 

3 ‘‘(ii) in a voluntary dissolution pro4 ceeding; 

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

6 by a court of competent jurisdiction, upon a pe7 tition by the State insurance commissioner al8 leging that the issuer is in hazardous financial 

9 condition; 

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

11 basis, in any insurance insolvency guaranty as12 sociation or similar association to which a 

13 health insurance issuer in the State is required 

14 to belong; 

15 ‘‘(G) to comply with any State law regard16 ing fraud and abuse (as defined in section 

17 2795(10)), except that if the State seeks an in18 junction regarding the conduct described in this 

19 subparagraph, such injunction must be obtained 

20 from a court of competent jurisdiction; 

21 ‘‘(H) to comply with any State law regard22 ing unfair claims settlement practices (as de23 fined in section 2795(9)); or 

24 ‘‘(I) to comply with the applicable require25 ments for independent review under section 


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1 2798 with respect to coverage offered in the 

2 State; 

3 ‘‘(2) require any individual health insurance 

4 coverage issued by the issuer to be countersigned by 

5 an insurance agent or broker residing in that Sec6 ondary State; or 

7 ‘‘(3) otherwise discriminate against the issuer 

8 issuing insurance in both the primary State and in 

9 any secondary State. 

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

11 health insurance issuer shall provide the following notice, 

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

13 in a secondary State under this part by such a health in14 surance issuer and at renewal of the policy, with the 5 

15 blank spaces therein being appropriately filled with the 

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

17 State, the name of the secondary State, the name of the 

18 secondary State, and the name of the secondary State, re19 spectively, for the coverage concerned: 

20 ‘‘Notice 

21 ‘‘ ‘This policy is issued by XXXXX and is gov22 erned by the laws and regulations of the State of 

23 XXXXX, and it has met all the laws of that State 

24 as determined by that State’s Department of Insur25 ance. This policy may be less expensive than others 


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1 because it is not subject to all of the insurance laws 

2 and regulations of the State of XXXXX, including 

3 coverage of some services or benefits mandated by 

4 the law of the State of XXXXX. Additionally, this 

5 policy is not subject to all of the consumer protec6 tion laws or restrictions on rate changes of the State 

7 of XXXXX. As with all insurance products, before 

8 purchasing this policy, you should carefully review 

9 the policy and determine what health care services 

10 the policy covers and what benefits it provides, in11 cluding any exclusions, limitations, or conditions for 

12 such services or benefits.’. 

13 ‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS

14 AND PREMIUM INCREASES.— 

15 ‘‘(1) IN GENERAL.—For purposes of this sec16 tion, a health insurance issuer that provides indi17 vidual health insurance coverage to an individual 

18 under this part in a primary or secondary State may 

19 not upon renewal— 

20 ‘‘(A) move or reclassify the individual in21 sured under the health insurance coverage from 

22 the class such individual is in at the time of 

23 issue of the contract based on the health-status 

24 related factors of the individual; or 


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1 ‘‘(B) increase the premiums assessed the 

2 individual for such coverage based on a health 

3 status-related factor or change of a health sta4 tus-related factor or the past or prospective 

5 claim experience of the insured individual. 

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

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

8 issuer— 

9 ‘‘(A) from terminating or discontinuing 

10 coverage or a class of coverage in accordance 

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

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

13 policy holders within a class based on claims ex14 perience; 

15 ‘‘(C) from changing premiums or offering 

16 discounted premiums to individuals who engage 

17 in wellness activities at intervals prescribed by 

18 the issuer, if such premium changes or incen19 tives— 

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

21 the insurance contract; 

22 ‘‘(ii) are based on specific wellness ac23 tivities that are not applicable to all indi24 viduals; and 


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1 ‘‘(iii) are not obtainable by all individ2 uals to whom coverage is offered; 

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

4 ‘‘(E) from retroactively adjusting the rates 

5 charged an insured individual if the initial rates 

6 were set based on material misrepresentation by 

7 the individual at the time of issue. 

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

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

10 individual health insurance coverage in a secondary State 

11 unless that coverage is currently offered for sale in the 

12 primary State. 

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

14 HEALTH INSURANCE ISSUERS.—Any State may require 

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

16 broker for a health insurance issuer with respect to the 

17 offering of individual health insurance coverage obtain a 

18 license from that State, with commissions or other com19 pensation subject to the provisions of the laws of that 

20 State, except that a State may not impose any qualifica21 tion or requirement which discriminates against a non22 resident agent or broker. 

23 ‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN24 SURANCE COMMISSIONER.—Each health insurance issuer 


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1 issuing individual health insurance coverage in both pri2 mary and secondary States shall submit— 

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

4 State in which it intends to offer such coverage, be5 fore it may offer individual health insurance cov6 erage in such State— 

7 ‘‘(A) a copy of the plan of operation or fea8 sibility study or any similar statement of the 

9 policy being offered and its coverage (which 

10 shall include the name of its primary State and 

11 its principal place of business); 

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

13 designation of its primary State; and 

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

15 issuer’s compliance with all the laws of the pri16 mary State; and 

17 ‘‘(2) to the insurance commissioner of each sec18 ondary State in which it offers individual health in19 surance coverage, a copy of the issuer’s quarterly fi20 nancial statement submitted to the primary State, 

21 which statement shall be certified by an independent 

22 public accountant and contain a statement of opin23 ion on loss and loss adjustment expense reserves 

24 made by— 


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

2 of Actuaries; or 

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

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

5 Nothing in this section shall be construed to affect the 

6 authority of any Federal or State court to enjoin— 

7 ‘‘(1) the solicitation or sale of individual health 

8 insurance coverage by a health insurance issuer to 

9 any person or group who is not eligible for such in10 surance; or 

11 ‘‘(2) the solicitation or sale of individual health 

12 insurance coverage that violates the requirements of 

13 the law of a secondary State which are described in 

14 subparagraphs (A) through (H) of section 

15 2796(b)(1). 

16 ‘‘(i) POWER OF SECONDARY STATES TO TAKE AD17 MINISTRATIVE ACTION.—Nothing in this section shall be 

18 construed to affect the authority of any State to enjoin 

19 conduct in violation of that State’s laws described in sec20 tion 2796(b)(1). 

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

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

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

24 paragraph (2), nothing in this section shall be con25 strued to affect the authority of any State to make 


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

2 State with respect to which a health insurance issuer 

3 is not exempt under subsection (b). 

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

5 If a State seeks an injunction regarding the conduct 

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

7 (h), such injunction must be obtained from a Fed8 eral or State court of competent jurisdiction. 

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

10 section shall affect the authority of any State to bring ac11 tion in any Federal or State court. 

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

13 this section shall be construed to affect the applicability 

14 of State laws generally applicable to persons or corpora15 tions. 

16 ‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO

17 HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 

18 health insurance issuer is offering coverage in a primary 

19 State that does not accommodate residents of secondary 

20 States or does not provide a working mechanism for resi21 dents of a secondary State, and the issuer is offering cov22 erage under this part in such secondary State which has 

23 not adopted a qualified high risk pool as its acceptable 

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

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1 surance coverage offered in a secondary State under this 

2 part, comply with the guaranteed availability requirements 

3 for eligible individuals in section 2741. 

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

5 BEFORE ISSUER MAY SELL INTO SECONDARY 

6 STATES. 

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

8 issue individual health insurance coverage in a secondary 

9 State if the State insurance commissioner does not use 

10 a risk-based capital formula for the determination of cap11 ital and surplus requirements for all health insurance 

12 issuers. 

13 ‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE14 DURES. 

15 ‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur16 ance issuer may not offer, sell, or issue individual health 

17 insurance coverage in a secondary State under the provi18 sions of this title unless— 

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

20 State have legislation or regulations in place estab21 lishing an independent review process for individuals 

22 who are covered by individual health insurance cov23 erage, or 

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

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1 ther of such States, the issuer provides an inde2 pendent review mechanism substantially identical (as 

3 determined by the applicable State authority of such 

4 State) to that prescribed in the ‘Health Carrier Ex5 ternal Review Model Act’ of the National Association 

6 of Insurance Commissioners for all individuals who 

7 purchase insurance coverage under the terms of this 

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

9 is conducted by an independent medical reviewer, or 

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

11 requirements of subsection (b) are met. 

12 ‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL

13 REVIEWERS.—In the case of any independent review 

14 mechanism referred to in subsection (a)(2)— 

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

16 claim to an independent medical reviewer, or to any 

17 panel of such reviewers, to conduct independent 

18 medical review, the issuer shall ensure that— 

19 ‘‘(A) each independent medical reviewer 

20 meets the qualifications described in paragraphs 

21 (2) and (3); 

22 ‘‘(B) with respect to each review, each re23 viewer meets the requirements of paragraph (4) 

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


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1 panel, meets the requirements described in 

2 paragraph (5); and 

3 ‘‘(C) compensation provided by the issuer 

4 to each reviewer is consistent with paragraph 

5 (6). 

6 ‘‘(2) LICENSURE AND EXPERTISE.—Each inde7 pendent medical reviewer shall be a physician 

8 (allopathic or osteopathic) or health care profes9 sional who— 

10 ‘‘(A) is appropriately credentialed or li11 censed in 1 or more States to deliver health 

12 care services; and 

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

14 the diagnosis, or provides the type of treatment 

15 under review. 

16 ‘‘(3) INDEPENDENCE.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), each independent medical reviewer 

19 in a case shall— 

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

21 in paragraph (7)); 

22 ‘‘(ii) not have a material familial, fi23 nancial, or professional relationship with 

24 such a party; and 


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

2 interest with such a party (as determined 

3 under regulations). 

4 ‘‘(B) EXCEPTION.—Nothing in subpara5 graph (A) shall be construed to— 

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

7 the basis of affiliation with the issuer, 

8 from serving as an independent medical re9 viewer if— 

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

11 not reasonably available; 

12 ‘‘(II) the affiliated individual is 

13 not involved in the provision of items 

14 or services in the case under review; 

15 ‘‘(III) the fact of such an affili16 ation is disclosed to the issuer and the 

17 enrollee (or authorized representative) 

18 and neither party objects; and 

19 ‘‘(IV) the affiliated individual is 

20 not an employee of the issuer and 

21 does not provide services exclusively or 

22 primarily to or on behalf of the issuer; 

23 ‘‘(ii) prohibit an individual who has 

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1 ing as an independent medical reviewer 

2 merely on the basis of such affiliation if 

3 the affiliation is disclosed to the issuer and 

4 the enrollee (or authorized representative), 

5 and neither party objects; or 

6 ‘‘(iii) prohibit receipt of compensation 

7 by an independent medical reviewer from 

8 an entity if the compensation is provided 

9 consistent with paragraph (6). 

10 ‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL

11 IN SAME FIELD.— 

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

13 treatment, or the provision of items or serv14 ices— 

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

16 a practicing physician (allopathic or osteo17 pathic) of the same or similar specialty, as 

18 a physician who, acting within the appro19 priate scope of practice within the State in 

20 which the service is provided or rendered, 

21 typically treats the condition, makes the 

22 diagnosis, or provides the type of treat23 ment under review; or 

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

25 professional, the reviewer, or at least 1 


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1 member of the review panel, shall be a 

2 practicing non-physician health care pro3 fessional of the same or similar specialty 

4 as the non-physician health care profes5 sional who, acting within the appropriate 

6 scope of practice within the State in which 

7 the service is provided or rendered, typi8 cally treats the condition, makes the diag9 nosis, or provides the type of treatment 

10 under review. 

11 ‘‘(B) PRACTICING DEFINED.—For pur12 poses of this paragraph, the term ‘practicing’ 

13 means, with respect to an individual who is a 

14 physician or other health care professional, that 

15 the individual provides health care services to 

16 individual patients on average at least 2 days 

17 per week. 

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

19 external review relating to a child, a reviewer shall 

20 have expertise under paragraph (2) in pediatrics. 

21 ‘‘(6) LIMITATIONS ON REVIEWER COMPENSA22 TION.—Compensation provided by the issuer to an 

23 independent medical reviewer in connection with a 

24 review under this section shall— 

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


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1 ‘‘(B) not be contingent on the decision ren2 dered by the reviewer. 

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

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

5 respect to a denial of a claim under a coverage relat6 ing to an enrollee, any of the following: 

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

8 officer, director, or employee of the issuer. 

9 ‘‘(B) The enrollee (or authorized represent10 ative). 

11 ‘‘(C) The health care professional that pro12 vides the items or services involved in the de13 nial. 

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

15 services (or treatment) involved in the denial 

16 are provided. 

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

18 other item that is included in the items or serv19 ices involved in the denial. 

20 ‘‘(F) Any other party determined under 

21 any regulations to have a substantial interest in 

22 the denial involved. 

23 ‘‘(8) DEFINITIONS.—For purposes of this sub24 section: 


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

2 means, with respect to health insurance cov3 erage offered by a health insurance issuer, an 

4 individual enrolled with the issuer to receive 

5 such coverage. 

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

7 term ‘health care professional’ means an indi8 vidual who is licensed, accredited, or certified 

9 under State law to provide specified health care 

10 services and who is operating within the scope 

11 of such licensure, accreditation, or certification. 

12 ‘‘SEC. 2799. ENFORCEMENT. 

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

14 respect to specific individual health insurance coverage the 

15 primary State for such coverage has sole jurisdiction to 

16 enforce the primary State’s covered laws in the primary 

17 State and any secondary State. 

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

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

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

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

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

23 initiated by the applicable secondary State authority, the 

24 court of competent jurisdiction shall apply the covered 

25 laws of the primary State. 


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

2 of individual health insurance coverage offered in a sec3 ondary State that fails to comply with the covered laws 

4 of the primary State, the applicable State authority of the 

5 secondary State may notify the applicable State authority 

6 of the primary State.’’. 

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

8 subsection (a) shall apply to individual health insurance 

9 coverage offered, issued, or sold after the date that is one 

10 year after the date of the enactment of this subtitle. 

11 (c) GAO ONGOING STUDY AND REPORTS.— 

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

13 United States shall conduct an ongoing study con14 cerning the effect of the amendment made by sub15 section (a) on— 

16 (A) the number of uninsured and under-in17 sured; 

18 (B) the availability and cost of health in19 surance policies for individuals with pre-existing 

20 medical conditions; 

21 (C) the availability and cost of health in22 surance policies generally; 

23 (D) the elimination or reduction of dif24 ferent types of benefits under health insurance 

25 policies offered in different States; and 


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1 (E) cases of fraud or abuse relating to 

2 health insurance coverage offered under such 

3 amendment and the resolution of such cases. 

4 (2) ANNUAL REPORTS.—The Comptroller Gen5 eral shall submit to Congress an annual report, after 

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

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

8 the ongoing study conducted under paragraph (1). 

9 SEC. 314. SEVERABILITY. 

10 If any provision of the Act or the application of such 

11 provision to any person or circumstance is held to be un12 constitutional, the remainder of this subtitle and the appli13 cation of the provisions of such to any other person or 

14 circumstance shall not be affected. 

15 Subtitle C—Young Adult 

16 Healthcare Coverage 

17 SEC. 321. REQUIRING THE OPTION OF EXTENSION OF DE18 PENDENT COVERAGE FOR CERTAIN UNMAR19 RIED, UNINSURED YOUNG ADULTS. 

20 (a) UNDER GROUP HEALTH PLANS.— 

21 (1) EMPLOYEE RETIREMENT INCOME SECURITY

22 ACT OF 1974 AMENDMENTS.— 

23 (A) IN GENERAL.—The Employee Retire24 ment Income Security Act of 1974 is amended 


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1 by inserting after section 703 the following new 

2 section: 

3 ‘‘SEC. 704. REQUIRING THE OPTION OF EXTENSION OF DE4 PENDENT COVERAGE FOR CERTAIN UNMAR5 RIED, UNINSURED YOUNG ADULTS. 

6 ‘‘(a) IN GENERAL.—A group health plan and a health 

7 insurance issuer offering health insurance coverage in con8 nection with a group health plan that provides coverage 

9 for dependent children shall make available such coverage, 

10 at the option of the participant involved, for one or more 

11 qualified children (as defined in subsection (b)) of the par12 ticipant. 

13 ‘‘(b) QUALIFIED CHILD DEFINED.—In this section, 

14 the term ‘qualified child’ means, with respect to a partici15 pant in a group health plan or group health insurance cov16 erage, an individual who (but for age) would be treated 

17 as a dependent child of the participant under such plan 

18 or coverage and who— 

19 ‘‘(1) is under 26 years of age; 

20 ‘‘(2) is not married; 

21 ‘‘(3) has no dependents; 

22 ‘‘(4) is a citizen or national of the United 

23 States; and 

24 ‘‘(5) is not provided coverage as a participant, 

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1 tion) under any other creditable coverage (as defined 

2 in section 701(c)(1)). 

3 ‘‘(c) PREMIUMS.—Nothing in this section shall be 

4 construed as preventing a group health plan or health in5 surance issuer with respect to group health insurance cov6 erage from increasing the premiums otherwise required for 

7 coverage provided under this section.’’. 

8 (B) CLERICAL AMENDMENT.—The table of 

9 contents of such Act is amended by inserting 

10 after the item relating to section 703 the fol11 lowing new item: 

‘‘704. Requiring the option of extension of dependent coverage for certain unmarried young adults.’’. 

12 (2) PHSA.—Title XXVII of the Public Health 

13 Service Act is amended by inserting after section 

14 2702 the following new section: 

15 ‘‘SEC. 2703. REQUIRING THE OPTION OF EXTENSION OF DE16 PENDENT COVERAGE FOR CERTAIN UNMAR17 RIED, UNINSURED YOUNG ADULTS. 

18 ‘‘The provisions of section 704 of the Employee Re19 tirement Income Security Act of 1974 shall apply to health 

20 insurance coverage offered by a health insurance issuer 

21 in the individual market in the same manner as they apply 

22 to health insurance coverage offered by a health insurance 

23 issuer in connection with a group health plan in the small 

24 or large group market.’’. 


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1 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 

2 Title XXVII of the Public Health Service Act is amended 

3 by inserting after section 2745 the following new section: 

4 ‘‘SEC. 2746. REQUIRING THE OPTION OF EXTENSION OF DE5 PENDENT COVERAGE FOR CERTAIN UNMAR6 RIED YOUNG ADULTS. 

7 ‘‘The provisions of section 2703 shall apply to health 

8 insurance coverage offered by a health insurance issuer 

9 in the individual market in the same manner as they apply 

10 to health insurance coverage offered by a health insurance 

11 issuer in connection with a group health plan in the small 

12 or large group market.’’. 

13 (c) EFFECTIVE DATES.— 

14 (1) GROUP HEALTH PLANS.— 

15 (A) IN GENERAL.—The amendments made 

16 by subsection (a) shall apply to group health 

17 plans for plan years beginning on or after the 

18 date that is 90 days after the date of enactment 

19 of this Act. 

20 (B) SPECIAL RULE FOR COLLECTIVE BAR21 GAINING AGREEMENTS.—In the case of a group 

22 health plan maintained pursuant to 1 or more 

23 collective bargaining agreements between em24 ployee representatives and 1 or more employers, 

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1 tive bargaining agreement relating to the plan 

2 which amends the plan solely to conform to any 

3 requirement added by an amendment made by 

4 subsection (a) shall not be treated as a termi5 nation of such collective bargaining agreement. 

6 (2) INDIVIDUAL HEALTH INSURANCE COV7 ERAGE.—Section 2746 of the Public Health Service 

8 Act, as inserted by subsection (b), shall apply with 

9 respect to health insurance coverage offered, sold, 

10 issued, renewed, in effect, or operated in the indi11 vidual market after the first day of the first month 

12 that begins more than 90 days after the date of the 

13 enactment of this Act. 

14 TITLE IV—OFFSETS 

15 SEC. 401. TRANSFER OF UNOBILGATED STIMULUS FUNDS. 

16 (a) RESCISSION.—Effective on the date of the enact17 ment of this Act, any unobligated balances available on 

18 such date of funds made available by division A of the 

19 American Recovery and Reinvestment Act of 2009 (Public 

20 Law 111–5), other than under the heading ‘‘Federal 

21 Highway Administration-Highway Infrastructure Invest22 ment’’ in title XII of such division, are rescinded and such 

23 provisions are repealed. 

24 (b) REPEAL.—The provisions of division B of the 

25 American Recovery and Reinvestment Act of 2009 (Public 


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1 Law 111–5), other than titles I and II of such division 

2 are repealed. 

3 (c) TRANSFER OF FUNDS.—The total amount re4 scinded by this section shall be deposited in the Federal 

5 Treasury. 

Æ 


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