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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3970 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medical Rights and Reform Act of 
2009''.

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.
                     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.
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.

          TITLE I--PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

SEC. 101. PROHIBITION ON RESTRICTIONS ON THE PRACTICE OF MEDICINE AND 
              OTHER HEALTH CARE PROFESSIONS.

    (a) In General.--Subject to subsection (b), no Federal funds shall 
be used to permit any Federal officer or employee to exercise any 
supervision or control over--
            (1) the practice of medicine, the practice of other health 
        care professions, or the manner in which health care services 
        are provided;
            (2) the provision, by a physician or a health care 
        practitioner, of advice to a patient about the patient's health 
        status or recommended treatment for a condition or disease;
            (3) the selection, tenure, or compensation of any officer, 
        employee, or contractor of any institution, business, non-
        Federal agency, or individual providing health care services; 
        or
            (4) the administration or operation of any such 
        institution, business, non-Federal agency, or individual, with 
        respect to the provision of health care services to a patient.
    (b) Preserving Certain Current Programs.--Subsection (a) shall not 
prohibit the Federal Government from operating, managing, supervising 
employees of, or defining the scope of services provided by Federal 
entities when directly providing health care services and products, 
only with respect to the following:
            (1) The Veterans Health Administration--
                    (A) in the case of directly providing health care 
                services through its own facilities and by its own 
                employees; or
                    (B) in the case of coordinating health care 
                services not described in subparagraph (A) and paid for 
                with Federal funds under programs operated by the 
                Veterans Health Administration.
            (2) The Department of Defense--
                    (A) in the case of directly providing health care 
                services through military treatment facilities;
                    (B) in the case of paying for health care services 
                for active-duty members of the Armed Forces or members 
                of the Reserve component when called to active duty;
                    (C) in the case of directly providing health care 
                services to the public in the event of emergency or 
                under other lawful circumstances; or
                    (D) when necessary to determine whether health care 
                services provided to those who are not active-duty 
                members of the Armed Forces are eligible for payment 
                with Federal funds or to coordinate health care 
                services for patients who are served by both non-
                Federal entities and military treatment facilities.
            (3) The United States Public Health Service--
                    (A) in the case of providing health care services 
                through its own facilities or by its officers or 
                civilian Federal employees;
                    (B) in the case of providing or paying for health 
                care services to active-duty members of uniformed 
                services or to Reserve members of such services when 
                called to active duty; or
                    (C) when necessary to determine whether health care 
                services provided to those who are not active-duty 
                members of uniformed services are eligible for payment 
                with Federal funds or to coordinate health care 
                services for patients who are served by both non-
                Federal entities and Public Health Service treatment 
                facilities.
            (4) The Indian Health Service--
                    (A) in the case of directly providing health care 
                services through its own facilities or Federal 
                employees; or
                    (B) in the case of providing care by non-Federal 
                entities, to the extent necessary to administer 
                contracts and grants pursuant to the Indian Health Care 
                Improvement Act.
            (5) The National Institutes of Health--
                    (A) in the case of providing direct patient care 
                incident to medical research; or
                    (B) in the case of administering grants for medical 
                research, but in no case shall a non-Federal entity be 
                required or requested to waive the protections of 
                subsection (a) for health care services not incident to 
                medical research funded by the National Institutes of 
                Health as a condition of receiving research grant 
                funding from the National Institutes of Health.
            (6) The Health Resources and Services Administration--
                    (A) in the case of certifying federally qualified 
                health centers, as defined by section 1905(l)(2)(B) of 
                the Social Security Act (42 U.S.C. 1396d(l)(2)(B)), 
                certifying FQHC look-alike status, as defined in 
                section 413.65(n) of title 45 of the Code of Federal 
                Regulations, or providing grants under section 330 of 
                the Public Health Service Act (42 U.S.C. 254b), but 
                only to the extent necessary to determine eligibility 
                for such certification and grant funding and the 
                appropriate amounts of such funding; or
                    (B) in the case of operating the nation's human 
                organ, bone marrow, and umbilical cord blood donation 
                and transplantation systems, as and to the extent 
                authorized by law and necessary for the operation of 
                those programs.

SEC. 102. RIGHT TO CONTRACT FOR HEALTH CARE SERVICES AND HEALTH 
              INSURANCE.

    (a) Receipt of Health Services.--No Federal funds shall be used by 
any Federal officer or employee to prohibit any individual from 
receiving health care services from any provider of health care 
services--
            (1) under terms and conditions mutually acceptable to the 
        patient and the provider; or
            (2) under terms and conditions mutually acceptable to the 
        patient, the provider, and any group health plan or health 
        insurance issuer that is obligated to provide health insurance 
        coverage to the patient or any other entity indemnifying the 
        patient's consumption of health care services;
provided that any such agreement shall be subject to the requirements 
of section 1802(b) of the Social Security Act (42 U.S.C. 1395a(b)), as 
amended by section 105.
    (b) Health Insurance Coverage.--No Federal funds shall be used by 
any Federal officer or employee to prohibit any person from entering 
into a contract with any group health plan, health insurance issuer, or 
other business, for the provision of, or payment to other parties for, 
health care services to be determined and provided subsequent to the 
effective date of the contract, according to terms, conditions, and 
procedures specified in such contract.
    (c) Eligibility for Federal Benefits.--No person's eligibility for 
benefits under any program operated by or funded wholly or partly by 
the Federal Government shall be adversely affected as a result of 
having received services in a manner described by subsection (a) or 
having entered into a contract described in subsection (b).
    (d) Federal Program Participation.--No provider of health care 
services--
            (1) shall be denied participation in a Federal program for 
        which it would otherwise be eligible as a result of having 
        provided services in a manner described in subsection (a); or
            (2) shall be denied payment for services otherwise eligible 
        for payment under a Federal program as a result of having 
        provided services in a manner described in subsection (a), 
        except to the extent required by subsection (a)(1).

SEC. 103. PROHIBITION ON MANDATING STATE RESTRICTIONS.

    (a) In General.--No Federal funds shall be used by any Federal 
officer or employee to induce or encourage any State or other 
jurisdiction of the United States to enact any restriction or 
prohibition prohibited to the Federal Government by this title.
    (b) Protecting State Eligibility for Federal Funds.--No State's 
eligibility for participation in any program operated by or funded 
wholly or partly by the Federal Government, or for receiving funds from 
the Federal Government shall be conditioned on that State enacting any 
restriction or prohibition prohibited to the Federal Government by this 
title, nor adversely affected by that State's failure to enact any 
restriction or prohibition prohibited to the Federal Government by this 
title.

SEC. 104. CLARIFICATION.

    Nothing in this subtitle shall be construed to permit the 
expenditure of funds otherwise prohibited by law.

SEC. 105. CONFORMING AMENDMENT.

    Section 1802(b)(3) of the Social Security Act (42 U.S.C. 
1395a(b)(3)) is hereby repealed.

SEC. 106. DEFINITIONS.

    For purposes of this title:
            (1) Health care services.--The term ``health care 
        services'' means any lawful service intended to diagnose, cure, 
        prevent, or mitigate the adverse effects of any disease, 
        injury, infirmity, or physical or mental disability, including 
        the provision of any lawful product the use of which is so 
        intended.
            (2) Physician.--The term ``physician'' means--
                    (A) a doctor of medicine or osteopathy legally 
                authorized to practice medicine and surgery by the 
                State in which he performs such practice and surgery;
                    (B) a doctor of dental surgery or of dental 
                medicine who is legally authorized to practice 
                dentistry by the State in which he performs such 
                function and who is acting within the scope of his 
                license when he performs such functions;
                    (C) a doctor of podiatric medicine but only with 
                respect to functions which he is legally authorized to 
                perform as such by the State in which he performs them;
                    (D) a doctor of optometry with respect to the 
                provision of items or services which he is legally 
                authorized to perform as a doctor of optometry by the 
                State in which he performs them; or
                    (E) a chiropractor who is licensed as such by the 
                State (or in a State which does not license 
                chiropractors as such, is legally authorized to perform 
                the services of a chiropractor in the jurisdiction in 
                which he performs such services), but only with respect 
                to treatment which he is legally authorized to perform 
                by the State or jurisdiction in which such treatment is 
                provided.
            (3) Practice of medicine.--The term ``practice of 
        medicine'' means--
                    (A) health care services that are performed by 
                physicians; and
                    (B) services and supplies furnished as an incident 
                to a physician's professional service.
            (4) Health care practitioner.--The term ``health care 
        practitioner'' means a physician assistant, registered nurse, 
        nurse practitioner, psychologist, clinical social worker, 
        midwife, or other individual (other than a physician) licensed 
        or legally authorized to perform health care services in the 
        State in which the individual performs such services.
            (5) Practice of other health care professions.--The term 
        ``practice of other health care professions'' means--
                    (A) health care services performed by a health care 
                practitioner; and
                    (B) services and supplies furnished as an incident 
                to a health care practitioner's professional service.
            (6) Group health plan.--The term ``group health plan'' has 
        the meaning given such term in section 733(a)(1) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1191b(a)(1)).
            (7) Health insurance issuer.--The term ``health insurance 
        issuer'' has the meaning given such term in section 733(b)(2) 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1191b(b)(2)).
            (8) Business.--The term ``business'' means any sole 
        proprietorship, partnership, for-profit corporation, or not-
        for-profit corporation.
            (9) State.--The term ``State'' means any of the United 
        States, the Commonwealth of Puerto Rico, the Commonwealth of 
        the Northern Mariana Islands, the United States Virgin Islands, 
        Guam, American Samoa, or the District of Columbia.

SEC. 107. EFFECTIVE DATE.

    The provisions of this title shall apply to Federal entities, 
including employees and officials of such entities, beginning on 
January 1, 2009.

    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.

    (a) In General.--Subsection (l) of section 162 of the Internal 
Revenue Code of 1986 (relating to special rules for health insurance 
costs of self-employed individuals) is amended by striking paragraph 
(4) and by redesignating paragraph (5) as paragraph (4).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this 
subtitle.

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

SEC. 211. FINDINGS AND PURPOSE.

    (a) Findings.--
            (1) Effect on health care access and costs.--Congress finds 
        that our current civil justice system is adversely affecting 
        patient access to health care services, better patient care, 
        and cost-efficient health care, in that the health care 
        liability system is a costly and ineffective mechanism for 
        resolving claims of health care liability and compensating 
        injured patients, and is a deterrent to the sharing of 
        information among health care professionals which impedes 
        efforts to improve patient safety and quality of care.
            (2) Effect on interstate commerce.--Congress finds that the 
        health care and insurance industries are industries affecting 
        interstate commerce and the health care liability litigation 
        systems existing throughout the United States are activities 
        that affect interstate commerce by contributing to the high 
        costs of health care and premiums for health care liability 
        insurance purchased by health care system providers.
            (3) Effect on federal spending.--Congress finds that the 
        health care liability litigation systems existing throughout 
        the United States have a significant effect on the amount, 
        distribution, and use of Federal funds because of--
                    (A) the large number of individuals who receive 
                health care benefits under programs operated or 
                financed by the Federal Government;
                    (B) the large number of individuals who benefit 
                because of the exclusion from Federal taxes of the 
                amounts spent to provide them with health insurance 
                benefits; and
                    (C) the large number of health care providers who 
                provide items or services for which the Federal 
                Government makes payments.
    (b) Purpose.--It is the purpose of this subtitle to implement 
reasonable, comprehensive, and effective health care liability reforms 
designed to--
            (1) improve the availability of health care services in 
        cases in which health care liability actions have been shown to 
        be a factor in the decreased availability of services;
            (2) reduce the incidence of ``defensive medicine'' and 
        lower the cost of health care liability insurance, all of which 
        contribute to the escalation of health care costs;
            (3) ensure that persons with meritorious health care injury 
        claims receive fair and adequate compensation, including 
        reasonable noneconomic damages;
            (4) improve the fairness and cost-effectiveness of our 
        current health care liability system to resolve disputes over, 
        and provide compensation for, health care liability by reducing 
        uncertainty in the amount of compensation provided to injured 
        individuals; and
            (5) provide an increased sharing of information in the 
        health care system which will reduce unintended injury and 
        improve patient care.

SEC. 212. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

    The time for the commencement of a health care lawsuit shall be 3 
years after the date of manifestation of injury or 1 year after the 
claimant discovers, or through the use of reasonable diligence should 
have discovered, the injury, whichever occurs first. In no event shall 
the time for commencement of a health care lawsuit exceed 3 years after 
the date of manifestation of injury unless tolled for any of the 
following--
            (1) upon proof of fraud;
            (2) intentional concealment; or
            (3) the presence of a foreign body, which has no 
        therapeutic or diagnostic purpose or effect, in the person of 
        the injured person.
Actions by a minor shall be commenced within 3 years from the date of 
the alleged manifestation of injury except that actions by a minor 
under the full age of 6 years shall be commenced within 3 years of 
manifestation of injury or prior to the minor's 8th birthday, whichever 
provides a longer period. Such time limitation shall be tolled for 
minors for any period during which a parent or guardian and a health 
care provider or health care organization have committed fraud or 
collusion in the failure to bring an action on behalf of the injured 
minor.

SEC. 213. COMPENSATING PATIENT INJURY.

    (a) Unlimited Amount of Damages for Actual Economic Losses in 
Health Care Lawsuits.--In any health care lawsuit, nothing in this 
subtitle shall limit a claimant's recovery of the full amount of the 
available economic damages, notwithstanding the limitation in 
subsection (b).
    (b) Additional Noneconomic Damages.--In any health care lawsuit, 
the amount of noneconomic damages, if available, may be as much as 
$250,000, regardless of the number of parties against whom the action 
is brought or the number of separate claims or actions brought with 
respect to the same injury.
    (c) No Discount of Award for Noneconomic Damages.--For purposes of 
applying the limitation in subsection (b), future noneconomic damages 
shall not be discounted to present value. The jury shall not be 
informed about the maximum award for noneconomic damages. An award for 
noneconomic damages in excess of $250,000 shall be reduced either 
before the entry of judgment, or by amendment of the judgment after 
entry of judgment, and such reduction shall be made before accounting 
for any other reduction in damages required by law. If separate awards 
are rendered for past and future noneconomic damages and the combined 
awards exceed $250,000, the future noneconomic damages shall be reduced 
first.
    (d) Fair Share Rule.--In any health care lawsuit, each party shall 
be liable for that party's several share of any damages only and not 
for the share of any other person. Each party shall be liable only for 
the amount of damages allocated to such party in direct proportion to 
such party's percentage of responsibility. Whenever a judgment of 
liability is rendered as to any party, a separate judgment shall be 
rendered against each such party for the amount allocated to such 
party. For purposes of this section, the trier of fact shall determine 
the proportion of responsibility of each party for the claimant's harm.

SEC. 214. MAXIMIZING PATIENT RECOVERY.

    (a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--In any health care lawsuit, the court shall supervise the 
arrangements for payment of damages to protect against conflicts of 
interest that may have the effect of reducing the amount of damages 
awarded that are actually paid to claimants. In particular, in any 
health care lawsuit in which the attorney for a party claims a 
financial stake in the outcome by virtue of a contingent fee, the court 
shall have the power to restrict the payment of a claimant's damage 
recovery to such attorney, and to redirect such damages to the claimant 
based upon the interests of justice and principles of equity. In no 
event shall the total of all contingent fees for representing all 
claimants in a health care lawsuit exceed the following limits:
            (1) 40 percent of the first $50,000 recovered by the 
        claimant(s).
            (2) 33\1/3\ percent of the next $50,000 recovered by the 
        claimant(s).
            (3) 25 percent of the next $500,000 recovered by the 
        claimant(s).
            (4) 15 percent of any amount by which the recovery by the 
        claimant(s) is in excess of $600,000.
    (b) Applicability.--The limitations in this section shall apply 
whether the recovery is by judgment, settlement, mediation, 
arbitration, or any other form of alternative dispute resolution. In a 
health care lawsuit involving a minor or incompetent person, a court 
retains the authority to authorize or approve a fee that is less than 
the maximum permitted under this section. The requirement for court 
supervision in the first two sentences of subsection (a) applies only 
in civil actions.

SEC. 215. ADDITIONAL HEALTH BENEFITS.

    In any health care lawsuit involving injury or wrongful death, any 
party may introduce evidence of collateral source benefits. If a party 
elects to introduce such evidence, any opposing party may introduce 
evidence of any amount paid or contributed or reasonably likely to be 
paid or contributed in the future by or on behalf of the opposing party 
to secure the right to such collateral source benefits. No provider of 
collateral source benefits shall recover any amount against the 
claimant or receive any lien or credit against the claimant's recovery 
or be equitably or legally subrogated to the right of the claimant in a 
health care lawsuit involving injury or wrongful death. This section 
shall apply to any health care lawsuit that is settled as well as a 
health care lawsuit that is resolved by a fact finder. This section 
shall not apply to section 1862(b) (42 U.S.C. 1395y(b)) or section 
1902(a)(25) (42 U.S.C. 1396a(a)(25)) of the Social Security Act.

SEC. 216. PUNITIVE DAMAGES.

    (a) In General.--Punitive damages may, if otherwise permitted by 
applicable State or Federal law, be awarded against any person in a 
health care lawsuit only if it is proven by clear and convincing 
evidence that such person acted with malicious intent to injure the 
claimant, or that such person deliberately failed to avoid unnecessary 
injury that such person knew the claimant was substantially certain to 
suffer. In any health care lawsuit where no judgment for compensatory 
damages is rendered against such person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. No demand for 
punitive damages shall be included in a health care lawsuit as 
initially filed. A court may allow a claimant to file an amended 
pleading for punitive damages only upon a motion by the claimant and 
after a finding by the court, upon review of supporting and opposing 
affidavits or after a hearing, after weighing the evidence, that the 
claimant has established by a substantial probability that the claimant 
will prevail on the claim for punitive damages. At the request of any 
party in a health care lawsuit, the trier of fact shall consider in a 
separate proceeding--
            (1) whether punitive damages are to be awarded and the 
        amount of such award; and
            (2) the amount of punitive damages following a 
        determination of punitive liability.
If a separate proceeding is requested, evidence relevant only to the 
claim for punitive damages, as determined by applicable State law, 
shall be inadmissible in any proceeding to determine whether 
compensatory damages are to be awarded.
    (b) Determining Amount of Punitive Damages.--
            (1) Factors considered.--In determining the amount of 
        punitive damages, if awarded, in a health care lawsuit, the 
        trier of fact shall consider only the following--
                    (A) the severity of the harm caused by the conduct 
                of such party;
                    (B) the duration of the conduct or any concealment 
                of it by such party;
                    (C) the profitability of the conduct to such party;
                    (D) the number of products sold or medical 
                procedures rendered for compensation, as the case may 
                be, by such party, of the kind causing the harm 
                complained of by the claimant;
                    (E) any criminal penalties imposed on such party, 
                as a result of the conduct complained of by the 
                claimant; and
                    (F) the amount of any civil fines assessed against 
                such party as a result of the conduct complained of by 
                the claimant.
            (2) Maximum award.--The amount of punitive damages, if 
        awarded, in a health care lawsuit may be as much as $250,000 or 
        as much as two times the amount of economic damages awarded, 
        whichever is greater. The jury shall not be informed of this 
        limitation.
    (c) No Punitive Damages for Products That Comply With FDA 
Standards.--
            (1) In general.--
                    (A) No punitive damages may be awarded against the 
                manufacturer or distributor of a medical product, or a 
                supplier of any component or raw material of such 
                medical product, based on a claim that such product 
                caused the claimant's harm where--
                            (i)(I) such medical product was subject to 
                        premarket approval, clearance, or licensure by 
                        the Food and Drug Administration with respect 
                        to the safety of the formulation or performance 
                        of the aspect of such medical product which 
                        caused the claimant's harm or the adequacy of 
                        the packaging or labeling of such medical 
                        product; and
                            (II) such medical product was so approved, 
                        cleared, or licensed; or
                            (ii) such medical product is generally 
                        recognized among qualified experts as safe and 
                        effective pursuant to conditions established by 
                        the Food and Drug Administration and applicable 
                        Food and Drug Administration regulations, 
                        including without limitation those related to 
                        packaging and labeling, unless the Food and 
                        Drug Administration has determined that such 
                        medical product was not manufactured or 
                        distributed in substantial compliance with 
                        applicable Food and Drug Administration 
                        statutes and regulations.
                    (B) Rule of construction.--Subparagraph (A) may not 
                be construed as establishing the obligation of the Food 
                and Drug Administration to demonstrate affirmatively 
                that a manufacturer, distributor, or supplier referred 
                to in such subparagraph meets any of the conditions 
                described in such subparagraph.
            (2) Liability of health care providers.--A health care 
        provider who prescribes, or who dispenses pursuant to a 
        prescription, a medical product approved, licensed, or cleared 
        by the Food and Drug Administration shall not be named as a 
        party to a product liability lawsuit involving such product and 
        shall not be liable to a claimant in a class action lawsuit 
        against the manufacturer, distributor, or seller of such 
        product. Nothing in this paragraph prevents a court from 
        consolidating cases involving health care providers and cases 
        involving products liability claims against the manufacturer, 
        distributor, or product seller of such medical product.
            (3) Packaging.--In a health care lawsuit for harm which is 
        alleged to relate to the adequacy of the packaging or labeling 
        of a drug which is required to have tamper-resistant packaging 
        under regulations of the Secretary of Health and Human Services 
        (including labeling regulations related to such packaging), the 
        manufacturer or product seller of the drug shall not be held 
        liable for punitive damages unless such packaging or labeling 
        is found by the trier of fact by clear and convincing evidence 
        to be substantially out of compliance with such regulations.
            (4) Exception.--Paragraph (1) shall not apply in any health 
        care lawsuit in which--
                    (A) a person, before or after premarket approval, 
                clearance, or licensure of such medical product, 
                knowingly misrepresented to or withheld from the Food 
                and Drug Administration information that is required to 
                be submitted under the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 301 et seq.) or section 351 of the 
                Public Health Service Act (42 U.S.C. 262) that is 
                material and is causally related to the harm which the 
                claimant allegedly suffered; or
                    (B) a person made an illegal payment to an official 
                of the Food and Drug Administration for the purpose of 
                either securing or maintaining approval, clearance, or 
                licensure of such medical product.

SEC. 217. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
              HEALTH CARE LAWSUITS.

    (a) In General.--In any health care lawsuit, if an award of future 
damages, without reduction to present value, equaling or exceeding 
$50,000 is made against a party with sufficient insurance or other 
assets to fund a periodic payment of such a judgment, the court shall, 
at the request of any party, enter a judgment ordering that the future 
damages be paid by periodic payments. In any health care lawsuit, the 
court may be guided by the Uniform Periodic Payment of Judgments Act 
promulgated by the National Conference of Commissioners on Uniform 
State Laws.
    (b) Applicability.--This section applies to all actions which have 
not been first set for trial or retrial before the effective date of 
this subtitle.

SEC. 218. DEFINITIONS.

    In this subtitle:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system that provides for the resolution of health care lawsuits 
        in a manner other than through a civil action brought in a 
        State or Federal court.
            (2) Claimant.--The term ``claimant'' means any person who 
        brings a health care lawsuit, including a person who asserts or 
        claims a right to legal or equitable contribution, indemnity, 
        or subrogation, arising out of a health care liability claim or 
        action, and any person on whose behalf such a claim is asserted 
        or such an action is brought, whether deceased, incompetent, or 
        a minor.
            (3) Collateral source benefits.--The term ``collateral 
        source benefits'' means any amount paid or reasonably likely to 
        be paid in the future to or on behalf of the claimant, or any 
        service, product, or other benefit provided or reasonably 
        likely to be provided in the future to or on behalf of the 
        claimant, as a result of the injury or wrongful death, pursuant 
        to--
                    (A) any State or Federal health, sickness, income-
                disability, accident, or workers' compensation law;
                    (B) any health, sickness, income-disability, or 
                accident insurance that provides health benefits or 
                income-disability coverage;
                    (C) any contract or agreement of any group, 
                organization, partnership, or corporation to provide, 
                pay for, or reimburse the cost of medical, hospital, 
                dental, or income-disability benefits; and
                    (D) any other publicly or privately funded program.
            (4) Compensatory damages.--The term ``compensatory 
        damages'' means objectively verifiable monetary losses incurred 
        as a result of the provision of, use of, or payment for (or 
        failure to provide, use, or pay for) health care services or 
        medical products, such as past and future medical expenses, 
        loss of past and future earnings, cost of obtaining domestic 
        services, loss of employment, and loss of business or 
        employment opportunities, damages for physical and emotional 
        pain, suffering, inconvenience, physical impairment, mental 
        anguish, disfigurement, loss of enjoyment of life, loss of 
        society and companionship, loss of consortium (other than loss 
        of domestic service), hedonic damages, injury to reputation, 
        and all other nonpecuniary losses of any kind or nature. The 
        term ``compensatory damages'' includes economic damages and 
        noneconomic damages, as such terms are defined in this section.
            (5) Contingent fee.--The term ``contingent fee'' includes 
        all compensation to any person or persons which is payable only 
        if a recovery is effected on behalf of one or more claimants.
            (6) Economic damages.--The term ``economic damages'' means 
        objectively verifiable monetary losses incurred as a result of 
        the provision of, use of, or payment for (or failure to 
        provide, use, or pay for) health care services or medical 
        products, such as past and future medical expenses, loss of 
        past and future earnings, cost of obtaining domestic services, 
        loss of employment, and loss of business or employment 
        opportunities.
            (7) Health care lawsuit.--The term ``health care lawsuit'' 
        means any health care liability claim concerning the provision 
        of health care goods or services or any medical product 
        affecting interstate commerce, or any health care liability 
        action concerning the provision of health care goods or 
        services or any medical product affecting interstate commerce, 
        brought in a State or Federal court or pursuant to an 
        alternative dispute resolution system, against a health care 
        provider, a health care organization, or the manufacturer, 
        distributor, supplier, marketer, promoter, or seller of a 
        medical product, regardless of the theory of liability on which 
        the claim is based, or the number of claimants, plaintiffs, 
        defendants, or other parties, or the number of claims or causes 
        of action, in which the claimant alleges a health care 
        liability claim. Such term does not include a claim or action 
        which is based on criminal liability; which seeks civil fines 
        or penalties paid to Federal, State, or local government; or 
        which is grounded in antitrust.
            (8) Health care liability action.--The term ``health care 
        liability action'' means a civil action brought in a State or 
        Federal court or pursuant to an alternative dispute resolution 
        system, against a health care provider, a health care 
        organization, or the manufacturer, distributor, supplier, 
        marketer, promoter, or seller of a medical product, regardless 
        of the theory of liability on which the claim is based, or the 
        number of plaintiffs, defendants, or other parties, or the 
        number of causes of action, in which the claimant alleges a 
        health care liability claim.
            (9) Health care liability claim.--The term ``health care 
        liability claim'' means a demand by any person, whether or not 
        pursuant to ADR, against a health care provider, health care 
        organization, or the manufacturer, distributor, supplier, 
        marketer, promoter, or seller of a medical product, including, 
        but not limited to, third-party claims, cross-claims, counter-
        claims, or contribution claims, which are based upon the 
        provision of, use of, or payment for (or the failure to 
        provide, use, or pay for) health care services or medical 
        products, regardless of the theory of liability on which the 
        claim is based, or the number of plaintiffs, defendants, or 
        other parties, or the number of causes of action.
            (10) Health care organization.--The term ``health care 
        organization'' means any person or entity which is obligated to 
        provide or pay for health benefits under any health plan, 
        including any person or entity acting under a contract or 
        arrangement with a health care organization to provide or 
        administer any health benefit.
            (11) Health care provider.--The term ``health care 
        provider'' means any person or entity required by State or 
        Federal laws or regulations to be licensed, registered, or 
        certified to provide health care services, and being either so 
        licensed, registered, or certified, or exempted from such 
        requirement by other statute or regulation.
            (12) Health care goods or services.--The term ``health care 
        goods or services'' means any goods or services provided by a 
        health care organization, provider, or by any individual 
        working under the supervision of a health care provider, that 
        relates to the diagnosis, prevention, or treatment of any human 
        disease or impairment, or the assessment or care of the health 
        of human beings.
            (13) Malicious intent to injure.--The term ``malicious 
        intent to injure'' means intentionally causing or attempting to 
        cause physical injury other than providing health care goods or 
        services.
            (14) Medical product.--The term ``medical product'' means a 
        drug, device, or biological product intended for humans, and 
        the terms ``drug'', ``device'', and ``biological product'' have 
        the meanings given such terms in sections 201(g)(1) and 201(h) 
        of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) 
        and (h)) and section 351(a) of the Public Health Service Act 
        (42 U.S.C. 262(a)), respectively, including any component or 
        raw material used therein, but excluding health care services.
            (15) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages for physical and emotional pain, suffering, 
        inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of society and 
        companionship, loss of consortium (other than loss of domestic 
        service), hedonic damages, injury to reputation, and all other 
        nonpecuniary losses of any kind or nature.
            (16) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not solely for compensatory purposes, against a health care 
        provider, health care organization, or a manufacturer, 
        distributor, or supplier of a medical product. Punitive damages 
        are neither economic nor noneconomic damages.
            (17) Recovery.--The term ``recovery'' means the net sum 
        recovered after deducting any disbursements or costs incurred 
        in connection with prosecution or settlement of the claim, 
        including all costs paid or advanced by any person. Costs of 
        health care incurred by the plaintiff and the attorneys' office 
        overhead costs or charges for legal services are not deductible 
        disbursements or costs for such purpose.
            (18) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, the Trust Territory of the Pacific Islands, 
        and any other territory or possession of the United States, or 
        any political subdivision thereof.

SEC. 219. EFFECT ON OTHER LAWS.

    (a) Vaccine Injury.--
            (1) To the extent that title XXI of the Public Health 
        Service Act establishes a Federal rule of law applicable to a 
        civil action brought for a vaccine-related injury or death--
                    (A) this subtitle does not affect the application 
                of the rule of law to such an action; and
                    (B) any rule of law prescribed by this subtitle in 
                conflict with a rule of law of such title XXI shall not 
                apply to such action.
            (2) If there is an aspect of a civil action brought for a 
        vaccine-related injury or death to which a Federal rule of law 
        under title XXI of the Public Health Service Act does not 
        apply, then this subtitle or otherwise applicable law (as 
        determined under this subtitle) will apply to such aspect of 
        such action.
    (b) Other Federal Law.--Except as provided in this section, nothing 
in this subtitle shall be deemed to affect any defense available to a 
defendant in a health care lawsuit or action under any other provision 
of Federal law.

SEC. 220. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

    (a) Health Care Lawsuits.--The provisions governing health care 
lawsuits set forth in this subtitle preempt, subject to subsections (b) 
and (c), State law to the extent that State law prevents the 
application of any provisions of law established by or under this 
subtitle. The provisions governing health care lawsuits set forth in 
this subtitle supersede chapter 171 of title 28, United States Code, to 
the extent that such chapter--
            (1) provides for a greater amount of damages or contingent 
        fees, a longer period in which a health care lawsuit may be 
        commenced, or a reduced applicability or scope of periodic 
        payment of future damages, than provided in this subtitle; or
            (2) prohibits the introduction of evidence regarding 
        collateral source benefits, or mandates or permits subrogation 
        or a lien on collateral source benefits.
    (b) Protection of States' Rights and Other Laws.--(1) Any issue 
that is not governed by any provision of law established by or under 
this subtitle (including State standards of negligence) shall be 
governed by otherwise applicable State or Federal law.
    (2) This subtitle shall not preempt or supersede any State or 
Federal law that imposes greater procedural or substantive protections 
for health care providers and health care organizations from liability, 
loss, or damages than those provided by this subtitle or create a cause 
of action.
    (c) State Flexibility.--No provision of this subtitle shall be 
construed to preempt--
            (1) any State law (whether effective before, on, or after 
        the date of the enactment of this subtitle) that specifies a 
        particular monetary amount of compensatory or punitive damages 
        (or the total amount of damages) that may be awarded in a 
        health care lawsuit, regardless of whether such monetary amount 
        is greater or lesser than is provided for under this subtitle, 
        notwithstanding section 4(a); or
            (2) any defense available to a party in a health care 
        lawsuit under any other provision of State or Federal law.

SEC. 221. APPLICABILITY; EFFECTIVE DATE.

    This subtitle shall apply to any health care lawsuit brought in a 
Federal or State court, or subject to an alternative dispute resolution 
system, that is initiated on or after the date of the enactment of this 
subtitle, except that any health care lawsuit arising from an injury 
occurring prior to the date of the enactment of this subtitle shall be 
governed by the applicable statute of limitations provisions in effect 
at the time the injury occurred.

SEC. 222. SENSE OF CONGRESS.

    It is the sense of Congress that a health insurer should be liable 
for damages for harm caused when it makes a decision as to what care is 
medically necessary and appropriate.

     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.

    Section 3001(c) of the Public Health Service Act (42 U.S.C. 300jj-
11(c)) is amended by adding at the end the following new paragraph:
            ``(9) Strategic plan for medicare and medicaid ehr payment 
        incentives and adjustments.--Not later than 90 days after the 
        date of the enactment of the Medical Rights and Reform Act of 
        2009, the National Coordinator shall publish a strategic plan 
        including--
                    ``(A) timelines for applying the incentive payments 
                and incentive adjustments applicable to eligible 
                providers, eligible hospitals, and eligible 
                professionals under sections 1848(a), 1848(o), 1853(l), 
                1853(m), 1886(n), 1814(l)(3), 1886(b)(3)(B)(ix), and 
                1903(a)(3)(F) during the 18-month period following such 
                date of enactment, including specifying specific steps 
                by date that providers and hospitals must take to be 
                eligible for such incentive payments; and
                    ``(B) a specific plan to educate health care 
                providers, consumers, and vendors of health information 
                technology about how eligible providers, eligible 
                hospitals, and eligible professionals may become 
                compliant with requirements under such sections for 
                purposes of eligibility for incentive payments under 
                such sections.''.

SEC. 232. PROCEDURES TO ENSURE TIMELY UPDATING OF STANDARDS THAT ENABLE 
              ELECTRONIC EXCHANGES.

    Section 1174(b) of the Social Security Act (42 U.S.C. 1320d-3(b)) 
is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by inserting ``and in 
                accordance with paragraph (3)'' before the period; and
                    (B) by adding at the end the following new 
                sentence: ``For purposes of this subsection and section 
                1173(c)(2), the term `modification' includes a new 
                version or a version upgrade''; and
            (2) by adding at the end the following new paragraph:
            ``(3) Expedited procedures for adoption of additions and 
        modifications to standards.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the Secretary shall provide for an expedited upgrade 
                program (in this paragraph referred to as the `upgrade 
                program'), in accordance with this paragraph, to 
                develop and approve additions and modifications to the 
                standards adopted under section 1173(a) to improve the 
                quality of such standards or to extend the 
                functionality of such standards to meet evolving 
                requirements in health care.
                    ``(B) Publication of notices.--Under the upgrade 
                program:
                            ``(i) Voluntary notice of initiation of 
                        process.--Not later than 30 days after the date 
                        the Secretary receives a notice from a standard 
                        setting organization that the organization is 
                        initiating a process to develop an addition or 
                        modification to a standard adopted under 
                        section 1173(a), the Secretary shall publish a 
                        notice in the Federal Register that--
                                    ``(I) identifies the subject matter 
                                of the addition or modification;
                                    ``(II) provides a description of 
                                how persons may participate in the 
                                development process; and
                                    ``(III) invites public 
                                participation in such process.
                            ``(ii) Voluntary notice of preliminary 
                        draft of additions or modifications to 
                        standards.--Not later than 30 days after the 
                        date the Secretary receives a notice from a 
                        standard setting organization that the 
                        organization has prepared a preliminary draft 
                        of an addition or modification to a standard 
                        adopted by section 1173(a), the Secretary shall 
                        publish a notice in the Federal Register that--
                                    ``(I) identifies the subject matter 
                                of (and summarizes) the addition or 
                                modification;
                                    ``(II) specifies the procedure for 
                                obtaining the draft;
                                    ``(III) provides a description of 
                                how persons may submit comments in 
                                writing and at any public hearing or 
                                meeting held by the organization on the 
                                addition or modification; and
                                    ``(IV) invites submission of such 
                                comments and participation in such 
                                hearing or meeting without requiring 
                                the public to pay a fee to participate.
                            ``(iii) Notice of proposed addition or 
                        modification to standards.--Not later than 30 
                        days after the date the Secretary receives a 
                        notice from a standard setting organization 
                        that the organization has a proposed addition 
                        or modification to a standard adopted under 
                        section 1173(a) that the organization intends 
                        to submit under subparagraph (D)(iii), the 
                        Secretary shall publish a notice in the Federal 
                        Register that contains, with respect to the 
                        proposed addition or modification, the 
                        information required in the notice under clause 
                        (ii) with respect to the addition or 
                        modification.
                            ``(iv) Construction.--Nothing in this 
                        paragraph shall be construed as requiring a 
                        standard setting organization to request the 
                        notices described in clauses (i) and (ii) with 
                        respect to an addition or modification to a 
                        standard in order to qualify for an expedited 
                        determination under subparagraph (C) with 
                        respect to a proposal submitted to the 
                        Secretary for adoption of such addition or 
                        modification.
                    ``(C) Provision of expedited determination.--Under 
                the upgrade program and with respect to a proposal by a 
                standard setting organization for an addition or 
                modification to a standard adopted under section 
                1173(a), if the Secretary determines that the standard 
                setting organization developed such addition or 
                modification in accordance with the requirements of 
                subparagraph (D) and the National Committee on Vital 
                and Health Statistics recommends approval of such 
                addition or modification under subparagraph (E), the 
                Secretary shall provide for expedited treatment of such 
                proposal in accordance with subparagraph (F).
                    ``(D) Requirements.--The requirements under this 
                subparagraph with respect to a proposed addition or 
                modification to a standard by a standard setting 
                organization are the following:
                            ``(i) Request for publication of notice.--
                        The standard setting organization submits to 
                        the Secretary a request for publication in the 
                        Federal Register of a notice described in 
                        subparagraph (B)(iii) for the proposed addition 
                        or modification.
                            ``(ii) Process for receipt and 
                        consideration of public comment.--The standard 
                        setting organization provides for a process 
                        through which, after the publication of the 
                        notice referred to under clause (i), the 
                        organization--
                                    ``(I) receives and responds to 
                                public comments submitted on a timely 
                                basis on the proposed addition or 
                                modification before submitting such 
                                proposed addition or modification to 
                                the National Committee on Vital and 
                                Health Statistics under clause (iii);
                                    ``(II) makes publicly available a 
                                written explanation for its response in 
                                the proposed addition or modification 
                                to comments submitted on a timely 
                                basis; and
                                    ``(III) makes public comments 
                                received under clause (I) available, or 
                                provides access to such comments, to 
                                the Secretary.
                            ``(iii) Submittal of final proposed 
                        addition or modification to ncvhs.--After 
                        completion of the process under clause (ii), 
                        the standard setting organization submits the 
                        proposed addition or modification to the 
                        National Committee on Vital and Health 
                        Statistics for review and consideration under 
                        subparagraph (E). Such submission shall include 
                        information on the organization's compliance 
                        with the notice and comment requirements (and 
                        responses to those comments) under clause (ii).
                    ``(E) Hearing and recommendations by national 
                committee on vital and health statistics.--Under the 
                upgrade program, upon receipt of a proposal submitted 
                by a standard setting organization under subparagraph 
                (D)(iii) for the adoption of an addition or 
                modification to a standard, the National Committee on 
                Vital and Health Statistics shall provide notice to the 
                public and a reasonable opportunity for public 
                testimony at a hearing on such addition or 
                modification. The Secretary may participate in such 
                hearing in such capacity (including presiding ex 
                officio) as the Secretary shall determine appropriate. 
                Not later than 90 days after the date of receipt of the 
                proposal, the Committee shall submit to the Secretary 
                its recommendation to adopt (or not adopt) the proposed 
                addition or modification.
                    ``(F) Determination by secretary to accept or 
                reject national committee on vital and health 
                statistics recommendation.--
                            ``(i) Timely determination.--Under the 
                        upgrade program, if the National Committee on 
                        Vital and Health Statistics submits to the 
                        Secretary a recommendation under subparagraph 
                        (E) to adopt a proposed addition or 
                        modification, not later than 90 days after the 
                        date of receipt of such recommendation the 
                        Secretary shall make a determination to accept 
                        or reject the recommendation and shall publish 
                        notice of such determination in the Federal 
                        Register not later than 30 days after the date 
                        of the determination.
                            ``(ii) Contents of notice.--If the 
                        determination is to reject the recommendation, 
                        such notice shall include the reasons for the 
                        rejection. If the determination is to accept 
                        the recommendation, as part of such notice the 
                        Secretary shall promulgate the modified 
                        standard (including the accepted proposed 
                        addition or modification accepted).
                            ``(iii) Limitation on consideration.--The 
                        Secretary shall not consider a proposal under 
                        this subparagraph unless the Secretary 
                        determines that the requirements of 
                        subparagraph (D) (including publication of 
                        notice and opportunity for public comment) have 
                        been met with respect to the proposal.
                    ``(G) Exemption from paperwork reduction act.--
                Chapter 35 of title 44, United States Code, shall not 
                apply to a final rule promulgated under subparagraph 
                (F).''.

SEC. 233. STUDY TO IMPROVE PRESERVATION AND PROTECTION OF SECURITY AND 
              CONFIDENTIALITY OF HEALTH INFORMATION.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct a study of the following:
            (1) Current Federal security and confidentiality standards 
        to determine the strengths and weaknesses of such standards for 
        purposes of protecting the security and confidentiality of 
        individually identifiable health information while taking into 
        account the need for timely and efficient exchanges of health 
        information to improve quality of care and ensure the 
        availability of health information necessary to make medical 
        decisions at the location in which the medical care involved is 
        provided.
            (2) The extent to which current security and 
        confidentiality standards and State laws relating to security 
        and confidentiality of individually identifiable health 
        information should be reconciled to produce uniform standards, 
        especially in the case of data that is shared by health care 
        providers for patient care and other activities across State 
        borders that would often result in more than one set of such 
        standards that would apply.
    (b) Report.--Not later than 9 months after the date of the 
enactment of this subtitle, the Secretary of Health and Human Services 
shall submit to Congress a report on the study under subsection (a) and 
shall include in such report recommendations for improving the current 
Federal security and confidentiality standards, including 
recommendations for a mechanism to track breaches to the security or 
confidentiality of individually identifiable health information and for 
appropriate penalties to apply in the case of such a breach and 
including proposals to address issues examined in subsection (a)(2).
    (c) Preservation of Current Security and Confidentiality Standards 
Before Submittal of Report.--None of the provisions of this subtitle or 
amendments made by this subtitle may limit, or require issuance of a 
regulation that would limit, the effect of a current Federal security 
and confidentiality standard before the date of the submittal of the 
report under subsection (b).
    (d) Current Federal Security and Confidentiality Standards 
Defined.--For purposes of this section, the term ``current Federal 
security and confidentiality standards'' means the Federal privacy 
standards established pursuant to section 264(c) of the Health 
Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2 
note) and security standards established under section 1173(d) of the 
Social Security Act.

SEC. 234. ASSISTING DOCTORS TO OBTAIN PROFICIENT AND TRANSMISSIBLE 
              HEALTH INFORMATION TECHNOLOGY.

    (a) In General.--Section 179 of the Internal Revenue Code of 1986 
(relating to election to expense certain depreciable assets) is amended 
by adding at the end the following new subsection:
    ``(f) Health Care Information Technology.--
            ``(1) In general.--In the case of qualified health care 
        information technology purchased by a medical care provider and 
        placed in service during a taxable year--
                    ``(A) subsection (b)(1) shall be applied by 
                substituting `$250,000' for `$125,000';
                    ``(B) subsection (b)(2) shall be applied by 
                substituting `$600,000' for `$500,000'; and
                    ``(C) subsection (b)(5)(A) shall be applied by 
                substituting `$250,000 and $600,000' for `$125,000 and 
                $500,000'.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Qualified health care information 
                technology.--The term `qualified health care 
                information technology' means section 179 property 
                which--
                            ``(i) has been certified pursuant to 
                        section 3001(c)(3) of the Public Health Service 
                        Act; and
                            ``(ii) is used primarily for the electronic 
                        creation, maintenance, and exchange of medical 
                        care information to provide or improve the 
                        quality or efficiency of medical care.
                    ``(B) Medical care provider.--The term `medical 
                care provider' means any person engaged in the trade or 
                business of providing medical care.
                    ``(C) Medical care.--The term `medical care' has 
                the meaning given such term by section 213(d).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2009.

SEC. 235. EXPANSION OF STARK AND ANTI-KICKBACK EXCEPTIONS FOR 
              ELECTRONIC HEALTH RECORDS ARRANGEMENTS.

    (a) Stark Exception.--In applying section 1877(e) of the Social 
Security Act (42 U.S.C. 1395(e)), with respect to a regulation 
implementing such section by providing an exception to the prohibition 
against making certain physician referrals in the case of the offering 
or payment of nonmonetary remuneration (consisting of items and 
services in the form of software or information technology and training 
services) necessary and used predominantly to create, maintain, 
transmit, or receive electronic health records, the Secretary of Health 
and Human Services shall--
            (1) not limit the period in which such an exception under 
        such a regulation applies;
            (2) not require the physician to pay any percentage of the 
        cost of such nonmonetary remuneration; and
            (3) apply the exception to such items and services in the 
        form of hardware and maintenance services, in addition to such 
        items and services in the form of software or information 
        technology and training services.
    (b) Anti-Kickback Exception.--In applying section 1128B(b)(3)(E) of 
the Social Security Act (42 U.S.C. 1320a-7b(b)(3)(E)), with respect to 
a regulation implementing such section by providing an exception to the 
prohibition against offering, paying, soliciting, or receiving 
remuneration in order to induce or reward referrals making certain 
physician referrals in the case of the offering, payment, solicitation, 
or receipt of remuneration (consisting of certain arrangements 
involving interoperable electronic health records software or 
information technology and training services) necessary and used 
predominantly to create, maintain, transmit, or receive electronic 
health records, the Secretary of Health and Human Services shall--
            (1) not limit the period in which such an exception under 
        such a regulation applies;
            (2) not require the recipient of such remuneration to pay 
        any percentage of the cost of such remuneration; and
            (3) apply the exception to such arrangements involving 
        interoperable electronic health records hardware and 
        maintenance services, in addition to software or information 
        technology and training services.

SEC. 236. APPLICATION OF MEDICARE EHR INCENTIVES AND ADJUSTMENTS TO 
              ADDITIONAL PROVIDERS.

    (a) Application of EHR Medicare Incentive Payments and Adjustments 
to Nurse Practitioner, Physician Assistants, and Clinical Nurse 
Specialists.--
            (1) Incentive payment.--Section 1848(o)(5)(C) of the Social 
        Security Act is amended by inserting ``, and a practitioner 
        described in section 1842(b)(18)(C)(i)'' after ``1861(r)''.
            (2) Incentive adjustment.--Section 1848(a)(7)(E)(iii) of 
        such Act is amended by inserting ``, and a practitioner 
        described in section 1842(b)(18)(C)(i)'' after ``1861(r)''.
    (b) Application of EHR Medicare Incentive Payments and Adjustments 
to SNFs, Home Health Agencies, IRFs, LTCHs, ASCs, and Long-Term Care 
Pharmacies.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish a methodology to--
                    (A) determine eligible entities described in 
                paragraph (2) that are to be considered meaningful EHR 
                users in a manner similar to how eligible hospitals are 
                determined to be meaningful EHR users for purposes of 
                sections 1886(n) and 1886(b)(3)(B)(ix) of the Social 
                Security Act; and
                    (B) apply the provisions of such sections to such 
                eligible entities in a similar manner as they apply to 
                hospitals under such section.
            (2) Eligible entities described.--Eligible entities 
        described in this paragraph are the following:
                    (A) Skilled nursing facilities.
                    (B) Home health agencies.
                    (C) Inpatient rehabilitation facilities .
                    (D) Ambulatory surgical centers.
                    (E) Long-term care pharmacies.
                    (F) Long-term care hospitals.

                     PART 2--TELEHEALTH ENHANCEMENT

                      Subpart A--Medicare Program

SEC. 241. EXPANSION AND IMPROVEMENT OF TELEHEALTH SERVICES.

    (a) Expanding Access to Telehealth Services to All Areas.--Section 
1834(m)(4)(C)(i) of the Social Security Act (42 U.S.C. 
1395m(m)(4)(C)(i)) is amended in paragraph (4)(C)(i) by striking ``and 
only if such site is located'' and all that follows and inserting 
``without regard to the geographic area within the United States where 
the site is located.''.
    (b) Expansion of Use of Store-and-Forward Technology.--The second 
sentence of section 1834(m)(1) of such Act (42 U.S.C. 1395m(m)(1)) is 
amended by inserting ``and any telehealth program that has been the 
recipient of any Federal support from the Centers for Medicare & 
Medicaid Services, the Indian Health Service, or the Health Services 
and Resources Administration'' after ``Alaska or Hawaii''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.

SEC. 242. INCREASE IN NUMBER OF TYPES OF ORIGINATING SITES; 
              CLARIFICATION.

    (a) Increase.--Paragraph (4)(C)(ii) of section 1834(m) of the 
Social Security Act (42 U.S.C. 1395m(m)) is amended by adding at the 
end the following new subclause:
                                    ``(IX) A renal dialysis 
                                facility.''.
    (b) Clarification of Intent of the Term Originating Site.--Such 
section is further amended by adding at the end the following new 
paragraph:
            ``(5) Construction.--In applying the term `originating 
        site' under this subsection, the Secretary shall apply the term 
        only for the purpose of determining whether a site is eligible 
        to receive a facility fee. Nothing in the application of such 
        term under this subsection shall be construed as affecting the 
        ability of an eligible practitioner to submit claims for 
        telehealth services that are provided to other sites that have 
        telehealth systems and capabilities.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.

SEC. 243. EXPANSION OF ELIGIBLE TELEHEALTH PROVIDERS AND CREDENTIALING 
              OF TELEMEDICINE PRACTITIONERS.

    (a) Expansion of Eligible Telehealth Providers.--Section 1834(m)(1) 
of the Social Security Act (42 U.S.C. 1395m(m)(1)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``or a practitioner'' and inserting 
                ``, a practitioner'';
                    (B) by inserting ``, or other telehealth provider'' 
                after ``1842(b)(18)(C))''; and
                    (C) by striking ``or practitioner'' and inserting 
                ``, practitioner, or provider'';
            (2) in paragraphs (2), (3)(A), and (4), by striking ``or 
        practitioner'' and inserting ``, practitioner, or other 
        telehealth provider'' each place it appears; and
            (3) in paragraph (4), by adding at the end the following 
        new subparagraph:
                    ``(G) Telehealth provider.--The term `telehealth 
                provider' means any supplier or provider of services 
                (other than a physician or practitioner) that is 
                eligible to provide other health services under this 
                title.''.
    (b) Credentialing Telemedicine Practitioners.--Section 1834(m) of 
such Act is amended by adding at the end the following new paragraph:
            ``(5) Hospital credentialing of telemedicine 
        practitioners.--A telemedicine practitioner that is 
        credentialed by a hospital in compliance with the Joint 
        Commission Standards for Telemedicine shall be considered in 
        compliance with Medicare condition of participation and 
        reimbursement credentialing requirements for telemedicine 
        services.''.

SEC. 244. ACCESS TO TELEHEALTH SERVICES IN THE HOME.

    (a) In General.--Section 1895 of the Social Security Act (42 U.S.C. 
1395fff(e)) is amended by adding at the end the following new 
subsection:
    ``(f) Coverage of Telehealth Services.--
            ``(1) In general.--The Secretary shall include telehealth 
        services that are furnished via a telecommunication system by a 
        home health agency to an individual receiving home health 
        services under section 1814(a)(2)(C) or 1835(a)(2)(A) as a home 
        health visit for purposes of eligibility and payment under this 
        title if the telehealth services--
                    ``(A) are ordered as part of a plan of care 
                certified by a physician pursuant to section 
                1814(a)(2)(C) or 1835(a)(2)(A);
                    ``(B) do not substitute for in-person home health 
                services ordered as part of a plan of care certified by 
                a physician pursuant to such respective section; and
                    ``(C) are considered the equivalent of a visit 
                under criteria developed by the Secretary under 
                paragraph (3).
            ``(2) Physician certification.--Nothing in this section 
        shall be construed as waiving the requirement for a physician 
        certification under section 1814(a)(2)(C) or 1835(a)(2)(A) for 
        the payment for home health services, whether or not furnished 
        via a telecommunication system.
            ``(3) Criteria for visit equivalency.--
                    ``(A) Standards.--The Secretary shall establish 
                standards and qualifications for categorizing and 
                coding under HCPCS codes telehealth services under this 
                subsection as equivalent to an in-person visit for 
                purposes of eligibility and payment for home health 
                services under this title. In establishing the 
                standards and qualifications, the Secretary may 
                distinguish between varying modes and modalities of 
                telehealth services and shall consider--
                            ``(i) the nature and amount of service time 
                        involved; and
                            ``(ii) the functions of the 
                        telecommunications.
                    ``(B) Limitation.--A telecommunication that 
                consists solely of a telephone audio conversation, 
                facsimile, electronic text mail, or consultation 
                between two health care practitioners is not considered 
                a visit under this subsection.
            ``(4) Telehealth service.--
                    ``(A) Definition.--For purposes of this subsection, 
                the term `telehealth service' means technology-based 
                professional consultations, patient monitoring, patient 
                training services, clinical observation, assessment, or 
                treatment, and any additional services that utilize 
                technologies specified by the Secretary as HCPCS codes 
                developed under paragraph (3).
                    ``(B) Update of hcpcs codes.--The Secretary shall 
                establish a process for the updating, not less 
                frequently than annually, of HCPCS codes for telehealth 
                services.
            ``(5) Conditions for payment and coverage.--Nothing in this 
        subsection shall be construed as waiving any condition of 
        payment under sections 1814(a)(2)(C) or 1835(a)(2)(A) or 
        exclusion of coverage under section 1862(a)(1).
            ``(6) Cost reporting.--Notwithstanding any provision to the 
        contrary, the Secretary shall provide that the costs of 
        telehealth services under this subsection shall be reported as 
        a reimbursable cost center on any cost report submitted by a 
        home health agency to the Secretary.''.
    (b) Effective Date.--
            (1) The amendment made by subsection (a) shall apply to 
        telehealth services furnished on or after October 1, 2010. The 
        Secretary of Health and Human Services shall develop and 
        implement criteria and standards under section 1895(f)(3) of 
        the Social Security Act, as amended by subsection (a), by no 
        later than July 1, 2010.
            (2) In the event that the Secretary has not complied with 
        these deadlines, beginning October 1, 2010, a home health visit 
        for purpose of eligibility and payment under title XVIII of the 
        Social Security Act shall include telehealth services under 
        section 1895(f) of such Act with the aggregate of 
        telecommunication encounters in a 24-hour period considered the 
        equivalent of one in-person visit.

SEC. 245. COVERAGE OF HOME HEALTH REMOTE PATIENT MANAGEMENT SERVICES 
              FOR CHRONIC HEALTH CONDITIONS.

    (a) Medicare Coverage.--
            (1) In general.--Section 1861(s)(2) of the Social Security 
        Act (42 U.S.C. 1395x(s)(2)) is amended--
                    (A) in subparagraph (DD), by striking ``and'' at 
                the end;
                    (B) in subparagraph (EE), by adding ``and'' at the 
                end; and
                    (C) by inserting after subparagraph (EE) the 
                following new subparagraph:
            ``(FF) home health remote patient management services (as 
        defined in subsection (hhh));''.
            (2) Services described.--Section 1861 of such Act (42 
        U.S.C. 1395x) is amended by adding at the end the following new 
        subsection:
    ``(hhh) Home Health Remote Patient Management Services for Chronic 
Health Conditions.--(1) The term `remote patient management services' 
means the remote monitoring, evaluation, and management of an 
individual with a covered chronic health condition (as defined in 
paragraph (2)) through the utilization of a system of technology that 
allows a remote interface to collect and transmit clinical data between 
the individual and a home health agency, in accordance with a plan of 
care established by a physician, for the purposes of clinical review or 
response by the home health agency. Such term, with respect to an 
individual, does not include any remote monitoring, evaluation, or 
management of the individual if such remote monitoring, evaluation, or 
management, respectively, is included as a home health visit under 
section 1895(f) for purposes of payment under this title.
    ``(2) For purposes of paragraph (1), the term `covered chronic 
health condition' means any chronic health condition specified by the 
Secretary.''.
    (b) Payment.--
            (1) In general.--Section 1834 of such Act (42 U.S.C. 1395l) 
        is amended by adding at the end the following new subsection:
    ``(n) Home Health Remote Patient Management Services.--
            ``(1) In general.--The Secretary shall establish a fee 
        schedule for home health remote patient management services (as 
        defined in section 1861(hhh)) for which payment is made under 
        this part. The fee schedule shall be designed in a manner so 
        that, on an annual basis, the aggregate payment amounts under 
        this title for such services approximates 50 percent of the 
        savings amount described in paragraph (2) for such year.
            ``(2) Savings described.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the savings amount described in this paragraph for a 
                year is the amount (if any), as estimated by the 
                Secretary before the beginning of the year, by which--
                            ``(i) the product described in subparagraph 
                        (B) for the year, exceeds
                            ``(ii) the total payments under this part 
                        and part A for items and services furnished to 
                        individuals receiving home health remote 
                        patient management services at any time during 
                        the year.
                    ``(B) Product described.--The product described in 
                this subparagraph for a year is the product of--
                            ``(i) the average per capita total payments 
                        under this part and part A for items and 
                        services furnished during the year to 
                        individuals not described in subparagraph 
                        (A)(ii), adjusted to remove case mix 
                        differences between such individuals not 
                        described in such subparagraph and the 
                        individuals described in such subparagraph; and
                            ``(ii) the number of individuals under 
                        subparagraph (A)(ii) for the year.
            ``(3) Limitation.--In no case may payments under this 
        subsection result in the aggregate expenditures under this 
        title (including payments under this subsection) exceeding the 
        amount that the Secretary estimates would have been expended if 
        coverage under this title for home health patient management 
        services was not provided.
            ``(4) Clarification.--Payments under the fee schedule under 
        this subsection, with respect to an individual, shall be in 
        addition to any other payments that a home health agency would 
        otherwise receive under this title for items and services 
        furnished to such individual and shall have no effect on the 
        amount of such other payments.
            ``(5) Payment transfer.--There shall be transferred from 
        the Federal Hospital Insurance Trust Fund under section 1817 to 
        the Federal Supplementary Medical Insurance Trust Fund under 
        section 1841 each year an amount equivalent to the product of--
                    ``(A) expenditures under this subsection for the 
                year, and
                    ``(B) the ratio of the portion of the savings 
                described in paragraph (2) for the year that are 
                attributable to part A, to the total savings described 
                in such paragraph for the year.''.
            (2) Conforming amendment.--Section 1833(a)(1) of such Act 
        (42 U.S.C. 1395l(1)) is amended--
                    (A) by striking ``and (W)'' and inserting ``(W)''; 
                and
                    (B) by inserting before the semicolon at the end 
                the following: ``, (X) with respect to home health 
                remote patient management services (as defined in 
                section 1861(hhh)), the amounts paid shall be the 
                amount determined under the fee schedule established 
                under section 1834(n)''.
    (c) Expansion of Home Health Remote Patient Management Services 
Coverage to Additional Chronic Health Conditions.--The Secretary of 
Health and Human Services is authorized to carry out pilot projects for 
purposes of determining the extent to which the coverage under title 
XVIII of the Social Security Act of home health remote patient 
management services (as defined in paragraph (1) of section 1861(hhh) 
of such Act, as added by subsection (a)) should be extended to 
individuals with chronic health conditions other than those initially 
specified by the Secretary under paragraph (2) of such section.
    (d) Effective Date.--The amendments made by subsections (a), (b), 
and (c) shall apply to services furnished on or after January 1, 2010.

SEC. 246. SENSE OF CONGRESS ON THE USE OF REMOTE PATIENT MANAGEMENT 
              SERVICES.

    (a) Findings.--Congress finds as follows:
            (1) Remote patient management services can make chronic 
        disease management more effective and efficient for patients 
        and for the health care system.
            (2) By collecting, analyzing, and transmitting clinical 
        health information to a health care provider, remote patient 
        management services allow patients and providers to manage the 
        medical condition of patients in a consistent and real time 
        fashion.
            (3) Utilization of remote patient management services not 
        only improves the quality of care given to patients, it also 
        reduces the need for frequent office appointments, costly 
        emergency room visits, and unnecessary hospitalizations.
            (4) Management the medical condition or disease of a 
        patient from the patient's home reduces the need for face to 
        face provider interactions. Use of remote patient management 
        services minimizes unnecessary travel and missed work and 
        provides particular value to patients residing in rural or 
        underserved communities who would otherwise face potentially 
        significant access barriers to receiving needed care.
            (5) Among the areas in which remote patient management 
        services are emerging in health care are the treatment of 
        congestive heart failure, diabetes, cardiac arrhythmia, 
        epilepsy, and sleep apnea. Prompt transmission of clinical data 
        on each of these conditions, to the health care provider or the 
        patient as appropriate, is essential to providing timely and 
        appropriate therapeutic interventions which can then reduce 
        expensive hospitalizations.
            (6) Despite these benefits, remote patient management 
        services have failed to diffuse rapidly. A significant barrier 
        to wider adoption is the relative lack of payment mechanisms in 
        fee for service Medicare to reimburse for remote, non face to 
        face patient management.
            (7) Elimination of this barrier to new remote patient 
        management services should be encouraged by requiring 
        reimbursement under the Medicare program for providers' time 
        spent analyzing and responding to patient data transmitted by 
        remote technologies.
            (8) Reimbursement under the Medicare program for health 
        care providers' time spent analyzing and responding to data 
        transmitted to providers by remote technologies should be made 
        on a separate basis and should not be combined with payments 
        for others services (also referred to as ``bundled payments'').
            (9) Payment codes used for reporting and billing for 
        payment for providers' remote patient management services 
        should be revised or adjusted, as appropriate, to encourage the 
        application of such services for other medical conditions.
    (b) Sense of Congress.--It is the sense of the Congress that--
            (1) remote patient management services are integral to 
        improvement in the delivery, care, and efficiency of health 
        care services furnished in the United States; and
            (2) the Administrator of the Centers for Medicare & 
        Medicaid Services should be encouraged to--
                    (A) expand the types of medical conditions for 
                which the use of remote patient management services are 
                reimbursed under the Medicare program;
                    (B) provide for separate, non-bundled payment under 
                the Medicare program for remote patient management 
                services; and
                    (C) create, revise and adjust, as appropriate, 
                codes for the accurate reporting and billing for 
                payment for remote patient management services.

SEC. 247. TELEHEALTH ADVISORY COMMITTEE.

    (a) In General.--Section 1834(m)(4)(F)(ii) of the Social Security 
Act (42 U.S.C. 1395m(m)(4)(F)(ii)) is amended by adding at the end the 
following sentences: ``Such process shall require the Secretary to take 
into account the recommendations of the Telehealth Advisory Committee 
(as established under section 247(b) of the Medical Rights and Reform 
Act of 2009) when adding or deleting services (and HCPCS codes) and in 
establishing policies of the Centers for Medicare & Medicaid Services 
regarding the delivery of telehealth services. If the Secretary does 
not implement a recommendation of the Telehealth Advisory Committee, 
the Secretary shall publish in the Federal Register a statement 
regarding the reason such recommendation was not implemented.''.
    (b) Telehealth Advisory Committee.--
            (1) Establishment.--On and after the date that is 6 months 
        after the date of enactment of this subtitle, the Secretary of 
        Health and Human Services (in this subsection referred to as 
        the ``Secretary'') shall have in place a Telehealth Advisory 
        Committee (in this subsection referred to as the ``Advisory 
        Committee'') to make recommendations to the Secretary on--
                    (A) policies of the Centers for Medicare & Medicaid 
                Services regarding the delivery of telehealth services; 
                and
                    (B) the appropriate addition or deletion of 
                services (and HCPCS codes) to those specified in 
                paragraph (4)(F)(i) of section 1834(m) of the Social 
                Security Act (42 U.S.C. 1395m(m)) for authorized 
                payment under paragraph (1) of such section.
            (2) Membership; terms.--
                    (A) Membership.--
                            (i) In general.--The Advisory Committee 
                        shall be composed of 9 members, to be appointed 
                        by the Secretary, of whom--
                                    (I) five shall be practicing 
                                physicians;
                                    (II) two shall be practicing non-
                                physician health care providers; and
                                    (III) two shall be administrators 
                                of telehealth programs.
                            (ii) Requirements for appointing members.--
                        In appointing members of the Advisory 
                        Committee, the Secretary shall--
                                    (I) ensure that each member has 
                                prior experience with the practice of 
                                telemedicine or telehealth;
                                    (II) give preference to individuals 
                                who are currently providing 
                                telemedicine or telehealth services or 
                                who are involved in telemedicine or 
                                telehealth programs;
                                    (III) ensure that the membership of 
                                the Advisory Committee represents a 
                                balance of specialties and geographic 
                                regions; and
                                    (IV) take into account the 
                                recommendations of stakeholders.
                    (B) Terms.--The members of the Advisory Committee 
                shall serve for such term as the Secretary may specify.
                    (C) Conflicts of interest.--An advisory committee 
                member may not participate with respect to a particular 
                matter considered in an advisory committee meeting if 
                such member (or an immediate family member of such 
                member) has a financial interest that could be affected 
                by the advice given to the Secretary with respect to 
                such matter.
            (3) Meetings.--The Advisory Committee shall meet twice per 
        year and at such other times as the Advisory Committee may 
        provide.
            (4) Permanent committee.--Section 14 of the Federal 
        Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
        Advisory Committee.
            (5) Waiver of administrative limitation.--The Secretary 
        shall establish the Advisory Committee notwithstanding any 
        limitation that may apply to the number of advisory committees 
        that may be established (within the Department of Health and 
        Human Services or otherwise).

                     Subpart B--HRSA Grant Program

SEC. 250. GRANT PROGRAM FOR THE DEVELOPMENT OF TELEHEALTH NETWORKS.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary''), acting through the 
Director of the Office for the Advancement of Telehealth (of the Health 
Resources and Services Administration), shall make grants to eligible 
entities (as described in subsection (b)(2)) for the purpose of 
expanding access to health care services for individuals in rural 
areas, frontier areas, and urban medically underserved areas through 
the use of telehealth.
    (b) Eligible Entities.--
            (1) Application.--To be eligible to receive a grant under 
        this section, an eligible entity described in paragraph (2) 
        shall, in consultation with the State office of rural health or 
        other appropriate State entity, prepare and submit to the 
        Secretary an application, at such time, in such manner, and 
        containing such information as the Secretary may require, 
        including the following:
                    (A) A description of the anticipated need for the 
                grant.
                    (B) A description of the activities which the 
                entity intends to carry out using amounts provided 
                under the grant.
                    (C) A plan for continuing the project after Federal 
                support under this section is ended.
                    (D) A description of the manner in which the 
                activities funded under the grant will meet health care 
                needs of underserved rural populations within the 
                State.
                    (E) A description of how the local community or 
                region to be served by the network or proposed network 
                will be involved in the development and ongoing 
                operations of the network.
                    (F) The source and amount of non-Federal funds the 
                entity would pledge for the project.
                    (G) A showing of the long-term viability of the 
                project and evidence of health care provider commitment 
                to the network.
        The application should demonstrate the manner in which the 
        project will promote the integration of telehealth in the 
        community so as to avoid redundancy of technology and achieve 
        economies of scale.
            (2) Eligible entities.--
                    (A) In general.--An eligible entity described in 
                this paragraph is a hospital or other health care 
                provider in a health care network of community-based 
                health care providers that includes at least--
                            (i) two of the organizations described in 
                        subparagraph (B); and
                            (ii) one of the institutions and entities 
                        described in subparagraph (C),
                if the institution or entity is able to demonstrate use 
                of the network for purposes of education or economic 
                development (as required by the Secretary).
                    (B) Organizations described.--The organizations 
                described in this subparagraph are the following:
                            (i) Community or migrant health centers.
                            (ii) Local health departments.
                            (iii) Nonprofit hospitals.
                            (iv) Private practice health professionals, 
                        including community and rural health clinics.
                            (v) Other publicly funded health or social 
                        services agencies.
                            (vi) Skilled nursing facilities.
                            (vii) County mental health and other 
                        publicly funded mental health facilities.
                            (viii) Providers of home health services.
                            (ix) Renal dialysis facilities.
                    (C) Institutions and entities described.--The 
                institutions and entities described in this 
                subparagraph are the following:
                            (i) A public school.
                            (ii) A public library.
                            (iii) A university or college.
                            (iv) A local government entity.
                            (v) A local health entity.
                            (vi) A health-related nonprofit foundation.
                            (vii) An academic health center.
        An eligible entity may include for-profit entities so long as 
        the recipient of the grant is a not-for-profit entity.
    (c) Preference.--The Secretary shall establish procedures to 
prioritize financial assistance under this section based upon the 
following considerations:
            (1) The applicant is a health care provider in a health 
        care network or a health care provider that proposes to form 
        such a network that furnishes or proposes to furnish services 
        in a medically underserved area, health professional shortage 
        area, or mental health professional shortage area.
            (2) The applicant is able to demonstrate broad geographic 
        coverage in the rural or medically underserved areas of the 
        State, or States in which the applicant is located.
            (3) The applicant proposes to use Federal funds to develop 
        plans for, or to establish, telehealth systems that will link 
        rural hospitals and rural health care providers to other 
        hospitals, health care providers, and patients.
            (4) The applicant will use the amounts provided for a range 
        of health care applications and to promote greater efficiency 
        in the use of health care resources.
            (5) The applicant is able to demonstrate the long-term 
        viability of projects through cost participation (cash or in-
        kind).
            (6) The applicant is able to demonstrate financial, 
        institutional, and community support for the long-term 
        viability of the network.
            (7) The applicant is able to provide a detailed plan for 
        coordinating system use by eligible entities so that health 
        care services are given a priority over non-clinical uses.
    (d) Maximum Amount of Assistance to Individual Recipients.--The 
Secretary shall establish, by regulation, the terms and conditions of 
the grant and the maximum amount of a grant award to be made available 
to an individual recipient for each fiscal year under this section. The 
Secretary shall cause to have published in the Federal Register or the 
``HRSA Preview'' notice of the terms and conditions of a grant under 
this section and the maximum amount of such a grant for a fiscal year.
    (e) Use of Amounts.--The recipient of a grant under this section 
may use sums received under such grant for the acquisition of 
telehealth equipment and modifications or improvements of 
telecommunications facilities including the following:
            (1) The development and acquisition through lease or 
        purchase of computer hardware and software, audio and video 
        equipment, computer network equipment, interactive equipment, 
        data terminal equipment, and other facilities and equipment 
        that would further the purposes of this section.
            (2) The provision of technical assistance and instruction 
        for the development and use of such programming equipment or 
        facilities.
            (3) The development and acquisition of instructional 
        programming.
            (4) Demonstration projects for teaching or training medical 
        students, residents, and other health profession students in 
        rural or medically underserved training sites about the 
        application of telehealth.
            (5) The provision of telenursing services designed to 
        enhance care coordination and promote patient self-management 
        skills.
            (6) The provision of services designed to promote patient 
        understanding and adherence to national guidelines for common 
        chronic diseases, such as congestive heart failure or diabetes.
            (7) Transmission costs, maintenance of equipment, and 
        compensation of specialists and referring health care 
        providers, when no other form of reimbursement is available.
            (8) Development of projects to use telehealth to facilitate 
        collaboration between health care providers.
            (9) Electronic archival of patient records.
            (10) Collection and analysis of usage statistics and data 
        that can be used to document the cost-effectiveness of the 
        telehealth services.
            (11) Such other uses that are consistent with achieving the 
        purposes of this section as approved by the Secretary.
    (f) Prohibited Uses.--Sums received under a grant under this 
section may not be used for any of the following:
            (1) To acquire real property.
            (2) Expenditures to purchase or lease equipment to the 
        extent the expenditures would exceed more than 40 percent of 
        the total grant funds.
            (3) To purchase or install transmission equipment off the 
        premises of the telehealth site and any transmission costs not 
        directly related to the grant.
            (4) For construction, except that such funds may be 
        expended for minor renovations relating to the installation of 
        equipment.
            (5) Expenditures for indirect costs (as determined by the 
        Secretary) to the extent the expenditures would exceed more 
        than 15 percent of the total grant.
    (g) Administration.--
            (1) Nonduplication.--The Secretary shall ensure that 
        facilities constructed using grants provided under this section 
        do not duplicate adequately established telehealth networks.
            (2) Coordination with other agencies.--The Secretary shall 
        coordinate, to the extent practicable, with other Federal and 
        State agencies and not-for-profit organizations, operating 
        similar grant programs to pool resources for funding 
        meritorious proposals.
            (3) Informational efforts.--The Secretary shall establish 
        and implement procedures to carry out outreach activities to 
        advise potential end users located in rural and medically 
        underserved areas of each State about the program authorized by 
        this section.
    (h) Prompt Implementation.--The Secretary shall take such actions 
as are necessary to carry out the grant program as expeditiously as 
possible.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $10,000,000 for fiscal year 
2010, and such sums as may be necessary for each of the fiscal years 
2011 through 2014.

SEC. 251. REAUTHORIZATION OF TELEHEALTH NETWORK AND TELEHEALTH RESOURCE 
              CENTERS GRANT PROGRAMS.

    Subsection (s) of section 330I of the Public Health Service Act (42 
U.S.C. 254c-14) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``and'' before ``such sums''; and
                    (B) by inserting ``$10,000,000 for fiscal year 
                2010, and such sums as may be necessary for each of 
                fiscal years 2011 through 2014'' before the semicolon; 
                and
            (2) in paragraph (2)--
                    (A) by striking ``and'' before ``such sums''; and
                    (B) by inserting ``$10,000,000 for fiscal year 
                2010, and such sums as may be necessary for each of 
                fiscal years 2011 through 2014'' before the semicolon.

            Subtitle D--Eliminating Waste, Fraud, and Abuse

SEC. 261. SITE INSPECTIONS; BACKGROUND CHECKS; DENIAL AND SUSPENSION OF 
              BILLING PRIVILEGES.

    (a) Site Inspections for DME Suppliers, Community Mental Health 
Centers, and Other Provider Groups.--Title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the 
following:

``site inspections for dme suppliers, community mental health centers, 
                       and other provider groups

    ``Sec. 1898.  (a) Site Inspections.--
            ``(1) In general.--The Secretary shall conduct a site 
        inspection for each applicable provider (as defined in 
        paragraph (2)) that applies to enroll under this title in order 
        to provide items or services under this title. Such site 
        inspection shall be in addition to any other site inspection 
        that the Secretary would otherwise conduct with regard to an 
        applicable provider.
            ``(2) Applicable provider defined.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this section the term `applicable 
                provider' means--
                            ``(i) a supplier of durable medical 
                        equipment (including items described in section 
                        1834(a)(13));
                            ``(ii) a supplier of prosthetics, 
                        orthotics, or supplies (including items 
                        described in paragraphs (8) and (9) of section 
                        1861(s));
                            ``(iii) a community mental health center; 
                        or
                            ``(iv) any other provider group, as 
                        determined by the Secretary (including 
                        suppliers, both participating suppliers and 
                        non-participating suppliers, as such terms are 
                        defined for purposes of section 1842).
                    ``(B) Exception.--In this section, the term 
                `applicable provider' does not include--
                            ``(i) a physician that provides durable 
                        medical equipment (as described in subparagraph 
                        (A)(i)) or prosthetics, orthotics, or supplies 
                        (as described in subparagraph (A)(ii)) to an 
                        individual as incident to an office visit by 
                        such individual; or
                            ``(ii) a hospital that provides durable 
                        medical equipment (as described in subparagraph 
                        (A)(i)) or prosthetics, orthotics, or supplies 
                        (as described in subparagraph (A)(ii)) to an 
                        individual as incident to an emergency room 
                        visit by such individual.
    ``(b) Standards and Requirements.--In conducting the site 
inspection pursuant to subsection (a), the Secretary shall ensure that 
the site being inspected is in full compliance with all the conditions 
and standards of participation and requirements for obtaining billing 
privileges under this title.
    ``(c) Time.--The Secretary shall conduct the site inspection for an 
applicable provider prior to the issuance of billing privileges under 
this title to such provider.
    ``(d) Timely Review.--The Secretary shall provide for procedures to 
ensure that the site inspection required under this section does not 
unreasonably delay the issuance of billing privileges under this title 
to an applicable provider.''.
    (b) Background Checks.--Title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.) (as amended by subsection (a)) is amended by 
adding at the end the following new section:

    ``background checks; denial and suspension of billing privileges

    ``Sec. 1899.  (a) Background Check Required.--Except as provided in 
subsection (b), the Secretary shall conduct a background check on any 
individual or entity that enrolls under this title for the purpose of 
furnishing any item or service under this title, including any 
individual or entity that is a supplier, a person with an ownership or 
control interest, a managing employee (as defined in section 1126(b)), 
or an authorized or delegated official of the individual or entity. In 
performing the background check, the Secretary shall--
            ``(1) conduct the background check before authorizing 
        billing privileges under this title to the individual or 
        entity, respectively;
            ``(2) include a search of criminal records in the 
        background check;
            ``(3) provide for procedures that ensure the background 
        check does not unreasonably delay the authorization of billing 
        privileges under this title to an eligible individual or 
        entity, respectively; and
            ``(4) establish criteria for targeted reviews when the 
        individual or entity renews participation under this title, 
        with respect to the background check of the individual or 
        entity, respectively, to detect changes in ownership, 
        bankruptcies, or felonies by the individual or entity.
    ``(b) Use of State Licensing Procedure.--The Secretary may use the 
results of a State licensing procedure as a background check under 
subsection (a) if the State licensing procedure meets the requirements 
of such subsection.
    ``(c) Attorney General Required To Provide Information.--
            ``(1) In general.--Upon request of the Secretary, the 
        Attorney General shall provide the criminal background check 
        information referred to in subsection (a)(2) to the Secretary.
            ``(2) Restriction on use of disclosed information.--The 
        Secretary may only use the information disclosed under 
        subsection (a) for the purpose of carrying out the Secretary's 
        responsibilities under this title.
    ``(d) Refusal To Authorize Billing Privileges.--
            ``(1) Authority.--In addition to any other remedy available 
        to the Secretary, the Secretary may refuse to authorize billing 
        privileges under this title to an individual or entity if the 
        Secretary determines, after a background check conducted under 
        this section, that such individual or entity, respectively, has 
        a history of acts that indicate authorization of billing 
        privileges under this title to such individual or entity, 
        respectively, would be detrimental to the best interests of the 
        program or program beneficiaries. Such acts may include--
                    ``(A) any bankruptcy;
                    ``(B) any act resulting in a civil judgment against 
                such individual or entity; or
                    ``(C) any felony conviction under Federal or State 
                law.
            ``(2) Reporting of refusal to authorize billing privileges 
        to the healthcare integrity and protection data bank (hipdb).--
                    ``(A) In general.--Subject to subparagraph (B), a 
                determination under paragraph (1) to refuse to 
                authorize billing privileges under this title to an 
                individual or entity as a result of a background check 
                conducted under this section shall be reported to the 
                healthcare integrity and protection data bank 
                established under section 1128E in accordance with the 
                procedures for reporting final adverse actions taken 
                against a health care provider, supplier, or 
                practitioner under that section.
                    ``(B) Exception.--Any determination described in 
                subparagraph (A) that the Secretary specifies is not 
                appropriate for inclusion in the healthcare integrity 
                and protection data bank established under section 
                1128E shall not be reported to such data bank.''.
    (c) Denial and Suspension of Billing Privileges.--Section 1899 of 
the Social Security Act, as added by subsection (b), is amended by 
adding at the end the following new subsection:
    ``(e) Authority To Suspend Billing Privileges or Refuse To 
Authorize Additional Billing Privileges.--
            ``(1) In general.--The Secretary may suspend any billing 
        privilege under this title authorized for an individual or 
        entity or refuse to authorize any additional billing privilege 
        under this title to such individual or entity if--
                    ``(A) such individual or entity, respectively, has 
                an outstanding overpayment due to the Secretary under 
                this title;
                    ``(B) payments under this title to such individual 
                or entity, respectively, have been suspended; or
                    ``(C) 100 percent of the payment claims under this 
                title for such individual or entity, respectively, are 
                reviewed on a pre-payment basis.
            ``(2) Application to restructured entities.--In the case 
        that an individual or entity is subject to a suspension or 
        refusal of billing privileges under this section, if the 
        Secretary determines that the ownership or management of a new 
        entity is under the control or management of such an individual 
        or entity subject to such a suspension or refusal, the new 
        entity shall be subject to any such applicable suspension or 
        refusal in the same manner and to the same extent as the 
        initial individual or entity involved had been subject to such 
        applicable suspension or refusal.
            ``(3) Duration of suspension.--A suspension of billing 
        privileges under this subsection, with respect to an individual 
        or entity, shall be in effect beginning on the date of the 
        Secretary's determination that the offense was committed and 
        ending not earlier than such date on which all applicable 
        overpayments and other applicable outstanding debts have been 
        paid and all applicable payment suspensions have been 
        lifted.''.
    (d) Regulations; Effective Date.--
            (1) Regulations.--Not later than one year after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall promulgate such regulations as are necessary to 
        implement the amendments made by subsections (a), (b), and (c).
            (2) Effective dates.--
                    (A) Site inspections and background checks.--The 
                amendments made by subsections (a) and (b) shall apply 
                to applications to enroll under title XVIII of the 
                Social Security Act received by the Secretary of Health 
                and Human Services on or after the first day of the 
                first year beginning after the date of the enactment of 
                this Act.
                    (B) Denials and suspensions of billing 
                privileges.--The amendment made by subsection (c) shall 
                apply to overpayments or debts in existence on or after 
                the date of the enactment of this Act, regardless of 
                whether the final determination, with respect to such 
                overpayment or debt, was made before, on, or after such 
                date.
    (e) Use of Medicare Integrity Program Funds.--The Secretary of 
Health and Human Services may use funds appropriated or transferred for 
purposes of carrying out the Medicare integrity program established 
under section 1893 of the Social Security Act (42 U.S.C. 1395ddd) to 
carry out the provisions of sections 1898 and 1899 of that Act (as 
added by subsections (a) and (b)).

SEC. 262. REGISTRATION AND BACKGROUND CHECKS OF BILLING AGENCIES AND 
              INDIVIDUALS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) (as amended by section 2(b)) is amended by adding at the 
end the following new section:

     ``registration and background checks of billing agencies and 
    individuals; identification numbers required for providers and 
                               suppliers

    ``Sec. 1899A.  (a) Registration.--
            ``(1) In general.--The Secretary shall establish 
        procedures, including modifying the Provider Enrollment and 
        Chain Ownership System (PECOS) administered by the Centers for 
        Medicare & Medicaid Services, to provide for the registration 
        of all applicable persons in accordance with this section.
            ``(2) Required application.--Each applicable person shall 
        submit a registration application to the Secretary at such 
        time, in such manner, and accompanied by such information as 
        the Secretary may require.
            ``(3) Identification number.--If the Secretary approves an 
        application submitted under subsection (b), the Secretary shall 
        assign a unique identification number to the applicable person.
            ``(4) Requirement.--Every claim for reimbursement under 
        this title that is compiled or submitted by an applicable 
        person shall contain the identification number that is assigned 
        to the applicable person pursuant to subsection (c).
            ``(5) Timely review.--The Secretary shall provide for 
        procedures that ensure the timely consideration and 
        determination regarding approval of applications under this 
        subsection.
            ``(6) Definition of applicable person.--In this section, 
        the term `applicable person' means any individual or entity 
        that compiles or submits claims for reimbursement under this 
        title to the Secretary on behalf of any individual or entity.
    ``(b) Background Checks.--
    ``(1) In General.--Except as provided in paragraph (2), the 
Secretary shall conduct a background check on any applicable person 
that registers under subsection (a). In performing the background 
check, the Secretary shall--
            ``(A) conduct the background check before issuing a unique 
        identification number to the applicable person;
            ``(B) include a search of criminal records in the 
        background check;
            ``(C) provide for procedures that ensure the background 
        check does not unreasonably delay the issuance of the unique 
        identification number to an eligible applicable person; and
            ``(D) establish criteria for periodic targeted reviews with 
        respect to the background check of the applicable person.
    ``(2) Use of State Licensing Procedure.--The Secretary may use the 
results of a State licensing procedure as a background check under 
paragraph (1) if the State licensing procedure meets the requirements 
of such paragraph.
    ``(3) Attorney General Required To Provide Information.--
            ``(A) In general.--Upon request of the Secretary, the 
        Attorney General shall provide the criminal background check 
        information referred to in paragraph (1)(B) to the Secretary.
            ``(B) Restriction on use of disclosed information.--The 
        Secretary may only use the information disclosed under 
        paragraph (1) for the purpose of carrying out the Secretary's 
        responsibilities under this title.
    ``(4) Refusal To Issue Unique Identification Number.--In addition 
to any other remedy available to the Secretary, the Secretary may 
refuse to issue a unique identification number described in subsection 
(a)(3) to an applicable person if the Secretary determines, after a 
background check conducted under this subsection, that such person has 
a history of acts that indicate issuance of such number under this 
title to such person would be detrimental to the best interests of the 
program or program beneficiaries. Such acts may include--
            ``(A) any bankruptcy;
            ``(B) any act resulting in a civil judgment against such 
        person; or
            ``(C) any felony conviction under Federal or State law.
    ``(c) Identification Numbers for Providers and Suppliers.--The 
Secretary shall establish procedures to ensure that each provider of 
services and each supplier that submits claims for reimbursement under 
this title to the Secretary is assigned a unique identification 
number.''.
    (b) Permissive Exclusion.--Section 1128(b) of the Social Security 
Act (42 U.S.C. 1320a-7(b)) is amended by adding at the end the 
following:
            ``(16) Fraud by applicable person.--An applicable person 
        (as defined in section 1899A(a)(6)) that the Secretary 
        determines knowingly submitted or caused to be submitted a 
        claim for reimbursement under title XVIII that the applicable 
        person knows or should know is false or fraudulent.''.
    (c) Regulations; Effective Date.--
            (1) Regulations.--Not later than one year after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall promulgate such regulations as are necessary to 
        implement the amendments made by subsections (a) and (b).
            (2) Effective date.--The amendments made by subsections (a) 
        and (b) shall apply to applicable persons and other entities on 
        and after the first day of the first year beginning after the 
        date of the enactment of this Act.

SEC. 263. EXPANDED ACCESS TO THE HEALTHCARE INTEGRITY AND PROTECTION 
              DATA BANK (HIPDB).

    (a) In General.--Section 1128E(d)(1) of the Social Security Act (42 
U.S.C. 1320a-7e(d)(1)) is amended to read as follows:
            ``(1) Availability.--The information in the data bank 
        maintained under this section shall be available to--
                    ``(A) Federal and State government agencies and 
                health plans, and any health care provider, supplier, 
                or practitioner entering an employment or contractual 
                relationship with an individual or entity who could 
                potentially be the subject of a final adverse action, 
                where the contract involves the furnishing of items or 
                services reimbursed by one or more Federal health care 
                programs (regardless of whether the individual or 
                entity is paid by the programs directly, or whether the 
                items or services are reimbursed directly or indirectly 
                through the claims of a direct provider); and
                    ``(B) utilization and quality control peer review 
                organizations and accreditation entities as defined by 
                the Secretary, including but not limited to 
                organizations described in part B of this title and in 
                section 1154(a)(4)(C).''.
    (b) No Fees for Use of HIPDB by Entities Contracting With 
Medicare.--Section 1128E(d)(2) of the Social Security Act (42 U.S.C. 
1320a-7e(d)(2)) is amended by striking ``Federal agencies'' and 
inserting ``Federal agencies or other entities, such as fiscal 
intermediaries and carriers, acting under contract on behalf of such 
agencies''.
    (c) Criminal Penalty for Misuse of Information.--Section 1128B(b) 
of the Social Security Act (42 U.S.C. 1320a-7b(b)) is amended by adding 
at the end the following:
    ``(4) Whoever knowingly uses information maintained in the 
healthcare integrity and protection data bank maintained in accordance 
with section 1128E for a purpose other than a purpose authorized under 
that section shall be imprisoned for not more than three years or fined 
under title 18, United States Code, or both.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 264. LIABILITY OF MEDICARE ADMINISTRATIVE CONTRACTORS FOR CLAIMS 
              SUBMITTED BY EXCLUDED PROVIDERS.

    (a) Reimbursement to the Secretary for Amounts Paid to Excluded 
Providers.--Section 1874A(b) of the Social Security Act (42 U.S.C. 
1395kk(b)) is amended by adding at the end the following new paragraph:
            ``(6) Reimbursements to secretary for amounts paid to 
        excluded providers.--The Secretary shall not enter into a 
        contract with a Medicare administrative contractor under this 
        section unless the contractor agrees to reimburse the Secretary 
        for any amounts paid by the contractor for a service under this 
        title which is furnished by an individual or entity during any 
        period for which the individual or entity is excluded, pursuant 
        to section 1128, 1128A, or 1156, from participation in the 
        health care program under this title if the amounts are paid 
        after the 60-day period beginning on the date the Secretary 
        provides notice of the exclusion to the contractor, unless the 
        payment was made as a result of incorrect information provided 
        by the Secretary or the individual or entity excluded from 
        participation has concealed or altered their identity.''.
    (b) Conforming Repeal of Mandatory Payment Rule.--Section 1862(e) 
of the Social Security Act (42 U.S.C. 1395y(e)) is amended--
            (1) in paragraph (1)(B), by striking ``and when the 
        person'' and all that follows through ``person)''; and
            (2) by amending paragraph (2) to read as follows:
    ``(2) No individual or entity may bill (or collect any amount from) 
any individual for any item or service for which payment is denied 
under paragraph (1). No individual is liable for payment of any amounts 
billed for such an item or service in violation of the preceding 
sentence.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to claims for payment submitted on or after the date of 
        the enactment of this Act.
            (2) Contract modification.--The Secretary of Health and 
        Human Services shall take such steps as may be necessary to 
        modify contracts entered into, renewed, or extended prior to 
        the date of the enactment of this Act to conform such contracts 
        to the provisions of this section.

SEC. 265. COMMUNITY MENTAL HEALTH CENTERS.

    (a) In General.--Section 1861(ff)(3)(B) of the Social Security Act 
(42 U.S.C. 1395x(ff)(3)(B)) is amended by striking ``entity that--'' 
and all that follows and inserting the following: ``entity that--
            ``(i) provides the community mental health services 
        specified in paragraph (1) of section 1913(c) of the Public 
        Health Service Act;
            ``(ii) meets applicable certification or licensing 
        requirements for community mental health centers in the State 
        in which it is located;
            ``(iii) provides a significant share of its services to 
        individuals who are not eligible for benefits under this title; 
        and
            ``(iv) meets such additional standards or requirements for 
        obtaining billing privileges under this title as the Secretary 
        may specify to ensure--
                    ``(I) the health and safety of beneficiaries 
                receiving such services; or
                    ``(II) the furnishing of such services in an 
                effective and efficient manner.''.
    (b) Restriction.--Section 1861(ff)(3)(A) of such Act (42 U.S.C. 
1395x(ff)(3)(A)) is amended by inserting ``other than in an 
individual's home or in an inpatient or residential setting'' before 
the period.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after the first day of the 
sixth month that begins after the date of the enactment of this Act.

SEC. 266. LIMITING THE DISCHARGE OF DEBTS IN BANKRUPTCY PROCEEDINGS IN 
              CASES WHERE A HEALTH CARE PROVIDER OR A SUPPLIER ENGAGES 
              IN FRAUDULENT ACTIVITY.

    (a) In General.--
            (1) Civil monetary penalties.--Section 1128A(a) of the 
        Social Security Act (42 U.S.C. 1320a-7a(a)) is amended by 
        adding at the end the following: ``Notwithstanding any other 
        provision of law, amounts made payable under this section are 
        not dischargeable under section 727, 944, 1141, 1228, or 1328 
        of title 11, United States Code, or any other provision of such 
        title.''.
            (2) Recovery of overpayment to providers of services under 
        part a of medicare.--Section 1815(d) of the Social Security Act 
        (42 U.S.C. 1395g(d)) is amended--
                    (A) by inserting ``(1)'' after ``(d)''; and
                    (B) by adding at the end the following:
    ``(2) Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under section 
727, 944, 1141, 1228, or 1328 of title 11, United States Code, or any 
other provision of such title if the overpayment was the result of 
fraudulent activity, as may be defined by the Secretary.''.
            (3) Recovery of overpayment of benefits under part b of 
        medicare.--Section 1833(j) of the Social Security Act (42 
        U.S.C. 1395l(j)) is amended--
                    (A) by inserting ``(1)'' after ``(j)''; and
                    (B) by adding at the end the following:
    ``(2) Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under section 
727, 944, 1141, 1228, or 1328 of title 11, United States Code, or any 
other provision of such title if the overpayment was the result of 
fraudulent activity, as may be defined by the Secretary.''.
            (4) Collection of past-due obligations arising from breach 
        of scholarship and loan contract.--Section 1892(a) of the 
        Social Security Act (42 U.S.C. 1395ccc(a)) is amended by adding 
        at the end the following:
            ``(5) Notwithstanding any other provision of law, amounts 
        due to the Secretary under this section are not dischargeable 
        under section 727, 944, 1141, 1228, or 1328 of title 11, United 
        States Code, or any other provision of such title.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to bankruptcy petitions filed after the date of the enactment of 
this Act.

SEC. 267. ILLEGAL DISTRIBUTION OF A MEDICARE OR MEDICAID BENEFICIARY 
              IDENTIFICATION OR BILLING PRIVILEGES.

    Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-
7b(b)), as amended by section 4(c), is amended by adding at the end the 
following:
    ``(5) Whoever knowingly, intentionally, and with the intent to 
defraud purchases, sells or distributes, or arranges for the purchase, 
sale, or distribution of two or more Medicare or Medicaid beneficiary 
identification numbers or billing privileges under title XVIII or title 
XIX shall be imprisoned for not more than three years or fined under 
title 18, United States Code (or, if greater, an amount equal to the 
monetary loss to the Federal and any State government as a result of 
such acts), or both.''.

SEC. 268. TREATMENT OF CERTAIN SOCIAL SECURITY ACT CRIMES AS FEDERAL 
              HEALTH CARE OFFENSES.

    (a) In General.--Section 24(a) of title 18, United States Code, is 
amended--
            (1) by striking the period at the end of paragraph (2) and 
        inserting ``; or''; and
            (2) by adding at the end the following:
            ``(3) section 1128B of the Social Security Act (42 U.S.C. 
        1320a-7b).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and apply to acts 
committed on or after the date of the enactment of this Act.

SEC. 269. AUTHORITY OF OFFICE OF INSPECTOR GENERAL OF THE DEPARTMENT OF 
              HEALTH AND HUMAN SERVICES.

    (a) Authority.--Notwithstanding any other provision of law, upon 
designation by the Inspector General of the Department of Health and 
Human Services, any criminal investigator of the Office of Inspector 
General of such department may, in accordance with guidelines issued by 
the Secretary of Health and Human Services and approved by the Attorney 
General, while engaged in activities within the lawful jurisdiction of 
such Inspector General--
            (1) obtain and execute any warrant or other process issued 
        under the authority of the United States;
            (2) make an arrest without a warrant for--
                    (A) any offense against the United States committed 
                in the presence of such investigator; or
                    (B) any felony offense against the United States, 
                if such investigator has reasonable cause to believe 
                that the person to be arrested has committed or is 
                committing that felony offense; and
            (3) exercise any other authority necessary to carry out the 
        authority described in paragraphs (1) and (2).
    (b) Funds.--The Office of Inspector General of the Department of 
Health and Human Services may receive and expend funds that represent 
the equitable share from the forfeiture of property in investigations 
in which the Office of Inspector General participated, and that are 
transferred to the Office of Inspector General by the Department of 
Justice, the Department of the Treasury, or the United States Postal 
Service. Such equitable sharing funds shall be deposited in a separate 
account and shall remain available until expended.

SEC. 270. UNIVERSAL PRODUCT NUMBERS ON CLAIMS FORMS FOR REIMBURSEMENT 
              UNDER THE MEDICARE PROGRAM.

    (a) UPNs on Claims Forms for Reimbursement Under the Medicare 
Program.--
            (1) Accommodation of upns on medicare claims forms.--Not 
        later than February 1, 2011, all claims forms developed or used 
        by the Secretary of Health and Human Services for reimbursement 
        under the Medicare program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.) shall accommodate the use 
        of universal product numbers for a UPN covered item.
            (2) Requirement for payment of claims.--Title XVIII of the 
        Social Security Act (42 U.S.C. 1395 et seq.), as amended by 
        sections 2 and 3, is amended by adding at the end the following 
        new section:

                   ``use of universal product numbers

    ``Sec. 1899B.  (a) In General.--No payment shall be made under this 
title for any claim for reimbursement for any UPN covered item unless 
the claim contains the universal product number of the UPN covered 
item.
    ``(b) Definitions.--In this section:
            ``(1) UPN covered item.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `UPN covered item' means--
                            ``(i) a covered item as that term is 
                        defined in section 1834(a)(13);
                            ``(ii) an item described in paragraph (8) 
                        or (9) of section 1861(s);
                            ``(iii) an item described in paragraph (5) 
                        of section 1861(s); and
                            ``(iv) any other item for which payment is 
                        made under this title that the Secretary 
                        determines to be appropriate.
                    ``(B) Exclusion.--The term `UPN covered item' does 
                not include a customized item for which payment is made 
                under this title.
            ``(2) Universal product number.--The term `universal 
        product number' means a number that is--
                    ``(A) affixed by the manufacturer to each 
                individual UPN covered item that uniquely identifies 
                the item at each packaging level; and
                    ``(B) based on commercially acceptable 
                identification standards such as, but not limited to, 
                standards established by the Uniform Code Council-
                International Article Numbering System or the Health 
                Industry Business Communication Council.''.
            (3) Development and implementation of procedures.--
                    (A) Information included in upn.--The Secretary of 
                Health and Human Services, in consultation with 
                manufacturers and entities with appropriate expertise, 
                shall determine the relevant descriptive information 
                appropriate for inclusion in a universal product number 
                for a UPN covered item.
                    (B) Review of procedure.--From the information 
                obtained by the use of universal product numbers on 
                claims for reimbursement under the Medicare program, 
                the Secretary of Health and Human Services, in 
                consultation with interested parties, shall 
                periodically review the UPN covered items billed under 
                the Health Care Financing Administration Common 
                Procedure Coding System and adjust such coding system 
                to ensure that functionally equivalent UPN covered 
                items are billed and reimbursed under the same codes.
            (4) Effective date.--The amendment made by paragraph (2) 
        shall apply to claims for reimbursement submitted on and after 
        February 1, 2011.
    (b) Study and Reports to Congress.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study on the results of the implementation of 
        the provisions in paragraphs (1) and (3) of subsection (a) and 
        the amendment to the Social Security Act in paragraph (2) of 
        such subsection.
            (2) Reports.--
                    (A) Progress report.--Not later than six months 
                after the date of the enactment of this Act, the 
                Secretary of Health and Human Services shall submit to 
                Congress a report that contains a detailed description 
                of the progress of the matters studied pursuant to 
                paragraph (1).
                    (B) Implementation.--Not later than 18 months after 
                the date of the enactment of this Act, and annually 
                thereafter for three years, the Secretary of Health and 
                Human Services shall submit to Congress a report that 
                contains a detailed description of the results of the 
                study conducted pursuant to paragraph (1), together 
                with the Secretary's recommendations regarding the use 
                of universal product numbers and the use of data 
                obtained from the use of such numbers.
    (c) Definitions.--In this section:
            (1) UPN covered item.--The term ``UPN covered item'' has 
        the meaning given such term in section 1899B(b)(1) of the 
        Social Security Act (as added by subsection (a)(2)).
            (2) Universal product number.--The term ``universal product 
        number'' has the meaning given such term in section 1899B(b)(2) 
        of the Social Security Act (as added by subsection (a)(2)).
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for the purpose of carrying 
out the provisions in paragraphs (1) and (3) of subsection (a), 
subsection (b), and section 1899B of the Social Security Act (as added 
by subsection (a)(2)).

  Subtitle E--Promoting Health and Preventing Chronic Disease Through 
                    Prevention and Wellness Programs

SEC. 281. FINDINGS.

    Congress finds the following:
            (1) Keeping people healthy and preventing disease must be 
        an important part of improving our Federal health system.
            (2) More than 133 million Americans, which accounts for 45 
        percent of the U.S. population, have at least one chronic 
        condition.
            (3) With the growth in obesity, especially among younger 
        Americans, the diagnosis of childhood chronic diseases has 
        almost quadrupled over the past four decades and is expected to 
        continue to rise.
            (4) Chronic diseases are the leading causes of preventable 
        death and disability in the United States, accounting for 7 out 
        of every 10 deaths and killing more than 1,700,000 people in 
        the United States every year.
            (5) Two-thirds of the increase in health care spending is 
        due to increased prevalence of treated chronic disease.
            (6) Seventy-five percent of the nation's aggregate health 
        care spending is on treating patients with chronic disease, and 
        the vast majority of these diseases are preventable. 
        Unfortunately, less than one percent of total health care 
        spending goes toward prevention.
            (7) According to a recent study, treatment of the seven 
        most common chronic diseases, coupled with productivity losses, 
        cost the U.S. economy more than $1 trillion dollars annually. 
        It has been estimated that modest reductions in unhealthy 
        behaviors could prevent or delay 40 million cases of chronic 
        illness per year.
            (8) Chronic diseases are burdensome to American businesses. 
        Not only does a sicker American workforce have higher health 
        care costs, but it is also less productive. Chronic illnesses 
        lead to absenteeism and decreased effectiveness while at work 
        due to illness.
            (9) Prevention not only saves lives, it is highly cost-
        effective. One study concluded that an investment of $10 per 
        person per year in proven community-based programs to increase 
        physical activity, improve nutrition, and prevent smoking and 
        other tobacco use could save the country more than $16 billion 
        annually within five years. This is a return of $5.60 for every 
        $1 spent.

SEC. 282. TAX CREDIT TO EMPLOYERS FOR COSTS OF IMPLEMENTING PREVENTION 
              AND WELLNESS PROGRAMS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45R. PREVENTION AND WELLNESS PROGRAM CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, the 
        prevention and wellness credit determined under this section 
        for any taxable year during the credit period with respect to 
        an employer is an amount equal to 50 percent of the costs paid 
        or incurred by the employer in connection with a qualified 
        prevention and wellness during the taxable year. For purposes 
        of the preceding sentence, in the case of any qualified 
        prevention and wellness offered as part of an employer-provided 
        group health plan, including health insurance offered in 
        connection with such plan, only costs attributable to the 
        qualified prevention and wellness and not to the group health 
        plan or health insurance coverage may be taken into account.    
          
            ``(2) Limitation.--The amount of credit allowed under 
        paragraph (1) for any taxable year shall not exceed the sum 
        of--
                    ``(A) the product of $200 and the number of 
                employees of the employer not in excess of 200 
                employees, plus
                    ``(B) the product of $100 and the number of 
                employees of the employer in excess of 200 employees.
    ``(b) Qualified Prevention and Wellness.--For purposes of this 
section--
            ``(1) Qualified prevention and wellness.--The term 
        `qualified prevention and wellness' means a program which--
                    ``(A) consists of any 3 of the prevention and 
                wellness components described in subsection (c), and
                    ``(B) which is certified by the Secretary of Health 
                and Human Services, in coordination with the Director 
                of the Center for Disease Control and Prevention, as a 
                qualified prevention and wellness under this section.
            ``(2) Programs must be consistent with research and best 
        practices.--
                    ``(A) In general.--The Secretary of Health and 
                Human Services shall not certify a program as a 
                qualified prevention and wellness unless the program--
                            ``(i) is consistent with evidence-based 
                        research and best practices, as identified by 
                        persons with expertise in employer health 
                        promotion and prevention and wellness,
                            ``(ii) includes multiple, evidence-based 
                        strategies which are based on the existing and 
                        emerging research and careful scientific 
                        reviews, including the Guide to Community 
                        Preventive Services, the Guide to Clinical 
                        Preventive Services, and the National Registry 
                        for Effective Programs, and
                            ``(iii) includes strategies which focus on 
                        employee populations with a disproportionate 
                        burden of health problems.
                    ``(B) Periodic updating and review.--The Secretary 
                of Health and Human Services shall establish procedures 
                for periodic review of programs under this subsection. 
                Such procedures shall require revisions of programs if 
                necessary to ensure compliance with the requirements of 
                this section and require updating of the programs to 
                the extent the Secretary, in coordination with the 
                Director of the Centers for Disease Control and 
                Prevention, determines necessary to reflect new 
                scientific findings.
            ``(3) Health literacy.--The Secretary of Health and Human 
        Services shall, as part of the certification process, encourage 
        employees to make the programs culturally competent and to meet 
        the health literacy needs of the employees covered by the 
        programs.
    ``(c) Prevention and Wellness Program Components.--For purposes of 
this section, the prevention and wellness components described in this 
subsection are the following:
            ``(1) Health awareness component.--A health awareness 
        component which provides for the following:
                    ``(A) Health education.--The dissemination of 
                health information which addresses the specific needs 
                and health risks of employees.
                    ``(B) Health screenings.--The opportunity for 
                periodic screenings for health problems and referrals 
                for appropriate follow up measures.
            ``(2) Employee engagement component.--An employee 
        engagement component which provides for--
                    ``(A) the establishment of a committee to actively 
                engage employees in worksite prevention and wellness 
                through worksite assessments and program planning, 
                delivery, evaluation, and improvement efforts, and
                    ``(B) the tracking of employee participation.
            ``(3) Behavioral change component.--A behavioral change 
        component which provides for altering employee lifestyles to 
        encourage healthy living through counseling, seminars, on-line 
        programs, or self-help materials which provide technical 
        assistance and problem solving skills. Such component may 
        include programs relating to--
                    ``(A) tobacco use,
                    ``(B) obesity,
                    ``(C) stress management,
                    ``(D) physical fitness,
                    ``(E) nutrition,
                    ``(F) substance abuse,
                    ``(G) depression, and
                    ``(H) mental health promotion (including anxiety).
            ``(4) Supportive environment component.--A supportive 
        environment component which includes the following:
                    ``(A) On-site policies.--Policies and services at 
                the worksite which promote a healthy lifestyle, 
                including policies relating to--
                            ``(i) tobacco use at the worksite,
                            ``(ii) the nutrition of food available at 
                        the worksite through cafeterias and vending 
                        options,
                            ``(iii) minimizing stress and promoting 
                        positive mental health in the workplace,
                            ``(iv) where applicable, accessible and 
                        attractive stairs, and
                            ``(v) the encouragement of physical 
                        activity before, during, and after work hours.
                    ``(B) Participation incentives.--
                            ``(i) In general.--Qualified incentive 
                        benefits for each employee who participates in 
                        the health screenings described in paragraph 
                        (1)(B) or the behavioral change programs 
                        described in paragraph (3).
                            ``(ii) Qualified incentive benefit.--For 
                        purposes of clause (i), the term `qualified 
                        incentive benefit' means any benefit which is 
                        approved by the Secretary of Health and Human 
                        Services, in coordination with the Director of 
                        the Centers for Disease Control and Prevention.
                    ``(C) Employee input.--The opportunity for 
                employees to participate in the management of any 
                qualified prevention and wellness to which this section 
                applies.
    ``(d) Participation Requirement.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) unless the Secretary of Health and Human 
        Services, in coordination with the Director of the Centers for 
        Disease Control and Prevention, certifies, as a part of any 
        certification described in subsection (b), that each prevention 
        and wellness component of the qualified prevention and wellness 
        applies to all qualified employees of the employer. The 
        Secretary of Health and Human Services shall prescribe rules 
        under which an employer shall not be treated as failing to meet 
        the requirements of this subsection merely because the employer 
        provides specialized programs for employees with specific 
        health needs or unusual employment requirements or provides a 
        pilot program to test new wellness strategies.
            ``(2) Qualified employee.--For purposes of paragraph (1), 
        the term `qualified employee' means--
                    ``(A) for employers offering health insurance 
                coverage, an employee who is eligible for such 
                coverage, or
                    ``(B) for employers not offering health insurance 
                coverage, an employee who works an average of not less 
                than 25 hours per week during the taxable year.
    ``(e) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Employee and employer.--
                    ``(A) Partners and partnerships.--The term 
                `employee' includes a partner and the term `employer' 
                includes a partnership.
                    ``(B) Certain rules to apply.--Rules similar to the 
                rules of section 52 shall apply.
            ``(2) Certain costs not included.--Costs paid or incurred 
        by an employer for food or health insurance shall not be taken 
        into account under subsection (a).
            ``(3) No credit where grant awarded.--No credit shall be 
        allowable under subsection (a) with respect to any qualified 
        prevention and wellness of any taxpayer (other than an eligible 
        employer described in subsection (f)(2)(A)) who receives a 
        grant provided by the United States, a State, or a political 
        subdivision of a State for use in connection with such program. 
        The Secretary shall prescribe rules providing for the waiver of 
        this paragraph with respect to any grant which does not 
        constitute a significant portion of the funding for the 
        qualified prevention and wellness.
            ``(4) Credit period.--
                    ``(A) In general.--The term `credit period' means 
                the period of 10 consecutive taxable years beginning 
                with the taxable year in which the qualified prevention 
                and wellness is first certified under this section.
                    ``(B) Special rule for existing programs.--In the 
                case of an employer (or predecessor) which operates a 
                prevention and wellness for its employees on the date 
                of the enactment of this section, subparagraph (A) 
                shall be applied by substituting `3 consecutive taxable 
                years' for `10 consecutive taxable years'. The 
                Secretary shall prescribe rules under which this 
                subsection shall not apply if an employer is required 
                to make substantial modifications in the existing 
                prevention and wellness in order to qualify such 
                program for certification as a qualified prevention and 
                wellness.
                    ``(C) Controlled groups.--For purposes of this 
                paragraph, all persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                shall be treated as a single employer.
    ``(f) Portion of Credit Made Refundable.--
            ``(1) In general.--In the case of an eligible employer of 
        an employee, the aggregate credits allowed to a taxpayer under 
        subpart C shall be increased by the lesser of--
                    ``(A) the credit which would be allowed under this 
                section without regard to this subsection and the 
                limitation under section 38(c), or
                    ``(B) the amount by which the aggregate amount of 
                credits allowed by this subpart (determined without 
                regard to this subsection) would increase if the 
                limitation imposed by section 38(c) for any taxable 
                year were increased by the amount of employer payroll 
                taxes imposed on the taxpayer during the calendar year 
                in which the taxable year begins.
        The amount of the credit allowed under this subsection shall 
        not be treated as a credit allowed under this subpart and shall 
        reduce the amount of the credit otherwise allowable under 
        subsection (a) without regard to section 38(c).
            ``(2) Eligible employer.--For purposes of this subsection, 
        the term `eligible employer' means an employer which is--
                    ``(A) a State or political subdivision thereof, the 
                District of Columbia, a possession of the United 
                States, or an agency or instrumentality of any of the 
                foregoing, or
                    ``(B) any organization described in section 501(c) 
                of the Internal Revenue Code of 1986 which is exempt 
                from taxation under section 501(a) of such Code.
            ``(3) Employer payroll taxes.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `employer payroll 
                taxes' means the taxes imposed by--
                            ``(i) section 3111(b), and
                            ``(ii) sections 3211(a) and 3221(a) 
                        (determined at a rate equal to the rate under 
                        section 3111(b)).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(g) Termination.--This section shall not apply to any amount paid 
or incurred after December 31, 2017.''.
    (b) Treatment as General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``plus'' at the end of 
paragraph (34), by striking the period at the end of paragraph (35) and 
inserting ``, plus'', and by adding at the end the following:
            ``(36) the prevention and wellness credit determined under 
        section 45R.''.
    (c) Denial of Double Benefit.--Section 280C of the Internal Revenue 
Code of 1986 (relating to certain expenses for which credits are 
allowable) is amended by adding at the end the following new 
subsection:
    ``(g) Prevention and Wellness Program Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the costs paid or incurred for a qualified 
        prevention and wellness (within the meaning of section 45R) 
        allowable as a deduction for the taxable year which is equal to 
        the amount of the credit allowable for the taxable year under 
        section 45R.
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--If--
                    ``(A) the amount of the credit determined for the 
                taxable year under section 45R, exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for a qualified prevention and wellness,
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such 
        excess.
            ``(3) Controlled groups.--In the case of a corporation 
        which is a member of a controlled group of corporations (within 
        the meaning of section 41(f)(5)) or a trade or business which 
        is treated as being under common control with other trades or 
        business (within the meaning of section 41(f)(1)(B)), this 
        subsection shall be applied under rules prescribed by the 
        Secretary similar to the rules applicable under subparagraphs 
        (A) and (B) of section 41(f)(1).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

``Sec. 45R. Prevention and wellness program credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.
    (f) Outreach.--
            (1) In general.--The Secretary of the Treasury, in 
        conjunction with the Director of the Centers for Disease 
        Control and members of the business community, shall institute 
        an outreach program to inform businesses about the availability 
        of the prevention and wellness credit under section 45R of the 
        Internal Revenue Code of 1986 as well as to educate businesses 
        on how to develop programs according to recognized and 
        promising practices and on how to measure the success of 
        implemented programs.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out the 
        outreach program described in paragraph (1).

SEC. 283. GRANTS TO INCREASE PHYSICAL ACTIVITY AND EMOTIONAL WELLNESS, 
              IMPROVE NUTRITION, AND PROMOTE HEALTHY EATING BEHAVIORS.

    Part Q of title III of the Public Health Service Act (42 U.S.C. 
280h et seq.) is amended by striking section 399W and inserting the 
following:

``SEC. 399W. GRANTS TO INCREASE PHYSICAL ACTIVITY AND EMOTIONAL 
              WELLNESS, IMPROVE NUTRITION, AND PROMOTE HEALTHY EATING 
              BEHAVIORS AND HEALTHY LIVING.

    ``(a) Establishment.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention and 
        in coordination with the Administrator of the Health Resources 
        and Services Administration, the Director of the Indian Health 
        Service, the Secretary of Education, the Secretary of 
        Agriculture, the Secretary of the Interior, the Director of the 
        National Institutes of Health, the Director of the Office of 
        Women's Health, and the heads of other appropriate agencies, 
        shall award competitive grants to eligible entities to plan and 
        implement prevention and wellness programs that promote health 
        and wellness and prevent chronic disease. Such grants may be 
        awarded to target at-risk populations including youth, health 
        disparity populations (as defined in section 485E(d)), and the 
        underserved.
            ``(2) Term.--The Secretary shall award grants under this 
        subsection for a period not to exceed 4 years.
    ``(b) Award of Grants.--An eligible entity desiring a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require, including--
            ``(1) a plan describing a comprehensive program of 
        approaches to encourage healthy living, emotional wellness, 
        healthy eating behaviors, and healthy levels of physical 
        activity;
            ``(2) the manner in which the eligible entity will 
        coordinate with appropriate State and local authorities and 
        community-based organizations, including but not limited to--
                    ``(A) State and local educational agencies;
                    ``(B) departments of health;
                    ``(C) State directors of programs under section 17 
                of the Child Nutrition Act of 1966 (42 U.S.C. 1786); 
                and
                    ``(D) community-based organizations serving youth; 
                and
            ``(3) the manner in which the applicant will evaluate the 
        effectiveness of the program carried out under this section.
    ``(c) Coordination.--In awarding grants under this section, the 
Secretary shall ensure that the proposed programs show a history of 
addressing these issues, have program evaluations that show success, 
and are coordinated in substance and format with programs currently 
funded through other Federal agencies and operating within the 
community.
    ``(d) Eligible Entity.--In this section, the term `eligible entity' 
means--
            ``(1) a city, county, tribe, territory, or State;
            ``(2) a State educational agency;
            ``(3) a tribal educational agency;
            ``(4) a local educational agency;
            ``(5) a federally qualified health center (as defined in 
        section 1861(aa)(4) of the Social Security Act);
            ``(6) a rural health clinic;
            ``(7) a health department;
            ``(8) an Indian Health Service hospital or clinic;
            ``(9) an Indian tribal health facility;
            ``(10) an urban Indian facility;
            ``(11) any health provider;
            ``(12) an accredited university or college;
            ``(13) a youth serving organization;
            ``(14) a community-based organization; or
            ``(15) any other entity determined appropriate by the 
        Secretary.
    ``(e) Use of Funds.--An eligible entity that receives a grant under 
this section shall use the funds made available through the grant to 
plan and implement prevention and wellness programs that promote health 
and wellness and prevent chronic disease.
    ``(f) Matching Funds.--In awarding grants under subsection (a), the 
Secretary may give priority to eligible entities who provide matching 
contributions. Such non-Federal contributions may be cash or in-kind, 
fairly evaluated, including plant, equipment, training, curriculum, or 
a preexisting evaluation framework.
    ``(g) Technical Assistance.--The Secretary may set aside an amount 
not to exceed 10 percent of the total amount appropriated for a fiscal 
year under subsection (j) to permit the Director of the Centers for 
Disease Control and Prevention to provide grantees with technical 
support in the development, implementation, and evaluation of 
prevention and wellness programs under this section and to disseminate 
information about effective strategies and interventions in promoting 
health and wellness and preventing chronic disease.
    ``(h) Limitation on Administrative Costs.--An eligible entity 
awarded a grant under this section may not use more than 10 percent of 
funds awarded under such grant for administrative expenses.
    ``(i) Report.--Not later than 6 years after the date of enactment 
of this section the Director of the Centers for Disease Control and 
Prevention shall review the results of the grants awarded under this 
section and other related research and identify prevention and wellness 
programs that have demonstrated effectiveness in promoting health and 
wellness and preventing chronic disease. Such review shall include an 
identification of model curricula, best practices, and lessons learned, 
as well as recommendations for next steps to promote health and 
wellness and prevent chronic disease. Information derived from such 
review, including model prevention and wellness program curricula, 
shall be disseminated to the public.
    ``(j) Definition.--In this section, the term `prevention and 
wellness program' means a program that consists of a combination of 
activities that are designed to increase awareness, assess risks, 
educate, and promote voluntary behavior change to improve the health of 
an individual, modify his or her consumer health behavior, enhance his 
or her personal well-being and productivity, and prevent illness and 
injury.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $60,000,000 for fiscal year 
2010, and such sums as may be necessary for each of fiscal years 2011 
through 2014.''.

SEC. 284. PREVENTION AND WELLNESS PROGRAMS FOR INDIVIDUALS AND 
              FAMILIES.

    (a) In General.--The Secretary of Health and Human Services shall 
encourage States to work with insurance companies on ways to promote 
and incentivize the participation of individuals and families in 
prevention and wellness programs, such as through insurance premium 
reductions.
    (b) Definition.--In this section, the term ``prevention and 
wellness program'' means a program that consists of a combination of 
activities that are designed to increase awareness, assess risks, 
educate, and promote voluntary behavior change to improve the health of 
an individual, modify his or her consumer health behavior, enhance his 
or her personal well-being and productivity, and prevent illness and 
injury.

               TITLE III--EXPANDING ACCESS TO HEALTH CARE

                  Subtitle A--State Innovation Program

SEC. 301. ENSURING AFFORDABILITY AND ACCESS THROUGH UNIVERSAL ACCESS 
              PROGRAMS.

    (a) State Requirement.--
            (1) In general.--Not later than 2 years after the date of 
        the enactment of this Act, in order to qualify for preferences 
        and increased flexibility under section 412(a), each State 
        shall implement at least one of the following programs for the 
        purposes of mitigating the cost to insurers of providing 
        insurance to high risk individuals in the State:
                    (A) a qualified State reinsurance program defined 
                in subsection (b); or
                    (B) a subsection (c) qualified State high risk pool 
                program defined in subsection (c)(1).
            (2) Funding.--As a condition of qualifying for preferences 
        and increased flexibility under section 412(a), a State shall--
                    (A) make available non-Federal contributions, as 
                specified by the Secretary, to ensure the continuing 
                stability of any program implemented by the State under 
                paragraph (1); and
                    (B) at the time of application, submit to the 
                Secretary of Health and Human Services a budget plan, 
                including assurances that the State has in place a 
                method to satisfy the requirement under subparagraph 
                (A).
    (b) Qualified State Reinsurance Program.--
            (1) Qualified state reinsurance program defined.--For 
        purposes of this section, the term ``qualified State 
        reinsurance program'' means a program that is operated by a 
        State or a program authorized by the State to provide 
        reinsurance for health insurance coverage offered in the 
        individual or small group market.
            (2) Form of program.--A qualified State reinsurance program 
        may provide reinsurance--
                    (A) on a prospective or retrospective basis;
                    (B) that protects health insurance issuers against 
                the annual aggregate spending of their enrollees; and
                    (C) that provides purchase protection against 
                individual catastrophic costs.
            (3) Satisfaction of hipaa requirement.--Section 2745(g)(1) 
        of the Public Health Service Act is amended by adding at the 
        end the following new subparagraph:
                    ``(B) Treatment of certain reinsurance programs.--
                For purposes of subparagraph (A), the term `qualified 
                high risk pool' includes a qualified State reinsurance 
                program under the Medical Rights and Reform Act of 
                2009.''.
    (c) Subsection (c) Qualifying State High Risk Pool.--
            (1) Defined.--For purposes of this section, the term 
        ``subsection (c) qualified State high risk pool program'' means 
        a program that operates a high risk pool that--
                    (A) is a qualified high risk pool under section 
                2745(g)(1)(A) of the Public Health Service Act; and
                    (B) meets all of the following requirements:
                            (i) The high risk pool provides a variety 
                        of types of coverage, including at least one 
                        high deductible health plan that may be coupled 
                        with a health savings account.
                            (ii) The high risk pool is funded with a 
                        stable funding source that is not solely 
                        dependent on an appropriation from the State 
                        legislature.
                            (iii) The high risk pool has no waiting 
                        list and no pre-existing condition exclusionary 
                        periods so that all eligible residents who are 
                        seeking coverage through the pool can receive 
                        coverage through the pool.
                            (iv) The high risk pool allows for coverage 
                        of individuals who, but for the 24-month 
                        disability waiting period under section 226(b) 
                        of the Social Security Act, would be eligible 
                        for Medicare during the period of such waiting 
                        period.
                            (v) The high risk pool does not charge 
                        participants a premium that is more than 150 
                        percent of the average premium for coverage in 
                        the individual market in that State.
                            (vi) The high risk pool conducts education 
                        and outreach initiatives so that residents and 
                        insurance brokers understand that the pool is 
                        available to eligible residents.
            (2) Relation to section 2745.--Section 2745(g)(1) of the 
        Public Health Service Act is further amended--
                    (A) in subparagraph (A), by striking ``The term'' 
                and inserting ``Subject to subparagraph (C), the 
                term''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Updated definition.--Beginning on the last 
                day of the 2-year period beginning in the date of the 
                enactment of the Medical Rights and Reform Act of 2009, 
                the term `qualified high risk pool' means a pool that 
                meets the requirements of subparagraph (A) of this 
                paragraph and the requirements of section 411(c)(1) of 
                such Act.''.
            (3) Relation to current qualified high risk pool program 
        operating a qualified high risk pool.--In the case of a State 
        that is operating a qualified high risk pool under section 2745 
        of the Public Health Service Act as of the date of the 
        enactment of this Act, the State may use current funding 
        sources to transition from the operation of such a pool to--
                    (A) the operation of a qualified State reinsurance 
                program described in subsection (b); or
                    (B) a qualified high risk pool under section 
                2745(g)(1)(C) of the Public Health Service Act.
    (d) Waivers.--In order to accommodate new and innovative programs, 
the Secretary may waive such requirements of this section for qualified 
State reinsurance programs and for subsection (c) qualifying State high 
risk pools as the Secretary deems appropriate.

SEC. 302. ENHANCED FEDERAL FUNDING AND REDUCED RED-TAPE FOR STATE 
              EFFORTS TO IMPROVE ACCESS TO HEALTH INSURANCE COVERAGE.

    (a) Benefits of Operating a Universal Access Program.--
            (1) Increased flexibility for states.--In the case of a 
        State that conducts an universal access program described in 
        section 301(a), the requirements of section 1115 of the Social 
        Security Act (42 U.S.C. 1315) shall not apply to activities 
        conducted by a State through a State innovation program 
        described in section 303.
            (2) Preference for competitive grants.--Beginning 3 years 
        after the date of the enactment of this Act, in the case of a 
        competitive grant for which the only eligible entities are 
        States, the Secretary, in awarding such grant to a State, shall 
        give preference to any State with a program that meets the 
        requirements of paragraphs (1) and (2) of section section 
        301(a).
    (b) State Incentives for States Implementing a State Innovation 
Program.--
            (1) One-time payment for states implementing a state 
        innovation program.--The Secretary shall make a one-time 
        payment to a State that establishes a State innovation program 
        under section 303.
            (2) Additional payments for states implementing a state 
        innovation program.--
                    (A) Annual payments.--
                            (i) In general.--The Secretary shall make 
                        annual payments to a State that meets the 
                        requirements under subparagraph (B).
                            (ii) Limitation.--The Secretary may make 
                        payments under clause (i) to a State for no 
                        more than a total period of 5 years, after 
                        which period such payments shall be subject to 
                        review by the Secretary.
                    (B) Requirements for additional payments.--A State 
                meets the requirements of this paragraph if the State--
                            (i) operates a State innovation program;
                            (ii) conducts activities under at least 2 
                        of the paragraphs in section 303;
                            (iii) operates a State transparency program 
                        described in section 304; and
                            (iv) reduces the number of uninsured 
                        individuals in the State without significantly 
                        expanding programs that increase direct 
                        spending for the Federal government and State 
                        budgets.
                    (C) Use of funds.--The State shall use funds from a 
                payment under subparagraph (A) to improve the State's 
                universal access program.

SEC. 303. STATE INNOVATION PROGRAM DESCRIBED.

    For purposes of this subtitle, a State innovation program is a 
program operated by a State that consists of any of the following:
            (1) A health plan finder described in section 305.
            (2) Assistance for small businesses jointly purchasing 
        health insurance coverage through small business health plans 
        under section 306.
            (3) An interstate compact on health insurance regulation 
        under section 307.
            (4) The offering in the State of a basic catastrophic 
        health benefit plan as defined in section 308(1).

SEC. 304. STATE TRANSPARENCY PROGRAM DESCRIBED.

    For purposes of this subtitle, a State transparency program is a 
program through which the State--
            (1) partners with private groups (including State medical 
        associations) and, through such partnerships, obtains pricing 
        and quality information related to health care services that 
        are provided in the State; and
            (2) provides members of the public with access to such 
        information.

SEC. 305. HEALTH PLAN FINDER.

    A health plan finder described under this section is a program, 
operated by a State (or a State acting in cooperation with other 
States) that--
            (1) provides consumers with information about the health 
        insurance coverage available to such consumer (including 
        information about basic catastrophic health benefit plans 
        described in section 303(5));
            (2) connects consumers with health insurance specialists 
        who provide advice to such consumers on which health insurance 
        coverage would best serve the individual needs of each such 
        consumer (taking into account the quality of the health care 
        providers participating in such in coverage); and
            (3) may, at the option of the State, enroll individuals--
                    (A) who are eligible for the Medicaid program under 
                title XIX of the Social Security Act in such program; 
                and
                    (B) who are eligible for the State Children's 
                Health Insurance Program under title XXI of such Act in 
                such program.

SEC. 306. SMALL BUSINESS HEALTH PLANS.

    For purposes of a State innovation program under this subtitle, a 
State may assist small businesses in jointly purchasing health 
insurance coverage through small business health plans that allow such 
businesses to combine purchasing and negotiating power and to pool risk 
in order to obtain more affordable health care benefits for the 
employees of such businesses.

SEC. 307. INTERSTATE COMPACTS ON HEALTH INSURANCE REGULATION.

    For purposes of a State innovation program under this subtitle, a 
State may establish an interstate compact with one or more States to 
establish a common regulatory system for health insurance coverage for 
the purpose of increasing the availability and diversity of health 
insurance coverage in the State, including provisions allowing small 
businesses to form small business health plans (as described in section 
306) and permitting individuals to purchase insurance across State 
lines.

SEC. 308. DEFINITIONS.

    For purposes of this subtitle:
            (1) Basic catastrophic health benefit plan.--The term 
        ``basic catastrophic health benefits plan'' means health 
        insurance coverage--
                    (A) that is a high deductible plan (as defined 
                under section 223(c)(2) of the Internal Revenue Code of 
                1986); and
                    (B) that is not subject to benefit mandates 
                otherwise applicable under State law.
            (2) Health insurance coverage.--The term ``health insurance 
        coverage'' has the meaning given such term under section 
        2791(b)(1) of the Public Health Service Act.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) State.--The term ``State'' means the several States, 
        the District of Columbia, Guam, the Commonwealth of Puerto 
        Rico, the Northern Mariana Islands, the Virgin Islands, 
        American Samoa, and the Trust Territory of the Pacific Islands.
            (5) State innovation program.--The term ``State innovation 
        program'' means a program described in section 303.
            (6) Universal access program.--The term ``universal access 
        program'' means a program described in section 301.

SEC. 309. AUTHORIZATION FOR APPROPRIATIONS.

    There is authorized to be appropriated such sums as are necessary 
to carry out the provisions of this subtitle.

           Subtitle B--Interstate Market for Health Insurance

SEC. 311. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR ENACTMENT OF 
              LAW.

    This subtitle is enacted pursuant to the power granted Congress 
under article I, section 8, clause 3, of the United States 
Constitution.

SEC. 312. FINDINGS.

    Congress finds the following:
            (1) The application of numerous and significant variations 
        in State law impacts the ability of insurers to offer, and 
        individuals to obtain, affordable individual health insurance 
        coverage, thereby impeding commerce in individual health 
        insurance coverage.
            (2) Individual health insurance coverage is increasingly 
        offered through the Internet, other electronic means, and by 
        mail, all of which are inherently part of interstate commerce.
            (3) In response to these issues, it is appropriate to 
        encourage increased efficiency in the offering of individual 
        health insurance coverage through a collaborative approach by 
        the States in regulating this coverage.
            (4) The establishment of risk-retention groups has provided 
        a successful model for the sale of insurance across State 
        lines, as the acts establishing those groups allow insurance to 
        be sold in multiple States but regulated by a single State.

SEC. 313. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE 
              COVERAGE.

    (a) In General.--Title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.) is amended by adding at the end the following new 
part:

``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

    ``In this part:
            ``(1) Primary state.--The term `primary State' means, with 
        respect to individual health insurance coverage offered by a 
        health insurance issuer, the State designated by the issuer as 
        the State whose covered laws shall govern the health insurance 
        issuer in the sale of such coverage under this part. An issuer, 
        with respect to a particular policy, may only designate one 
        such State as its primary State with respect to all such 
        coverage it offers. Such an issuer may not change the 
        designated primary State with respect to individual health 
        insurance coverage once the policy is issued, except that such 
        a change may be made upon renewal of the policy. With respect 
        to such designated State, the issuer is deemed to be doing 
        business in that State.
            ``(2) Secondary state.--The term `secondary State' means, 
        with respect to individual health insurance coverage offered by 
        a health insurance issuer, any State that is not the primary 
        State. In the case of a health insurance issuer that is selling 
        a policy in, or to a resident of, a secondary State, the issuer 
        is deemed to be doing business in that secondary State.
            ``(3) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2), 
        except that such an issuer must be licensed in the primary 
        State and be qualified to sell individual health insurance 
        coverage in that State.
            ``(4) Individual health insurance coverage.--The term 
        `individual health insurance coverage' means health insurance 
        coverage offered in the individual market, as defined in 
        section 2791(e)(1).
            ``(5) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of this title for the State with respect to the 
        issuer.
            ``(6) Hazardous financial condition.--The term `hazardous 
        financial condition' means that, based on its present or 
        reasonably anticipated financial condition, a health insurance 
        issuer is unlikely to be able--
                    ``(A) to meet obligations to policyholders with 
                respect to known claims and reasonably anticipated 
                claims; or
                    ``(B) to pay other obligations in the normal course 
                of business.
            ``(7) Covered laws.--
                    ``(A) In general.--The term `covered laws' means 
                the laws, rules, regulations, agreements, and orders 
                governing the insurance business pertaining to--
                            ``(i) individual health insurance coverage 
                        issued by a health insurance issuer;
                            ``(ii) the offer, sale, rating (including 
                        medical underwriting), renewal, and issuance of 
                        individual health insurance coverage to an 
                        individual;
                            ``(iii) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of health care and insurance related 
                        services;
                            ``(iv) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of management, operations, and 
                        investment activities of a health insurance 
                        issuer; and
                            ``(v) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of loss control and claims 
                        administration for a health insurance issuer 
                        with respect to liability for which the issuer 
                        provides insurance.
                    ``(B) Exception.--Such term does not include any 
                law, rule, regulation, agreement, or order governing 
                the use of care or cost management techniques, 
                including any requirement related to provider 
                contracting, network access or adequacy, health care 
                data collection, or quality assurance.
            ``(8) State.--The term `State' means the 50 States and 
        includes the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
            ``(9) Unfair claims settlement practices.--The term `unfair 
        claims settlement practices' means only the following 
        practices:
                    ``(A) Knowingly misrepresenting to claimants and 
                insured individuals relevant facts or policy provisions 
                relating to coverage at issue.
                    ``(B) Failing to acknowledge with reasonable 
                promptness pertinent communications with respect to 
                claims arising under policies.
                    ``(C) Failing to adopt and implement reasonable 
                standards for the prompt investigation and settlement 
                of claims arising under policies.
                    ``(D) Failing to effectuate prompt, fair, and 
                equitable settlement of claims submitted in which 
                liability has become reasonably clear.
                    ``(E) Refusing to pay claims without conducting a 
                reasonable investigation.
                    ``(F) Failing to affirm or deny coverage of claims 
                within a reasonable period of time after having 
                completed an investigation related to those claims.
                    ``(G) A pattern or practice of compelling insured 
                individuals or their beneficiaries to institute suits 
                to recover amounts due under its policies by offering 
                substantially less than the amounts ultimately 
                recovered in suits brought by them.
                    ``(H) A pattern or practice of attempting to settle 
                or settling claims for less than the amount that a 
                reasonable person would believe the insured individual 
                or his or her beneficiary was entitled by reference to 
                written or printed advertising material accompanying or 
                made part of an application.
                    ``(I) Attempting to settle or settling claims on 
                the basis of an application that was materially altered 
                without notice to, or knowledge or consent of, the 
                insured.
                    ``(J) Failing to provide forms necessary to present 
                claims within 15 calendar days of a requests with 
                reasonable explanations regarding their use.
                    ``(K) Attempting to cancel a policy in less time 
                than that prescribed in the policy or by the law of the 
                primary State.
            ``(10) Fraud and abuse.--The term `fraud and abuse' means 
        an act or omission committed by a person who, knowingly and 
        with intent to defraud, commits, or conceals any material 
        information concerning, one or more of the following:
                    ``(A) Presenting, causing to be presented or 
                preparing with knowledge or belief that it will be 
                presented to or by an insurer, a reinsurer, broker or 
                its agent, false information as part of, in support of 
                or concerning a fact material to one or more of the 
                following:
                            ``(i) An application for the issuance or 
                        renewal of an insurance policy or reinsurance 
                        contract.
                            ``(ii) The rating of an insurance policy or 
                        reinsurance contract.
                            ``(iii) A claim for payment or benefit 
                        pursuant to an insurance policy or reinsurance 
                        contract.
                            ``(iv) Premiums paid on an insurance policy 
                        or reinsurance contract.
                            ``(v) Payments made in accordance with the 
                        terms of an insurance policy or reinsurance 
                        contract.
                            ``(vi) A document filed with the 
                        commissioner or the chief insurance regulatory 
                        official of another jurisdiction.
                            ``(vii) The financial condition of an 
                        insurer or reinsurer.
                            ``(viii) The formation, acquisition, 
                        merger, reconsolidation, dissolution or 
                        withdrawal from one or more lines of insurance 
                        or reinsurance in all or part of a State by an 
                        insurer or reinsurer.
                            ``(ix) The issuance of written evidence of 
                        insurance.
                            ``(x) The reinstatement of an insurance 
                        policy.
                    ``(B) Solicitation or acceptance of new or renewal 
                insurance risks on behalf of an insurer reinsurer or 
                other person engaged in the business of insurance by a 
                person who knows or should know that the insurer or 
                other person responsible for the risk is insolvent at 
                the time of the transaction.
                    ``(C) Transaction of the business of insurance in 
                violation of laws requiring a license, certificate of 
                authority or other legal authority for the transaction 
                of the business of insurance.
                    ``(D) Attempt to commit, aiding or abetting in the 
                commission of, or conspiracy to commit the acts or 
                omissions specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

    ``(a) In General.--The covered laws of the primary State shall 
apply to individual health insurance coverage offered by a health 
insurance issuer in the primary State and in any secondary State, but 
only if the coverage and issuer comply with the conditions of this 
section with respect to the offering of coverage in any secondary 
State.
    ``(b) Exemptions From Covered Laws in a Secondary State.--Except as 
provided in this section, a health insurance issuer with respect to its 
offer, sale, rating (including medical underwriting), renewal, and 
issuance of individual health insurance coverage in any secondary State 
is exempt from any covered laws of the secondary State (and any rules, 
regulations, agreements, or orders sought or issued by such State under 
or related to such covered laws) to the extent that such laws would--
            ``(1) make unlawful, or regulate, directly or indirectly, 
        the operation of the health insurance issuer operating in the 
        secondary State, except that any secondary State may require 
        such an issuer--
                    ``(A) to pay, on a nondiscriminatory basis, 
                applicable premium and other taxes (including high risk 
                pool assessments) which are levied on insurers and 
                surplus lines insurers, brokers, or policyholders under 
                the laws of the State;
                    ``(B) to register with and designate the State 
                insurance commissioner as its agent solely for the 
                purpose of receiving service of legal documents or 
                process;
                    ``(C) to submit to an examination of its financial 
                condition by the State insurance commissioner in any 
                State in which the issuer is doing business to 
                determine the issuer's financial condition, if--
                            ``(i) the State insurance commissioner of 
                        the primary State has not done an examination 
                        within the period recommended by the National 
                        Association of Insurance Commissioners; and
                            ``(ii) any such examination is conducted in 
                        accordance with the examiners' handbook of the 
                        National Association of Insurance Commissioners 
                        and is coordinated to avoid unjustified 
                        duplication and unjustified repetition;
                    ``(D) to comply with a lawful order issued--
                            ``(i) in a delinquency proceeding commenced 
                        by the State insurance commissioner if there 
                        has been a finding of financial impairment 
                        under subparagraph (C); or
                            ``(ii) in a voluntary dissolution 
                        proceeding;
                    ``(E) to comply with an injunction issued by a 
                court of competent jurisdiction, upon a petition by the 
                State insurance commissioner alleging that the issuer 
                is in hazardous financial condition;
                    ``(F) to participate, on a nondiscriminatory basis, 
                in any insurance insolvency guaranty association or 
                similar association to which a health insurance issuer 
                in the State is required to belong;
                    ``(G) to comply with any State law regarding fraud 
                and abuse (as defined in section 2795(10)), except that 
                if the State seeks an injunction regarding the conduct 
                described in this subparagraph, such injunction must be 
                obtained from a court of competent jurisdiction;
                    ``(H) to comply with any State law regarding unfair 
                claims settlement practices (as defined in section 
                2795(9)); or
                    ``(I) to comply with the applicable requirements 
                for independent review under section 2798 with respect 
                to coverage offered in the State;
            ``(2) require any individual health insurance coverage 
        issued by the issuer to be countersigned by an insurance agent 
        or broker residing in that Secondary State; or
            ``(3) otherwise discriminate against the issuer issuing 
        insurance in both the primary State and in any secondary State.
    ``(c) Clear and Conspicuous Disclosure.--A health insurance issuer 
shall provide the following notice, in 12-point bold type, in any 
insurance coverage offered in a secondary State under this part by such 
a health insurance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the name of the 
health insurance issuer, the name of primary State, the name of the 
secondary State, the name of the secondary State, and the name of the 
secondary State, respectively, for the coverage concerned:
            ``Notice
            ```This policy is issued by XXXXX and is governed by the 
        laws and regulations of the State of XXXXX, and it has met all 
        the laws of that State as determined by that State's Department 
        of Insurance. This policy may be less expensive than others 
        because it is not subject to all of the insurance laws and 
        regulations of the State of XXXXX, including coverage of some 
        services or benefits mandated by the law of the State of XXXXX. 
        Additionally, this policy is not subject to all of the consumer 
        protection laws or restrictions on rate changes of the State of 
        XXXXX. As with all insurance products, before purchasing this 
        policy, you should carefully review the policy and determine 
        what health care services the policy covers and what benefits 
        it provides, including any exclusions, limitations, or 
        conditions for such services or benefits.'.
    ``(d) Prohibition on Certain Reclassifications and Premium 
Increases.--
            ``(1) In general.--For purposes of this section, a health 
        insurance issuer that provides individual health insurance 
        coverage to an individual under this part in a primary or 
        secondary State may not upon renewal--
                    ``(A) move or reclassify the individual insured 
                under the health insurance coverage from the class such 
                individual is in at the time of issue of the contract 
                based on the health-status related factors of the 
                individual; or
                    ``(B) increase the premiums assessed the individual 
                for such coverage based on a health status-related 
                factor or change of a health status-related factor or 
                the past or prospective claim experience of the insured 
                individual.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to prohibit a health insurance issuer--
                    ``(A) from terminating or discontinuing coverage or 
                a class of coverage in accordance with subsections (b) 
                and (c) of section 2742;
                    ``(B) from raising premium rates for all policy 
                holders within a class based on claims experience;
                    ``(C) from changing premiums or offering discounted 
                premiums to individuals who engage in wellness 
                activities at intervals prescribed by the issuer, if 
                such premium changes or incentives--
                            ``(i) are disclosed to the consumer in the 
                        insurance contract;
                            ``(ii) are based on specific wellness 
                        activities that are not applicable to all 
                        individuals; and
                            ``(iii) are not obtainable by all 
                        individuals to whom coverage is offered;
                    ``(D) from reinstating lapsed coverage; or
                    ``(E) from retroactively adjusting the rates 
                charged an insured individual if the initial rates were 
                set based on material misrepresentation by the 
                individual at the time of issue.
    ``(e) Prior Offering of Policy in Primary State.--A health 
insurance issuer may not offer for sale individual health insurance 
coverage in a secondary State unless that coverage is currently offered 
for sale in the primary State.
    ``(f) Licensing of Agents or Brokers for Health Insurance 
Issuers.--Any State may require that a person acting, or offering to 
act, as an agent or broker for a health insurance issuer with respect 
to the offering of individual health insurance coverage obtain a 
license from that State, with commissions or other compensation subject 
to the provisions of the laws of that State, except that a State may 
not impose any qualification or requirement which discriminates against 
a nonresident agent or broker.
    ``(g) Documents for Submission to State Insurance Commissioner.--
Each health insurance issuer issuing individual health insurance 
coverage in both primary and secondary States shall submit--
            ``(1) to the insurance commissioner of each State in which 
        it intends to offer such coverage, before it may offer 
        individual health insurance coverage in such State--
                    ``(A) a copy of the plan of operation or 
                feasibility study or any similar statement of the 
                policy being offered and its coverage (which shall 
                include the name of its primary State and its principal 
                place of business);
                    ``(B) written notice of any change in its 
                designation of its primary State; and
                    ``(C) written notice from the issuer of the 
                issuer's compliance with all the laws of the primary 
                State; and
            ``(2) to the insurance commissioner of each secondary State 
        in which it offers individual health insurance coverage, a copy 
        of the issuer's quarterly financial statement submitted to the 
        primary State, which statement shall be certified by an 
        independent public accountant and contain a statement of 
        opinion on loss and loss adjustment expense reserves made by--
                    ``(A) a member of the American Academy of 
                Actuaries; or
                    ``(B) a qualified loss reserve specialist.
    ``(h) Power of Courts To Enjoin Conduct.--Nothing in this section 
shall be construed to affect the authority of any Federal or State 
court to enjoin--
            ``(1) the solicitation or sale of individual health 
        insurance coverage by a health insurance issuer to any person 
        or group who is not eligible for such insurance; or
            ``(2) the solicitation or sale of individual health 
        insurance coverage that violates the requirements of the law of 
        a secondary State which are described in subparagraphs (A) 
        through (H) of section 2796(b)(1).
    ``(i) Power of Secondary States To Take Administrative Action.--
Nothing in this section shall be construed to affect the authority of 
any State to enjoin conduct in violation of that State's laws described 
in section 2796(b)(1).
    ``(j) State Powers To Enforce State Laws.--
            ``(1) In general.--Subject to the provisions of subsection 
        (b)(1)(G) (relating to injunctions) and paragraph (2), nothing 
        in this section shall be construed to affect the authority of 
        any State to make use of any of its powers to enforce the laws 
        of such State with respect to which a health insurance issuer 
        is not exempt under subsection (b).
            ``(2) Courts of competent jurisdiction.--If a State seeks 
        an injunction regarding the conduct described in paragraphs (1) 
        and (2) of subsection (h), such injunction must be obtained 
        from a Federal or State court of competent jurisdiction.
    ``(k) States' Authority To Sue.--Nothing in this section shall 
affect the authority of any State to bring action in any Federal or 
State court.
    ``(l) Generally Applicable Laws.--Nothing in this section shall be 
construed to affect the applicability of State laws generally 
applicable to persons or corporations.
    ``(m) Guaranteed Availability of Coverage to HIPAA Eligible 
Individuals.--To the extent that a health insurance issuer is offering 
coverage in a primary State that does not accommodate residents of 
secondary States or does not provide a working mechanism for residents 
of a secondary State, and the issuer is offering coverage under this 
part in such secondary State which has not adopted a qualified high 
risk pool as its acceptable alternative mechanism (as defined in 
section 2744(c)(2)), the issuer shall, with respect to any individual 
health insurance coverage offered in a secondary State under this part, 
comply with the guaranteed availability requirements for eligible 
individuals in section 2741.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY 
              SELL INTO SECONDARY STATES.

    ``A health insurance issuer may not offer, sell, or issue 
individual health insurance coverage in a secondary State if the State 
insurance commissioner does not use a risk-based capital formula for 
the determination of capital and surplus requirements for all health 
insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A health insurance issuer may not 
offer, sell, or issue individual health insurance coverage in a 
secondary State under the provisions of this title unless--
            ``(1) both the secondary State and the primary State have 
        legislation or regulations in place establishing an independent 
        review process for individuals who are covered by individual 
        health insurance coverage, or
            ``(2) in any case in which the requirements of subparagraph 
        (A) are not met with respect to the either of such States, the 
        issuer provides an independent review mechanism substantially 
        identical (as determined by the applicable State authority of 
        such State) to that prescribed in the `Health Carrier External 
        Review Model Act' of the National Association of Insurance 
        Commissioners for all individuals who purchase insurance 
        coverage under the terms of this part, except that, under such 
        mechanism, the review is conducted by an independent medical 
        reviewer, or a panel of such reviewers, with respect to whom 
        the requirements of subsection (b) are met.
    ``(b) Qualifications of Independent Medical Reviewers.--In the case 
of any independent review mechanism referred to in subsection (a)(2)--
            ``(1) In general.--In referring a denial of a claim to an 
        independent medical reviewer, or to any panel of such 
        reviewers, to conduct independent medical review, the issuer 
        shall ensure that--
                    ``(A) each independent medical reviewer meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review, each reviewer 
                meets the requirements of paragraph (4) and the 
                reviewer, or at least 1 reviewer on the panel, meets 
                the requirements described in paragraph (5); and
                    ``(C) compensation provided by the issuer to each 
                reviewer is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each independent medical 
        reviewer shall be a physician (allopathic or osteopathic) or 
        health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the issuer, from 
                        serving as an independent medical reviewer if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the issuer 
                                and the enrollee (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the issuer and does 
                                not provide services exclusively or 
                                primarily to or on behalf of the 
                                issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer merely on the 
                        basis of such affiliation if the affiliation is 
                        disclosed to the issuer and the enrollee (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review; or
                            ``(ii) by a non-physician health care 
                        professional, the reviewer, or at least 1 
                        member of the review panel, shall be a 
                        practicing non-physician health care 
                        professional of the same or similar specialty 
                        as the non-physician health care professional 
                        who, acting within the appropriate scope of 
                        practice within the State in which the service 
                        is provided or rendered, typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional, that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have expertise 
        under paragraph (2) in pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by the issuer to an independent medical reviewer in 
        connection with a review under this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a coverage relating to an enrollee, any of the 
        following:
                    ``(A) The issuer involved, or any fiduciary, 
                officer, director, or employee of the issuer.
                    ``(B) The enrollee (or authorized representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
            ``(8) Definitions.--For purposes of this subsection:
                    ``(A) Enrollee.--The term `enrollee' means, with 
                respect to health insurance coverage offered by a 
                health insurance issuer, an individual enrolled with 
                the issuer to receive such coverage.
                    ``(B) Health care professional.--The term `health 
                care professional' means an individual who is licensed, 
                accredited, or certified under State law to provide 
                specified health care services and who is operating 
                within the scope of such licensure, accreditation, or 
                certification.

``SEC. 2799. ENFORCEMENT.

    ``(a) In General.--Subject to subsection (b), with respect to 
specific individual health insurance coverage the primary State for 
such coverage has sole jurisdiction to enforce the primary State's 
covered laws in the primary State and any secondary State.
    ``(b) Secondary State's Authority.--Nothing in subsection (a) shall 
be construed to affect the authority of a secondary State to enforce 
its laws as set forth in the exception specified in section 2796(b)(1).
    ``(c) Court Interpretation.--In reviewing action initiated by the 
applicable secondary State authority, the court of competent 
jurisdiction shall apply the covered laws of the primary State.
    ``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State that fails to 
comply with the covered laws of the primary State, the applicable State 
authority of the secondary State may notify the applicable State 
authority of the primary State.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individual health insurance coverage offered, issued, or sold 
after the date that is one year after the date of the enactment of this 
subtitle.
    (c) GAO Ongoing Study and Reports.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct an ongoing study concerning the effect of the 
        amendment made by subsection (a) on--
                    (A) the number of uninsured and under-insured;
                    (B) the availability and cost of health insurance 
                policies for individuals with pre-existing medical 
                conditions;
                    (C) the availability and cost of health insurance 
                policies generally;
                    (D) the elimination or reduction of different types 
                of benefits under health insurance policies offered in 
                different States; and
                    (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment and the 
                resolution of such cases.
            (2) Annual reports.--The Comptroller General shall submit 
        to Congress an annual report, after the end of each of the 5 
        years following the effective date of the amendment made by 
        subsection (a), on the ongoing study conducted under paragraph 
        (1).

SEC. 314. SEVERABILITY.

    If any provision of the Act or the application of such provision to 
any person or circumstance is held to be unconstitutional, the 
remainder of this subtitle and the application of the provisions of 
such to any other person or circumstance shall not be affected.

              Subtitle C--Young Adult Healthcare Coverage

SEC. 321. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE FOR 
              CERTAIN UNMARRIED, UNINSURED YOUNG ADULTS.

    (a) Under Group Health Plans.--
            (1) Employee retirement income security act of 1974 
        amendments.--
                    (A) In general.--The Employee Retirement Income 
                Security Act of 1974 is amended by inserting after 
                section 703 the following new section:

``SEC. 704. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE FOR 
              CERTAIN UNMARRIED, UNINSURED YOUNG ADULTS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering health insurance coverage in connection with a group 
health plan that provides coverage for dependent children shall make 
available such coverage, at the option of the participant involved, for 
one or more qualified children (as defined in subsection (b)) of the 
participant.
    ``(b) Qualified Child Defined.--In this section, the term 
`qualified child' means, with respect to a participant in a group 
health plan or group health insurance coverage, an individual who (but 
for age) would be treated as a dependent child of the participant under 
such plan or coverage and who--
            ``(1) is under 26 years of age;
            ``(2) is not married;
            ``(3) has no dependents;
            ``(4) is a citizen or national of the United States; and
            ``(5) is not provided coverage as a participant, 
        beneficiary, or enrollee (other than under this section) under 
        any other creditable coverage (as defined in section 
        701(c)(1)).
    ``(c) Premiums.--Nothing in this section shall be construed as 
preventing a group health plan or health insurance issuer with respect 
to group health insurance coverage from increasing the premiums 
otherwise required for coverage provided under this section.''.
                    (B) Clerical amendment.--The table of contents of 
                such Act is amended by inserting after the item 
                relating to section 703 the following new item:

``704. Requiring the option of extension of dependent coverage for 
                            certain unmarried young adults.''.
            (2) PHSA.--Title XXVII of the Public Health Service Act is 
        amended by inserting after section 2702 the following new 
        section:

``SEC. 2703. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE 
              FOR CERTAIN UNMARRIED, UNINSURED YOUNG ADULTS.

    ``The provisions of section 704 of the Employee Retirement Income 
Security Act of 1974 shall apply to health insurance coverage offered 
by a health insurance issuer in the individual market in the same 
manner as they apply to health insurance coverage offered by a health 
insurance issuer in connection with a group health plan in the small or 
large group market.''.
    (b) Individual Health Insurance Coverage.--Title XXVII of the 
Public Health Service Act is amended by inserting after section 2745 
the following new section:

``SEC. 2746. REQUIRING THE OPTION OF EXTENSION OF DEPENDENT COVERAGE 
              FOR CERTAIN UNMARRIED YOUNG ADULTS.

    ``The provisions of section 2703 shall apply to health insurance 
coverage offered by a health insurance issuer in the individual market 
in the same manner as they apply to health insurance coverage offered 
by a health insurance issuer in connection with a group health plan in 
the small or large group market.''.
    (c) Effective Dates.--
            (1) Group health plans.--
                    (A) In general.--The amendments made by subsection 
                (a) shall apply to group health plans for plan years 
                beginning on or after the date that is 90 days after 
                the date of enactment of this Act.
                    (B) Special rule for collective bargaining 
                agreements.--In the case of a group health plan 
                maintained pursuant to 1 or more collective bargaining 
                agreements between employee representatives and 1 or 
                more employers, any plan amendment made pursuant to a 
                collective bargaining agreement relating to the plan 
                which amends the plan solely to conform to any 
                requirement added by an amendment made by subsection 
                (a) shall not be treated as a termination of such 
                collective bargaining agreement.
            (2) Individual health insurance coverage.--Section 2746 of 
        the Public Health Service Act, as inserted by subsection (b), 
        shall apply with respect to health insurance coverage offered, 
        sold, issued, renewed, in effect, or operated in the individual 
        market after the first day of the first month that begins more 
        than 90 days after the date of the enactment of this Act.

                           TITLE IV--OFFSETS

SEC. 401. TRANSFER OF UNOBILGATED STIMULUS FUNDS.

    (a) Rescission.--Effective on the date of the enactment of this 
Act, any unobligated balances available on such date of funds made 
available by division A of the American Recovery and Reinvestment Act 
of 2009 (Public Law 111-5), other than under the heading ``Federal 
Highway Administration-Highway Infrastructure Investment'' in title XII 
of such division, are rescinded and such provisions are repealed.
    (b) Repeal.--The provisions of division B of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111-5), other than titles I 
and II of such division are repealed.
    (c) Transfer of Funds.--The total amount rescinded by this section 
shall be deposited in the Federal Treasury.
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