I 

112TH CONGRESS 

1ST SESSION H. R. 1200 

To provide for health care for every American and to control the cost and 

enhance the quality of the health care system. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2011 

Mr. MCDERMOTT introduced the following bill; which was referred to the 

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

on Ways and Means, Oversight and Government Reform, Armed Services, 

and Education and the Workforce, 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 provide for health care for every American and to control 

the cost and enhance the quality of the health care system. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Health Secu5 rity Act of 2011’’. 

6 SEC. 2. FINDINGS; SENSE OF THE HOUSE OF REPRESENTA7 TIVES. 

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


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1 (1) The number of uninsured Americans rose 

2 by more than 4,000,000 between 2008 and 2009 to 

3 a total of 51,000,000, or more than 1 of every 6 

4 Americans. 

5 (2) Such rise in the number of uninsured Amer6 icans was the largest single-year increase since 1987 

7 and was the result of a continued decline in private 

8 health coverage, primarily in employer-sponsored in9 surance. 

10 (3) Small businesses around the country cannot 

11 afford to reinvest in their companies and create new 

12 jobs because their health care bills are going up 10 

13 or 15 percent every year. 

14 (4) American businesses are at an economic dis15 advantage, because their health care costs are so 

16 much higher than in other countries. Notably, auto17 mobile manufacturers spend more on health care for 

18 an automobile than on steel. 

19 (b) SENSE OF THE HOUSE OF REPRESENTATIVES

20 CONCERNING URGENCY OF A MEDICARE-FOR-ALL TYPE

21 SINGLE PAYER HEALTH CARE SYSTEM.—It is the sense 

22 of the House of Representatives that the 112th Congress 

23 should enact a Medicare-for-All Single Payer Health Care 

24 System to make American companies more competitive 

25 and to stimulate job creation. 


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1 (c) SENSE OF THE HOUSE OF REPRESENTATIVES

2 CONCERNING THE STATUS OF HEALTH CARE.—It is the 

3 sense of the House of Representatives that the 112th Con4 gress should recognize and proclaim that health care is 

5 a human right. 

6 SEC. 3. TABLE OF CONTENTS. 

7 The table of contents of this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Findings; sense of the House of Representatives. 

Sec. 3. Table of contents. 

TITLE I—ESTABLISHMENT OF A STATE-BASED AMERICAN 

HEALTH SECURITY PROGRAM; UNIVERSAL ENTITLEMENT; ENROLLMENT 

Sec. 101. Establishment of a State-Based American Health Security Program. 

Sec. 102. Universal entitlement. 

Sec. 103. Enrollment. 

Sec. 104. Portability of benefits. 

Sec. 105. Effective date of benefits. 

Sec. 106. Relationship to existing Federal health programs. 

Sec. 107. Repeal of provisions related to the State exchanges. 

TITLE II—COMPREHENSIVE BENEFITS, INCLUDING PREVENTIVE 

BENEFITS AND BENEFITS FOR LONG-TERM CARE 

Sec. 201. Comprehensive benefits. 

Sec. 202. Definitions relating to services. 

Sec. 203. Special rules for home and community-based long-term care services. 

Sec. 204. Exclusions and limitations. 

Sec. 205. Certification; quality review; plans of care. 

TITLE III—PROVIDER PARTICIPATION 

Sec. 301. Provider participation and standards. 

Sec. 302. Qualifications for providers. 

Sec. 303. Qualifications for comprehensive health service organizations. 

Sec. 304. Limitation on certain physician referrals. 

TITLE IV—ADMINISTRATION 

Subtitle A—General Administrative Provisions 

Sec. 401. American Health Security Standards Board. 

Sec. 402. American Health Security Advisory Council. 

Sec. 403. Consultation with private entities. 

Sec. 404. State health security programs. 

Sec. 405. Complementary conduct of related health programs. 


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Subtitle B—Control Over Fraud and Abuse 

Sec. 411. Application of Federal sanctions to all fraud and abuse under American Health Security Program. 

Sec. 412. Requirements for operation of State health care fraud and abuse control units. 

TITLE V—QUALITY ASSESSMENT 

Sec. 501. American Health Security Quality Council. 

Sec. 502. Development of certain methodologies, guidelines, and standards. 

Sec. 503. State quality review programs. 

Sec. 504. Elimination of utilization review programs; transition. 

TITLE VI—HEALTH SECURITY BUDGET; PAYMENTS; COST 

CONTAINMENT MEASURES 

Subtitle A—Budgeting and Payments to States 

Sec. 601. National health security budget. 

Sec. 602. Computation of individual and State capitation amounts. 

Sec. 603. State health security budgets. 

Sec. 604. Federal payments to States. 

Sec. 605. Account for health professional education expenditures. 

Subtitle B—Payments by States to Providers 

Sec. 611. Payments to hospitals and other facility-based services for operating 

expenses on the basis of approved global budgets. 

Sec. 612. Payments to health care practitioners based on prospective fee schedule. 

Sec. 613. Payments to comprehensive health service organizations. 

Sec. 614. Payments for community-based primary health services. 

Sec. 615. Payments for prescription drugs. 

Sec. 616. Payments for approved devices and equipment. 

Sec. 617. Payments for other items and services. 

Sec. 618. Payment incentives for medically underserved areas. 

Sec. 619. Authority for alternative payment methodologies. 

Subtitle C—Mandatory Assignment and Administrative Provisions 

Sec. 631. Mandatory assignment. 

Sec. 632. Procedures for reimbursement; appeals. 

TITLE VII—PROMOTION OF PRIMARY HEALTH CARE; DEVELOPMENT OF HEALTH SERVICE CAPACITY; PROGRAMS TO ASSIST 

THE MEDICALLY UNDERSERVED 

Subtitle A—Promotion and Expansion of Primary Care Professional Training 

Sec. 701. Role of Board; establishment of primary care professional output 

goals. 

Sec. 702. Establishment of Advisory Committee on Health Professional Education. 

Sec. 703. Grants for health professions education, nurse education, and the National Health Service Corps. 

Subtitle B—Direct Health Care Delivery 


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Sec. 711. Set-aside for public health. 

Sec. 712. Set-aside for primary health care delivery. 

Sec. 713. Primary care service expansion grants. 

Subtitle C—Primary Care and Outcomes Research 

Sec. 721. Set-aside for outcomes research. 

Sec. 722. Office of Primary Care and Prevention Research. 

Subtitle D—School-Related Health Services 

Sec. 731. Authorizations of appropriations. 

Sec. 732. Eligibility for development and operation grants. 

Sec. 733. Preferences. 

Sec. 734. Grants for development of projects. 

Sec. 735. Grants for operation of projects. 

Sec. 736. Federal administrative costs. 

Sec. 737. Definitions. 

TITLE VIII—FINANCING PROVISIONS; AMERICAN HEALTH 

SECURITY TRUST FUND 

Sec. 800. Amendment of 1986 code; Section 15 not to apply. 

Subtitle A—American Health Security Trust Fund 

Sec. 801. American Health Security Trust Fund. 

Subtitle B—Taxes Based on Income and Wages 

Sec. 811. Payroll tax on employers. 

Sec. 812. Health care income tax. 

Sec. 813. Surcharge on high income individuals. 

Subtitle C—Other Financing Provisions 

Sec. 821. Tax on Securities Transactions. 

TITLE IX—CONFORMING AMENDMENTS TO THE EMPLOYEE 

RETIREMENT INCOME SECURITY ACT OF 1974 

Sec. 901. ERISA inapplicable to health coverage arrangements under State 

health security programs. 

Sec. 902. Exemption of State health security programs from ERISA preemption. 

Sec. 903. Prohibition of employee benefits duplicative of benefits under State 

health security programs; coordination in case of workers’ compensation. 

Sec. 904. Repeal of continuation coverage requirements under ERISA and certain other requirements relating to group health plans. 

Sec. 905. Effective date of title. 

TITLE X—ADDITIONAL CONFORMING AMENDMENTS 

Sec. 1001. Repeal of certain provisions in Internal Revenue Code of 1986. 

Sec. 1002. Repeal of certain provisions in the Employee Retirement Income Security Act of 1974. 


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Sec. 1003. Repeal of certain provisions in the Public Health Service Act and 

related provisions. 

Sec. 1004. Effective date of title. 

1 TITLE I—ESTABLISHMENT OF A 

2 STATE-BASED AMERICAN 

3 HEALTH SECURITY PRO4 GRAM; UNIVERSAL ENTITLE5 MENT; ENROLLMENT 

6 SEC. 101. ESTABLISHMENT OF A STATE-BASED AMERICAN 

7 HEALTH SECURITY PROGRAM. 

8 (a) IN GENERAL.—There is hereby established in the 

9 United States a State-Based American Health Security 

10 Program to be administered by the individual States in 

11 accordance with Federal standards specified in, or estab12 lished under, this Act. 

13 (b) STATE HEALTH SECURITY PROGRAMS.—In order 

14 for a State to be eligible to receive payment under section 

15 604, a State shall establish a State health security pro16 gram in accordance with this Act. 

17 (c) STATE DEFINED.— 

18 (1) IN GENERAL.—In this Act, subject to para19 graph (2), the term ‘‘State’’ means each of the 50 

20 States and the District of Columbia. 

21 (2) ELECTION.—If the Governor of Puerto 

22 Rico, the Virgin Islands, Guam, American Samoa, or 

23 the Northern Mariana Islands certifies to the Presi24 dent that the legislature of the Commonwealth or 


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1 territory has enacted legislation desiring that the 

2 Commonwealth or territory be included as a State 

3 under the provisions of this Act, such Common4 wealth or territory shall be included as a ‘‘State’’ 

5 under this Act beginning January 1 of the first year 

6 beginning 90 days after the President receives the 

7 notification. 

8 SEC. 102. UNIVERSAL ENTITLEMENT. 

9 (a) IN GENERAL.—Every individual who is a resident 

10 of the United States and is a citizen or national of the 

11 United States or lawful resident alien (as defined in sub12 section (d)) is entitled to benefits for health care services 

13 under this Act under the appropriate State health security 

14 program. In this section, the term ‘‘appropriate State 

15 health security program’’ means, with respect to an indi16 vidual, the State health security program for the State in 

17 which the individual maintains a primary residence. 

18 (b) TREATMENT OF CERTAIN NONIMMIGRANTS.— 

19 (1) IN GENERAL.—The American Health Secu20 rity Standards Board (in this Act referred to as the 

21 ‘‘Board’’) may make eligible for benefits for health 

22 care services under the appropriate State health se23 curity program under this Act such classes of aliens 

24 admitted to the United States as nonimmigrants as 

25 the Board may provide. 


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1 (2) CONSIDERATION.—In providing for eligi2 bility under paragraph (1), the Board shall consider 

3 reciprocity in health care services offered to United 

4 States citizens who are nonimmigrants in other for5 eign states, and such other factors as the Board de6 termines to be appropriate. 

7 (c) TREATMENT OF OTHER INDIVIDUALS.— 

8 (1) BY BOARD.—The Board also may make eli9 gible for benefits for health care services under the 

10 appropriate State health security program under this 

11 Act other individuals not described in subsection (a) 

12 or (b), and regulate the nature of the eligibility of 

13 such individuals, in order— 

14 (A) to preserve the public health of com15 munities; 

16 (B) to compensate States for the addi17 tional health care financing burdens created by 

18 such individuals; and 

19 (C) to prevent adverse financial and med20 ical consequences of uncompensated care, 

21 while inhibiting travel and immigration to the 

22 United States for the sole purpose of obtaining 

23 health care services. 


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1 (2) BY STATES.—Any State health security pro2 gram may make individuals described in paragraph 

3 (1) eligible for benefits at the expense of the State. 

4 (d) LAWFUL RESIDENT ALIEN DEFINED.—For pur5 poses of this section, the term ‘‘lawful resident alien’’ 

6 means an alien lawfully admitted for permanent residence 

7 and any other alien lawfully residing permanently in the 

8 United States under color of law, including an alien with 

9 lawful temporary resident status under section 210, 210A, 

10 or 234A of the Immigration and Nationality Act (8 U.S.C. 

11 1160, 1161, or 1255a). 

12 SEC. 103. ENROLLMENT. 

13 (a) IN GENERAL.—Each State health security pro14 gram shall provide a mechanism for the enrollment of indi15 viduals entitled or eligible for benefits under this Act. The 

16 mechanism shall— 

17 (1) include a process for the automatic enroll18 ment of individuals at the time of birth in the 

19 United States and at the time of immigration into 

20 the United States or other acquisition of lawful resi21 dent status in the United States; 

22 (2) provide for the enrollment, as of January 1, 

23 2013, of all individuals who are eligible to be en24 rolled as of such date; and 


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1 (3) include a process for the enrollment of indi2 viduals made eligible for health care services under 

3 subsections (b) and (c) of section 102. 

4 (b) AVAILABILITY OF APPLICATIONS.—Each State 

5 health security program shall make applications for enroll6 ment under the program available— 

7 (1) at employment and payroll offices of em8 ployers located in the State; 

9 (2) at local offices of the Social Security Ad10 ministration; 

11 (3) at social services locations; 

12 (4) at out-reach sites (such as provider and 

13 practitioner locations); and 

14 (5) at other locations (including post offices 

15 and schools) accessible to a broad cross-section of in16 dividuals eligible to enroll. 

17 (c) ISSUANCE OF HEALTH SECURITY CARDS.—In 

18 conjunction with an individual’s enrollment for benefits 

19 under this Act, the State health security program shall 

20 provide for the issuance of a health security card (to be 

21 referred to as a ‘‘smart card’’) that shall be used for pur22 poses of identification and processing of claims for bene23 fits under the program. The State health security program 

24 may provide for issuance of such cards by employers for 


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1 purposes of carrying out enrollment pursuant to sub2 section (a)(2). 

3 SEC. 104. PORTABILITY OF BENEFITS. 

4 (a) IN GENERAL.—To ensure continuous access to 

5 benefits for health care services covered under this Act, 

6 each State health security program— 

7 (1) shall not impose any minimum period of 

8 residence in the State, or waiting period, in excess 

9 of 3 months before residents of the State are enti10 tled to, or eligible for, such benefits under the pro11 gram; 

12 (2) shall provide continuation of payment for 

13 covered health care services to individuals who have 

14 terminated their residence in the State and estab15 lished their residence in another State, for the dura16 tion of any waiting period imposed in the State of 

17 new residency for establishing entitlement to, or eli18 gibility for, such services; and 

19 (3) shall provide for the payment for health 

20 care services covered under this Act provided to indi21 viduals while temporarily absent from the State 

22 based on the following principles: 

23 (A) Payment for such health care services 

24 is at the rate that is approved by the State 

25 health security program in the State in which 


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1 the services are provided, unless the States con2 cerned agree to apportion the cost between 

3 them in a different manner. 

4 (B) Payment for such health care services 

5 provided outside the United States is made on 

6 the basis of the amount that would have been 

7 paid by the State health security program for 

8 similar services rendered in the State, with due 

9 regard, in the case of hospital services, to the 

10 size of the hospital, standards of service, and 

11 other relevant factors. 

12 (b) CROSS-BORDER ARRANGEMENTS.—A State 

13 health security program for a State may negotiate with 

14 such a program in an adjacent State a reciprocal arrange15 ment for the coverage under such other program of health 

16 care services to enrollees residing in the border region. 

17 SEC. 105. EFFECTIVE DATE OF BENEFITS. 

18 Benefits shall first be available under this Act for 

19 items and services furnished on or after January 1, 2013. 

20 SEC. 106. RELATIONSHIP TO EXISTING FEDERAL HEALTH 

21 PROGRAMS. 

22 (a) MEDICARE, MEDICAID AND STATE CHILDREN’S

23 HEALTH INSURANCE PROGRAM (SCHIP).— 

24 (1) IN GENERAL.—Notwithstanding any other 

25 provision of law, subject to paragraph (2)— 


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1 (A) no benefits shall be available under 

2 title XVIII of the Social Security Act for any 

3 item or service furnished after December 31, 

4 2012; 

5 (B) no individual is entitled to medical as6 sistance under a State plan approved under 

7 title XIX of such Act for any item or service 

8 furnished after such date; 

9 (C) no individual is entitled to medical as10 sistance under an SCHIP plan under title XXI 

11 of such Act for any item or service furnished 

12 after such date; and 

13 (D) no payment shall be made to a State 

14 under section 1903(a) or 2105(a) of such Act 

15 with respect to medical assistance or child 

16 health assistance for any item or service fur17 nished after such date. 

18 (2) TRANSITION.—In the case of inpatient hos19 pital services and extended care services during a 

20 continuous period of stay which began before Janu21 ary 1, 2013, and which had not ended as of such 

22 date, for which benefits are provided under title 

23 XVIII, under a State plan under title XIX, or a 

24 State child health plan under title XXI, of the Social 

25 Security Act, the Secretary of Health and Human 


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1 Services and each State plan, respectively, shall pro2 vide for continuation of benefits under such title or 

3 plan until the end of the period of stay. 

4 (b) FEDERAL EMPLOYEES HEALTH BENEFITS PRO5 GRAM.—No benefits shall be made available under chapter 

6 89 of title 5, United States Code, for any part of a cov7 erage period occurring after December 31, 2012. 

8 (c) TRICARE.—No benefits shall be made available 

9 under sections 1079 and 1086 of title 10, United States 

10 Code, for items or services furnished after December 31, 

11 2012. 

12 (d) TREATMENT OF BENEFITS FOR VETERANS AND

13 NATIVE AMERICANS.—Nothing in this Act shall affect the 

14 eligibility of veterans for the medical benefits and services 

15 provided under title 38, United States Code, or of Indians 

16 for the medical benefits and services provided by or 

17 through the Indian Health Service. 

18 (e) TREATMENT OF PREMIUM CREDITS, COST-SHAR19 ING REDUCTIONS, AND SMALL EMPLOYER CREDITS.— 

20 (1) IN GENERAL.—For each calendar year, the 

21 Secretary of the Treasury shall transfer to the 

22 American Health Security Trust Fund an amount 

23 equal to the sum of— 

24 (A) the premium assistance credit amount 

25 which would have been allowable to taxpayers 


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1 residing in such State in such calendar year 

2 under section 36B of the Internal Revenue 

3 Code of 1986 (relating to refundable credit for 

4 coverage under a qualified health plan), as 

5 added by section 1401 of the Patient Protection 

6 and Affordable Care Act, if such section were in 

7 effect for such year, 

8 (B) the amount of cost-sharing reductions 

9 which would have been required with respect to 

10 eligible insured residing in such State in such 

11 calendar year under section 1402 of the Patient 

12 Protection and Affordable Care Act if such sec13 tion were in effect for such year, plus 

14 (C) the amount of tax credits which would 

15 have been allowable to eligible small employers 

16 doing business in such State in such calendar 

17 year under section 45R of the Internal Revenue 

18 Code of 1986 if such section were in effect for 

19 such calendar year. 

20 (2) DETERMINATION.—The amounts deter21 mined under paragraph (1) shall be estimated by the 

22 Secretary of the Treasury in consultation with the 

23 Secretary of Health and Human Services. 


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1 SEC. 107. REPEAL OF PROVISIONS RELATED TO THE STATE 

2 EXCHANGES. 

3 Title I of the Patient Protection and Affordable Care 

4 Act (Public Law 111–148) (and the amendments made 

5 by title I) is repealed. 

6 TITLE II—COMPREHENSIVE BEN7 EFITS, INCLUDING PREVEN8 TIVE BENEFITS AND BENE9 FITS FOR LONG-TERM CARE 

10 SEC. 201. COMPREHENSIVE BENEFITS. 

11 (a) IN GENERAL.—Subject to the succeeding provi12 sions of this title, individuals enrolled for benefits under 

13 this Act are entitled to have payment made under a State 

14 health security program for the following items and serv15 ices if medically necessary or appropriate for the mainte16 nance of health or for the diagnosis, treatment, or rehabili17 tation of a health condition: 

18 (1) HOSPITAL SERVICES.—Inpatient and out19 patient hospital care, including 24-hour-a-day emer20 gency services. 

21 (2) PROFESSIONAL SERVICES.—Professional 

22 services of health care practitioners authorized to 

23 provide health care services under State law, includ24 ing patient education and training in self-manage25 ment techniques. 


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1 (3) COMMUNITY-BASED PRIMARY HEALTH

2 SERVICES.—Community-based primary health serv3 ices (as defined in section 202(a)). 

4 (4) PREVENTIVE SERVICES.—Preventive serv5 ices (as defined in section 202(b)). 

6 (5) LONG-TERM, ACUTE, AND CHRONIC CARE

7 SERVICES.— 

8 (A) Nursing facility services. 

9 (B) Home health services. 

10 (C) Home and community-based long-term 

11 care services (as defined in section 202(c)) for 

12 individuals described in section 203(a). 

13 (D) Hospice care. 

14 (E) Services in intermediate care facilities 

15 for individuals with an intellectual disability. 

16 (6) PRESCRIPTION DRUGS, BIOLOGICALS, INSU17 LIN, MEDICAL FOODS.— 

18 (A) Outpatient prescription drugs and bio19 logics, as specified by the Board consistent with 

20 section 615. 

21 (B) Insulin. 

22 (C) Medical foods (as defined in section 

23 202(e)). 

24 (7) DENTAL SERVICES.—Dental services (as de25 fined in section 202(h)). 


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1 (8) MENTAL HEALTH AND SUBSTANCE ABUSE

2 TREATMENT SERVICES.—Mental health and sub3 stance abuse treatment services (as defined in sec4 tion 202(f)). 

5 (9) DIAGNOSTIC TESTS.—Diagnostic tests. 

6 (10) OTHER ITEMS AND SERVICES.— 

7 (A) OUTPATIENT THERAPY.—Outpatient 

8 physical therapy services, outpatient speech pa9 thology services, and outpatient occupational 

10 therapy services in all settings. 

11 (B) DURABLE MEDICAL EQUIPMENT.—Du12 rable medical equipment. 

13 (C) HOME DIALYSIS.—Home dialysis sup14 plies and equipment. 

15 (D) AMBULANCE.—Emergency ambulance 

16 service. 

17 (E) PROSTHETIC DEVICES.—Prosthetic de18 vices, including replacements of such devices. 

19 (F) ADDITIONAL ITEMS AND SERVICES.— 

20 Such other medical or health care items or serv21 ices as the Board may specify. 

22 (b) PROHIBITION OF BALANCE BILLING.—As pro23 vided in section 531, no person may impose a charge for 

24 covered services for which benefits are provided under this 

25 Act. 


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1 (c) NO DUPLICATE HEALTH INSURANCE.—Each 

2 State health security program shall prohibit the sale of 

3 health insurance in the State if payment under the insur4 ance duplicates payment for any items or services for 

5 which payment may be made under such a program. 

6 (d) STATE PROGRAM MAY PROVIDE ADDITIONAL

7 BENEFITS.—Nothing in this Act shall be construed as 

8 limiting the benefits that may be made available under a 

9 State health security program to residents of the State 

10 at the expense of the State. 

11 (e) EMPLOYERS MAY PROVIDE ADDITIONAL BENE12 FITS.—Nothing in this Act shall be construed as limiting 

13 the additional benefits that an employer may provide to 

14 employees or their dependents, or to former employees or 

15 their dependents. 

16 (f) TAFT-HARTLEY AND MEW BENEFIT PLANS.— 

17 Notwithstanding any other provision of law, a health plan 

18 may be provided for under a collective bargaining agree19 ment or a MEWA if such plan is limited to coverage that 

20 is supplemental to the coverage provided for under the 

21 State-based American Health Security Program and avail22 able only to employees or their dependents or to retirees 

23 or their dependents. 


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1 SEC. 202. DEFINITIONS RELATING TO SERVICES. 

2 (a) COMMUNITY-BASED PRIMARY HEALTH SERV3 ICES.—In this title, the term ‘‘community-based primary 

4 health services’’ means ambulatory health services fur5 nished— 

6 (1) by a rural health clinic; 

7 (2) by a federally qualified health center (as de8 fined in section 1905(l)(2)(B) of the Social Security 

9 Act), and which, for purposes of this Act, include 

10 services furnished by State and local health agencies; 

11 (3) in a school-based setting; 

12 (4) by public educational agencies and other 

13 providers of services to children entitled to assist14 ance under the Individuals with Disabilities Edu15 cation Act for services furnished pursuant to a writ16 ten Individualized Family Services Plan or Indi17 vidual Education Plan under such Act; and 

18 (5) public and private nonprofit entities receiv19 ing Federal assistance under the Public Health 

20 Service Act. 

21 (b) PREVENTIVE SERVICES.— 

22 (1) IN GENERAL.—In this title, the term ‘‘pre23 ventive services’’ means items and services— 

24 (A) which— 

25 (i) are specified in paragraph (2); or 


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1 (ii) the Board determines to be effec2 tive in the maintenance and promotion of 

3 health or minimizing the effect of illness, 

4 disease, or medical condition; and 

5 (B) which are provided consistent with the 

6 periodicity schedule established under para7 graph (3). 

8 (2) SPECIFIED PREVENTIVE SERVICES.—The 

9 services specified in this paragraph are as follows: 

10 (A) Immunizations recommended by the 

11 Advisory Committee on Immunization Practices 

12 of the Centers for Disease Control and Preven13 tion. 

14 (B) Prenatal and well-baby care (for in15 fants under 1 year of age). 

16 (C) Well-child care (including periodic 

17 physical examinations, hearing and vision 

18 screening, and developmental screening and ex19 aminations) for individuals under 18 years of 

20 age, including evidence-informed preventive care 

21 and screenings included in the comprehensive 

22 guidelines of the Health Resources and Services 

23 Administration. 


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1 (D) Periodic screening mammography, Pap 

2 smears, and colorectal examinations and exami3 nations for prostate cancer. 

4 (E) Physical examinations. 

5 (F) Family planning services. 

6 (G) Routine eye examinations, eyeglasses, 

7 and contact lenses. 

8 (H) Hearing aids, but only upon a deter9 mination of a certified audiologist or physician 

10 that a hearing problem exists and is caused by 

11 a condition that can be corrected by use of a 

12 hearing aid. 

13 (I) Evidence-based items or services that 

14 have in effect a rating of ‘‘A’’ or ‘‘B’’ in the 

15 current recommendations of the United States 

16 Preventive Services Task Force. 

17 (J) With respect to women, such additional 

18 preventive care and screenings not described in 

19 subparagraph (I) that are included in the com20 prehensive guidelines of the Health Resources 

21 and Services Administration. 

22 (3) SCHEDULE.—The Board shall establish, in 

23 consultation with experts in preventive medicine and 

24 public health and taking into consideration those 

25 preventive services recommended by the Preventive 


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1 Services Task Force and published as the Guide to 

2 Clinical Preventive Services, a periodicity schedule 

3 for the coverage of preventive services under para4 graph (1). Such schedule shall take into consider5 ation the cost-effectiveness of appropriate preventive 

6 care and shall be revised not less frequently than 

7 once every 5 years, in consultation with experts in 

8 preventive medicine and public health. 

9 (c) HOME AND COMMUNITY-BASED LONG-TERM

10 CARE SERVICES.—In this title, the term ‘‘home and com11 munity-based long-term care services’’ means the following 

12 services provided to an individual to enable the individual 

13 to remain in such individual’s place of residence within 

14 the community: 

15 (1) Home health aide services. 

16 (2) Adult day health care, social day care or 

17 psychiatric day care. 

18 (3) Medical social work services. 

19 (4) Care coordination services, as defined in 

20 subsection (g)(1). 

21 (5) Respite care, including training for informal 

22 caregivers. 

23 (6) Personal assistance services, and home24 maker services (including meals) incidental to the 

25 provision of personal assistance services. 


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1 (d) HOME HEALTH SERVICES.— 

2 (1) IN GENERAL.—The term ‘‘home health 

3 services’’ means items and services described in sec4 tion 1861(m) of the Social Security Act and includes 

5 home infusion services. 

6 (2) HOME INFUSION SERVICES.—The term 

7 ‘‘home infusion services’’ includes the nursing, phar8 macy, and related services that are necessary to con9 duct the home infusion of a drug regimen safely and 

10 effectively under a plan established and periodically 

11 reviewed by a physician and that are provided in 

12 compliance with quality assurance requirements es13 tablished by the Secretary. 

14 (e) MEDICAL FOODS.—In this title, the term ‘‘med15 ical foods’’ means foods which are formulated to be con16 sumed or administered enterally under the supervision of 

17 a physician and which are intended for the specific dietary 

18 management of a disease or condition for which distinctive 

19 nutritional requirements, based on recognized scientific 

20 principles, are established by medical evaluation. 

21 (f) MENTAL HEALTH AND SUBSTANCE ABUSE

22 TREATMENT SERVICES.— 

23 (1) SERVICES DESCRIBED.—In this title, the 

24 term ‘‘mental health and substance abuse treatment 

25 services’’ means the following services related to the 


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1 prevention, diagnosis, treatment, and rehabilitation 

2 of mental illness and promotion of mental health: 

3 (A) INPATIENT HOSPITAL SERVICES.—In4 patient hospital services furnished primarily for 

5 the diagnosis or treatment of mental illness or 

6 substance abuse for up to 60 days during a 

7 year, reduced by a number of days determined 

8 by the Secretary so that the actuarial value of 

9 providing such number of days of services 

10 under this paragraph to the individual is equal 

11 to the actuarial value of the days of inpatient 

12 residential services furnished to the individual 

13 under subparagraph (B) during the year after 

14 such services have been furnished to the indi15 vidual for 120 days during the year (rounded to 

16 the nearest day), but only if (with respect to 

17 services furnished to an individual described in 

18 section 204(b)(1)) such services are furnished 

19 in conformity with the plan of an organized sys20 tem of care for mental health and substance 

21 abuse services in accordance with section 

22 204(b)(2). 

23 (B) INTENSIVE RESIDENTIAL SERVICES.— 

24 Intensive residential services (as defined in 

25 paragraph (2)) furnished to an individual for 


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1 up to 120 days during any calendar year, ex2 cept that— 

3 (i) such services may be furnished to 

4 the individual for additional days during 

5 the year if necessary for the individual to 

6 complete a course of treatment to the ex7 tent that the number of days of inpatient 

8 hospital services described in subparagraph 

9 (A) that may be furnished to the individual 

10 during the year (as reduced under such 

11 subparagraph) is not less than 15; and 

12 (ii) reduced by a number of days de13 termined by the Secretary so that the actu14 arial value of providing such number of 

15 days of services under this paragraph to 

16 the individual is equal to the actuarial 

17 value of the days of intensive community18 based services furnished to the individual 

19 under subparagraph (D) during the year 

20 after such services have been furnished to 

21 the individual for 90 days (or, in the case 

22 of services described in subparagraph 

23 (D)(ii), for 180 days) during the year 

24 (rounded to the nearest day). 


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1 (C) OUTPATIENT SERVICES.—Outpatient 

2 treatment services of mental illness or sub3 stance abuse (other than intensive community4 based services under subparagraph (D)) for an 

5 unlimited number of days during any calendar 

6 year furnished in accordance with standards es7 tablished by the Secretary for the management 

8 of such services, and, in the case of services fur9 nished to an individual described in section 

10 204(b)(1) who is not an inpatient of a hospital, 

11 in conformity with the plan of an organized sys12 tem of care for mental health and substance 

13 abuse services in accordance with section 

14 204(b)(2). 

15 (D) INTENSIVE COMMUNITY-BASED SERV16 ICES.—Intensive community-based services (as 

17 described in paragraph (3))— 

18 (i) for an unlimited number of days 

19 during any calendar year, in the case of 

20 services described in section 1861(ff)(2)(E) 

21 of the Social Security Act (42 U.S.C. 

22 1395x(ff)(2)(E)) that are furnished to an 

23 individual who is a seriously mentally ill 

24 adult, a seriously emotionally disturbed 

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1 stance abuse disorder (as determined in ac2 cordance with criteria established by the 

3 Secretary); 

4 (ii) in the case of services described in 

5 section 1861(ff)(2)(C) of the Social Secu6 rity Act (42 U.S.C. 1395x(ff)(2)(C)), for 

7 up to 180 days during any calendar year, 

8 except that such services may be furnished 

9 to the individual for a number of addi10 tional days during the year equal to the 

11 difference between the total number of 

12 days of intensive residential services which 

13 the individual may receive during the year 

14 under part A (as determined under sub15 paragraph (B)) and the number of days of 

16 such services which the individual has re17 ceived during the year; or 

18 (iii) in the case of any other such 

19 services, for up to 90 days during any cal20 endar year, except that such services may 

21 be furnished to the individual for the num22 ber of additional days during the year de23 scribed in clause (ii). 

24 (2) INTENSIVE RESIDENTIAL SERVICES DE25 FINED.— 


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1 (A) IN GENERAL.—Subject to subpara2 graphs (B) and (C), the term ‘‘intensive resi3 dential services’’ means inpatient services pro4 vided in any of the following facilities: 

5 (i) Residential detoxification centers. 

6 (ii) Crisis residential programs or 

7 mental illness residential treatment pro8 grams. 

9 (iii) Therapeutic family or group 

10 treatment homes. 

11 (iv) Residential centers for substance 

12 abuse treatment. 

13 (B) REQUIREMENTS FOR FACILITIES.—No 

14 service may be treated as an intensive residen15 tial service under subparagraph (A) unless the 

16 facility at which the service is provided— 

17 (i) is legally authorized to provide 

18 such service under the law of the State (or 

19 under a State regulatory mechanism pro20 vided by State law) in which the facility is 

21 located or is certified to provide such serv22 ice by an appropriate accreditation entity 

23 approved by the State in consultation with 

24 the Secretary; and 


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1 (ii) meets such other requirements as 

2 the Secretary may impose to ensure the 

3 quality of the intensive residential services 

4 provided. 

5 (C) SERVICES FURNISHED TO AT-RISK

6 CHILDREN.—In the case of services furnished 

7 to an individual described in section 204(b)(1), 

8 no service may be treated as an intensive resi9 dential service under this subsection unless the 

10 service is furnished in conformity with the plan 

11 of an organized system of care for mental 

12 health and substance abuse services in accord13 ance with section 204(b)(2). 

14 (D) MANAGEMENT STANDARDS.—No serv15 ice may be treated as an intensive residential 

16 service under subparagraph (A) unless the serv17 ice is furnished in accordance with standards 

18 established by the Secretary for the manage19 ment of such services. 

20 (3) INTENSIVE COMMUNITY-BASED SERVICES

21 DEFINED.— 

22 (A) IN GENERAL.—The term ‘‘intensive 

23 community-based services’’ means the items 

24 and services described in subparagraph (B) pre25 scribed by a physician (or, in the case of servVerDate Mar 15 2010 04:40 Mar 19, 2011 Jkt 099200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 ices furnished to an individual described in sec2 tion 204(b)(1), by an organized system of care 

3 for mental health and substance abuse services 

4 in accordance with such section) and provided 

5 under a program described in subparagraph 

6 (D) under the supervision of a physician (or, to 

7 the extent permitted under the law of the State 

8 in which the services are furnished, a non-phy9 sician mental health professional) pursuant to 

10 an individualized, written plan of treatment es11 tablished and periodically reviewed by a physi12 cian (in consultation with appropriate staff par13 ticipating in such program) which sets forth the 

14 physician’s diagnosis, the type, amount, fre15 quency, and duration of the items and services 

16 provided under the plan, and the goals for 

17 treatment under the plan, but does not include 

18 any item or service that is not furnished in ac19 cordance with standards established by the Sec20 retary for the management of such services. 

21 (B) ITEMS AND SERVICES DESCRIBED.— 

22 The items and services described in this sub23 paragraph are— 


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1 (i) partial hospitalization services con2 sisting of the items and services described 

3 in subparagraph (C); 

4 (ii) psychiatric rehabilitation services; 

5 (iii) day treatment services for indi6 viduals under 19 years of age; 

7 (iv) in-home services; 

8 (v) case management services, includ9 ing collateral services designated as such 

10 case management services by the Sec11 retary; 

12 (vi) ambulatory detoxification services; 

13 and 

14 (vii) such other items and services as 

15 the Secretary may provide (but in no event 

16 to include meals and transportation), 

17 that are reasonable and necessary for the diag18 nosis or active treatment of the individual’s 

19 condition, reasonably expected to improve or 

20 maintain the individual’s condition and func21 tional level and to prevent relapse or hos22 pitalization, and furnished pursuant to such 

23 guidelines relating to frequency and duration of 

24 services as the Secretary shall by regulation es25 tablish (taking into account accepted norms of 


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1 medical practice and the reasonable expectation 

2 of patient improvement). 

3 (C) ITEMS AND SERVICES INCLUDED AS

4 PARTIAL HOSPITALIZATION SERVICES.—For 

5 purposes of subparagraph (B)(i), partial hos6 pitalization services consist of the following: 

7 (i) Individual and group therapy with 

8 physicians or psychologists (or other men9 tal health professionals to the extent au10 thorized under State law). 

11 (ii) Occupational therapy requiring 

12 the skills of a qualified occupational thera13 pist. 

14 (iii) Services of social workers, trained 

15 psychiatric nurses, behavioral aides, and 

16 other staff trained to work with psychiatric 

17 patients (to the extent authorized under 

18 State law). 

19 (iv) Drugs and biologicals furnished 

20 for therapeutic purposes (which cannot, as 

21 determined in accordance with regulations, 

22 be self-administered). 

23 (v) Individualized activity therapies 

24 that are not primarily recreational or di25 versionary. 


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1 (vi) Family counseling (the primary 

2 purpose of which is treatment of the indi3 vidual’s condition). 

4 (vii) Patient training and education 

5 (to the extent that training and edu6 cational activities are closely and clearly 

7 related to the individual’s care and treat8 ment). 

9 (viii) Diagnostic services. 

10 (D) PROGRAMS DESCRIBED.—A program 

11 described in this subparagraph is a program 

12 (whether facility-based or freestanding) which is 

13 furnished by an entity— 

14 (i) legally authorized to furnish such a 

15 program under State law (or the State reg16 ulatory mechanism provided by State law) 

17 or certified to furnish such a program by 

18 an appropriate accreditation entity ap19 proved by the State in consultation with 

20 the Secretary; and 

21 (ii) meeting such other requirements 

22 as the Secretary may impose to ensure the 

23 quality of the intensive community-based 

24 services provided. 

25 (g) CARE COORDINATION SERVICES.— 


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1 (1) IN GENERAL.—In this title, the term ‘‘care 

2 coordination services’’ means services provided by 

3 care coordinators (as defined in paragraph (2)) to 

4 individuals described in paragraph (3) for the co5 ordination and monitoring of home and community6 based long-term care services to ensure appropriate, 

7 cost-effective utilization of such services in a com8 prehensive and continuous manner, and includes— 

9 (A) transition management between inpa10 tient facilities and community-based services, 

11 including assisting patients in identifying and 

12 gaining access to appropriate ancillary services; 

13 and 

14 (B) evaluating and recommending appro15 priate treatment services, in cooperation with 

16 patients and other providers and in conjunction 

17 with any quality review program or plan of care 

18 under section 205. 

19 (2) CARE COORDINATOR.— 

20 (A) IN GENERAL.—In this title, the term 

21 ‘‘care coordinator’’ means an individual or non22 profit or public agency or organization which 

23 the State health security program determines— 

24 (i) is capable of performing directly, 

25 efficiently, and effectively the duties of a 


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1 care coordinator described in paragraph 

2 (1); and 

3 (ii) demonstrates capability in estab4 lishing and periodically reviewing and re5 vising plans of care, and in arranging for 

6 and monitoring the provision and quality 

7 of services under any plan. 

8 (B) INDEPENDENCE.—State health secu9 rity programs shall establish safeguards to en10 sure that care coordinators have no financial in11 terest in treatment decisions or placements. 

12 Care coordination may not be provided through 

13 any structure or mechanism through which 

14 quality review is performed. 

15 (3) ELIGIBLE INDIVIDUALS.—An individual de16 scribed in this paragraph is an individual described 

17 in section 203 (relating to individuals qualifying for 

18 long-term and chronic care services). 

19 (h) DENTAL SERVICES.— 

20 (1) IN GENERAL.—In this title, subject to sub21 section (b), the term ‘‘dental services’’ means the 

22 following: 

23 (A) Emergency dental treatment, including 

24 extractions, for bleeding, pain, acute infections, 

25 and injuries to the maxillofacial region. 


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1 (B) Prevention and diagnosis of dental dis2 ease, including examinations of the hard and 

3 soft tissues of the oral cavity and related struc4 tures, radiographs, dental sealants, fluorides, 

5 and dental prophylaxis. 

6 (C) Treatment of dental disease, including 

7 non-cast fillings, periodontal maintenance serv8 ices, and endodontic services. 

9 (D) Space maintenance procedures to pre10 vent orthodontic complications. 

11 (E) Orthodontic treatment to prevent se12 vere malocclusions. 

13 (F) Full dentures. 

14 (G) Medically necessary oral health care. 

15 (H) Any items and services for special 

16 needs patients that are not described in sub17 paragraphs (A) through (G) and that— 

18 (i) are required to provide such pa19 tients the items and services described in 

20 subparagraphs (A) through (G); 

21 (ii) are required to establish oral func22 tion (including general anesthesia for indi23 viduals with physical or emotional limita24 tions that prevent the provision of dental 

25 care without such anesthesia); 


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1 (iii) consist of orthodontic care for se2 vere dentofacial abnormalities; or 

3 (iv) consist of prosthetic dental de4 vices for genetic or birth defects or fitting 

5 for such devices. 

6 (I) Any dental care for individuals with a 

7 seizure disorder that is not described in sub8 paragraphs (A) through (H) and that is re9 quired because of an illness, injury, disorder, or 

10 other health condition that results from such 

11 seizure disorder. 

12 (2) LIMITATIONS.—Dental services are subject 

13 to the following limitations: 

14 (A) PREVENTION AND DIAGNOSIS.— 

15 (i) EXAMINATIONS AND PROPHY16 LAXIS.—The examinations and prophylaxis 

17 described in paragraph (1)(B) are covered 

18 only consistent with a periodicity schedule 

19 established by the Board, which schedule 

20 may provide for special treatment of indi21 viduals less than 18 years of age and of 

22 special needs patients. 

23 (ii) DENTAL SEALANTS.—The dental 

24 sealants described in such paragraph are 

25 not covered for individuals 18 years of age 


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1 or older. Such sealants are covered for in2 dividuals less than 10 years of age for pro3 tection of the 1st permanent molars. Such 

4 sealants are covered for individuals 10 

5 years of age or older for protection of the 

6 2d permanent molars. 

7 (B) TREATMENT OF DENTAL DISEASE.— 

8 Prior to January 1, 2018, the items and serv9 ices described in paragraph (1)(C) are covered 

10 only for individuals less than 18 years of age 

11 and special needs patients. On or after such 

12 date, such items and services are covered for all 

13 individuals enrolled for benefits under this Act, 

14 except that endodontic services are not covered 

15 for individuals 18 years of age or older. 

16 (C) SPACE MAINTENANCE.—The items and 

17 services described in paragraph (1)(D) are cov18 ered only for individuals at least 3 years of age, 

19 but less than 13 years of age and— 

20 (i) are limited to posterior teeth; 

21 (ii) involve maintenance of a space or 

22 spaces for permanent posterior teeth that 

23 would otherwise be prevented from normal 

24 eruption if the space were not maintained; 

25 and 


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1 (iii) do not include a space maintainer 

2 that is placed within 6 months of the ex3 pected eruption of the permanent posterior 

4 tooth concerned. 

5 (3) DEFINITIONS.—For purposes of this title: 

6 (A) MEDICALLY NECESSARY ORAL HEALTH

7 CARE.—The term ‘‘medically necessary oral 

8 health care’’ means oral health care that is re9 quired as a direct result of, or would have a di10 rect impact on, an underlying medical condi11 tion. Such term includes oral health care di12 rected toward control or elimination of pain, in13 fection, or reestablishment of oral function. 

14 (B) SPECIAL NEEDS PATIENT.—The term 

15 ‘‘special needs patient’’ includes an individual 

16 with a genetic or birth defect, a developmental 

17 disability, or an acquired medical disability. 

18 (i) NURSING FACILITY; NURSING FACILITY SERV19 ICES.—Except as may be provided by the Board, the 

20 terms ‘‘nursing facility’’ and ‘‘nursing facility services’’ 

21 have the meanings given such terms in sections 1919(a) 

22 and 1905(f), respectively, of the Social Security Act. 

23 (j) SERVICES IN INTERMEDIATE CARE FACILITIES

24 FOR INDIVIDUALS WITH AN INTELLECTUAL DIS25 ABILITY.—Except as may be provided by the Board— 


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1 (1) the term ‘‘intermediate care facility for indi2 viduals with an intellectual disability’’ has the mean3 ing given the term ‘‘intermediate care facility for in4 dividuals with mental retardation’’ in section 

5 1905(d) of the Social Security Act (as in effect be6 fore the enactment of this Act); and 

7 (2) the term ‘‘services in intermediate care fa8 cilities for individuals with an intellectual disability’’ 

9 means services described in section 1905(a)(15) of 

10 such Act (as so in effect) in an intermediate care fa11 cility for individuals with an intellectual disability to 

12 an individual determined to require such services in 

13 accordance with standards specified by the Board 

14 and comparable to the standards described in section 

15 1902(a)(31)(A) of such Act (as so in effect). 

16 (k) OTHER TERMS.—Except as may be provided by 

17 the Board, the definitions contained in section 1861 of the 

18 Social Security Act shall apply. 

19 SEC. 203. SPECIAL RULES FOR HOME AND COMMUNITY20 BASED LONG-TERM CARE SERVICES. 

21 (a) QUALIFYING INDIVIDUALS.—For purposes of sec22 tion 201(a)(5)(C), individuals described in this subsection 

23 are the following individuals: 


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1 (1) ADULTS.—Individuals 18 years of age or 

2 older determined (in a manner specified by the 

3 Board)— 

4 (A) to be unable to perform, without the 

5 assistance of an individual, at least 2 of the fol6 lowing 5 activities of daily living (or who has a 

7 similar level of disability due to cognitive im8 pairment)— 

9 (i) bathing; 

10 (ii) eating; 

11 (iii) dressing; 

12 (iv) toileting; and 

13 (v) transferring in and out of a bed or 

14 in and out of a chair; 

15 (B) due to cognitive or mental impair16 ments, to require supervision because the indi17 vidual behaves in a manner that poses health or 

18 safety hazards to himself or herself or others; 

19 or 

20 (C) due to cognitive or mental impair21 ments, to require queuing to perform activities 

22 of daily living. 

23 (2) CHILDREN.—Individuals under 18 years of 

24 age determined (in a manner specified by the Board) 

25 to meet such alternative standard of disability for 


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1 children as the Board develops. Such alternative 

2 standard shall be comparable to the standard for 

3 adults and appropriate for children. 

4 (b) LIMIT ON SERVICES.— 

5 (1) IN GENERAL.—The aggregate expenditures 

6 by a State health security program with respect to 

7 home and community-based long-term care services 

8 in a period (specified by the Board) may not exceed 

9 65 percent (or such alternative ratio as the Board 

10 establishes under paragraph (2)) of the average of 

11 the amount of payment that would have been made 

12 under the program during the period if all the home13 based long-term care beneficiaries had been resi14 dents of nursing facilities in the same area in which 

15 the services were provided. 

16 (2) ALTERNATIVE RATIO.—The Board may es17 tablish for purposes of paragraph (1) an alternative 

18 ratio (of payments for home and community-based 

19 long-term care services to payments for nursing fa20 cility services) as the Board determines to be more 

21 consistent with the goal of providing cost-effective 

22 long-term care in the most appropriate and least re23 strictive setting. 


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1 SEC. 204. EXCLUSIONS AND LIMITATIONS. 

2 (a) IN GENERAL.—Subject to section 201(e), benefits 

3 for service are not available under this Act unless the serv4 ices meet the standards specified in section 201(a). 

5 (b) SPECIAL DELIVERY REQUIREMENTS FOR MEN6 TAL HEALTH AND SUBSTANCE ABUSE TREATMENT SERV7 ICES PROVIDED TO AT-RISK CHILDREN.— 

8 (1) REQUIRING SERVICES TO BE PROVIDED

9 THROUGH ORGANIZED SYSTEMS OF CARE.—A State 

10 health security program shall ensure that mental 

11 health services and substance abuse treatment serv12 ices are furnished through an organized system of 

13 care, as described in paragraph (2), if— 

14 (A) the services are provided to an indi15 vidual less than 22 years of age; 

16 (B) the individual has a serious emotional 

17 disturbance or a substance abuse disorder; and 

18 (C) the individual is, or is at imminent risk 

19 of being, subject to the authority of, or in need 

20 of the services of, at least 1 public agency that 

21 serves the needs of children, including an agen22 cy involved with child welfare, special education, 

23 juvenile justice, or criminal justice. 

24 (2) REQUIREMENTS FOR SYSTEM OF CARE.—In 

25 this subsection, an ‘‘organized system of care’’ is a 

26 community-based service delivery network, which 


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1 may consist of public and private providers, that 

2 meets the following requirements: 

3 (A) The system has established linkages 

4 with existing mental health services and sub5 stance abuse treatment service delivery pro6 grams in the plan service area (or is in the 

7 process of developing or operating a system 

8 with appropriate public agencies in the area to 

9 coordinate the delivery of such services to indi10 viduals in the area). 

11 (B) The system provides for the participa12 tion and coordination of multiple agencies and 

13 providers that serve the needs of children in the 

14 area, including agencies and providers involved 

15 with child welfare, education, juvenile justice, 

16 criminal justice, health care, mental health, and 

17 substance abuse prevention and treatment. 

18 (C) The system provides for the involve19 ment of the families of children to whom mental 

20 health services and substance abuse treatment 

21 services are provided in the planning of treat22 ment and the delivery of services. 

23 (D) The system provides for the develop24 ment and implementation of individualized 

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1 agency teams, which are recognized and fol2 lowed by the applicable agencies and providers 

3 in the area. 

4 (E) The system ensures the delivery and 

5 coordination of the range of mental health serv6 ices and substance abuse treatment services re7 quired by individuals under 22 years of age who 

8 have a serious emotional disturbance or a sub9 stance abuse disorder. 

10 (F) The system provides for the manage11 ment of the individualized treatment plans de12 scribed in subparagraph (D) and for a flexible 

13 response to changes in treatment needs over 

14 time. 

15 (c) TREATMENT OF EXPERIMENTAL SERVICES.—In 

16 applying subsection (a), the Board shall make national 

17 coverage determinations with respect to those services that 

18 are experimental in nature. Such determinations shall be 

19 made consistent with a process that provides for input 

20 from representatives of health care professionals and pa21 tients and public comment. 

22 (d) APPLICATION OF PRACTICE GUIDELINES.—In 

23 the case of services for which the American Health Secu24 rity Quality Council (established under section 501) has 

25 recognized a national practice guideline, the services are 


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1 considered to meet the standards specified in section 

2 201(a) if they have been provided in accordance with such 

3 guideline or in accordance with such guidelines as are pro4 vided by the State health security program consistent with 

5 title V. For purposes of this subsection, a service shall 

6 be considered to have been provided in accordance with 

7 a practice guideline if the health care provider providing 

8 the service exercised appropriate professional discretion to 

9 deviate from the guideline in a manner authorized or an10 ticipated by the guideline. 

11 (e) SPECIFIC LIMITATIONS.— 

12 (1) LIMITATIONS ON EYEGLASSES, CONTACT

13 LENSES, HEARING AIDS, AND DURABLE MEDICAL

14 EQUIPMENT.—Subject to section 201(e), the Board 

15 may impose such limits relating to the costs and fre16 quency of replacement of eyeglasses, contact lenses, 

17 hearing aids, and durable medical equipment to 

18 which individuals enrolled for benefits under this Act 

19 are entitled to have payment made under a State 

20 health security program as the Board deems appro21 priate. 

22 (2) OVERLAP WITH PREVENTIVE SERVICES.— 

23 The coverage of services described in section 201(a) 

24 (other than paragraph (3)) which also are preventive 

25 services are required to be covered only to the extent 


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1 that they are required to be covered as preventive 

2 services. 

3 (3) MISCELLANEOUS EXCLUSIONS FROM COV4 ERED SERVICES.—Covered services under this Act 

5 do not include the following: 

6 (A) Surgery and other procedures (such as 

7 orthodontia) performed solely for cosmetic pur8 poses (as defined in regulations) and hospital or 

9 other services incident thereto, unless— 

10 (i) required to correct a congenital 

11 anomaly; 

12 (ii) required to restore or correct a 

13 part of the body which has been altered as 

14 a result of accidental injury, disease, or 

15 surgery; or 

16 (iii) otherwise determined to be medi17 cally necessary and appropriate under sec18 tion 201(a). 

19 (B) Personal comfort items or private 

20 rooms in inpatient facilities, unless determined 

21 to be medically necessary and appropriate 

22 under section 201(a). 

23 (C) The services of a professional practi24 tioner if they are furnished in a hospital or 


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1 other facility which is not a participating pro2 vider. 

3 (f) NURSING FACILITY SERVICES AND HOME

4 HEALTH SERVICES.—Nursing facility services and home 

5 health services (other than post-hospital services, as de6 fined by the Board) furnished to an individual who is not 

7 described in section 203(a) are not covered services unless 

8 the services are determined to meet the standards speci9 fied in section 201(a) and, with respect to nursing facility 

10 services, to be provided in the least restrictive and most 

11 appropriate setting. 

12 SEC. 205. CERTIFICATION; QUALITY REVIEW; PLANS OF 

13 CARE. 

14 (a) CERTIFICATIONS.—State health security pro15 grams may require, as a condition of payment for institu16 tional health care services and other services of the type 

17 described in such sections 1814(a) and 1835(a) of the So18 cial Security Act, periodic professional certifications of the 

19 kind described in such sections. 

20 (b) QUALITY REVIEW.—For the requirement that 

21 each State health security program establish a quality re22 view program that meets the requirements for such a pro23 gram under title V, see section 404(b)(1)(H). 

24 (c) PLAN OF CARE REQUIREMENTS.—A State health 

25 security program may require, consistent with standards 


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1 established by the Board, that payment for services ex2 ceeding specified levels or duration be provided only as 

3 consistent with a plan of care or treatment formulated by 

4 one or more providers of the services or other qualified 

5 professionals. Such a plan may include, consistent with 

6 subsection (b), case management at specified intervals as 

7 a further condition of payment for services. 

8 TITLE III—PROVIDER 

9 PARTICIPATION 

10 SEC. 301. PROVIDER PARTICIPATION AND STANDARDS. 

11 (a) IN GENERAL.—An individual or other entity fur12 nishing any covered service under a State health security 

13 program under this Act is not a qualified provider unless 

14 the individual or entity— 

15 (1) is a qualified provider of the services under 

16 section 302; 

17 (2) has filed with the State health security pro18 gram a participation agreement described in sub19 section (b); and 

20 (3) meets such other qualifications and condi21 tions as are established by the Board or the State 

22 health security program under this Act. 

23 (b) REQUIREMENTS IN PARTICIPATION AGREE24 MENT.— 


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1 (1) IN GENERAL.—A participation agreement 

2 described in this subsection between a State health 

3 security program and a provider shall provide at 

4 least for the following: 

5 (A) Services to eligible persons will be fur6 nished by the provider without discrimination 

7 on the ground of race, national origin, income, 

8 religion, age, sex or sexual orientation, dis9 ability, handicapping condition, or (subject to 

10 the professional qualifications of the provider) 

11 illness. Nothing in this subparagraph shall be 

12 construed as requiring the provision of a type 

13 or class of services which services are outside 

14 the scope of the provider’s normal practice. 

15 (B) No charge will be made for any cov16 ered services other than for payment authorized 

17 by this Act. 

18 (C) The provider agrees to furnish such in19 formation as may be reasonably required by the 

20 Board or a State health security program, in 

21 accordance with uniform reporting standards 

22 established under section 401(g)(1), for— 

23 (i) quality review by designated enti24 ties; 


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1 (ii) the making of payments under 

2 this Act (including the examination of 

3 records as may be necessary for the 

4 verification of information on which pay5 ments are based); 

6 (iii) statistical or other studies re7 quired for the implementation of this Act; 

8 and 

9 (iv) such other purposes as the Board 

10 or State may specify. 

11 (D) The provider agrees not to bill the pro12 gram for any services for which benefits are not 

13 available because of section 204(d). 

14 (E) In the case of a provider that is not 

15 an individual, the provider agrees not to employ 

16 or use for the provision of health services any 

17 individual or other provider who or which has 

18 had a participation agreement under this sub19 section terminated for cause. 

20 (F) In the case of a provider paid under a 

21 fee-for-service basis under section 612, the pro22 vider agrees to submit bills and any required 

23 supporting documentation relating to the provi24 sion of covered services within 30 days (or such 

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1 gram may require) after the date of providing 

2 such services. 

3 (2) TERMINATION OF PARTICIPATION AGREE4 MENTS.— 

5 (A) IN GENERAL.—Participation agree6 ments may be terminated, with appropriate no7 tice— 

8 (i) by the Board or a State health se9 curity program for failure to meet the re10 quirements of this title; or 

11 (ii) by a provider. 

12 (B) TERMINATION PROCESS.—Providers 

13 shall be provided notice and a reasonable oppor14 tunity to correct deficiencies before the Board 

15 or a State health security program terminates 

16 an agreement unless a more immediate termi17 nation is required for public safety or similar 

18 reasons. 

19 SEC. 302. QUALIFICATIONS FOR PROVIDERS. 

20 (a) IN GENERAL.—A health care provider is consid21 ered to be qualified to provide covered services if the pro22 vider is licensed or certified and meets— 

23 (1) all the requirements of State law to provide 

24 such services; 


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1 (2) applicable requirements of Federal law to 

2 provide such services; and 

3 (3) any applicable standards established under 

4 subsection (b). 

5 (b) MINIMUM PROVIDER STANDARDS.— 

6 (1) IN GENERAL.—The Board shall establish, 

7 evaluate, and update national minimum standards to 

8 ensure the quality of services provided under this 

9 Act and to monitor efforts by State health security 

10 programs to ensure the quality of such services. A 

11 State health security program may also establish ad12 ditional minimum standards which providers shall 

13 meet. 

14 (2) NATIONAL MINIMUM STANDARDS.—The na15 tional minimum standards under paragraph (1) shall 

16 be established for institutional providers of services, 

17 individual health care practitioners, and comprehen18 sive health service organizations. Except as the 

19 Board may specify in order to carry out this title, 

20 a hospital, nursing facility, or other institutional 

21 provider of services shall meet standards for such a 

22 facility under the medicare program under title 

23 XVIII of the Social Security Act (42 U.S.C. 1395 et 

24 seq.). Such standards also may include, where ap25 propriate, elements relating to— 


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1 (A) adequacy and quality of facilities; 

2 (B) training and competence of personnel 

3 (including continuing education requirements); 

4 (C) comprehensiveness of service; 

5 (D) continuity of service; 

6 (E) patient satisfaction (including waiting 

7 time and access to services); and 

8 (F) performance standards (including or9 ganization, facilities, structure of services, effi10 ciency of operation, and outcome in palliation, 

11 improvement of health, stabilization, cure, or 

12 rehabilitation). 

13 (3) TRANSITION IN APPLICATION.—If the 

14 Board provides for additional requirements for pro15 viders under this subsection, any such additional re16 quirement shall be implemented in a manner that 

17 provides for a reasonable period during which a pre18 viously qualified provider is permitted to meet such 

19 an additional requirement. 

20 (4) EXCHANGE OF INFORMATION.—The Board 

21 shall provide for an exchange, at least annually, 

22 among State health security programs of informa23 tion with respect to quality assurance and cost con24 tainment. 


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1 SEC. 303. QUALIFICATIONS FOR COMPREHENSIVE HEALTH 

2 SERVICE ORGANIZATIONS. 

3 (a) IN GENERAL.—For purposes of this Act, a com4 prehensive health service organization (in this section re5 ferred to as a ‘‘CHSO’’) is a public or private organization 

6 which, in return for a capitated payment amount, under7 takes to furnish, arrange for the provision of, or provide 

8 payment with respect to— 

9 (1) a full range of health services (as identified 

10 by the Board), including at least hospital services 

11 and physicians services; and 

12 (2) out-of-area coverage in the case of urgently 

13 needed services; 

14 to an identified population which is living in or near a 

15 specified service area and which enrolls voluntarily in the 

16 organization. 

17 (b) ENROLLMENT.— 

18 (1) IN GENERAL.—All eligible persons living in 

19 or near the specified service area of a CHSO are eli20 gible to enroll in the organization; except that the 

21 number of enrollees may be limited to avoid over22 taxing the resources of the organization. 

23 (2) MINIMUM ENROLLMENT PERIOD.—Subject 

24 to paragraph (3), the minimum period of enrollment 

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1 dividual becomes ineligible to enroll with the organi2 zation. 

3 (3) WITHDRAWAL FOR CAUSE.—Each CHSO 

4 shall permit an enrolled individual to disenroll from 

5 the organization for cause at any time. 

6 (c) REQUIREMENTS FOR CHSOS.— 

7 (1) ACCESSIBLE SERVICES.—Each CHSO, to 

8 the maximum extent feasible, shall make all health 

9 services readily and promptly accessible to enrollees 

10 who live in the specified service area. 

11 (2) CONTINUITY OF CARE.—Each CHSO shall 

12 furnish services in such manner as to provide con13 tinuity of care and (when services are furnished by 

14 different providers) shall provide ready referral of 

15 patients to such services and at such times as may 

16 be medically appropriate. 

17 (3) BOARD OF DIRECTORS.—In the case of a 

18 CHSO that is a private organization— 

19 (A) CONSUMER REPRESENTATION.—At 

20 least one-third of the members of the CHSO’s 

21 board of directors shall be consumer members 

22 with no direct or indirect, personal or family fi23 nancial relationship to the organization. 

24 (B) PROVIDER REPRESENTATION.—The 

25 CHSO’s board of directors shall include at least 


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1 one member who represents health care pro2 viders. 

3 (4) PATIENT GRIEVANCE PROGRAM.—Each 

4 CHSO shall have in effect a patient grievance pro5 gram and shall conduct regularly surveys of the sat6 isfaction of members with services provided by or 

7 through the organization. 

8 (5) MEDICAL STANDARDS.—Each CHSO shall 

9 provide that a committee or committees of health 

10 care practitioners associated with the organization 

11 will promulgate medical standards, oversee the pro12 fessional aspects of the delivery of care, perform the 

13 functions of a pharmacy and drug therapeutics com14 mittee, and monitor and review the quality of all 

15 health services (including drugs, education, and pre16 ventive services). 

17 (6) QUALITY AND OTHER REPORTING REQUIRE18 MENTS.— 

19 (A) IN GENERAL.—The Board shall deter20 mine appropriate measures to assess the quality 

21 of care furnished by the CHSO, such as meas22 ures of— 

23 (i) clinical processes and outcomes; 

24 (ii) patient and, where practicable, 

25 caregiver experience of care; and 


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1 (iii) utilization (such as rates of hos2 pital admissions for ambulatory care sen3 sitive conditions). 

4 (B) OTHER DUTIES.—The CHSO shall— 

5 (i) define processes to promote evi6 dence-based medicine and patient engage7 ment, report on quality and cost measures, 

8 and coordinate care, such as through the 

9 use of telehealth, remote patient moni10 toring, and other such enabling tech11 nologies; and 

12 (ii) demonstrate to the Board that the 

13 CHSO meets patient-centeredness criteria 

14 specified by the Board, such as the use of 

15 patient and caregiver assessments or the 

16 use of individualized care plans. 

17 (C) REPORTING REQUIREMENTS.—A 

18 CHSO shall submit data in a form and manner 

19 specified by the Board on measures the Board 

20 determines necessary in order to evaluate the 

21 quality of care furnished by the CHSO. Such 

22 data may include care transitions across health 

23 care settings, including hospital discharge plan24 ning and post-hospital discharge follow-up by 


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1 CHSO professionals, as the Board determines 

2 appropriate. 

3 (D) QUALITY PERFORMANCE STAND4 ARDS.—The Board shall establish quality per5 formance standards to assess the quality of care 

6 furnished by CHSOs and shall seek to improve 

7 the quality of care furnished by CHSOs over 

8 time by specifying higher standards, new meas9 ures, or both for purposes of assessing such 

10 quality of care. 

11 (7) PREMIUMS.—Premiums or other charges by 

12 a CHSO for any services not paid for under this Act 

13 shall be reasonable. 

14 (8) UTILIZATION AND BONUS INFORMATION.— 

15 Each CHSO shall— 

16 (A) comply with the requirements of sec17 tion 1876(i)(8) of the Social Security Act (re18 lating to prohibiting physician incentive plans 

19 that provide specific inducements to reduce or 

20 limit medically necessary services); and 

21 (B) make available to its membership utili22 zation information and data regarding financial 

23 performance, including bonus or incentive pay24 ment arrangements to practitioners. 


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1 (9) PROVISION OF SERVICES TO ENROLLEES AT

2 INSTITUTIONS OPERATING UNDER GLOBAL BUDG3 ETS.—The organization shall arrange to reimburse 

4 for hospital services and other facility-based services 

5 (as identified by the Board) for services provided to 

6 members of the organization in accordance with the 

7 global operating budget of the hospital or facility ap8 proved under section 611. 

9 (10) BROAD MARKETING.—Each CHSO shall 

10 provide for the marketing of its services (including 

11 dissemination of marketing materials) to potential 

12 enrollees in a manner that is designed to enroll indi13 viduals representative of the different population 

14 groups and geographic areas included within its 

15 service area and meets such requirements as the 

16 Board or a State health security program may speci17 fy. 

18 (11) ADDITIONAL REQUIREMENTS.—Each 

19 CHSO shall meet— 

20 (A) such requirements relating to min21 imum enrollment; 

22 (B) such requirements relating to financial 

23 solvency; 

24 (C) such requirements relating to quality 

25 and availability of care; and 


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1 (D) such other requirements, 

2 as the Board or a State health security program 

3 may specify. 

4 (d) PROVISION OF EMERGENCY SERVICES TO NON5 ENROLLEES.—A CHSO may furnish emergency services 

6 to persons who are not enrolled in the organization. Pay7 ment for such services, if they are covered services to eligi8 ble persons, shall be made to the organization unless the 

9 organization requests that it be made to the individual 

10 provider who furnished the services. 

11 SEC. 304. LIMITATION ON CERTAIN PHYSICIAN REFERRALS. 

12 (a) APPLICATION TO AMERICAN HEALTH SECURITY

13 PROGRAM.—Section 1877 of the Social Security Act, as 

14 amended by subsections (b) and (c), shall apply under this 

15 Act in the same manner as it applies under title XVIII 

16 of the Social Security Act; except that in applying such 

17 section under this Act any references in such section to 

18 the Secretary or title XVIII of the Social Security Act are 

19 deemed references to the Board and the American Health 

20 Security Program under this Act, respectively. 

21 (b) EXPANSION OF PROHIBITION TO CERTAIN ADDI22 TIONAL DESIGNATED SERVICES.—Section 1877(h)(6) of 

23 the Social Security Act (42 U.S.C. 1395nn(h)(6)) is 

24 amended by adding at the end the following: 

25 ‘‘(M) Ambulance services. 


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1 ‘‘(N) Home infusion therapy services.’’. 

2 (c) CONFORMING AMENDMENTS.—Section 1877 of 

3 such Act is further amended— 

4 (1) in subsection (a)(1)(A), by striking ‘‘for 

5 which payment otherwise may be made under this 

6 title’’ and inserting ‘‘for which a charge is imposed’’; 

7 (2) in subsection (a)(1)(B), by striking ‘‘under 

8 this title’’; 

9 (3) by amending paragraph (1) of subsection 

10 (g) to read as follows: 

11 ‘‘(1) DENIAL OF PAYMENT.—No payment may 

12 be made under a State health security program for 

13 a designated health service for which a claim is pre14 sented in violation of subsection (a)(1)(B). No indi15 vidual, third-party payor, or other entity is liable for 

16 payment for designated health services for which a 

17 claim is presented in violation of such subsection.’’; 

18 and 

19 (4) in subsection (g)(3), by striking ‘‘for which 

20 payment may not be made under paragraph (1)’’ 

21 and inserting ‘‘for which such a claim may not be 

22 presented under subsection (a)(1)’’. 


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1 TITLE IV—ADMINISTRATION 

2 Subtitle A—General Administrative 

3 Provisions 

4 SEC. 401. AMERICAN HEALTH SECURITY STANDARDS 

5 BOARD. 

6 (a) ESTABLISHMENT.—There is hereby established 

7 an American Health Security Standards Board. 

8 (b) APPOINTMENT AND TERMS OF MEMBERS.— 

9 (1) IN GENERAL.—The Board shall be com10 posed of— 

11 (A) the Secretary of Health and Human 

12 Services; and 

13 (B) 6 other individuals (described in para14 graph (2)) appointed by the President with the 

15 advice and consent of the Senate. 

16 The President shall first nominate individuals under 

17 subparagraph (B) on a timely basis so as to provide 

18 for the operation of the Board by not later than 

19 January 1, 2012. 

20 (2) SELECTION OF APPOINTED MEMBERS.— 

21 With respect to the individuals appointed under 

22 paragraph (1)(B): 

23 (A) The members shall be chosen on the 

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1 onomics, the healing professions, and the ad2 ministration of health care institutions. 

3 (B) The members shall provide a balanced 

4 point of view with respect to the various health 

5 care interests and at least 2 of them shall rep6 resent the interests of individual consumers. 

7 (C) At least 1 member shall have a nurs8 ing background. 

9 (D) Not more than 3 members shall be 

10 from the same political party. 

11 (E) To the greatest extent feasible, the 

12 members shall represent the various geographic 

13 regions of the United States and shall reflect 

14 the racial, ethnic, and gender composition of 

15 the population of the United States. 

16 (3) TERMS OF APPOINTED MEMBERS.—Individ17 uals appointed under paragraph (1)(B) shall serve 

18 for a term of 6 years, except that the terms of 5 of 

19 the individuals initially appointed shall be, as des20 ignated by the President at the time of their ap21 pointment, for 1, 2, 3, 4, and 5 years. During a 

22 term of membership on the Board, no member shall 

23 engage in any other business, vocation or employ24 ment. 

25 (c) VACANCIES.— 


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1 (1) IN GENERAL.—The President shall fill any 

2 vacancy in the membership of the Board in the same 

3 manner as the original appointment. The vacancy 

4 shall not affect the power of the remaining members 

5 to execute the duties of the Board. 

6 (2) VACANCY APPOINTMENTS.—Any member 

7 appointed to fill a vacancy shall serve for the re8 mainder of the term for which the predecessor of the 

9 member was appointed. 

10 (3) REAPPOINTMENT.—The President may re11 appoint an appointed member of the Board for a 

12 second term in the same manner as the original ap13 pointment. A member who has served for 2 consecu14 tive 6-year terms shall not be eligible for reappoint15 ment until 2 years after the member has ceased to 

16 serve. 

17 (4) REMOVAL FOR CAUSE.—Upon confirmation, 

18 members of the Board may not be removed except 

19 by the President for cause. 

20 (d) CHAIR.—The President shall designate 1 of the 

21 members of the Board, other than the Secretary, to serve 

22 at the will of the President as Chair of the Board. 

23 (e) COMPENSATION.—Members of the Board (other 

24 than the Secretary) shall be entitled to compensation at 

25 a level equivalent to level II of the Executive Schedule, 


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1 in accordance with section 5313 of title 5, United States 

2 Code. 

3 (f) GENERAL DUTIES OF THE BOARD.— 

4 (1) IN GENERAL.—The Board shall develop 

5 policies, procedures, guidelines, and requirements to 

6 carry out this Act, including those related to— 

7 (A) eligibility; 

8 (B) enrollment; 

9 (C) benefits; 

10 (D) provider participation standards and 

11 qualifications, as defined in title III; 

12 (E) national and State funding levels; 

13 (F) methods for determining amounts of 

14 payments to providers of covered services, con15 sistent with subtitle B of title VI; 

16 (G) the determination of medical necessity 

17 and appropriateness with respect to coverage of 

18 certain services; 

19 (H) assisting State health security pro20 grams with planning for capital expenditures 

21 and service delivery; 

22 (I) planning for health professional edu23 cation funding (as specified in title VI); 

24 (J) allocating funds provided under title 

25 VII; and 


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1 (K) encouraging States to develop regional 

2 planning mechanisms (described in section 

3 404(a)(3)). 

4 (2) REGULATIONS.—Regulations authorized by 

5 this Act shall be issued by the Board in accordance 

6 with the provisions of section 553 of title 5, United 

7 States Code. 

8 (g) UNIFORM REPORTING STANDARDS; ANNUAL RE9 PORT; STUDIES.— 

10 (1) UNIFORM REPORTING STANDARDS.— 

11 (A) IN GENERAL.—The Board shall estab12 lish uniform reporting requirements and stand13 ards to ensure an adequate national data base 

14 regarding health services practitioners, services 

15 and finances of State health security programs, 

16 approved plans, providers, and the costs of fa17 cilities and practitioners providing services. 

18 Such standards shall include, to the maximum 

19 extent feasible, health outcome measures. 

20 (B) REPORTS.—The Board shall analyze 

21 regularly information reported to it, and to 

22 State health security programs pursuant to 

23 such requirements and standards. 

24 (2) ANNUAL REPORT.—Beginning January 1, 

25 of the second year beginning after the date of the 


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1 enactment of this Act, the Board shall annually re2 port to Congress on the following: 

3 (A) The status of implementation of the 

4 Act. 

5 (B) Enrollment under this Act. 

6 (C) Benefits under this Act. 

7 (D) Expenditures and financing under this 

8 Act. 

9 (E) Cost-containment measures and 

10 achievements under this Act. 

11 (F) Quality assurance. 

12 (G) Health care utilization patterns, in13 cluding any changes attributable to the pro14 gram. 

15 (H) Long-range plans and goals for the de16 livery of health services. 

17 (I) Differences in the health status of the 

18 populations of the different States, including in19 come and racial characteristics. 

20 (J) Necessary changes in the education of 

21 health personnel. 

22 (K) Plans for improving service to medi23 cally underserved populations. 

24 (L) Transition problems as a result of im25 plementation of this Act. 


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1 (M) Opportunities for improvements under 

2 this Act. 

3 (3) STATISTICAL ANALYSES AND OTHER STUD4 IES.—The Board may, either directly or by con5 tract— 

6 (A) make statistical and other studies, on 

7 a nationwide, regional, State, or local basis, of 

8 any aspect of the operation of this Act, includ9 ing studies of the effect of the Act upon the 

10 health of the people of the United States and 

11 the effect of comprehensive health services upon 

12 the health of persons receiving such services; 

13 (B) develop and test methods of providing 

14 through payment for services or otherwise, ad15 ditional incentives for adherence by providers to 

16 standards of adequacy, access, and quality; 

17 methods of consumer and peer review and peer 

18 control of the utilization of drugs, of laboratory 

19 services, and of other services; and methods of 

20 consumer and peer review of the quality of serv21 ices; 

22 (C) develop and test, for use by the Board, 

23 records and information retrieval systems and 

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1 tion, and develop and test model systems for 

2 use by providers of services; 

3 (D) develop and test, for use by providers 

4 of services, records and information retrieval 

5 systems useful in the furnishing of preventive 

6 or diagnostic services; 

7 (E) develop, in collaboration with the phar8 maceutical profession, and test, improved ad9 ministrative practices or improved methods for 

10 the reimbursement of independent pharmacies 

11 for the cost of furnishing drugs as a covered 

12 service; and 

13 (F) make such other studies as it may con14 sider necessary or promising for the evaluation, 

15 or for the improvement, of the operation of this 

16 Act. 

17 (4) REPORT ON USE OF EXISTING FEDERAL

18 HEALTH CARE FACILITIES.—Not later than 1 year 

19 after the date of the enactment of this Act, the 

20 Board shall recommend to Congress one or more 

21 proposals for the treatment of health care facilities 

22 of the Federal Government. 

23 (h) EXECUTIVE DIRECTOR.— 

24 (1) APPOINTMENT.—There is hereby estab25 lished the position of Executive Director of the 


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1 Board. The Director shall be appointed by the 

2 Board and shall serve as secretary to the Board and 

3 perform such duties in the administration of this 

4 title as the Board may assign. 

5 (2) DELEGATION.—The Board is authorized to 

6 delegate to the Director or to any other officer or 

7 employee of the Board or, with the approval of the 

8 Secretary of Health and Human Services (and sub9 ject to reimbursement of identifiable costs), to any 

10 other officer or employee of the Department of 

11 Health and Human Services, any of its functions or 

12 duties under this Act other than— 

13 (A) the issuance of regulations; or 

14 (B) the determination of the availability of 

15 funds and their allocation to implement this 

16 Act. 

17 (3) COMPENSATION.—The Executive Director 

18 of the Board shall be entitled to compensation at a 

19 level equivalent to level III of the Executive Sched20 ule, in accordance with section 5314 of title 5, 

21 United States Code. 

22 (i) INSPECTOR GENERAL.—The Inspector General 

23 Act of 1978 (5 U.S.C. App.) is amended— 

24 (1) in section 12(1), by inserting after ‘‘Cor25 poration;’’ the first place it appears the following: 


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1 ‘‘the Chair of the American Health Security Stand2 ards Board;’’; 

3 (2) in section 12(2), by inserting after ‘‘Resolu4 tion Trust Corporation,’’ the following: ‘‘the Amer5 ican Health Security Standards Board,’’; and 

6 (3) by inserting before section 9 the following: 

7 ‘‘SPECIAL PROVISIONS CONCERNING AMERICAN HEALTH

8 SECURITY STANDARDS BOARD

9 ‘‘SEC. 8M. The Inspector General of the American 

10 Health Security Standards Board, in addition to the other 

11 authorities vested by this Act, shall have the same author12 ity, with respect to the Board and the American Health 

13 Security Program under this Act, as the Inspector General 

14 for the Department of Health and Human Services has 

15 with respect to the Secretary of Health and Human Serv16 ices and the medicare and medicaid programs, respec17 tively.’’. 

18 (j) STAFF.—The Board shall employ such staff as the 

19 Board may deem necessary. 

20 (k) ACCESS TO INFORMATION.—The Secretary of 

21 Health and Human Services shall make available to the 

22 Board all information available from sources within the 

23 Department or from other sources, pertaining to the du24 ties of the Board. 


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1 SEC. 402. AMERICAN HEALTH SECURITY ADVISORY COUN2 CIL. 

3 (a) IN GENERAL.—The Board shall provide for an 

4 American Health Security Advisory Council (in this sec5 tion referred to as the ‘‘Council’’) to advise the Board on 

6 its activities. 

7 (b) MEMBERSHIP.—The Council shall be composed 

8 of— 

9 (1) the Chair of the Board, who shall serve as 

10 Chair of the Council; and 

11 (2) 20 members, not otherwise in the employ of 

12 the United States, appointed by the Board without 

13 regard to the provisions of title 5, United States 

14 Code, governing appointments in the competitive 

15 service. 

16 The appointed members shall include, in accordance with 

17 subsection (e), individuals who are representative of State 

18 health security programs, public health professionals, pro19 viders of health services, and of individuals (who shall con20 stitute a majority of the Council) who are representative 

21 of consumers of such services, including a balanced rep22 resentation of employers, unions, consumer organizations, 

23 and population groups with special health care needs. To 

24 the greatest extent feasible, the membership of the Council 

25 shall represent the various geographic regions of the 


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1 United States and shall reflect the racial, ethnic, and gen2 der composition of the population of the United States. 

3 (c) TERMS OF MEMBERS.—Each appointed member 

4 shall hold office for a term of 4 years, except that— 

5 (1) any member appointed to fill a vacancy oc6 curring during the term for which the member’s 

7 predecessor was appointed shall be appointed for the 

8 remainder of that term; and 

9 (2) the terms of the members first taking office 

10 shall expire, as designated by the Board at the time 

11 of appointment, at the end of the first year with re12 spect to 5 members, at the end of the second year 

13 with respect to 5 members, at the end of the third 

14 year with respect to 5 members, and at the end of 

15 the fourth year with respect to 5 members after the 

16 date of enactment of this Act. 

17 (d) VACANCIES.— 

18 (1) IN GENERAL.—The Board shall fill any va19 cancy in the membership of the Council in the same 

20 manner as the original appointment. The vacancy 

21 shall not affect the power of the remaining members 

22 to execute the duties of the Council. 

23 (2) VACANCY APPOINTMENTS.—Any member 

24 appointed to fill a vacancy shall serve for the reVerDate Mar 15 2010 04:40 Mar 19, 2011 Jkt 099200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 mainder of the term for which the predecessor of the 

2 member was appointed. 

3 (3) REAPPOINTMENT.—The Board may re4 appoint an appointed member of the Council for a 

5 second term in the same manner as the original ap6 pointment. 

7 (e) QUALIFICATIONS.— 

8 (1) PUBLIC HEALTH REPRESENTATIVES.— 

9 Members of the Council who are representative of 

10 State health security programs and public health 

11 professionals shall be individuals who have extensive 

12 experience in the financing and delivery of care 

13 under public health programs. 

14 (2) PROVIDERS.—Members of the Council who 

15 are representative of providers of health care shall 

16 be individuals who are outstanding in fields related 

17 to medical, hospital, or other health activities, or 

18 who are representative of organizations or associa19 tions of professional health practitioners. 

20 (3) CONSUMERS.—Members who are represent21 ative of consumers of such care shall be individuals, 

22 not engaged in and having no financial interest in 

23 the furnishing of health services, who are familiar 

24 with the needs of various segments of the population 

25 for personal health services and are experienced in 


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1 dealing with problems associated with the consump2 tion of such services. 

3 (f) DUTIES.— 

4 (1) IN GENERAL.—It shall be the duty of the 

5 Council— 

6 (A) to advise the Board on matters of gen7 eral policy in the administration of this Act, in 

8 the formulation of regulations, and in the per9 formance of the Board’s duties under section 

10 401; and 

11 (B) to study the operation of this Act and 

12 the utilization of health services under it, with 

13 a view to recommending any changes in the ad14 ministration of the Act or in its provisions 

15 which may appear desirable. 

16 (2) REPORT.—The Council shall make an an17 nual report to the Board on the performance of its 

18 functions, including any recommendations it may 

19 have with respect thereto, and the Board shall 

20 promptly transmit the report to the Congress, to21 gether with a report by the Board on any rec22 ommendations of the Council that have not been fol23 lowed. 

24 (g) STAFF.—The Council, its members, and any com25 mittees of the Council shall be provided with such secreVerDate Mar 15 2010 04:40 Mar 19, 2011 Jkt 099200 PO 00000 Frm 00077 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 tarial, clerical, or other assistance as may be authorized 

2 by the Board for carrying out their respective functions. 

3 (h) MEETINGS.—The Council shall meet as fre4 quently as the Board deems necessary, but not less than 

5 4 times each year. Upon request by 7 or more members 

6 it shall be the duty of the Chair to call a meeting of the 

7 Council. 

8 (i) COMPENSATION.—Members of the Council shall 

9 be reimbursed by the Board for travel and per diem in 

10 lieu of subsistence expenses during the performance of du11 ties of the Board in accordance with subchapter I of chap12 ter 57 of title 5, United States Code. 

13 (j) FACA NOT APPLICABLE.—The provisions of the 

14 Federal Advisory Committee Act shall not apply to the 

15 Council. 

16 SEC. 403. CONSULTATION WITH PRIVATE ENTITIES. 

17 The Secretary and the Board shall consult with pri18 vate entities, such as professional societies, national asso19 ciations, nationally recognized associations of experts, 

20 medical schools and academic health centers, consumer 

21 groups, and labor and business organizations in the for22 mulation of guidelines, regulations, policy initiatives, and 

23 information gathering to ensure the broadest and most in24 formed input in the administration of this Act. Nothing 

25 in this Act shall prevent the Secretary from adopting 


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1 guidelines developed by such a private entity if, in the Sec2 retary’s and Board’s judgment, such guidelines are gen3 erally accepted as reasonable and prudent and consistent 

4 with this Act. 

5 SEC. 404. STATE HEALTH SECURITY PROGRAMS. 

6 (a) SUBMISSION OF PLANS.— 

7 (1) IN GENERAL.—Each State shall submit to 

8 the Board a plan for a State health security pro9 gram for providing for health care services to the 

10 residents of the State in accordance with this Act. 

11 (2) REGIONAL PROGRAMS.—A State may join 

12 with 1 or more neighboring States to submit to the 

13 Board a plan for a regional health security program 

14 instead of separate State health security programs. 

15 (3) REGIONAL PLANNING MECHANISMS.—The 

16 Board shall provide incentives for States to develop 

17 regional planning mechanisms to promote the ration18 al distribution of, adequate access to, and efficient 

19 use of, tertiary care facilities, equipment, and serv20 ices. 

21 (4) STATES THAT FAIL TO SUBMIT A PLAN.— 

22 In the case of a State that fails to submit a plan as 

23 required under this subsection, the American Health 

24 Security Standards Board Authority shall develop a 


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1 plan for a State health security program in such 

2 State. 

3 (b) REVIEW AND APPROVAL OF PLANS.— 

4 (1) IN GENERAL.—The Board shall review 

5 plans submitted under subsection (a) and determine 

6 whether such plans meet the requirements for ap7 proval. The Board shall not approve such a plan un8 less it finds that the plan (or State law) provides, 

9 consistent with the provisions of this Act, for the fol10 lowing: 

11 (A) Payment for required health services 

12 for eligible individuals in the State in accord13 ance with this Act. 

14 (B) Adequate administration, including the 

15 designation of a single State agency responsible 

16 for the administration (or supervision of the ad17 ministration) of the program. 

18 (C) The establishment of a State health se19 curity budget. 

20 (D) Establishment of payment methodolo21 gies (consistent with subtitle B of title VII). 

22 (E) Assurances that individuals have the 

23 freedom to choose practitioners and other 

24 health care providers for services covered under 

25 this Act. 


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1 (F) A procedure for carrying out long-term 

2 regional management and planning functions 

3 with respect to the delivery and distribution of 

4 health care services that— 

5 (i) ensures participation of consumers 

6 of health services and providers of health 

7 services; and 

8 (ii) gives priority to the most acute 

9 shortages and maldistributions of health 

10 personnel and facilities and the most seri11 ous deficiencies in the delivery of covered 

12 services and to the means for the speedy 

13 alleviation of these shortcomings. 

14 (G) The licensure and regulation of all 

15 health providers and facilities to ensure compli16 ance with Federal and State laws and to pro17 mote quality of care. 

18 (H) Establishment of a quality review sys19 tem in accordance with section 503. 

20 (I) Establishment of an independent om21 budsman for consumers to register complaints 

22 about the organization and administration of 

23 the State health security program and to help 

24 resolve complaints and disputes between con25 sumers and providers. 


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1 (J) Publication of an annual report on the 

2 operation of the State health security program, 

3 which report shall include information on cost, 

4 progress towards achieving full enrollment, pub5 lic access to health services, quality review, 

6 health outcomes, health professional training, 

7 and the needs of medically underserved popu8 lations. 

9 (K) Provision of a fraud and abuse preven10 tion and control unit that the Inspector General 

11 determines meets the requirements of section 

12 412(a). 

13 (L) Prohibit payment in cases of prohib14 ited physician referrals under section 304. 

15 (2) CONSEQUENCES OF FAILURE TO COMPLY.— 

16 If the Board finds that a State plan submitted 

17 under paragraph (1) does not meet the requirements 

18 for approval under this section or that a State 

19 health security program or specific portion of such 

20 program, the plan for which was previously ap21 proved, no longer meets such requirements, the 

22 Board shall provide notice to the State of such fail23 ure and that unless corrective action is taken within 

24 a period specified by the Board, the Board shall 

25 place the State health security program (or specific 


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1 portions of such program) in receivership under the 

2 jurisdiction of the Board. 

3 (c) STATE HEALTH SECURITY ADVISORY COUN4 CILS.— 

5 (1) IN GENERAL.—For each State, the Gov6 ernor shall provide for appointment of a State 

7 Health Security Advisory Council to advise and 

8 make recommendations to the Governor and State 

9 with respect to the implementation of the State 

10 health security program in the State. 

11 (2) MEMBERSHIP.—Each State Health Security 

12 Advisory Council shall be composed of at least 11 in13 dividuals. The appointed members shall include indi14 viduals who are representative of the State health 

15 security program, public health professionals, pro16 viders of health services, and of individuals (who 

17 shall constitute a majority) who are representative of 

18 consumers of such services, including a balanced 

19 representation of employers, unions and consumer 

20 organizations. To the greatest extent feasible, the 

21 membership of each State Health Security Advisory 

22 Council shall represent the various geographic re23 gions of the State and shall reflect the racial, ethnic, 

24 and gender composition of the population of the 

25 State. 


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1 (3) DUTIES.— 

2 (A) IN GENERAL.—Each State Health Se3 curity Advisory Council shall review, and sub4 mit comments to the Governor concerning the 

5 implementation of the State health security pro6 gram in the State. 

7 (B) ASSISTANCE.—Each State Health Se8 curity Advisory Council shall provide assistance 

9 and technical support to community organiza10 tions and public and private non-profit agencies 

11 submitting applications for funding under ap12 propriate State and Federal public health pro13 grams, with particular emphasis placed on as14 sisting those applicants with broad consumer 

15 representation. 

16 (d) STATE USE OF FISCAL AGENTS.— 

17 (1) IN GENERAL.—Each State health security 

18 program, using competitive bidding procedures, may 

19 enter into such contracts with qualified entities, such 

20 as voluntary associations, as the State determines to 

21 be appropriate to process claims and to perform 

22 other related functions of fiscal agents under the 

23 State health security program. 

24 (2) RESTRICTION.—Except as the Board may 

25 provide for good cause shown, in no case may more 


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1 than 1 contract described in paragraph (1) be en2 tered into under a State health security program. 

3 SEC. 405. COMPLEMENTARY CONDUCT OF RELATED 

4 HEALTH PROGRAMS. 

5 In performing functions with respect to health per6 sonnel education and training, health research, environ7 mental health, disability insurance, vocational rehabilita8 tion, the regulation of food and drugs, and all other mat9 ters pertaining to health, the Secretary of Health and 

10 Human Services shall direct all activities of the Depart11 ment of Health and Human Services toward contributions 

12 to the health of the people complementary to this Act. 

13 Subtitle B—Control Over Fraud 

14 and Abuse 

15 SEC. 411. APPLICATION OF FEDERAL SANCTIONS TO ALL 

16 FRAUD AND ABUSE UNDER AMERICAN 

17 HEALTH SECURITY PROGRAM. 

18 The following sections of the Social Security Act shall 

19 apply to State health security programs in the same man20 ner as they apply to State medical assistance plans under 

21 title XIX of such Act (except that in applying such provi22 sions any reference to the Secretary is deemed a reference 

23 to the Board): 

24 (1) Section 1128 (relating to exclusion of indi25 viduals and entities). 


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1 (2) Section 1128A (civil monetary penalties). 

2 (3) Section 1128B (criminal penalties). 

3 (4) Section 1124 (relating to disclosure of own4 ership and related information). 

5 (5) Section 1126 (relating to disclosure of cer6 tain owners). 

7 SEC. 412. REQUIREMENTS FOR OPERATION OF STATE 

8 HEALTH CARE FRAUD AND ABUSE CONTROL 

9 UNITS. 

10 (a) REQUIREMENT.—In order to meet the require11 ment of section 404(b)(1)(K), each State health security 

12 program shall establish and maintain a health care fraud 

13 and abuse control unit (in this section referred to as a 

14 ‘‘fraud unit’’) that meets requirements of this section and 

15 other requirements of the Board. Such a unit may be a 

16 State medicaid fraud control unit (described in section 

17 1903(q) of the Social Security Act). 

18 (b) STRUCTURE OF UNIT.—The fraud unit shall— 

19 (1) be a single identifiable entity of the State 

20 government; 

21 (2) be separate and distinct from the State 

22 agency with principal responsibility for the adminis23 tration of the State health security program; and 

24 (3) meet 1 of the following requirements: 


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1 (A) It shall be a unit of the office of the 

2 State Attorney General or of another depart3 ment of State government which possesses 

4 statewide authority to prosecute individuals for 

5 criminal violations. 

6 (B) If it is in a State the constitution of 

7 which does not provide for the criminal prosecu8 tion of individuals by a statewide authority and 

9 has formal procedures, approved by the Board, 

10 that— 

11 (i) assure its referral of suspected 

12 criminal violations relating to the State 

13 health insurance plan to the appropriate 

14 authority or authorities in the States for 

15 prosecution; and 

16 (ii) assure its assistance of, and co17 ordination with, such authority or authori18 ties in such prosecutions. 

19 (C) It shall have a formal working relation20 ship with the office of the State Attorney Gen21 eral and have formal procedures (including pro22 cedures for its referral of suspected criminal 

23 violations to such office) which are approved by 

24 the Board and which provide effective coordina25 tion of activities between the fraud unit and 


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1 such office with respect to the detection, inves2 tigation, and prosecution of suspected criminal 

3 violations relating to the State health insurance 

4 plan. 

5 (c) FUNCTIONS.—The fraud unit shall— 

6 (1) have the function of conducting a statewide 

7 program for the investigation and prosecution of vio8 lations of all applicable State laws regarding any 

9 and all aspects of fraud in connection with any as10 pect of the provision of health care services and ac11 tivities of providers of such services under the State 

12 health security program; 

13 (2) have procedures for reviewing complaints of 

14 the abuse and neglect of patients of providers and 

15 facilities that receive payments under the State 

16 health security program, and, where appropriate, for 

17 acting upon such complaints under the criminal laws 

18 of the State or for referring them to other State 

19 agencies for action; and 

20 (3) provide for the collection, or referral for col21 lection to a single State agency, of overpayments 

22 that are made under the State health security pro23 gram to providers and that are discovered by the 

24 fraud unit in carrying out its activities. 

25 (d) RESOURCES.—The fraud unit shall— 


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1 (1) employ such auditors, attorneys, investiga2 tors, and other necessary personnel; 

3 (2) be organized in such a manner; and 

4 (3) provide sufficient resources (as specified by 

5 the Board), 

6 as is necessary to promote the effective and efficient con7 duct of the unit’s activities. 

8 (e) COOPERATIVE AGREEMENTS.—The fraud unit 

9 shall have cooperative agreements (as specified by the 

10 Board) with— 

11 (1) similar fraud units in other States; 

12 (2) the Inspector General; and 

13 (3) the Attorney General of the United States. 

14 (f) REPORTS.—The fraud unit shall submit to the In15 spector General an application and annual reports con16 taining such information as the Inspector General deter17 mines to be necessary to determine whether the unit meets 

18 the previous requirements of this section. 

19 TITLE V—QUALITY ASSESSMENT 

20 SEC. 501. AMERICAN HEALTH SECURITY QUALITY COUNCIL. 

21 (a) ESTABLISHMENT.—There is hereby established 

22 an American Health Security Quality Council (in this title 

23 referred to as the ‘‘Council’’). 

24 (b) DUTIES OF THE COUNCIL.—The Council shall 

25 perform the following duties: 


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1 (1) PRACTICE GUIDELINES.—The Council shall 

2 review and evaluate each practice guideline devel3 oped under part B of title IX of the Public Health 

4 Service Act. The Council shall determine whether 

5 the guideline should be recognized as a national 

6 practice guideline to be used under section 204(d) 

7 for purposes of determining payments under a State 

8 health security program. 

9 (2) STANDARDS OF QUALITY, PERFORMANCE

10 MEASURES, AND MEDICAL REVIEW CRITERIA.—The 

11 Council shall review and evaluate each standard of 

12 quality, performance measure, and medical review 

13 criterion developed under part B of title IX of the 

14 Public Health Service Act. The Council shall deter15 mine whether the standard, measure, or criterion is 

16 appropriate for use in assessing or reviewing the 

17 quality of services provided by State health security 

18 programs, health care institutions, or health care 

19 professionals. 

20 (3) CRITERIA FOR ENTITIES CONDUCTING

21 QUALITY REVIEWS.—The Council shall develop min22 imum criteria for competence for entities that can 

23 qualify to conduct ongoing and continuous external 

24 quality review for State quality review programs 

25 under section 503. Such criteria shall require such 


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1 an entity to be administratively independent of the 

2 individual or board that administers the State health 

3 security program and shall ensure that such entities 

4 do not provide financial incentives to reviewers to 

5 favor one pattern of practice over another. The 

6 Council shall ensure coordination and reporting by 

7 such entities to ensure national consistency in qual8 ity standards. 

9 (4) REPORTING.—The Council shall report to 

10 the Board annually on the conduct of activities 

11 under such title and shall report to the Board annu12 ally specifically on findings from outcomes research 

13 and development of practice guidelines that may af14 fect the Board’s determination of coverage of serv15 ices under section 401(f)(1)(G). 

16 (5) OTHER FUNCTIONS.—The Council shall 

17 perform the functions of the Council described in 

18 section 502. 

19 (c) APPOINTMENT AND TERMS OF MEMBERS.— 

20 (1) IN GENERAL.—The Council shall be com21 posed of 10 members appointed by the President. 

22 The President shall first appoint individuals on a 

23 timely basis so as to provide for the operation of the 

24 Council by not later than January 1, 2012. 


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1 (2) SELECTION OF MEMBERS.—Each member 

2 of the Council shall be a member of a health profes3 sion. Five members of the Council shall be physi4 cians. Individuals shall be appointed to the Council 

5 on the basis of national reputations for clinical and 

6 academic excellence. To the greatest extent feasible, 

7 the membership of the Council shall represent the 

8 various geographic regions of the United States and 

9 shall reflect the racial, ethnic, and gender composi10 tion of the population of the United States. 

11 (3) TERMS OF MEMBERS.—Individuals ap12 pointed to the Council shall serve for a term of 5 

13 years, except that the terms of 4 of the individuals 

14 initially appointed shall be, as designated by the 

15 President at the time of their appointment, for 1, 2, 

16 3, and 4 years. 

17 (d) VACANCIES.— 

18 (1) IN GENERAL.—The President shall fill any 

19 vacancy in the membership of the Council in the 

20 same manner as the original appointment. The va21 cancy shall not affect the power of the remaining 

22 members to execute the duties of the Council. 

23 (2) VACANCY APPOINTMENTS.—Any member 

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1 mainder of the term for which the predecessor of the 

2 member was appointed. 

3 (3) REAPPOINTMENT.—The President may re4 appoint a member of the Council for a second term 

5 in the same manner as the original appointment. A 

6 member who has served for 2 consecutive 5-year 

7 terms shall not be eligible for reappointment until 2 

8 years after the member has ceased to serve. 

9 (e) CHAIR.—The President shall designate 1 of the 

10 members of the Council to serve at the will of the Presi11 dent as Chair of the Council. 

12 (f) COMPENSATION.—Members of the Council who 

13 are not employees of the Federal Government shall be en14 titled to compensation at a level equivalent to level II of 

15 the Executive Schedule, in accordance with section 5313 

16 of title 5, United States Code. 

17 SEC. 502. DEVELOPMENT OF CERTAIN METHODOLOGIES, 

18 GUIDELINES, AND STANDARDS. 

19 (a) PROFILING OF PATTERNS OF PRACTICE; IDENTI20 FICATION OF OUTLIERS.—The Council shall adopt meth21 odologies for profiling the patterns of practice of health 

22 care professionals and for identifying outliers (as defined 

23 in subsection (e)). 

24 (b) CENTERS OF EXCELLENCE.—The Council shall 

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1 ignated by the Board to be performed only at tertiary care 

2 centers which can meet standards for frequency of proce3 dure performance and intensity of support mechanisms 

4 that are consistent with the high probability of desired pa5 tient outcome. Reimbursement under this Act for such a 

6 designated procedure may only be provided if the proce7 dure was performed at a center that meets such stand8 ards. 

9 (c) REMEDIAL ACTIONS.—The Council shall develop 

10 standards for education and sanctions with respect to 

11 outliers so as to ensure the quality of health care services 

12 provided under this Act. The Council shall develop criteria 

13 for referral of providers to the State licensing board if edu14 cation proves ineffective in correcting provider practice be15 havior. 

16 (d) DISSEMINATION.—The Council shall disseminate 

17 to the State— 

18 (1) the methodologies adopted under subsection 

19 (a); 

20 (2) the guidelines developed under subsection 

21 (b); and 

22 (3) the standards developed under subsection 

23 (c); 

24 for use by the States under section 503. 


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1 (e) OUTLIER DEFINED.—In this title, the term 

2 ‘‘outlier’’ means a health care provider whose pattern of 

3 practice, relative to applicable practice guidelines, suggests 

4 deficiencies in the quality of health care services being pro5 vided. 

6 SEC. 503. STATE QUALITY REVIEW PROGRAMS. 

7 (a) REQUIREMENT.—In order to meet the require8 ment of section 404(b)(1)(H), each State health security 

9 program shall establish 1 or more qualified entities to con10 duct quality reviews of persons providing covered services 

11 under the program, in accordance with standards estab12 lished under subsection (b)(1) (except as provided in sub13 section (b)(2)) and subsection (d). 

14 (b) FEDERAL STANDARDS.— 

15 (1) IN GENERAL.—The Council shall establish 

16 standards with respect to— 

17 (A) the adoption of practice guidelines 

18 (whether developed by the Federal Government 

19 or other entities); 

20 (B) the identification of outliers (con21 sistent with methodologies adopted under sec22 tion 502(a)); 

23 (C) the development of remedial programs 

24 and monitoring for outliers; and 


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1 (D) the application of sanctions (consistent 

2 with the standards developed under section 

3 502(c)). 

4 (2) STATE DISCRETION.—A State may apply 

5 under subsection (a) standards other than those es6 tablished under paragraph (1) so long as the State 

7 demonstrates to the satisfaction of the Council on an 

8 annual basis that the standards applied have been as 

9 efficacious in promoting and achieving improved 

10 quality of care as the application of the standards 

11 established under paragraph (1). Positive improve12 ments in quality shall be documented by reductions 

13 in the variations of clinical care process and im14 provement in patient outcomes. 

15 (c) QUALIFICATIONS.—An entity is not qualified to 

16 conduct quality reviews under subsection (a) unless the 

17 entity satisfies the criteria for competence for such entities 

18 developed by the Council under section 501(b)(3). 

19 (d) INTERNAL QUALITY REVIEW.—Nothing in this 

20 section shall preclude an institutional provider from estab21 lishing its own internal quality review and enhancement 

22 programs. 


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1 SEC. 504. ELIMINATION OF UTILIZATION REVIEW PRO2 GRAMS; TRANSITION. 

3 (a) INTENT.—It is the intention of this title to re4 place by January 1, 2015, random utilization controls with 

5 a systematic review of patterns of practice that com6 promise the quality of care. 

7 (b) SUPERSEDING CASE REVIEWS.— 

8 (1) IN GENERAL.—Subject to the succeeding 

9 provisions of this subsection, the program of quality 

10 review provided under the previous sections of this 

11 title supersede all existing Federal requirements for 

12 utilization review programs, including requirements 

13 for random case-by-case reviews and programs re14 quiring pre-certification of medical procedures on a 

15 case-by-case basis. 

16 (2) TRANSITION.—Before January 1, 2015, the 

17 Board and the States may employ existing utiliza18 tion review standards and mechanisms as may be 

19 necessary to effect the transition to pattern of prac20 tice-based reviews. 

21 (3) CONSTRUCTION.—Nothing in this sub22 section shall be construed— 

23 (A) as precluding the case-by-case review 

24 of the provision of care— 


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1 (i) in individual incidents where the 

2 quality of care has significantly deviated 

3 from acceptable standards of practice; and 

4 (ii) with respect to a provider who has 

5 been determined to be an outlier; or 

6 (B) as precluding the case management of 

7 catastrophic, mental health, or substance abuse 

8 cases or long-term care where such manage9 ment is necessary to achieve appropriate, cost10 effective, and beneficial comprehensive medical 

11 care, as provided for in section 204. 

12 TITLE VI—HEALTH SECURITY 

13 BUDGET; PAYMENTS; COST 

14 CONTAINMENT MEASURES 

15 Subtitle A—Budgeting and 

16 Payments to States 

17 SEC. 601. NATIONAL HEALTH SECURITY BUDGET. 

18 (a) NATIONAL HEALTH SECURITY BUDGET.— 

19 (1) IN GENERAL.—By not later than September 

20 1 before the beginning of each year (beginning with 

21 2012), the Board shall establish a national health 

22 security budget, which— 

23 (A) specifies the total expenditures (includ24 ing expenditures for administrative costs) to be 

25 made by the Federal Government and the 


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1 States for covered health care services under 

2 this Act; and 

3 (B) allocates those expenditures among the 

4 States consistent with section 604. 

5 Pursuant to subsection (b), such budget for a year 

6 shall not exceed the budget for the preceding year 

7 increased by the percentage increase in gross domes8 tic product. 

9 (2) DIVISION OF BUDGET INTO COMPONENTS.— 

10 The national health security budget shall consist of 

11 at least 4 components: 

12 (A) A component for quality assessment 

13 activities (described in title V). 

14 (B) A component for health professional 

15 education expenditures. 

16 (C) A component for administrative costs. 

17 (D) A component for operating and other 

18 expenditures not described in subparagraphs 

19 (A) through (C) (in this title referred to as the 

20 ‘‘operating component’’), consisting of amounts 

21 not included in the other components. A State 

22 may provide for the allocation of this compo23 nent between capital expenditures and other ex24 penditures. 


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1 (3) ALLOCATION AMONG COMPONENTS.—Tak2 ing into account the State health security budgets 

3 established and submitted under section 603, the 

4 Board shall allocate the national health security 

5 budget among the components in a manner that— 

6 (A) assures a fair allocation for quality as7 sessment activities (consistent with the national 

8 health security spending growth limit); and 

9 (B) assures that the health professional 

10 education expenditure component is sufficient 

11 to provide for the amount of health professional 

12 education expenditures sufficient to meet the 

13 need for covered health care services (consistent 

14 with the national health security spending 

15 growth limit under subsection (b)(2)). 

16 (b) BASIS FOR TOTAL EXPENDITURES.— 

17 (1) IN GENERAL.—The total expenditures speci18 fied in such budget shall be the sum of the capita19 tion amounts computed under section 602(a) and 

20 the amount of Federal administrative expenditures 

21 needed to carry out this Act. 

22 (2) NATIONAL HEALTH SECURITY SPENDING

23 GROWTH LIMIT.—For purposes of this subtitle, the 

24 national health security spending growth limit de25 scribed in this paragraph for a year is (A) zero, or, 


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1 if greater, (B) the average annual percentage in2 crease in the gross domestic product (in current dol3 lars) during the 3-year period beginning with the 

4 first quarter of the fourth previous year to the first 

5 quarter of the previous year minus the percentage 

6 increase (if any) in the number of eligible individuals 

7 residing in any State the United States from the 

8 first quarter of the second previous year to the first 

9 quarter of the previous year. 

10 (c) DEFINITIONS.—In this title: 

11 (1) CAPITAL EXPENDITURES.—The term ‘‘cap12 ital expenditures’’ means expenses for the purchase, 

13 lease, construction, or renovation of capital facilities 

14 and for equipment and includes return on equity 

15 capital. 

16 (2) HEALTH PROFESSIONAL EDUCATION EX17 PENDITURES.—The term ‘‘health professional edu18 cation expenditures’’ means expenditures in hospitals 

19 and other health care facilities to cover costs associ20 ated with teaching and related research activities. 

21 SEC. 602. COMPUTATION OF INDIVIDUAL AND STATE CAPI22 TATION AMOUNTS. 

23 (a) CAPITATION AMOUNTS.— 

24 (1) INDIVIDUAL CAPITATION AMOUNTS.—In es25 tablishing the national health security budget under 


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1 section 601(a) and in computing the national aver2 age per capita cost under subsection (b) for each 

3 year, the Board shall establish a method for com4 puting the capitation amount for each eligible indi5 vidual residing in each State. The capitation amount 

6 for an eligible individual in a State classified within 

7 a risk group (established under subsection (d)(2)) is 

8 the product of— 

9 (A) a national average per capita cost for 

10 all covered health care services (computed 

11 under subsection (b)); 

12 (B) the State adjustment factor (estab13 lished under subsection (c)) for the State; and 

14 (C) the risk adjustment factor (established 

15 under subsection (d)) for the risk group. 

16 (2) STATE CAPITATION AMOUNT.— 

17 (A) IN GENERAL.—For purposes of this 

18 title, the term ‘‘State capitation amount’’ 

19 means, for a State for a year, the sum of the 

20 capitation amounts computed under paragraph 

21 (1) for all the residents of the State in the year, 

22 as estimated by the Board before the beginning 

23 of the year involved. 

24 (B) USE OF STATISTICAL MODEL.—The 

25 Board may provide for the computation of 


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1 State capitation amounts based on statistical 

2 models that fairly reflect the elements that com3 prise the State capitation amount described in 

4 subparagraph (A). 

5 (C) POPULATION INFORMATION.—The Bu6 reau of the Census shall assist the Board in de7 termining the number, place of residence, and 

8 risk group classification of eligible individuals. 

9 (b) COMPUTATION OF NATIONAL AVERAGE PER CAP10 ITA COST.— 

11 (1) FOR 2012.—For 2012, the national average 

12 per capita cost under this paragraph is equal to— 

13 (A) the average per capita health care ex14 penditures in the United States in 2010 (as es15 timated by the Board); 

16 (B) increased to 2011 by the Board’s esti17 mate of the actual amount of such per capita 

18 expenditures during 2011; and 

19 (C) updated to 2012 by the national health 

20 security spending growth limit specified in sec21 tion 601(b)(2) for 2012. 

22 (2) FOR SUCCEEDING YEARS.—For each suc23 ceeding year, the national average per capita cost 

24 under this subsection is equal to the national aver25 age per capita cost computed under this subsection 


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1 for the previous year increased by the national 

2 health security spending growth limit (specified in 

3 section 601(b)(2)) for the year involved. 

4 (c) STATE ADJUSTMENT FACTORS.— 

5 (1) IN GENERAL.—Subject to the succeeding 

6 paragraphs of this subsection, the Board shall de7 velop for each State a factor to adjust the national 

8 average per capita costs to reflect differences be9 tween the State and the United States in— 

10 (A) average labor and nonlabor costs that 

11 are necessary to provide covered health services; 

12 (B) any social, environmental, or geo13 graphic condition affecting health status or the 

14 need for health care services, to the extent such 

15 a condition is not taken into account in the es16 tablishment of risk groups under subsection (d); 

17 (C) the geographic distribution of the 

18 State’s population, particularly the proportion 

19 of the population residing in medically under20 served areas, to the extent such a condition is 

21 not taken into account in the establishment of 

22 risk groups under subsection (d); and 

23 (D) any other factor relating to operating 

24 costs required to ensure equitable distribution 

25 of funds among the States. 


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1 (2) MODIFICATION OF HEALTH PROFESSIONAL

2 EDUCATION COMPONENT.—With respect to the por3 tion of the national health security budget allocated 

4 to expenditures for health professional education, the 

5 Board shall modify the State adjustment factors so 

6 as to take into account— 

7 (A) differences among States in health 

8 professional education programs in operation as 

9 of the date of the enactment of this Act; and 

10 (B) differences among States in their rel11 ative need for expenditures for health profes12 sional education, taking into account the health 

13 professional education expenditures proposed in 

14 State health security budgets under section 

15 603(a). 

16 (3) BUDGET NEUTRALITY.—The State adjust17 ment factors, as modified under paragraph (2), shall 

18 be applied under this subsection in a manner that 

19 results in neither an increase nor a decrease in the 

20 total amount of the Federal contributions to all 

21 State health security programs under subsection (b) 

22 as a result of the application of such factors. 

23 (4) PHASE-IN.—In applying State adjustment 

24 factors under this subsection during the 5-year pe25 riod beginning with 2012, the Board shall phase-in, 


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1 over such period, the use of factors described in 

2 paragraph (1) in a manner so that the adjustment 

3 factor for a State is based on a blend of such factors 

4 and a factor that reflects the relative actual average 

5 per capita costs of health services of the different 

6 States as of the time of enactment of this Act. 

7 (5) PERIODIC ADJUSTMENT.—In establishing 

8 the national health security budget before the begin9 ning of each year, the Board shall provide for appro10 priate adjustments in the State adjustment factors 

11 under this subsection. 

12 (d) ADJUSTMENTS FOR RISK GROUP CLASSIFICA13 TION.— 

14 (1) IN GENERAL.—The Board shall develop an 

15 adjustment factor to the national average per capita 

16 costs computed under subsection (b) for individuals 

17 classified in each risk group (as designated under 

18 paragraph (2)) to reflect the difference between the 

19 average national average per capita costs and the 

20 national average per capita cost for individuals clas21 sified in the risk group. 

22 (2) RISK GROUPS.—The Board shall designate 

23 a series of risk groups, determined by age, health in24 dicators, and other factors that represent distinct 

25 patterns of health care services utilization and costs. 


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1 (3) PERIODIC ADJUSTMENT.—In establishing 

2 the national health security budget before the begin3 ning of each year, the Board shall provide for appro4 priate adjustments in the risk adjustment factors 

5 under this subsection. 

6 SEC. 603. STATE HEALTH SECURITY BUDGETS. 

7 (a) ESTABLISHMENT AND SUBMISSION OF BUDG8 ETS.— 

9 (1) IN GENERAL.—Each State health security 

10 program shall establish and submit to the Board for 

11 each year a proposed and a final State health secu12 rity budget, which specifies the following: 

13 (A) The total expenditures (including ex14 penditures for administrative costs) to be made 

15 under the program in the State for covered 

16 health care services under this Act, consistent 

17 with subsection (b), broken down as follows: 

18 (i) By the 4 components (described in 

19 section 601(a)(2)), consistent with sub20 section (b). 

21 (ii) Within the operating component— 

22 (I) expenditures for operating 

23 costs of hospitals and other facility24 based services in the State; 


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1 (II) expenditures for payment to 

2 comprehensive health service organiza3 tions; 

4 (III) expenditures for payment of 

5 services provided by health care prac6 titioners; and 

7 (IV) expenditures for other cov8 ered items and services. 

9 Amounts included in the operating compo10 nent include amounts that may be used by 

11 providers for capital expenditures. 

12 (B) The total revenues required to meet 

13 the State health security expenditures. 

14 (2) PROPOSED BUDGET DEADLINE.—The pro15 posed budget for a year shall be submitted under 

16 paragraph (1) not later than June 1 before the year. 

17 (3) FINAL BUDGET.—The final budget for a 

18 year shall— 

19 (A) be established and submitted under 

20 paragraph (1) not later than October 1 before 

21 the year, and 

22 (B) take into account the amounts estab23 lished under the national health security budget 

24 under section 601 for the year. 


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1 (4) ADJUSTMENT IN ALLOCATIONS PER2 MITTED.— 

3 (A) IN GENERAL.—Subject to subpara4 graphs (B) and (C), in the case of a final budg5 et, a State may change the allocation of 

6 amounts among components. 

7 (B) NOTICE.—No such change may be 

8 made unless the State has provided prior notice 

9 of the change to the Board. 

10 (C) DENIAL.—Such a change may not be 

11 made if the Board, within such time period as 

12 the Board specifies, disapproves such change. 

13 (b) EXPENDITURE LIMITS.— 

14 (1) IN GENERAL.—The total expenditures speci15 fied in each State health security budget under sub16 section (a)(1) shall take into account Federal con17 tributions made under section 604. 

18 (2) LIMIT ON CLAIMS PROCESSING AND BILL19 ING EXPENDITURES.—Each State health security 

20 budget shall provide that State administrative ex21 penditures, including expenditures for claims proc22 essing and billing, shall not exceed 3 percent of the 

23 total expenditures under the State health security 

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1 tures would improve health care quality and cost ef2 fectiveness. 

3 (3) WORKER ASSISTANCE.—A State health se4 curity program may provide that, for budgets for 

5 years before 2015, up to 1 percent of the budget 

6 may be used for purposes of programs providing as7 sistance to workers who are currently performing 

8 functions in the administration of the health insur9 ance system and who may experience economic dis10 location as a result of the implementation of the pro11 gram. 

12 (c) APPROVAL PROCESS FOR CAPITAL EXPENDI13 TURES PERMITTED.—Nothing in this title shall be con14 strued as preventing a State health security program from 

15 providing for a process for the approval of capital expendi16 tures based on information derived from regional planning 

17 agencies. 

18 SEC. 604. FEDERAL PAYMENTS TO STATES. 

19 (a) IN GENERAL.—Each State with an approved 

20 State health security program is entitled to receive, from 

21 amounts in the American Health Security Trust Fund, on 

22 a monthly basis each year, of an amount equal to one23 twelfth of the product of— 


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1 (1) the State capitation amount (computed 

2 under section 602(a)(2)) for the State for the year; 

3 and 

4 (2) the Federal contribution percentage (estab5 lished under subsection (b)). 

6 (b) FEDERAL CONTRIBUTION PERCENTAGE.—The 

7 Board shall establish a formula for the establishment of 

8 a Federal contribution percentage for each State. Such 

9 formula shall take into consideration a State’s per capita 

10 income and revenue capacity and such other relevant eco11 nomic indicators as the Board determines to be appro12 priate. In addition, during the 5-year period beginning 

13 with 2012, the Board may provide for a transition adjust14 ment to the formula in order to take into account current 

15 expenditures by the State (and local governments thereof) 

16 for health services covered under the State health security 

17 program. The weighted-average Federal contribution per18 centage for all States shall equal 86 percent and in no 

19 event shall such percentage be less than 81 percent nor 

20 more than 91 percent. 

21 (c) USE OF PAYMENTS.—All payments made under 

22 this section may only be used to carry out the State health 

23 security program. 

24 (d) EFFECT OF SPENDING EXCESS OR SURPLUS.— 


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1 (1) SPENDING EXCESS.—If a State exceeds its 

2 budget in a given year, the State shall continue to 

3 fund covered health services from its own revenues. 

4 (2) SURPLUS.—If a State provides all covered 

5 health services for less than the budgeted amount 

6 for a year, it may retain its Federal payment for 

7 that year for uses consistent with this Act. 

8 SEC. 605. ACCOUNT FOR HEALTH PROFESSIONAL EDU9 CATION EXPENDITURES. 

10 (a) SEPARATE ACCOUNT.—Each State health secu11 rity program shall— 

12 (1) include a separate account for health pro13 fessional education expenditures; and 

14 (2) specify the general manner, consistent with 

15 subsection (b), in which such expenditures are to be 

16 distributed among different types of institutions and 

17 the different areas of the State. 

18 (b) DISTRIBUTION RULES.—The distribution of 

19 funds to hospitals and other health care facilities from the 

20 account shall conform to the following principles: 

21 (1) The disbursement of funds shall be con22 sistent with achievement of the national and pro23 gram goals (specified in section 701(b)) within the 

24 State health security program and the distribution 

25 of funds from the account shall be conditioned upon 


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1 the receipt of such reports as the Board may require 

2 in order to monitor compliance with such goals. 

3 (2) The distribution of funds from the account 

4 shall take into account the potentially higher costs 

5 of placing health professional students in clinical 

6 education programs in health professional shortage 

7 areas. 

8 Subtitle B—Payments by States to 

9 Providers 

10 SEC. 611. PAYMENTS TO HOSPITALS AND OTHER FACILITY11 BASED SERVICES FOR OPERATING EXPENSES 

12 ON THE BASIS OF APPROVED GLOBAL BUDG13 ETS. 

14 (a) DIRECT PAYMENT UNDER GLOBAL BUDGET.— 

15 Payment for operating expenses for institutional and facil16 ity-based care, including hospital services and nursing fa17 cility services, under State health security programs shall 

18 be made directly to each institution or facility by each 

19 State health security program under an annual prospec20 tive global budget approved under the program. Such a 

21 budget shall include payment for outpatient care and non22 facility-based care that is furnished by or through the fa23 cility. In the case of a hospital that is wholly owned (or 

24 controlled) by a comprehensive health service organization 

25 that is paid under section 614 on the basis of a global 


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1 budget, the global budget of the organization shall include 

2 the budget for the hospital. 

3 (b) ANNUAL NEGOTIATIONS; BUDGET APPROVAL.— 

4 (1) IN GENERAL.—The prospective global budg5 et for an institution or facility shall— 

6 (A) be developed through annual negotia7 tions between— 

8 (i) a panel of individuals who are ap9 pointed by the Governor of the State and 

10 who represent consumers, labor, business, 

11 and the State government; and 

12 (ii) the institution or facility; and 

13 (B) be based on a nationally uniform sys14 tem of cost accounting established under stand15 ards of the Board. 

16 (2) CONSIDERATIONS.—In developing a budget 

17 through negotiations, there shall be taken into ac18 count at least the following: 

19 (A) With respect to inpatient hospital serv20 ices, the number, and classification by diag21 nosis-related group, of discharges. 

22 (B) An institution’s or facility’s past ex23 penditures. 


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1 (C) The extent to which debt service for 

2 capital expenditures has been included in the 

3 proposed operating budget. 

4 (D) The extent to which capital expendi5 tures are financed directly or indirectly through 

6 reductions in direct care to patients, including 

7 reductions in registered nursing staffing pat8 terns or changes in emergency room or primary 

9 care services or availability. 

10 (E) Change in the consumer price index 

11 and other price indices. 

12 (F) The cost of reasonable compensation 

13 to health care practitioners. 

14 (G) The compensation level of the institu15 tion’s or facility’s work force. 

16 (H) The extent to which the institution or 

17 facility is providing health care services to meet 

18 the needs of residents in the area served by the 

19 institution or facility, including the institution’s 

20 or facility’s occupancy level. 

21 (I) The institution’s or facility’s previous 

22 financial and clinical performance, based on uti23 lization and outcomes data provided under this 

24 Act. 


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1 (J) The type of institution or facility, in2 cluding whether the institution or facility is 

3 part of a clinical education program or serves 

4 a health professional education, research or 

5 other training purpose. 

6 (K) Technological advances or changes. 

7 (L) Costs of the institution or facility asso8 ciated with meeting Federal and State regula9 tions. 

10 (M) The costs associated with necessary 

11 public outreach activities. 

12 (N) In the case of a for-profit facility, a 

13 reasonable rate of return on equity capital, 

14 independent of those operating expenses nec15 essary to fulfill the objectives of this Act. 

16 (O) Incentives to facilities that maintain 

17 costs below previous reasonable budgeted levels 

18 without reducing the care provided. 

19 (P) With respect to facilities that provide 

20 mental health services and substance abuse 

21 treatment services, any additional costs involved 

22 in the treatment of dually diagnosed individ23 uals. 

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1 sistent with the State health security budget for 

2 such expenditures. 

3 (3) PROVISION OF REQUIRED INFORMATION; DI4 AGNOSIS-RELATED GROUP.—No budget for an insti5 tution or facility for a year may be approved unless 

6 the institution or facility has submitted on a timely 

7 basis to the State health security program such in8 formation as the program or the Board shall specify, 

9 including in the case of hospitals information on dis10 charges classified by diagnosis-related group. 

11 (c) ADJUSTMENTS IN APPROVED BUDGETS.— 

12 (1) ADJUSTMENTS TO GLOBAL BUDGETS THAT

13 CONTRACT WITH COMPREHENSIVE HEALTH SERVICE

14 ORGANIZATIONS.—Each State health security pro15 gram shall develop an administrative mechanism for 

16 reducing operating funds to institutions or facilities 

17 in proportion to payments made to such institutions 

18 or facilities for services contracted for by a com19 prehensive health service organization. 

20 (2) AMENDMENTS.—In accordance with stand21 ards established by the Board, an operating and 

22 capital budget approved under this section for a year 

23 may be amended before, during, or after the year if 

24 there is a substantial change in any of the factors 

25 relevant to budget approval. 


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1 (d) DONATIONS PERMISSIBLE.—The States health 

2 security programs may permit institutions and facilities 

3 to raise funds from private sources to pay for newly con4 structed facilities, major renovations, and equipment. The 

5 expenditure of such funds, whether for operating or cap6 ital expenditures, does not obligate the State health secu7 rity program to provide for continued support for such ex8 penditures unless included in an approved global budget. 

9 SEC. 612. PAYMENTS TO HEALTH CARE PRACTITIONERS 

10 BASED ON PROSPECTIVE FEE SCHEDULE. 

11 (a) FEE FOR SERVICE.— 

12 (1) IN GENERAL.—Every independent health 

13 care practitioner is entitled to be paid, for the provi14 sion of covered health services under the State 

15 health security program, a fee for each billable cov16 ered service. 

17 (2) GLOBAL FEE PAYMENT METHODOLOGIES.— 

18 The Board shall establish models and encourage 

19 State health security programs to implement alter20 native payment methodologies that incorporate glob21 al fees for related services (such as all outpatient 

22 procedures for treatment of a condition) or for a 

23 basic group of services (such as primary care serv24 ices) furnished to an individual over a period of 

25 time, in order to encourage continuity and efficiency 


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1 in the provision of services. Such methodologies shall 

2 be designed to ensure a high quality of care. 

3 (3) BILLING DEADLINES; ELECTRONIC BILL4 ING.—A State health security program may deny 

5 payment for any service of an independent health 

6 care practitioner for which it did not receive a bill 

7 and appropriate supporting documentation (which 

8 had been previously specified) within 30 days after 

9 the date the service was provided. Such a program 

10 may require that bills for services for which payment 

11 may be made under this section, or for any class of 

12 such services, be submitted electronically. 

13 (b) PAYMENT RATES BASED ON NEGOTIATED PRO14 SPECTIVE FEE SCHEDULES.—With respect to any pay15 ment method for a class of services of practitioners, the 

16 State health security program shall establish, on a pro17 spective basis, a payment schedule. The State health secu18 rity program may establish such a schedule after negotia19 tions with organizations representing the practitioners in20 volved. Such fee schedules shall be designed to provide in21 centives for practitioners to choose primary care medicine, 

22 including general internal medicine, family medicine, gyne23 cology, and pediatrics, over medical specialization. Noth24 ing in this section shall be construed as preventing a State 

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1 terly or other periodic basis depending on whether expend2 itures under the schedule will exceed the budgeted amount 

3 with respect to such expenditures. 

4 (c) BILLABLE COVERED SERVICE DEFINED.—In this 

5 section, the term ‘‘billable covered service’’ means a service 

6 covered under section 201 for which a practitioner is enti7 tled to compensation by payment of a fee determined 

8 under this section. 

9 SEC. 613. PAYMENTS TO COMPREHENSIVE HEALTH SERV10 ICE ORGANIZATIONS. 

11 (a) IN GENERAL.—Payment under a State health se12 curity program to a comprehensive health service organi13 zation to its enrollees shall be determined by the State— 

14 (1) based on a global budget described in sec15 tion 611; or 

16 (2) based on the basic capitation amount de17 scribed in subsection (b) for each of its enrollees. 

18 (b) BASIC CAPITATION AMOUNT.— 

19 (1) IN GENERAL.—The basic capitation amount 

20 described in this subsection for an enrollee shall be 

21 determined by the State health security program on 

22 the basis of the average amount of expenditures that 

23 is estimated would be made under the State health 

24 security program for covered health care services for 


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1 an enrollee, based on actuarial characteristics (as de2 fined by the State health security program). 

3 (2) ADJUSTMENT FOR SPECIAL HEALTH

4 NEEDS.—The State health security program shall 

5 adjust such average amounts to take into account 

6 the special health needs, including a disproportionate 

7 number of medically underserved individuals, of pop8 ulations served by the organization. 

9 (3) ADJUSTMENT FOR SERVICES NOT PRO10 VIDED.—The State health security program shall ad11 just such average amounts to take into account the 

12 cost of covered health care services that are not pro13 vided by the comprehensive health service organiza14 tion under section 303(a). 

15 SEC. 614. PAYMENTS FOR COMMUNITY-BASED PRIMARY 

16 HEALTH SERVICES. 

17 (a) IN GENERAL.—In the case of community-based 

18 primary health services, subject to subsection (b), pay19 ments under a State health security program shall— 

20 (1) be based on a global budget described in 

21 section 611; 

22 (2) be based on the basic primary care capita23 tion amount described in subsection (c) for each in24 dividual enrolled with the provider of such services; 

25 or 


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1 (3) be made on a fee-for-service basis under 

2 section 612. 

3 (b) PAYMENT ADJUSTMENT.—Payments under sub4 section (a) may include, consistent with the budgets devel5 oped under this title— 

6 (1) an additional amount, as set by the State 

7 health security program, to cover the costs incurred 

8 by a provider which serves persons not covered by 

9 this Act whose health care is essential to overall 

10 community health and the control of communicable 

11 disease, and for whom the cost of such care is other12 wise uncompensated; 

13 (2) an additional amount, as set by the State 

14 health security program, to cover the reasonable 

15 costs incurred by a provider that furnishes case 

16 management services (as defined in section 

17 1915(g)(2) of the Social Security Act), transpor18 tation services, and translation services; and 

19 (3) an additional amount, as set by the State 

20 health security program, to cover the costs incurred 

21 by a provider in conducting health professional edu22 cation programs in connection with the provision of 

23 such services. 

24 (c) BASIC PRIMARY CARE CAPITATION AMOUNT.— 


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1 (1) IN GENERAL.—The basic primary care capi2 tation amount described in this subsection for an en3 rollee with a provider of community-based primary 

4 health services shall be determined by the State 

5 health security program on the basis of the average 

6 amount of expenditures that is estimated would be 

7 made under the State health security program for 

8 such an enrollee, based on actuarial characteristics 

9 (as defined by the State health security program). 

10 (2) ADJUSTMENT FOR SPECIAL HEALTH

11 NEEDS.—The State health security program shall 

12 adjust such average amounts to take into account 

13 the special health needs, including a disproportionate 

14 number of medically underserved individuals, of pop15 ulations served by the provider. 

16 (3) ADJUSTMENT FOR SERVICES NOT PRO17 VIDED.—The State health security program shall ad18 just such average amounts to take into account the 

19 cost of community-based primary health services 

20 that are not provided by the provider. 

21 (d) COMMUNITY-BASED PRIMARY HEALTH SERVICES

22 DEFINED.—In this section, the term ‘‘community-based 

23 primary health services’’ has the meaning given such term 

24 in section 202(a). 


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1 SEC. 615. PAYMENTS FOR PRESCRIPTION DRUGS. 

2 (a) ESTABLISHMENT OF LIST.— 

3 (1) IN GENERAL.—The Board shall establish a 

4 list of approved prescription drugs and biologicals 

5 that the Board determines are necessary for the 

6 maintenance or restoration of health or of employ7 ability or self-management and eligible for coverage 

8 under this Act. 

9 (2) EXCLUSIONS.—The Board may exclude re10 imbursement under this Act for ineffective, unsafe, 

11 or over-priced products where better alternatives are 

12 determined to be available. 

13 (b) PRICES.—For each such listed prescription drug 

14 or biological covered under this Act, for insulin, and for 

15 medical foods, the Board shall from time to time deter16 mine a product price or prices which shall constitute the 

17 maximum to be recognized under this Act as the cost of 

18 a drug to a provider thereof. The Board may conduct ne19 gotiations, on behalf of State health security programs, 

20 with product manufacturers and distributors in deter21 mining the applicable product price or prices. 

22 (c) CHARGES BY INDEPENDENT PHARMACIES.— 

23 Each State health security program shall provide for pay24 ment for a prescription drug or biological or insulin fur25 nished by an independent pharmacy based on the drug’s 

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1 uct price established under subsection (b)) plus a dis2 pensing fee. In accordance with standards established by 

3 the Board, each State health security program, after con4 sultation with representatives of the pharmaceutical pro5 fession, shall establish schedules of dispensing fees, de6 signed to afford reasonable compensation to independent 

7 pharmacies after taking into account variations in their 

8 cost of operation resulting from regional differences, dif9 ferences in the volume of prescription drugs dispensed, dif10 ferences in services provided, the need to maintain expend11 itures within the budgets established under this title, and 

12 other relevant factors. 

13 SEC. 616. PAYMENTS FOR APPROVED DEVICES AND EQUIP14 MENT. 

15 (a) ESTABLISHMENT OF LIST.—The Board shall es16 tablish a list of approved durable medical equipment and 

17 therapeutic devices and equipment (including eyeglasses, 

18 hearing aids, and prosthetic appliances), that the Board 

19 determines are necessary for the maintenance or restora20 tion of health or of employability or self-management and 

21 eligible for coverage under this Act. 

22 (b) CONSIDERATIONS AND CONDITIONS.—In estab23 lishing the list under subsection (a), the Board shall take 

24 into consideration the efficacy, safety, and cost of each 

25 item contained on such list, and shall attach to any item 


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1 such conditions as the Board determines appropriate with 

2 respect to the circumstances under which, or the frequency 

3 with which, the item may be prescribed. 

4 (c) PRICES.—For each such listed item covered under 

5 this Act, the Board shall from time to time determine a 

6 product price or prices which shall constitute the max7 imum to be recognized under this Act as the cost of the 

8 item to a provider thereof. The Board may conduct nego9 tiations, on behalf of State health security programs, with 

10 equipment and device manufacturers and distributors in 

11 determining the applicable product price or prices. 

12 (d) EXCLUSIONS.—The Board may exclude from cov13 erage under this Act ineffective, unsafe, or overpriced 

14 products where better alternatives are determined to be 

15 available. 

16 SEC. 617. PAYMENTS FOR OTHER ITEMS AND SERVICES. 

17 In the case of payment for other covered health serv18 ices, the amount of payment under a State health security 

19 program shall be established by the program— 

20 (1) in accordance with payment methodologies 

21 which are specified by the Board, after consultation 

22 with the American Health Security Advisory Coun23 cil, or methodologies established by the State under 

24 section 620; and 


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1 (2) consistent with the State health security 

2 budget. 

3 SEC. 618. PAYMENT INCENTIVES FOR MEDICALLY UNDER4 SERVED AREAS. 

5 (a) MODEL PAYMENT METHODOLOGIES.—In addi6 tion to the payment amounts otherwise provided in this 

7 title, the Board shall establish model payment methodolo8 gies and other incentives that promote the provision of 

9 covered health care services in medically underserved 

10 areas, particularly in rural and inner-city underserved 

11 areas. 

12 (b) CONSTRUCTION.—Nothing in this title shall be 

13 construed as limiting the authority of State health security 

14 programs to increase payment amounts or otherwise pro15 vide additional incentives, consistent with the State health 

16 security budget, to encourage the provision of medically 

17 necessary and appropriate services in underserved areas. 

18 SEC. 619. AUTHORITY FOR ALTERNATIVE PAYMENT METH19 ODOLOGIES. 

20 A State health security program, as part of its plan 

21 under section 404(a), may use a payment methodology 

22 other than a methodology required under this subtitle so 

23 long as— 

24 (1) such payment methodology does not affect 

25 the entitlement of individuals to coverage, the 


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1 weighting of fee schedules to encourage an increase 

2 in the number of primary care providers, the ability 

3 of individuals to choose among qualified providers, 

4 the benefits covered under the program, or the com5 pliance of the program with the State health security 

6 budget under subtitle A; and 

7 (2) the program submits periodic reports to the 

8 Board showing the operation and effectiveness of the 

9 alternative methodology, in order for the Board to 

10 evaluate the appropriateness of applying the alter11 native methodology to other States. 

12 Subtitle C—Mandatory Assignment 

13 and Administrative Provisions 

14 SEC. 631. MANDATORY ASSIGNMENT. 

15 (a) NO BALANCE BILLING.—Payments for benefits 

16 under this Act shall constitute payment in full for such 

17 benefits and the entity furnishing an item or service for 

18 which payment is made under this Act shall accept such 

19 payment as payment in full for the item or service and 

20 may not accept any payment or impose any charge for 

21 any such item or service other than accepting payment 

22 from the State health security program in accordance with 

23 this Act. 

24 (b) ENFORCEMENT.—If an entity knowingly and will25 fully bills for an item or service or accepts payment in 


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1 violation of subsection (a), the Board may apply sanctions 

2 against the entity in the same manner as sanctions could 

3 have been imposed under section 1842(j)(2) of the Social 

4 Security Act for a violation of section 1842(j)(1) of such 

5 Act. Such sanctions are in addition to any sanctions that 

6 a State may impose under its State health security pro7 gram. 

8 SEC. 632. PROCEDURES FOR REIMBURSEMENT; APPEALS. 

9 (a) PROCEDURES FOR REIMBURSEMENT.—In accord10 ance with standards issued by the Board, a State health 

11 security program shall establish a timely and administra12 tively simple procedure to ensure payment within 60 days 

13 of the date of submission of clean claims by providers 

14 under this Act. 

15 (b) APPEALS PROCESS.—Each State health security 

16 program shall establish an appeals process to handle all 

17 grievances pertaining to payment to providers under this 

18 title. 


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1 TITLE VII—PROMOTION OF PRI2 MARY HEALTH CARE; DEVEL3 OPMENT OF HEALTH SERV4 ICE CAPACITY; PROGRAMS TO 

5 ASSIST THE MEDICALLY UN6 DERSERVED 

7 Subtitle A—Promotion and Expan8 sion of Primary Care Profes9 sional Training 

10 SEC. 701. ROLE OF BOARD; ESTABLISHMENT OF PRIMARY 

11 CARE PROFESSIONAL OUTPUT GOALS. 

12 (a) IN GENERAL.—The Board is responsible for— 

13 (1) coordinating health professional education 

14 policies and goals, in consultation with the Secretary 

15 of Health and Human Services (in this title referred 

16 to as the ‘‘Secretary’’), to achieve the national goals 

17 specified in subsection (b); 

18 (2) overseeing the health professional education 

19 expenditures of the State health security programs 

20 from the account established under section 602(c); 

21 (3) developing and maintaining, in cooperation 

22 with the Secretary, a system to monitor the number 

23 and specialties of individuals through their health 

24 professional education, any postgraduate training, 

25 and professional practice; and 


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1 (4) developing, coordinating, and promoting 

2 other policies that expand the number of primary 

3 care practitioners. 

4 (b) NATIONAL GOALS.—The national goals specified 

5 in this subsection are as follows: 

6 (1) GRADUATE MEDICAL EDUCATION.—By not 

7 later than 5 years after the date of the enactment 

8 of this Act, at least 50 percent of the residents in 

9 medical residency education programs (as defined in 

10 subsection (e)(1)) are primary care residents (as de11 fined in subsection (e)(3)). 

12 (2) MIDLEVEL PRIMARY CARE PRACTI13 TIONERS.—To ensure an adequate supply of primary 

14 care practitioners, there shall be a number, specified 

15 by the Board, of midlevel primary care practitioners 

16 (as defined in subsection (e)(2)) employed in the 

17 health care system as of January 1, 2015. 

18 (3) DENTISTRY.—To ensure an adequate sup19 ply of dental care practitioners, there shall be a 

20 number, specified by the Board, of dentists (as de21 fined in subsection (e)(1)) employed in the health 

22 care system as of January 1, 2015. 

23 (c) METHOD FOR ATTAINMENT OF NATIONAL GOAL

24 FOR GRADUATE MEDICAL EDUCATION; PROGRAM

25 GOALS.— 


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1 (1) IN GENERAL.—The Board shall establish a 

2 method of applying the national goal in subsection 

3 (b)(1) to program goals for each medical residency 

4 education program or to medical residency education 

5 consortia. 

6 (2) CONSIDERATION.—The program goals 

7 under paragraph (1) shall be based on the distribu8 tion of medical schools and other teaching facilities 

9 within each State health security program, and the 

10 number of positions for graduate medical education. 

11 (3) MEDICAL RESIDENCY EDUCATION CONSOR12 TIUM.—In this subsection, the term ‘‘medical resi13 dency education consortium’’ means a consortium of 

14 medical residency education programs in a contig15 uous geographic area (which may be an interstate 

16 area) if the consortium— 

17 (A) includes at least 1 medical school with 

18 a teaching hospital and related teaching set19 tings; and 

20 (B) has an affiliation with qualified com21 munity-based primary health service providers 

22 described in section 202(a) and with at least 1 

23 comprehensive health service organization es24 tablished under section 303. 


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1 (4) ENFORCEMENT THROUGH STATE HEALTH

2 SECURITY BUDGETS.—The Board shall develop a 

3 formula for reducing payments to State health secu4 rity programs (that provide for payments to a med5 ical residency education program) that failed to meet 

6 the goal for the program established under this sub7 section. 

8 (d) METHOD FOR ATTAINMENT OF NATIONAL GOAL

9 FOR MIDLEVEL PRIMARY CARE PRACTITIONERS.—To as10 sist in attaining the national goal identified in subsection 

11 (b)(2), the Board shall— 

12 (1) advise the Public Health Service on alloca13 tions of funding under titles VII and VIII of the 

14 Public Health Service Act, the National Health 

15 Service Corps, and other programs in order to in16 crease the supply of midlevel primary care practi17 tioners; and 

18 (2) commission a study of the potential benefits 

19 and disadvantages of expanding the scope of practice 

20 authorized under State laws for any class of midlevel 

21 primary care practitioners. 

22 (e) DEFINITIONS.—In this title: 

23 (1) DENTIST.—The term ‘‘dentist’’ means a 

24 practitioner who performs the evaluation, diagnosis, 

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1 lated procedures) of diseases, disorders or conditions 

2 of the oral cavity, maxillofacial area or the adjacent 

3 and associated structures and their impact on the 

4 human body, within the scope of his or her edu5 cation, training and experience, in accordance with 

6 the ethics of the profession and applicable law. 

7 (2) MEDICAL RESIDENCY EDUCATION PRO8 GRAM.—The term ‘‘medical residency education pro9 gram’’ means a program that provides education 

10 and training to graduates of medical schools in order 

11 to meet requirements for licensing and certification 

12 as a physician, and includes the medical school su13 pervising the program and includes the hospital or 

14 other facility in which the program is operated. 

15 (3) MIDLEVEL PRIMARY CARE PRACTI16 TIONER.—The term ‘‘midlevel primary care practi17 tioner’’ means a clinical nurse practitioner, certified 

18 nurse midwife, physician assistance, or other non19 physician practitioner, specified by the Board, as au20 thorized to practice under State law. 

21 (4) PRIMARY CARE RESIDENT.—The term ‘‘pri22 mary care resident’’ means (in accordance with cri23 teria established by the Board) a resident being 

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1 icine, general practice, general internal medicine, or 

2 general pediatrics. 

3 SEC. 702. ESTABLISHMENT OF ADVISORY COMMITTEE ON 

4 HEALTH PROFESSIONAL EDUCATION. 

5 (a) IN GENERAL.—The Board shall provide for an 

6 Advisory Committee on Health Professional Education (in 

7 this section referred to as the ‘‘Committee’’) to advise the 

8 Board on its activities under section 701. 

9 (b) MEMBERSHIP.—The Committee shall be com10 posed of— 

11 (1) the Chair of the Board, who shall serve as 

12 Chair of the Committee; and 

13 (2) 12 members, not otherwise in the employ of 

14 the United States, appointed by the Board without 

15 regard to the provisions of title 5, United States 

16 Code, governing appointments in the competitive 

17 service. 

18 The appointed members shall provide a balanced point of 

19 view with respect to health professional education, primary 

20 care disciplines, and health care policy and shall include 

21 individuals who are representative of medical schools, 

22 other health professional schools, residency programs, pri23 mary care practitioners, teaching hospitals, professional 

24 associations, public health organizations, State health se25 curity programs, and consumers. 


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1 (c) TERMS OF MEMBERS.—Each appointed member 

2 shall hold office for a term of 5 years, except that— 

3 (1) any member appointed to fill a vacancy oc4 curring during the term for which the member’s 

5 predecessor was appointed shall be appointed for the 

6 remainder of that term; and 

7 (2) the terms of the members first taking office 

8 shall expire, as designated by the Board at the time 

9 of appointment, 2 at the end of the second year, 2 

10 at the end of the third year, 2 at the end of the 

11 fourth year, and 3 at the end of the fifth year after 

12 the date of enactment of this Act. 

13 (d) VACANCIES.— 

14 (1) IN GENERAL.—The Board shall fill any va15 cancy in the membership of the Committee in the 

16 same manner as the original appointment. The va17 cancy shall not affect the power of the remaining 

18 members to execute the duties of the Committee. 

19 (2) VACANCY APPOINTMENTS.—Any member 

20 appointed to fill a vacancy shall serve for the re21 mainder of the term for which the predecessor of the 

22 member was appointed. 

23 (3) REAPPOINTMENT.—The Board may re24 appoint an appointed member of the Committee for 


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1 a second term in the same manner as the original 

2 appointment. 

3 (e) DUTIES.—It shall be the duty of the Committee 

4 to advise the Board concerning graduate medical edu5 cation policies under this title. 

6 (f) STAFF.—The Committee, its members, and any 

7 committees of the Committee shall be provided with such 

8 secretarial, clerical, or other assistance as may be author9 ized by the Board for carrying out their respective func10 tions. 

11 (g) MEETINGS.—The Committee shall meet as fre12 quently as the Board deems necessary, but not less than 

13 4 times each year. Upon request by 4 or more members 

14 it shall be the duty of the Chair to call a meeting of the 

15 Committee. 

16 (h) COMPENSATION.—Members of the Committee 

17 shall be reimbursed by the Board for travel and per diem 

18 in lieu of subsistence expenses during the performance of 

19 duties of the Board in accordance with subchapter I of 

20 chapter 57 of title 5, United States Code. 

21 (i) FACA NOT APPLICABLE.—The provisions of the 

22 Federal Advisory Committee Act shall not apply to the 

23 Committee. 


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1 SEC. 703. GRANTS FOR HEALTH PROFESSIONS EDUCATION, 

2 NURSE EDUCATION, AND THE NATIONAL 

3 HEALTH SERVICE CORPS. 

4 (a) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

5 (1) IN GENERAL.—The Board shall make trans6 fers from the American Health Security Trust Fund 

7 to the Public Health Service under subpart II of 

8 part D of title III, title VII, and title VIII of the 

9 Public Health Service Act for the support of the Na10 tional Health Service Corps, health professions edu11 cation, and nursing education, including education of 

12 clinical nurse practitioners, certified registered nurse 

13 anesthetists, certified nurse midwives, and physician 

14 assistants. 

15 (2) FISCAL YEAR 2016 AND SUBSEQUENT

16 YEARS.—The amount transferred for the support of 

17 the National Health Service Corps for fiscal year 

18 2016 and each subsequent fiscal year shall be equal 

19 to the amount transferred for the preceding fiscal 

20 year adjusted by the product of— 

21 (A) one plus the average percentage in22 crease in the costs of health professions edu23 cation during the prior fiscal year; and 

24 (B) one plus the average percentage 

25 change in the number of individuals residing in 

26 health professions shortage areas designated 


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1 under section 333 during the prior fiscal year, 

2 relative to the number of individuals residing in 

3 such areas during the previous fiscal year. 

4 (b) RANGE OF FUNDS.—The amount of transfers 

5 under subsection (a) for any fiscal year for title VII and 

6 VIII shall be an amount (specified by the Board each 

year) not less than 3⁄100 percent and not to exceed 4 7 ⁄100

8 percent of the amounts the Board estimates will be ex9 pended from the Trust Fund in the fiscal year. 

10 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

11 funds provided under this section with respect to provision 

12 of services are in addition to, and not in replacement of, 

13 funds made available under the provisions referred to in 

14 subsection (a) and shall be administered in accordance 

15 with the terms of such provisions. The Board shall make 

16 no transfer of funds under this section for any fiscal year 

17 for which the total appropriations for the programs au18 thorized by such provisions are less than the total amount 

19 appropriated for such programs in fiscal year 2010. 

20 Subtitle B—Direct Health Care 

21 Delivery 

22 SEC. 711. SET-ASIDE FOR PUBLIC HEALTH. 

23 (a) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

24 From the amounts provided under subsection (c), the 

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1 curity Trust Fund to the Public Health Service for the 

2 following purposes (other than payment for services cov3 ered under title II): 

4 (1) For payments to States under the maternal 

5 and child health block grants under title V of the 

6 Social Security Act (42 U.S.C. 701 et seq.). 

7 (2) For prevention and treatment of tuber8 culosis under section 317 of the Public Health Serv9 ice Act (42 U.S.C. 247b). 

10 (3) For the prevention and treatment of sexu11 ally transmitted diseases under section 318 of the 

12 Public Health Service Act (42 U.S.C. 247c). 

13 (4) Preventive health block grants under part A 

14 of title XIX of the Public Health Service Act (42 

15 U.S.C. 300w et seq.). 

16 (5) Grants to States for community mental 

17 health services under subpart I of part B of title 

18 XIX of the Public Health Service Act (42 U.S.C. 

19 300x et seq.). 

20 (6) Grants to States for prevention and treat21 ment of substance abuse under subpart II of part B 

22 of title XIX of the Public Health Service Act (42 

23 U.S.C. 300x–21 et seq.). 


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1 (7) Grants for HIV health care services under 

2 parts A, B, and C of title XXVI of the Public 

3 Health Service Act (42 U.S.C. 300ff–11 et seq.). 

4 (8) Public health formula grants described in 

5 subsection (d). 

6 (b) RANGE OF FUNDS.—The amount of transfers 

7 under subsection (a) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 1 8 ⁄10 percent and not to exceed 14 9 ⁄100 percent of the amounts the 

10 Board estimates will be expended from the Trust Fund 

11 in the fiscal year. 

12 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

13 funds provided under this section with respect to provision 

14 of services are in addition to, and not in replacement of, 

15 funds made available under the programs referred to in 

16 subsection (a) and shall be administered in accordance 

17 with the terms of such programs. 

18 (d) REQUIRED REPORTS ON HEALTH STATUS.—The 

19 Secretary shall require each State receiving funds under 

20 this section to submit annual reports to the Secretary on 

21 the health status of the population and measurable objec22 tives for improving the health of the public in the State. 

23 Such reports shall include the following: 

24 (1) A comparison of the measures of the State 

25 and local public health system compared to relevant 


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1 objectives set forth in ‘‘Healthy People 2020’’ or 

2 subsequent national objectives set by the Secretary. 

3 (2) A description of health status measures to 

4 be improved within the State (at the State and local 

5 levels) through expanded public health functions and 

6 health promotion and disease prevention programs. 

7 (3) Measurable outcomes and process objectives 

8 for improving health status, and a report on out9 comes from the previous year. 

10 (4) Information regarding how Federal funding 

11 has improved population-based prevention activities 

12 and programs. 

13 (5) A description of the core public health func14 tions to be carried out at the local level. 

15 (6) A description of the relationship between 

16 the State’s public health system, community-based 

17 health promotion and disease prevention providers, 

18 and the State health security program. 

19 (e) LIMITATION ON FUND TRANSFERS.—The Board 

20 shall make no transfer of funds under this section for any 

21 fiscal year for which the total appropriations for such pro22 grams are less than the total amount appropriated for 

23 such programs in fiscal year 2010. 

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1 mula grants for the purpose of carrying out core public 

2 health functions to monitor and protect the health of com3 munities from communicable diseases and exposure to 

4 toxic environmental pollutants, occupational hazards, 

5 harmful products, and poor health outcomes. Such func6 tions include the following: 

7 (1) Data collection, analysis, and assessment of 

8 public health data, vital statistics, and personal 

9 health data to assess community health status and 

10 outcomes reporting. This function includes the ac11 quisition and installation of hardware and software, 

12 and personnel training and technical assistance to 

13 operate and support automated and integrated infor14 mation systems. 

15 (2) Activities to protect the environment and to 

16 ensure the safety of housing, workplaces, food, and 

17 water. 

18 (3) Investigation and control of adverse health 

19 conditions, and threats to the health status of indi20 viduals and the community. This function includes 

21 the identification and control of outbreaks of infec22 tious disease, patterns of chronic disease and injury, 

23 and cooperative activities to reduce the levels of vio24 lence. 


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1 (4) Health promotion and disease prevention 

2 activities for which there is a significant need and a 

3 high priority of the Public Health Service. 

4 (5) The provision of public health laboratory 

5 services to complement private clinical laboratory 

6 services, including— 

7 (A) screening tests for metabolic diseases 

8 in newborns; 

9 (B) toxicology assessments of blood lead 

10 levels and other environmental toxins; 

11 (C) tuberculosis and other diseases requir12 ing partner notification; and 

13 (D) testing for infectious and food-borne 

14 diseases. 

15 (6) Training and education for the public 

16 health professions. 

17 (7) Research on effective and cost-effective pub18 lic health practices. This function includes the devel19 opment, testing, evaluation, and publication of re20 sults of new prevention and public health control 

21 interventions. 

22 (8) Integration and coordination of the preven23 tion programs and services of community-based pro24 viders, local and State health departments, and 


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1 other sectors of State and local government that af2 fect health. 

3 SEC. 712. SET-ASIDE FOR PRIMARY HEALTH CARE DELIV4 ERY. 

5 (a) TRANSFERS TO SECTION 330 PROGRAM OF THE

6 PUBLIC HEALTH SERVICE ACT.— 

7 (1) IN GENERAL.—The Board shall make trans8 fers from the American Health Security Trust Fund 

9 to the Public Health Service for the program author10 ized under section 330 of the Public Health Service 

11 Act (42 U.S.C. 254b). 

12 (2) FISCAL YEAR 2016 AND SUBSEQUENT

13 YEARS.—The amount transferred for fiscal year 

14 2016 and each subsequent fiscal year shall be equal 

15 to the amount transferred for the preceding fiscal 

16 year adjusted by the product of— 

17 (A) one plus the average percentage in18 crease in costs incurred per patient served by 

19 entities receiving funding under such section; 

20 and 

21 (B) one plus the average percentage in22 crease in the total number of patients served by 

23 entities receiving funding under such section. 

24 (b) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

25 From the amounts provided under subsection (d), the 


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1 Board shall make transfers from the American Health Se2 curity Trust Fund to the Public Health Service for the 

3 program of primary care service expansion grants under 

4 subpart V of part D of title III of the Public Health Serv5 ice Act (as added by section 713 of this Act). 

6 (c) RANGE OF FUNDS.—The amount of transfers 

7 under subsection (b) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 6 8 ⁄100 percent and not to exceed 1 9 ⁄10 percent of the amounts the 

10 Board estimates will be expended from the Trust Fund 

11 in the fiscal year. 

12 (d) FUNDS SUPPLEMENTAL TO OTHER FUNDS.— 

13 The funds provided under this section with respect to pro14 vision of services are in addition to, and not in replace15 ment of, funds made available under the sections 340A, 

16 1001, and 2655 of the Public Health Service Act. The 

17 Board shall make no transfer of funds under this section 

18 for any fiscal year for which the total appropriations for 

19 such sections are less than the total amount appropriated 

20 under such sections in fiscal year 2010. 

21 SEC. 713. PRIMARY CARE SERVICE EXPANSION GRANTS. 

22 (a) IN GENERAL.—Part D of title III of the Public 

23 Health Service Act (42 U.S.C. 254b et seq.) is amended 

24 by adding at the end the following new subpart: 


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1 ‘‘Subpart XIII—Primary Care Expansion 

2 ‘‘SEC. 340J. EXPANDING PRIMARY CARE DELIVERY CAPAC3 ITY IN URBAN AND RURAL AREAS. 

4 ‘‘(a) GRANTS FOR PRIMARY CARE CENTERS.—From 

5 the amounts described in subsection (c), the American 

6 Health Security Standards Board shall make grants to 

7 public and nonprofit private entities for projects to plan 

8 and develop primary care centers which will serve medi9 cally underserved populations (as defined in section 

10 330(b)(3)) in urban and rural areas and to deliver primary 

11 care services to such populations in such areas. The funds 

12 provided under such a grant may be used for the same 

13 purposes for which a grant may be made under subsection 

14 (c), (e), (f), (g), (h), or (i) of section 330. 

15 ‘‘(b) PROCESS OF AWARDING GRANTS.—The provi16 sions of subsection (k)(1) of section 330 shall apply to 

17 a grant under this section in the same manner as they 

18 apply to a grant under the corresponding subsection of 

19 such section. The provisions of subsection (r)(2)(A) of 

20 such section shall apply to grants for projects to plan and 

21 develop primary care centers under this section in the 

22 same manner as they apply to grants under such section. 

23 ‘‘(c) FUNDING AS SET-ASIDE FROM TRUST FUND.— 

24 Funds in the American Health Security Trust Fund (es25 tablished under section 801 of the act) shall be available 

26 to carry out this section. 


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1 ‘‘(d) PRIMARY CARE CENTER DEFINED.—In this sec2 tion, the term ‘primary care center’ means— 

3 ‘‘(1) a health center (as defined in section 

4 330(a)(1)); 

5 ‘‘(2) an entity qualified to receive a grant under 

6 section 330, 1001, or 2651; or 

7 ‘‘(3) a Federally-qualified health center (as de8 fined in section 1905(l)(2)(B) of the Social Security 

9 Act).’’. 

10 (b) TECHNICAL AMENDMENTS.—Part D of title III 

11 of the Public Health Service Act (42 U.S.C. 254b et seq.) 

12 is amended— 

13 (1) by redesignating subpart XI, as added by 

14 section 10333 of the Patient Protection and Afford15 able Care Act (Public Law 111–148), as subpart 

16 XII; and 

17 (2) by redesignating section 340H of the Public 

18 Health Service Act (42 U.S.C. 256i), as added by 

19 section 10333 of the Patient Protection and Afford20 able Care Act (Public Law 111–148), as section 

21 340I. 


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1 Subtitle C—Primary Care and 

2 Outcomes Research 

3 SEC. 721. SET-ASIDE FOR OUTCOMES RESEARCH. 

4 (a) GRANTS FOR OUTCOMES RESEARCH.—The 

5 Board shall make transfers from the American Health Se6 curity Trust Fund to the Agency for Healthcare Research 

7 and Quality under title IX of the Public Health Service 

8 Act (42 U.S.C. 299 et seq.) for the purpose of carrying 

9 out activities under such title. The Secretary shall assure 

10 that there is a special emphasis placed on pediatric out11 comes research. 

12 (b) RANGE OF FUNDS.—The amount of transfers 

13 under subsection (a) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 1 14 ⁄100 percent and not to exceed 2 15 ⁄100 percent of the amounts the 

16 Board estimates will be expended from the Trust Fund 

17 in the fiscal year. 

18 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

19 funds provided under this section with respect to provision 

20 of services are in addition to, and not in replacement of, 

21 funds made available to the Agency for Healthcare Re22 search and Quality under section 947 of the Public Health 

23 Service Act (42 U.S.C. 299c–6). The Board shall make 

24 no transfer of funds under this section for any fiscal year 

25 for which the total appropriations under such section are 


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1 less than the total amount appropriated under such sec2 tion and title in fiscal year 2010. 

3 (d) CONFORMING AMENDMENT.—Section 947(b) of 

4 the Public Health Service Act (42 U.S.C. 299c–6(b)) is 

5 amended by inserting after ‘‘of the fiscal years 2001 

6 through 2005’’ the following: ‘‘and of fiscal year 2012 and 

7 each subsequent year’’. 

8 SEC. 722. OFFICE OF PRIMARY CARE AND PREVENTION RE9 SEARCH. 

10 (a) IN GENERAL.—Title IV of the Public Health 

11 Service Act is amended— 

12 (1) by redesignating parts G through I as parts 

13 H through J, respectively; and 

14 (2) by inserting after part F the following new 

15 part: 

16 ‘‘PART G—RESEARCH ON PRIMARY CARE AND 

17 PREVENTION 

18 ‘‘SEC. 486E. OFFICE OF PRIMARY CARE AND PREVENTION 

19 RESEARCH. 

20 ‘‘(a) ESTABLISHMENT.—There is established within 

21 the Office of the Director of NIH an office to be known 

22 as the Office of Primary Care and Prevention Research 

23 (in this part referred to as the ‘Office’). The Office shall 

24 be headed by a director, who shall be appointed by the 

25 Director of NIH. 


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1 ‘‘(b) PURPOSE.—The Director of the Office shall— 

2 ‘‘(1) identify projects of research on primary 

3 care and prevention, for children as well as adults, 

4 that should be conducted or supported by the na5 tional research institutes, with particular emphasis 

6 on— 

7 ‘‘(A) clinical patient care, with special em8 phasis on pediatric clinical care and diagnosis; 

9 ‘‘(B) diagnostic effectiveness; 

10 ‘‘(C) primary care education; 

11 ‘‘(D) health and family planning services; 

12 ‘‘(E) medical effectiveness outcomes of pri13 mary care procedures and interventions; and 

14 ‘‘(F) the use of multidisciplinary teams of 

15 health care practitioners; 

16 ‘‘(2) identify multidisciplinary research related 

17 to primary care and prevention that should be so 

18 conducted; 

19 ‘‘(3) promote coordination and collaboration 

20 among entities conducting research identified under 

21 any of paragraphs (1) and (2); 

22 ‘‘(4) encourage the conduct of such research by 

23 entities receiving funds from the national research 

24 institutes; 


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1 ‘‘(5) recommend an agenda for conducting and 

2 supporting such research; 

3 ‘‘(6) promote the sufficient allocation of the re4 sources of the national research institutes for con5 ducting and supporting such research; and 

6 ‘‘(7) prepare the report required under section 

7 486G. 

8 ‘‘(c) PRIMARY CARE AND PREVENTION RESEARCH

9 DEFINED.—For purposes of this part, the term ‘primary 

10 care and prevention research’ means research on improve11 ment of the practice of family medicine, general internal 

12 medicine, and general pediatrics, and includes research re13 lating to— 

14 ‘‘(1) obstetrics and gynecology, dentistry, or 

15 mental health or substance abuse treatment when 

16 provided by a primary care physician or other pri17 mary care practitioner; and 

18 ‘‘(2) primary care provided by multidisciplinary 

19 teams. 

20 ‘‘SEC. 486F. NATIONAL DATA SYSTEM AND CLEARINGHOUSE 

21 ON PRIMARY CARE AND PREVENTION RE22 SEARCH. 

23 ‘‘(a) DATA SYSTEM.—The Director of NIH, in con24 sultation with the Director of the Office, shall establish 

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1 trieval, and dissemination of information regarding pri2 mary care and prevention research that is conducted or 

3 supported by the national research institutes. Information 

4 from the data system shall be available through informa5 tion systems available to health care professionals and pro6 viders, researchers, and members of the public. 

7 ‘‘(b) CLEARINGHOUSE.—The Director of NIH, in 

8 consultation with the Director of the Office and with the 

9 National Library of Medicine, shall establish, maintain, 

10 and operate a program to provide, and encourage the use 

11 of, information on research and prevention activities of the 

12 national research institutes that relate to primary care 

13 and prevention research. 

14 ‘‘SEC. 486G. BIENNIAL REPORT. 

15 ‘‘(a) IN GENERAL.—With respect to primary care 

16 and prevention research, the Director of the Office shall, 

17 not later than 1 year after the date of the enactment of 

18 this part, and biennially thereafter, prepare a report— 

19 ‘‘(1) describing and evaluating the progress 

20 made during the preceding 2 fiscal years in research 

21 and treatment conducted or supported by the Na22 tional Institutes of Health; 

23 ‘‘(2) summarizing and analyzing expenditures 

24 made by the agencies of such Institutes (and by 

25 such Office) during the preceding 2 fiscal years; and 


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1 ‘‘(3) making such recommendations for legisla2 tive and administrative initiatives as the Director of 

3 the Office determines to be appropriate. 

4 ‘‘(b) INCLUSION IN BIENNIAL REPORT OF DIRECTOR

5 OF NIH.—The Director of the Office shall submit each 

6 report prepared under subsection (a) to the Director of 

7 NIH for inclusion in the report submitted to the President 

8 and the Congress under section 403. 

9 ‘‘SEC. 486H. AUTHORIZATION OF APPROPRIATIONS. 

10 ‘‘For the Office of Primary Care and Prevention Re11 search, there are authorized to be appropriated 

12 $150,000,000 for fiscal year 2012, $180,000,000 for fis13 cal year 2013, and $216,000,000 for fiscal year 2014.’’. 

14 (b) REQUIREMENT OF SUFFICIENT ALLOCATION OF

15 RESOURCES OF INSTITUTES.—Section 402(b) of the Pub16 lic Health Service Act (42 U.S.C. 282(b)) is amended— 

17 (1) in paragraph (23), by striking ‘‘and’’ after 

18 the semicolon at the end; 

19 (2) in paragraph (24), by striking the period at 

20 the end and inserting ‘‘; and’’; and 

21 (3) by inserting after paragraph (24) the fol22 lowing new paragraph: 

23 ‘‘(25) after consultation with the Director of 

24 the Office of Primary Care and Prevention Re25 search, shall ensure that resources of the National 


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1 Institutes of Health are sufficiently allocated for 

2 projects on primary care and prevention research 

3 that are identified under section 486E(b).’’. 

4 Subtitle D—School-Related Health 

5 Services 

6 SEC. 731. AUTHORIZATIONS OF APPROPRIATIONS. 

7 (a) FUNDING FOR SCHOOL-RELATED HEALTH SERV8 ICES.—For the purpose of carrying out this subtitle, there 

9 are authorized to be appropriated $100,000,000 for fiscal 

10 year 2014, $275,000,000 for fiscal year 2015, 

11 $350,000,000 for fiscal year 2016, and $400,000,000 for 

12 each of the fiscal years 2017 and 2018. 

13 (b) RELATION TO OTHER FUNDS.—The authoriza14 tions of appropriations established in subsection (a) are 

15 in addition to any other authorizations of appropriations 

16 that are available for the purpose described in such sub17 section. 

18 SEC. 732. ELIGIBILITY FOR DEVELOPMENT AND OPER19 ATION GRANTS. 

20 (a) IN GENERAL.—Entities eligible to apply for and 

21 receive grants under section 734 or 735 are the following: 

22 (1) State health agencies that apply on behalf 

23 of local community partnerships and other commu24 nities in need of health services for school-aged chil25 dren within the State. 


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1 (2) Local community partnerships in States in 

2 which health agencies have not applied. 

3 (b) LOCAL COMMUNITY PARTNERSHIPS.— 

4 (1) IN GENERAL.—A local community partner5 ship under subsection (a)(2) is an entity that, at a 

6 minimum, includes— 

7 (A) a local health care provider with expe8 rience in delivering services to school-aged chil9 dren; 

10 (B) 1 or more local public schools; and 

11 (C) at least 1 community-based organiza12 tion located in the community to be served that 

13 has a history of providing services to school14 aged children in the community who are at-risk. 

15 (2) PARTICIPATION.—A partnership described 

16 in paragraph (1) shall, to the maximum extent fea17 sible, involve broad based community participation 

18 from parents and adolescent children to be served, 

19 health and social service providers, teachers and 

20 other public school and school board personnel, de21 velopment and service organizations for adolescent 

22 children, and interested business leaders. Such par23 ticipation may be evidenced through an expanded 

24 partnership, or an advisory board to such partner25 ship. 


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1 (c) DEFINITIONS REGARDING CHILDREN.—For pur2 poses of this subtitle: 

3 (1) The term ‘‘adolescent children’’ means 

4 school-aged children who are adolescents. 

5 (2) The term ‘‘school-aged children’’ means in6 dividuals who are between the ages of 4 and 19 (in7 clusive). 

8 SEC. 733. PREFERENCES. 

9 (a) IN GENERAL.—In making grants under sections 

10 734 and 735, the Secretary shall give preference to appli11 cants whose communities to be served show the most sub12 stantial level of need for such services among school-aged 

13 children, as measured by indicators of community health 

14 including the following: 

15 (1) High levels of poverty. 

16 (2) The presence of a medically underserved 

17 population. 

18 (3) The presence of a health professional short19 age area. 

20 (4) High rates of indicators of health risk 

21 among school-aged children, including a high propor22 tion of such children receiving services through the 

23 Individuals with Disabilities Education Act, adoles24 cent pregnancy, sexually transmitted disease (includ25 ing infection with the human immunodeficiency 


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1 virus), preventable disease, communicable disease, 

2 intentional and unintentional injuries, community 

3 and gang violence, unemployment among adolescent 

4 children, juvenile justice involvement, and high rates 

5 of drug and alcohol exposure. 

6 (b) LINKAGE TO COMMUNITY HEALTH CENTERS.— 

7 In making grants under sections 734 and 735, the Sec8 retary shall give preference to applicants that demonstrate 

9 a linkage to community health centers. 

10 SEC. 734. GRANTS FOR DEVELOPMENT OF PROJECTS. 

11 (a) IN GENERAL.—The Secretary may make grants 

12 to State health agencies or to local community partner13 ships to develop school health service sites. 

14 (b) USE OF FUNDS.—A project for which a grant 

15 may be made under subsection (a) may include the cost 

16 of the following: 

17 (1) Planning for the provision of school health 

18 services. 

19 (2) Recruitment, compensation, and training of 

20 health and administrative staff. 

21 (3) The development of agreements, and the ac22 quisition and development of equipment and infor23 mation services, necessary to support information 

24 exchange between school health service sites and 


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1 health plans, health providers, and other entities au2 thorized to collect information under this Act. 

3 (4) Other activities necessary to assume oper4 ational status. 

5 (c) APPLICATION FOR GRANT.— 

6 (1) IN GENERAL.—Applicants shall submit ap7 plications in a form and manner prescribed by the 

8 Secretary. 

9 (2) APPLICATIONS BY STATE HEALTH AGEN10 CIES.— 

11 (A) In the case of applicants that are State 

12 health agencies, the application shall contain 

13 assurances that the State health agency is ap14 plying for funds— 

15 (i) on behalf of at least 1 local com16 munity partnership; and 

17 (ii) on behalf of at least 1 other com18 munity identified by the State as in need 

19 of the services funded under this subtitle 

20 but without a local community partnership. 

21 (B) In the case of the communities identi22 fied in applications submitted by State health 

23 agencies that do not yet have local community 

24 partnerships (including the community identi25 fied under subparagraph (A)(ii)), the State 


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1 shall describe the steps that will be taken to aid 

2 the communities in developing a local commu3 nity partnership. 

4 (C) A State applying on behalf of local 

5 community partnerships and other communities 

6 may retain not more than 10 percent of grants 

7 awarded under this subtitle for administrative 

8 costs. 

9 (d) CONTENTS OF APPLICATION.—In order to receive 

10 a grant under this section, an applicant shall include in 

11 the application the following information: 

12 (1) An assessment of the need for school health 

13 services in the communities to be served, using the 

14 latest available health data and health goals and ob15 jectives established by the Secretary. 

16 (2) A description of how the applicant will de17 sign the proposed school health services to reach the 

18 maximum number of school-aged children who are at 

19 risk. 

20 (3) An explanation of how the applicant will in21 tegrate its services with those of other health and 

22 social service programs within the community. 

23 (4) A description of a quality assurance pro24 gram which complies with standards that the Sec25 retary may prescribe. 


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1 (e) NUMBER OF GRANTS.—Not more than 1 planning 

2 grant may be made to a single applicant. A planning grant 

3 may not exceed 2 years in duration. 

4 SEC. 735. GRANTS FOR OPERATION OF PROJECTS. 

5 (a) IN GENERAL.—The Secretary may make grants 

6 to State health agencies or to local community partner7 ships for the cost of operating school health service sites. 

8 (b) USE OF GRANT.—The costs for which a grant 

9 may be made under this section include the following: 

10 (1) The cost of furnishing health services that 

11 are not otherwise covered under this Act or by any 

12 other public or private insurer. 

13 (2) The cost of furnishing services whose pur14 pose is to increase the capacity of individuals to uti15 lize available health services, including transpor16 tation, community and patient outreach, patient 

17 education, translation services, and such other serv18 ices as the Secretary determines to be appropriate in 

19 carrying out such purpose. 

20 (3) Training, recruitment and compensation of 

21 health professionals and other staff. 

22 (4) Outreach services to school-aged children 

23 who are at risk and to the parents of such children. 

24 (5) Linkage of individuals to health plans, com25 munity health services and social services. 


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1 (6) Other activities deemed necessary by the 

2 Secretary. 

3 (c) APPLICATION FOR GRANT.—Applicants shall sub4 mit applications in a form and manner prescribed by the 

5 Secretary. In order to receive a grant under this section, 

6 an applicant shall include in the application the following 

7 information: 

8 (1) A description of the services to be furnished 

9 by the applicant. 

10 (2) The amounts and sources of funding that 

11 the applicant will expend, including estimates of the 

12 amount of payments the applicant will receive from 

13 sources other than the grant. 

14 (3) Such other information as the Secretary de15 termines to be appropriate. 

16 (d) ADDITIONAL CONTENTS OF APPLICATION.—In 

17 order to receive a grant under this section, an applicant 

18 shall meet the following conditions: 

19 (1) The applicant furnishes the following serv20 ices: 

21 (A) Diagnosis and treatment of simple ill22 nesses and minor injuries. 

23 (B) Preventive health services, including 

24 health screenings. 


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1 (C) Services provided for the purpose de2 scribed in subsection (b)(2). 

3 (D) Referrals and followups in situations 

4 involving illness or injury. 

5 (E) Health and social services, counseling 

6 services, and necessary referrals, including re7 ferrals regarding mental health and substance 

8 abuse. 

9 (F) Such other services as the Secretary 

10 determines to be appropriate. 

11 (2) The applicant is a participating provider in 

12 the State’s program for medical assistance under 

13 title XIX of the Social Security Act. 

14 (3) The applicant does not impose charges on 

15 students or their families for services (including col16 lection of any cost-sharing for services under the 

17 comprehensive benefit package that otherwise would 

18 be required). 

19 (4) The applicant has reviewed and will periodi20 cally review the needs of the population served by 

21 the applicant in order to ensure that its services are 

22 accessible to the maximum number of school-aged 

23 children in the area, and that, to the maximum ex24 tent possible, barriers to access to services of the ap25 plicant are removed (including barriers resulting 


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1 from the area’s physical characteristics, its eco2 nomic, social and cultural grouping, the health care 

3 utilization patterns of such children, and available 

4 transportation). 

5 (5) In the case of an applicant which serves a 

6 population that includes a substantial proportion of 

7 individuals of limited English speaking ability, the 

8 applicant has developed a plan to meet the needs of 

9 such population to the extent practicable in the lan10 guage and cultural context most appropriate to such 

11 individuals. 

12 (6) The applicant will provide non-Federal con13 tributions toward the cost of the project in an 

14 amount determined by the Secretary. 

15 (7) The applicant will operate a quality assur16 ance program consistent with section 734(d). 

17 (e) DURATION OF GRANT.—A grant under this sec18 tion shall be for a period determined by the Secretary. 

19 (f) REPORTS.—A recipient of funding under this sec20 tion shall provide such reports and information as are re21 quired in regulations of the Secretary. 

22 SEC. 736. FEDERAL ADMINISTRATIVE COSTS. 

23 Of the amounts made available under section 731, the 

24 Secretary may reserve not more than 5 percent for admin25 istrative expenses regarding this subtitle. 


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1 SEC. 737. DEFINITIONS. 

2 For purposes of this subtitle: 

3 (1) The term ‘‘adolescent children’’ has the 

4 meaning given such term in section 732(c). 

5 (2) The term ‘‘at risk’’ means at-risk with re6 spect to health. 

7 (3) The term ‘‘community health center’’ has 

8 the meaning given such term in section 330 of the 

9 Public Health Service Act. 

10 (4) The term ‘‘health professional shortage 

11 area’’ means a health professional shortage area des12 ignated under section 332 of the Public Health Serv13 ice Act. 

14 (5) The term ‘‘medically underserved popu15 lation’’ has the meaning given such term in section 

16 330 of the Public Health Service Act. 

17 (6) The term ‘‘school-aged children’’ has the 

18 meaning given such term in section 732(c). 

19 TITLE VIII—FINANCING PROVI20 SIONS; AMERICAN HEALTH 

21 SECURITY TRUST FUND 

22 SEC. 800. AMENDMENT OF 1986 CODE; SECTION 15 NOT TO 

23 APPLY. 

24 (a) AMENDMENT OF 1986 CODE.—Except as other25 wise expressly provided, whenever in this title an amend26 ment or repeal is expressed in terms of an amendment 


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1 to, or repeal of, a section or other provision, the reference 

2 shall be considered to be made to a section or other provi3 sion of the Internal Revenue Code of 1986. 

4 (b) SECTION 15 NOT TO APPLY.—The amendments 

5 made by subtitle B shall not be treated as a change in 

6 a rate of tax for purposes of section 15 of the Internal 

7 Revenue Code of 1986. 

8 Subtitle A—American Health 

9 Security Trust Fund 

10 SEC. 801. AMERICAN HEALTH SECURITY TRUST FUND. 

11 (a) IN GENERAL.—There is hereby created on the 

12 books of the Treasury of the United States a trust fund 

13 to be known as the American Health Security Trust Fund 

14 (in this section referred to as the ‘‘Trust Fund’’). The 

15 Trust Fund shall consist of such gifts and bequests as 

16 may be made and such amounts as may be deposited in, 

17 or appropriated to, such Trust Fund as provided in this 

18 Act. 

19 (b) APPROPRIATIONS INTO TRUST FUND.— 

20 (1) TAXES.—There are hereby appropriated to 

21 the Trust Fund for each fiscal year (beginning with 

22 fiscal year 2013), out of any moneys in the Treasury 

23 not otherwise appropriated, amounts equivalent to 

24 100 percent of the aggregate increase in tax liabil25 ities under the Internal Revenue Code of 1986 which 


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1 is attributable to the application of the amendments 

2 made by this title. The amounts appropriated by the 

3 preceding sentence shall be transferred from time to 

4 time (but not less frequently than monthly) from the 

5 general fund in the Treasury to the Trust Fund, 

6 such amounts to be determined on the basis of esti7 mates by the Secretary of the Treasury of the taxes 

8 paid to or deposited into the Treasury; and proper 

9 adjustments shall be made in amounts subsequently 

10 transferred to the extent prior estimates were in ex11 cess of or were less than the amounts that should 

12 have been so transferred. 

13 (2) CURRENT PROGRAM RECEIPTS.—Notwith14 standing any other provision of law, there are hereby 

15 appropriated to the Trust Fund for each fiscal year 

16 (beginning with fiscal year 2013) the amounts that 

17 would otherwise have been appropriated to carry out 

18 the following programs: 

19 (A) The Medicare program, under parts A, 

20 B, and D of title XVIII of the Social Security 

21 Act (other than amounts attributable to any 

22 premiums under such parts). 

23 (B) The Medicaid program, under State 

24 plans approved under title XIX of such Act. 


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1 (C) The Federal employees health benefit 

2 program, under chapter 89 of title 5, United 

3 States Code. 

4 (D) The TRICARE program (formerly 

5 known as the CHAMPUS program), under 

6 chapter 55 of title 10, United States Code. 

7 (E) The maternal and child health pro8 gram (under title V of the Social Security Act), 

9 vocational rehabilitation programs, programs 

10 for drug abuse and mental health services 

11 under the Public Health Service Act, programs 

12 providing general hospital or medical assistance, 

13 and any other Federal program identified by 

14 the Board, in consultation with the Secretary of 

15 the Treasury, to the extent the programs pro16 vide for payment for health services the pay17 ment of which may be made under this Act. 

18 (c) INCORPORATION OF PROVISIONS.—The provisions 

19 of subsections (b) through (i) of section 1817 of the Social 

20 Security Act shall apply to the Trust Fund under this Act 

21 in the same manner as they applied to the Federal Hos22 pital Insurance Trust Fund under part A of title XVIII 

23 of such Act, except that the American Health Security 

24 Standards Board shall constitute the Board of Trustees 

25 of the Trust Fund. 


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1 (d) TRANSFER OF FUNDS.—Any amounts remaining 

2 in the Federal Hospital Insurance Trust Fund or the Fed3 eral Supplementary Medical Insurance Trust Fund after 

4 the settlement of claims for payments under title XVIII 

5 have been completed, shall be transferred into the Amer6 ican Health Security Trust Fund. 

7 Subtitle B—Taxes Based on Income 

8 and Wages 

9 SEC. 811. PAYROLL TAX ON EMPLOYERS. 

10 (a) IN GENERAL.—Section 3111 (relating to tax on 

11 employers) is amended by redesignating subsections (c) 

12 and (d) as subsection (d) and (e), respectively, and by in13 serting after subsection (b) the following new subsection: 

14 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

15 there is hereby imposed on every employer an excise tax, 

16 with respect to having individuals in his employ, equal to 

17 6.7 percent of the wages (as defined in section 3121(a)) 

18 paid by him with respect to employment (as defined in 

19 section 3121(b)).’’. 

20 (b) SELF-EMPLOYMENT INCOME.—Section 1401 (re21 lating to rate of tax on self-employment income) is amend22 ed by redesignating subsection (c) as subsection (d) and 

23 inserting after subsection (b) the following new subsection: 

24 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

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1 employment income of every individual, a tax equal to 6.7 

2 percent of the amount of the self-employment income for 

3 such taxable year.’’. 

4 (c) COMPARABLE TAXES FOR RAILROAD SERV5 ICES.— 

6 (1) TAX ON EMPLOYERS.—Section 3221 is 

7 amended by redesignating subsections (c) and (d) as 

8 subsections (d) and (e), respectively, and by insert9 ing after subsection (b) the following new subsection: 

10 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

11 there is hereby imposed on every employer an excise tax, 

12 with respect to having individuals in his employ, equal to 

13 6.7 percent of the compensation paid by such employer 

14 for services rendered to such employer.’’. 

15 (2) TAX ON EMPLOYEE REPRESENTATIVES.— 

16 Section 3211 (relating to tax on employee represent17 atives) is amended by redesignating subsection (c) as 

18 subsection (d) and inserting after subsection (b) the 

19 following new paragraph: 

20 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

21 there is hereby imposed on the income of each employee 

22 representative a tax equal to 6.7 percent of the compensa23 tion received during the calendar year by such employee 

24 representative for services rendered by such employee rep25 resentative.’’. 


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1 (3) NO APPLICABLE BASE.—Subparagraph (A) 

2 of section 3231(e)(2) is amended by adding at the 

3 end thereof the following new clause: 

4 ‘‘(iv) HEALTH CARE TAXES.—Clause 

5 (i) shall not apply to the taxes imposed by 

6 sections 3221(c) and 3211(c).’’. 

7 (4) TECHNICAL AMENDMENT.— 

8 (A) Subsection (d) of section 3211, as re9 designated by paragraph (2), is amended by 

10 striking ‘‘and (b)’’ and inserting ‘‘, (b), and 

11 (c)’’. 

12 (B) Subsection (d) of section 3221, as re13 designated by paragraph (1), is amended by 

14 striking ‘‘and (b)’’ and inserting ‘‘, (b), and 

15 (c)’’. 

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

17 this section shall apply to remuneration paid after Decem18 ber 31, 2012. 

19 SEC. 812. HEALTH CARE INCOME TAX. 

20 (a) GENERAL RULE.—Subchapter A of chapter 1 (re21 lating to determination of tax liability) is amended by add22 ing at the end thereof the following new part: 

23 ‘‘PART VIII—HEALTH CARE RELATED TAXES 

‘‘SUBPART A.—HEALTH CARE INCOME TAX ON INDIVIDUALS


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1 ‘‘Subpart A—Health Care Income Tax on Individuals 

‘‘Sec. 59B. Health care income tax. 

2 ‘‘SEC. 59B. HEALTH CARE INCOME TAX. 

3 ‘‘(a) IMPOSITION OF TAX.—In the case of an indi4 vidual, there is hereby imposed on the taxable income of 

5 the taxpayer for the taxable year a tax (in addition to any 

6 other tax imposed by this subtitle) determined in accord7 ance with the following tables: 

8 ‘‘(1) MARRIED INDIVIDUALS FILING JOINT RE9 TURNS AND SURVIVING SPOUSES.—In the case of 

10 any taxpayer making a joint return under section 

11 6013 or a surviving spouse (as defined in section 

12 2(a)), the following table shall apply: 

‘‘If taxable income is: The tax is: 

Not over $250,000 ........................ 2.2% of taxable income. 

Over $250,000 but not over 

$400,000.

$5,500, plus 3.2% of the excess over 

$250,000. 

Over $400,000 but not over 

$600,000.

$10,300, plus 4.2% of the excess over 

$400,000. 

Over $600,000 ............................... $18,700, plus 5.2% of the excess over 

$600,000. 

13 ‘‘(2) OTHER TAXPAYERS.—In the case of any 

14 taxpayer not described in paragraph (1), the fol15 lowing table shall apply: 

‘‘If taxable income is: The tax is: 

Not over $200,000 ........................ 2.2% of taxable income. 

Over $200,000 but not over 

$400,000.

$4,400, plus 3.2% of the excess over 

$200,000. 

Over $400,000 but not over 

$600,000.

$10,800, plus 4.2% of the excess over 

$400,000. 

Over $600,000 ............................... $19,200, plus 5.2% of the excess over 

$600,000. 

16 ‘‘(b) INFLATION ADJUSTMENT.— 


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1 ‘‘(1) IN GENERAL.—In the case of any taxable 

2 year beginning after 2013, each of the dollar 

3 amounts set forth in the tables in subsection (a) 

4 shall be increased by an amount equal to— 

5 ‘‘(A) such dollar amount, multiplied by 

6 ‘‘(B) the cost-of-living adjustment deter7 mined under section 1(f)(3) for such calendar 

8 year by substituting ‘calendar year 2012’ for 

9 ‘calendar year 1992’ in subparagraph (B) 

10 thereof. 

11 ‘‘(2) ROUNDING.—If the amount as adjusted 

12 under paragraph (1) is not a multiple of $1,000, 

13 such amount shall be rounded to the next lowest 

14 multiple of $1,000. 

15 ‘‘(c) NO CREDITS AGAINST TAX; NO EFFECT ON

16 MINIMUM TAX.—The tax imposed by this section shall not 

17 be treated as a tax imposed by this chapter for purposes 

18 of determining— 

19 ‘‘(1) the amount of any credit allowable under 

20 this chapter, or 

21 ‘‘(2) the amount of the minimum tax imposed 

22 by section 55. 

23 ‘‘(d) SPECIAL RULES.— 


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1 ‘‘(1) TAX TO BE WITHHELD, ETC.—For pur2 poses of this title, the tax imposed by this section 

3 shall be treated as imposed by section 1. 

4 ‘‘(2) REIMBURSEMENT OF TAX BY EMPLOYER

5 NOT INCLUDIBLE IN GROSS INCOME.—The gross in6 come of an employee shall not include any payment 

7 by his employer to reimburse the employee for the 

8 tax paid by the employee under this section. 

9 ‘‘(3) OTHER RULES.—The rules of section 

10 59A(d) shall apply to the tax imposed by this sec11 tion.’’. 

12 (b) CLERICAL AMENDMENT.—The table of parts for 

13 subchapter A of chapter 1 is amended by adding at the 

14 end the following new item: 

‘‘PART VIII—HEALTH CARE RELATED TAXES’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2012. 

18 SEC. 813. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

19 (a) IN GENERAL.—Part VIII of subchapter A of 

20 chapter 1, as added by this title, is amended by adding 

21 at the end the following new subpart: 

22 ‘‘Subpart B—Surcharge on High Income Individuals 

‘‘Sec. 59C. Surcharge on high income individuals. 


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1 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

2 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

3 other than a corporation, there is hereby imposed (in addi4 tion to any other tax imposed by this subtitle) a tax equal 

5 to 5.4 percent of so much of the modified adjusted gross 

6 income of the taxpayer as exceeds $1,000,000. 

7 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 

8 In the case of any taxpayer other than a taxpayer making 

9 a joint return under section 6013 or a surviving spouse 

10 (as defined in section 2(a)), subsection (a) shall be applied 

11 by substituting ‘$500,000’ for ‘$1,000,000’. 

12 ‘‘(c) MODIFIED ADJUSTED GROSS INCOME.—For 

13 purposes of this section, the term ‘modified adjusted gross 

14 income’ means adjusted gross income reduced by any de15 duction (not taken into account in determining adjusted 

16 gross income) allowed for investment interest (as defined 

17 in section 163(d)). In the case of an estate or trust, ad18 justed gross income shall be determined as provided in sec19 tion 67(e). 

20 ‘‘(d) SPECIAL RULES.— 

21 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

22 nonresident alien individual, only amounts taken 

23 into account in connection with the tax imposed 

24 under section 871(b) shall be taken into account 

25 under this section. 


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1 ‘‘(2) CITIZENS AND RESIDENTS LIVING

2 ABROAD.—The dollar amount in effect under sub3 section (a) (after the application of subsection (b)) 

4 shall be decreased by the excess of— 

5 ‘‘(A) the amounts excluded from the tax6 payer’s gross income under section 911, over 

7 ‘‘(B) the amounts of any deductions or ex8 clusions disallowed under section 911(d)(6) 

9 with respect to the amounts described in sub10 paragraph (A). 

11 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

12 shall not apply to a trust all the unexpired interests 

13 in which are devoted to one or more of the purposes 

14 described in section 170(c)(2)(B). 

15 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

16 CHAPTER FOR CERTAIN PURPOSES.—The tax im17 posed under this section shall not be treated as tax 

18 imposed by this chapter for purposes of determining 

19 the amount of any credit under this chapter or for 

20 purposes of section 55.’’. 

21 (b) CLERICAL AMENDMENT.—The table of subparts 

22 for part VIII of subchapter A of chapter 1, as added by 

23 this title, is amended by inserting after the item relating 

24 to subpart A the following new item: 

‘‘SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS’’. 


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1 (c) SECTION 15 NOT TO APPLY.—The amendment 

2 made by subsection (a) shall not be treated as a change 

3 in a rate of tax for purposes of section 15 of the Internal 

4 Revenue Code of 1986. 

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

6 this section shall apply to taxable years beginning after 

7 December 31, 2012. 

8 Subtitle C—Other Financing 

9 Provisions 

10 SEC. 821. TAX ON SECURITIES TRANSACTIONS. 

11 (a) IN GENERAL.—Chapter 36 is amended by insert12 ing after subchapter B the following new subchapter: 

13 ‘‘Subchapter C—Tax on Securities 

14 Transactions 

‘‘Sec. 4475. Tax on securities transactions. 

15 ‘‘SEC. 4475. TAX ON SECURITIES TRANSACTIONS. 

16 ‘‘(a) IMPOSITION OF TAX.— 

17 ‘‘(1) STOCKS.—There is hereby imposed a tax 

18 on each covered transaction in a stock contract of 

19 0.25 percent of the value of the instruments involved 

20 in such transaction. 

21 ‘‘(2) FUTURES.—There is hereby imposed a tax 

22 on each covered transaction in a futures contract of 

23 0.02 percent of the value of the instruments involved 

24 in such transaction. 


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1 ‘‘(3) SWAPS.—There is hereby imposed a tax on 

2 each covered transaction in a swaps contract of 0.02 

3 percent of the value of the instruments involved in 

4 such transaction. 

5 ‘‘(4) CREDIT DEFAULT SWAPS.—There is here6 by imposed a tax on each covered transaction in a 

7 credit default swaps contract of 0.02 percent of the 

8 value of the instruments involved in such trans9 action. 

10 ‘‘(5) OPTIONS.—There is hereby imposed a tax 

11 on each covered transaction in an options contract 

12 with respect to a transaction described in paragraph 

13 (1), (2), (3), or (4) of— 

14 ‘‘(A) the rate imposed with respect to such 

15 underlying transaction under paragraph (1), 

16 (2), (3), or (4) (as the case may be), multiplied 

17 by 

18 ‘‘(B) the premium paid on such option. 

19 ‘‘(b) EXCEPTION FOR RETIREMENT ACCOUNTS, 

20 ETC.—No tax shall be imposed under subsection (a) with 

21 respect to any stock contract, futures contract, swaps con22 tract, credit default swap, or options contract which is 

23 held in any plan, account, or arrangement described in 

24 section 220, 223, 401(a), 403(a), 403(b), 408, 408A, 529, 

25 or 530. 


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1 ‘‘(c) EXCEPTION FOR INTERESTS IN MUTUAL

2 FUNDS.—No tax shall be imposed under subsection (a) 

3 with respect to the purchase or sale of any interest in a 

4 regulated investment company (as defined in section 851) 

5 or of any derivative of such an interest. 

6 ‘‘(d) BY WHOM PAID.— 

7 ‘‘(1) IN GENERAL.—The tax imposed by this 

8 section shall be paid by— 

9 ‘‘(A) in the case of a transaction which oc10 curs on a trading facility located in the United 

11 States, such trading facility, or 

12 ‘‘(B) in any other case, the purchaser with 

13 respect to the transaction. 

14 ‘‘(2) WITHHOLDING IF BUYER IS NOT A

15 UNITED STATES PERSON.—See section 1447 for 

16 withholding by seller if buyer is a foreign person. 

17 ‘‘(e) COVERED TRANSACTION.—The term ‘covered 

18 transaction’ means any purchase or sale if— 

19 ‘‘(1) such purchase or sale occurs on a trading 

20 facility located in the United States, or 

21 ‘‘(2) the purchaser or seller is a United States 

22 person. 

23 ‘‘(f) ADMINISTRATION.—The Secretary shall carry 

24 out this section in consultation with the Securities and ExVerDate Mar 15 2010 04:40 Mar 19, 2011 Jkt 099200 PO 00000 Frm 00179 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 change Commission and the Commodity Futures Trading 

2 Commission.’’. 

3 (b) CREDIT FOR FIRST $100,000 OF STOCK TRANS4 ACTIONS PER YEAR.—Subpart C of part IV of subchapter 

5 A of chapter 1 is amended by inserting after section 36A 

6 the following new section: 

7 ‘‘SEC. 36B. CREDIT FOR SECURITIES TRANSACTION TAXES. 

8 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 

9 purchaser with respect to a covered transaction, there 

10 shall be allowed as a credit against the tax imposed by 

11 this subtitle for the taxable year an amount equal to the 

12 lesser of— 

13 ‘‘(1) the aggregate amount of tax imposed 

14 under section 4475 on covered transactions during 

15 the taxable year with respect to which the taxpayer 

16 is the purchaser, or 

17 ‘‘(2) $250 ($500 in the case of a joint return). 

18 ‘‘(b) AGGREGATION RULE.—For purposes of this sec19 tion, all persons treated as a single employer under sub20 section (a) or (b) of section 52, or subsection (m) or (o) 

21 of section 414, shall be treated as one taxpayer. 

22 ‘‘(c) DEFINITIONS.—For purposes of this section, 

23 any term used in this section which is also used in section 

24 4475 shall have the same meaning as when used in section 

25 4475.’’. 


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1 (c) WITHHOLDING.—Subchapter A of chapter 3 is 

2 amended by adding at the end the following new section: 

3 ‘‘SEC. 1447. WITHHOLDING ON SECURITIES TRANSACTIONS. 

4 ‘‘(a) IN GENERAL.—In the case of any outbound se5 curities transaction, the transferor shall deduct and with6 hold a tax equal to the tax imposed under section 4475 

7 with respect to such transaction. 

8 ‘‘(b) OUTBOUND SECURITIES TRANSACTION.—For 

9 purposes of this section, the term ‘outbound securities 

10 transaction’ means any covered transaction to which sec11 tion 4475(a) applies if— 

12 ‘‘(1) such transaction does not occur on a trad13 ing facility located in the United States, and 

14 ‘‘(2) the purchaser with respect to such trans15 action is not a United States person.’’. 

16 (d) CONFORMING AMENDMENTS.— 

17 (1) Section 6211(b)(4)(A) is amended by insert18 ing ‘‘36B,’’ after ‘‘36A,’’. 

19 (2) Section 1324(b)(2) of title 31, United 

20 States Code, is amended by inserting ‘‘36B,’’ after 

21 ‘‘36A,’’. 

22 (3) The table of subchapters for chapter 36 is 

23 amended by inserting after the item relating to sub24 chapter B the following new item: 

‘‘Subchapter C. Tax on securities transactions’’. 


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1 (4) The table of sections for subchapter A of 

2 chapter 3 is amended by adding at the end the fol3 lowing new item: 

‘‘Sec. 1447. Withholding on securities transactions.’’. 

4 (5) The table of sections for subpart C of part 

5 IV of subchapter A of chapter 1 is amended by in6 serting after the item relating to section 36A the fol7 lowing new item: 

‘‘Sec. 36B. Credit for securities transaction taxes.’’. 

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

9 this section shall apply to transactions occurring more 

10 than 180 days after the date of the enactment of this Act. 

11 TITLE IX—CONFORMING AMEND12 MENTS TO THE EMPLOYEE 

13 RETIREMENT INCOME SECU14 RITY ACT OF 1974 

15 SEC. 901. ERISA INAPPLICABLE TO HEALTH COVERAGE AR16 RANGEMENTS UNDER STATE HEALTH SECU17 RITY PROGRAMS. 

18 Section 4 of the Employee Retirement Income Secu19 rity Act of 1974 (29 U.S.C. 1003) is amended— 

20 (1) in subsection (a), by striking ‘‘(b) or (c)’’ 

21 and inserting ‘‘(b), (c), or (d)’’; and 

22 (2) by adding at the end the following new sub23 section: 


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1 ‘‘(d) The provisions of this title shall not apply to 

2 any arrangement forming a part of a State health security 

3 program established pursuant to section 101(b) of the 

4 American Health Security Act of 2011.’’. 

5 SEC. 902. EXEMPTION OF STATE HEALTH SECURITY PRO6 GRAMS FROM ERISA PREEMPTION. 

7 Section 514(b) of the Employee Retirement Income 

8 Security Act of 1974 (29 U.S.C. 1144(b)) (as amended 

9 by sections 904(b)(3)(B) and 1002(b) of this Act) is 

10 amended by adding at the end the following new para11 graph: 

12 ‘‘(10) Subsection (a) of this section shall not apply 

13 to State health security programs established pursuant to 

14 section 101(b) of the American Health Security Act of 

15 2011.’’. 

16 SEC. 903. PROHIBITION OF EMPLOYEE BENEFITS DUPLICA17 TIVE OF BENEFITS UNDER STATE HEALTH 

18 SECURITY PROGRAMS; COORDINATION IN 

19 CASE OF WORKERS’ COMPENSATION. 

20 (a) IN GENERAL.—Part 5 of subtitle B of title I of 

21 the Employee Retirement Income Security Act of 1974 is 

22 amended by adding at the end the following new section: 


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1 ‘‘PROHIBITION OF EMPLOYEE BENEFITS DUPLICATIVE OF

2 STATE HEALTH SECURITY PROGRAM BENEFITS; CO3 ORDINATION IN CASE OF WORKERS’ COMPENSATION

4 ‘‘SEC. 522. (a) Subject to subsection (b), no employee 

5 benefit plan may provide benefits which duplicate payment 

6 for any items or services for which payment may be made 

7 under a State health security program established pursu8 ant to section 101(b) of the American Health Security Act 

9 of 2011. 

10 ‘‘(b)(1) Each workers compensation carrier that is 

11 liable for payment for workers compensation services fur12 nished in a State shall reimburse the State health security 

13 plan for the State in which the services are furnished for 

14 the cost of such services. 

15 ‘‘(2) In this subsection: 

16 ‘‘(A) The term ‘workers compensation carrier’ 

17 means an insurance company that underwrites work18 ers compensation medical benefits with respect to 1 

19 or more employers and includes an employer or fund 

20 that is financially at risk for the provision of work21 ers compensation medical benefits. 

22 ‘‘(B) The term ‘workers compensation medical 

23 benefits’ means, with respect to an enrollee who is 

24 an employee subject to the workers compensation 

25 laws of a State, the comprehensive medical benefits 


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1 for work-related injuries and illnesses provided for 

2 under such laws with respect to such an employee. 

3 ‘‘(C) The term ‘workers compensation services’ 

4 means items and services included in workers com5 pensation medical benefits and includes items and 

6 services (including rehabilitation services and long7 term-care services) commonly used for treatment of 

8 work-related injuries and illnesses.’’. 

9 (b) CONFORMING AMENDMENT.—Section 4(b) of 

10 such Act (29 U.S.C. 1003(b)) is amended by adding at 

11 the end the following: ‘‘Paragraph (3) shall apply subject 

12 to section 522(b) (relating to reimbursement of State 

13 health security plans by workers compensation carriers).’’. 

14 (c) CLERICAL AMENDMENT.—The table of contents 

15 in section 1 of such Act is amended by inserting after the 

16 item relating to section 521 the following new items: 

‘‘Sec. 522. Prohibition of employee benefits duplicative of state health security 

program benefits; coordination in case of workers’ compensation.’’. 

17 SEC. 904. REPEAL OF CONTINUATION COVERAGE REQUIRE18 MENTS UNDER ERISA AND CERTAIN OTHER 

19 REQUIREMENTS RELATING TO GROUP 

20 HEALTH PLANS. 

21 (a) IN GENERAL.—Part 6 of subtitle B of title I of 

22 the Employee Retirement Income Security Act of 1974 

23 (29 U.S.C. 1161 et seq.) is repealed. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 502(a) of such Act (29 U.S.C. 

2 1132(a)) is amended— 

3 (A) by striking paragraph (7); and 

4 (B) by redesignating paragraphs (8), (9), 

5 and (10) as paragraphs (7), (8), and (9), re6 spectively. 

7 (2) Section 502(c)(1) of such Act (29 U.S.C. 

8 1132(c)(1)) is amended by striking ‘‘paragraph (1) 

9 or (4) of section 606,’’. 

10 (3) Section 514(b) of such Act (29 U.S.C. 

11 1144(b)) is amended— 

12 (A) in paragraph (7), by striking ‘‘section 

13 206(d)(3)(B)(i)),’’ and all that follows and in14 serting ‘‘section 206(d)(3)(B)(i)).’’; and 

15 (B) by striking paragraph (8). 

16 (4) The table of contents in section 1 of the 

17 Employee Retirement Income Security Act of 1974 

18 is amended by striking the items relating to part 6 

19 of subtitle B of title I of such Act. 

20 SEC. 905. EFFECTIVE DATE OF TITLE. 

21 The amendments made by this title shall take effect 

22 January 1, 2014. 


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1 TITLE X—ADDITIONAL 

2 CONFORMING AMENDMENTS 

3 SEC. 1001. REPEAL OF CERTAIN PROVISIONS IN INTERNAL 

4 REVENUE CODE OF 1986. 

5 The provisions of titles III and IV of the Health In6 surance Portability and Accountability Act of 1996, other 

7 than subtitles D and H of title III and section 342, are 

8 repealed and the provisions of law that were amended or 

9 repealed by such provisions are hereby restored as if such 

10 provisions had not been enacted. 

11 SEC. 1002. REPEAL OF CERTAIN PROVISIONS IN THE EM12 PLOYEE RETIREMENT INCOME SECURITY 

13 ACT OF 1974. 

14 (a) IN GENERAL.—Part 7 of subtitle B of title I of 

15 the Employee Retirement Income Security Act of 1974 is 

16 repealed and the items relating to such part in the table 

17 of contents in section 1 of such Act are repealed. 

18 (b) CONFORMING AMENDMENT.—Section 514(b) of 

19 such Act (29 U.S.C. 1144(b)) is amended by striking 

20 paragraph (9). 

21 SEC. 1003. REPEAL OF CERTAIN PROVISIONS IN THE PUB22 LIC HEALTH SERVICE ACT AND RELATED 

23 PROVISIONS. 

24 (a) IN GENERAL.—Titles XXII and XXVII of the 

25 Public Health Service Act are repealed. 


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1 (b) ADDITIONAL AMENDMENTS.— 

2 (1) Section 1301(b) of such Act (42 U.S.C. 

3 300e(b)) is amended by striking paragraph (6). 

4 (2) Sections 104 and 191 of the Health Insur5 ance Portability and Accountability Act of 1996 are 

6 repealed. 

7 SEC. 1004. EFFECTIVE DATE OF TITLE. 

8 The amendments made by this title shall take effect 

9 January 1, 2015. 

Æ 


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