I 

113TH 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 14, 2013 

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 2013’’. 


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1 SEC. 2. SENSE OF THE HOUSE OF REPRESENTATIVES CON2 CERNING THE STATUS OF HEALTH CARE. 

3 It is the sense of the House of Representatives that 

4 the 113th Congress should recognize and proclaim that 

5 health care is 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. Sense of the House of Representatives concerning the status of health 

care. 

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. 

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 2015, 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, 2015. 

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 2014; 

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, 2015, 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, 2014. 

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 2014. 

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 TITLE II—COMPREHENSIVE BEN2 EFITS, INCLUDING PREVEN3 TIVE BENEFITS AND BENE4 FITS FOR LONG-TERM CARE 

5 SEC. 201. COMPREHENSIVE BENEFITS. 

6 (a) IN GENERAL.—Subject to the succeeding provi7 sions of this title, individuals enrolled for benefits under 

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

9 health security program for the following items and serv10 ices if medically necessary or appropriate for the mainte11 nance of health or for the diagnosis, treatment, or rehabili12 tation of a health condition: 

13 (1) HOSPITAL SERVICES.—Inpatient and out14 patient hospital care, including 24-hour-a-day emer15 gency services. 

16 (2) PROFESSIONAL SERVICES.—Professional 

17 services of health care practitioners authorized to 

18 provide health care services under State law, includ19 ing patient education and training in self-manage20 ment techniques. 

21 (3) COMMUNITY-BASED PRIMARY HEALTH

22 SERVICES.—Community-based primary health serv23 ices (as defined in section 202(a)). 

24 (4) PREVENTIVE SERVICES.—Preventive serv25 ices (as defined in section 202(b)). 


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

2 SERVICES.— 

3 (A) Nursing facility services. 

4 (B) Home health services. 

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

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

7 individuals described in section 203(a). 

8 (D) Hospice care. 

9 (E) Services in intermediate care facilities 

10 for individuals with an intellectual disability. 

11 (6) PRESCRIPTION DRUGS, BIOLOGICALS, INSU12 LIN, MEDICAL FOODS.— 

13 (A) Outpatient prescription drugs and bio14 logics, as specified by the Board consistent with 

15 section 615. 

16 (B) Insulin. 

17 (C) Medical foods (as defined in section 

18 202(e)). 

19 (7) DENTAL SERVICES.—Dental services (as de20 fined in section 202(h)). 

21 (8) MENTAL HEALTH AND SUBSTANCE ABUSE

22 TREATMENT SERVICES.—Mental health and sub23 stance abuse treatment services (as defined in sec24 tion 202(f)). 

25 (9) DIAGNOSTIC TESTS.—Diagnostic tests. 


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1 (10) OTHER ITEMS AND SERVICES.— 

2 (A) OUTPATIENT THERAPY.—Outpatient 

3 physical therapy services, outpatient speech pa4 thology services, and outpatient occupational 

5 therapy services in all settings. 

6 (B) DURABLE MEDICAL EQUIPMENT.—Du7 rable medical equipment. 

8 (C) HOME DIALYSIS.—Home dialysis sup9 plies and equipment. 

10 (D) AMBULANCE.—Emergency ambulance 

11 service. 

12 (E) PROSTHETIC DEVICES.—Prosthetic de13 vices, including replacements of such devices. 

14 (F) ADDITIONAL ITEMS AND SERVICES.— 

15 Such other medical or health care items or serv16 ices as the Board may specify. 

17 (b) PROHIBITION OF BALANCE BILLING.—As pro18 vided in section 531, no person may impose a charge for 

19 covered services for which benefits are provided under this 

20 Act. 

21 (c) NO DUPLICATE HEALTH INSURANCE.—Each 

22 State health security program shall prohibit the sale of 

23 health insurance in the State if payment under the insur24 ance duplicates payment for any items or services for 

25 which payment may be made under such a program. 


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1 (d) STATE PROGRAM MAY PROVIDE ADDITIONAL

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

3 limiting the benefits that may be made available under a 

4 State health security program to residents of the State 

5 at the expense of the State. 

6 (e) EMPLOYERS MAY PROVIDE ADDITIONAL BENE7 FITS.—Nothing in this Act shall be construed as limiting 

8 the additional benefits that an employer may provide to 

9 employees or their dependents, or to former employees or 

10 their dependents. 

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

12 Notwithstanding any other provision of law, a health plan 

13 may be provided for under a collective bargaining agree14 ment or a MEWA if such plan is limited to coverage that 

15 is supplemental to the coverage provided for under the 

16 State-based American Health Security Program and avail17 able only to employees or their dependents or to retirees 

18 or their dependents. 

19 SEC. 202. DEFINITIONS RELATING TO SERVICES. 

20 (a) COMMUNITY-BASED PRIMARY HEALTH SERV21 ICES.—In this title, the term ‘‘community-based primary 

22 health services’’ means ambulatory health services fur23 nished— 

24 (1) by a rural health clinic; 


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1 (2) by a federally qualified health center (as de2 fined in section 1905(l)(2)(B) of the Social Security 

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

4 services furnished by State and local health agencies; 

5 (3) in a school-based setting; 

6 (4) by public educational agencies and other 

7 providers of services to children entitled to assist8 ance under the Individuals with Disabilities Edu9 cation Act for services furnished pursuant to a writ10 ten Individualized Family Services Plan or Indi11 vidual Education Plan under such Act; and 

12 (5) public and private nonprofit entities receiv13 ing Federal assistance under the Public Health 

14 Service Act. 

15 (b) PREVENTIVE SERVICES.— 

16 (1) IN GENERAL.—In this title, the term ‘‘pre17 ventive services’’ means items and services— 

18 (A) which— 

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

20 (ii) the Board determines to be effec21 tive in the maintenance and promotion of 

22 health or minimizing the effect of illness, 

23 disease, or medical condition; and 


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1 (B) which are provided consistent with the 

2 periodicity schedule established under para3 graph (3). 

4 (2) SPECIFIED PREVENTIVE SERVICES.—The 

5 services specified in this paragraph are as follows: 

6 (A) Immunizations recommended by the 

7 Advisory Committee on Immunization Practices 

8 of the Centers for Disease Control and Preven9 tion. 

10 (B) Prenatal and well-baby care (for in11 fants under 1 year of age). 

12 (C) Well-child care (including periodic 

13 physical examinations, hearing and vision 

14 screening, and developmental screening and ex15 aminations) for individuals under 18 years of 

16 age, including evidence-informed preventive care 

17 and screenings included in the comprehensive 

18 guidelines of the Health Resources and Services 

19 Administration. 

20 (D) Periodic screening mammography, Pap 

21 smears, and colorectal examinations and exami22 nations for prostate cancer. 

23 (E) Physical examinations. 

24 (F) Family planning services. 


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1 (G) Routine eye examinations, eyeglasses, 

2 and contact lenses. 

3 (H) Hearing aids, but only upon a deter4 mination of a certified audiologist or physician 

5 that a hearing problem exists and is caused by 

6 a condition that can be corrected by use of a 

7 hearing aid. 

8 (I) Evidence-based items or services that 

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

10 current recommendations of the United States 

11 Preventive Services Task Force. 

12 (J) With respect to women, such additional 

13 preventive care and screenings not described in 

14 subparagraph (I) that are included in the com15 prehensive guidelines of the Health Resources 

16 and Services Administration. 

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

18 consultation with experts in preventive medicine and 

19 public health and taking into consideration those 

20 preventive services recommended by the Preventive 

21 Services Task Force and published as the Guide to 

22 Clinical Preventive Services, a periodicity schedule 

23 for the coverage of preventive services under para24 graph (1). Such schedule shall take into consider25 ation the cost-effectiveness of appropriate preventive 


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1 care and shall be revised not less frequently than 

2 once every 5 years, in consultation with experts in 

3 preventive medicine and public health. 

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

5 CARE SERVICES.—In this title, the term ‘‘home and com6 munity-based long-term care services’’ means the following 

7 services provided to an individual to enable the individual 

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

9 the community: 

10 (1) Home health aide services. 

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

12 psychiatric day care. 

13 (3) Medical social work services. 

14 (4) Care coordination services, as defined in 

15 subsection (g)(1). 

16 (5) Respite care, including training for informal 

17 caregivers. 

18 (6) Personal assistance services, and home19 maker services (including meals) incidental to the 

20 provision of personal assistance services. 

21 (d) HOME HEALTH SERVICES.— 

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

23 services’’ means items and services described in sec24 tion 1861(m) of the Social Security Act and includes 

25 home infusion services. 


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1 (2) HOME INFUSION SERVICES.—The term 

2 ‘‘home infusion services’’ includes the nursing, phar3 macy, and related services that are necessary to con4 duct the home infusion of a drug regimen safely and 

5 effectively under a plan established and periodically 

6 reviewed by a physician and that are provided in 

7 compliance with quality assurance requirements es8 tablished by the Secretary. 

9 (e) MEDICAL FOODS.—In this title, the term ‘‘med10 ical foods’’ means foods which are formulated to be con11 sumed or administered enterally under the supervision of 

12 a physician and which are intended for the specific dietary 

13 management of a disease or condition for which distinctive 

14 nutritional requirements, based on recognized scientific 

15 principles, are established by medical evaluation. 

16 (f) MENTAL HEALTH AND SUBSTANCE ABUSE

17 TREATMENT SERVICES.— 

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

19 term ‘‘mental health and substance abuse treatment 

20 services’’ means the following services related to the 

21 prevention, diagnosis, treatment, and rehabilitation 

22 of mental illness and promotion of mental health: 

23 (A) INPATIENT HOSPITAL SERVICES.—In24 patient hospital services furnished primarily for 

25 the diagnosis or treatment of mental illness or 


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1 substance abuse for up to 60 days during a 

2 year, reduced by a number of days determined 

3 by the Secretary so that the actuarial value of 

4 providing such number of days of services 

5 under this paragraph to the individual is equal 

6 to the actuarial value of the days of inpatient 

7 residential services furnished to the individual 

8 under subparagraph (B) during the year after 

9 such services have been furnished to the indi10 vidual for 120 days during the year (rounded to 

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

12 services furnished to an individual described in 

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

14 in conformity with the plan of an organized sys15 tem of care for mental health and substance 

16 abuse services in accordance with section 

17 204(b)(2). 

18 (B) INTENSIVE RESIDENTIAL SERVICES.— 

19 Intensive residential services (as defined in 

20 paragraph (2)) furnished to an individual for 

21 up to 120 days during any calendar year, ex22 cept that— 

23 (i) such services may be furnished to 

24 the individual for additional days during 

25 the year if necessary for the individual to 


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1 complete a course of treatment to the ex2 tent that the number of days of inpatient 

3 hospital services described in subparagraph 

4 (A) that may be furnished to the individual 

5 during the year (as reduced under such 

6 subparagraph) is not less than 15; and 

7 (ii) reduced by a number of days de8 termined by the Secretary so that the actu9 arial value of providing such number of 

10 days of services under this paragraph to 

11 the individual is equal to the actuarial 

12 value of the days of intensive community13 based services furnished to the individual 

14 under subparagraph (D) during the year 

15 after such services have been furnished to 

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

17 of services described in subparagraph 

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

19 (rounded to the nearest day). 

20 (C) OUTPATIENT SERVICES.—Outpatient 

21 treatment services of mental illness or sub22 stance abuse (other than intensive community23 based services under subparagraph (D)) for an 

24 unlimited number of days during any calendar 

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1 tablished by the Secretary for the management 

2 of such services, and, in the case of services fur3 nished to an individual described in section 

4 204(b)(1) who is not an inpatient of a hospital, 

5 in conformity with the plan of an organized sys6 tem of care for mental health and substance 

7 abuse services in accordance with section 

8 204(b)(2). 

9 (D) INTENSIVE COMMUNITY-BASED SERV10 ICES.—Intensive community-based services (as 

11 described in paragraph (3))— 

12 (i) for an unlimited number of days 

13 during any calendar year, in the case of 

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

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

16 1395x(ff)(2)(E)) that are furnished to an 

17 individual who is a seriously mentally ill 

18 adult, a seriously emotionally disturbed 

19 child, or an adult or child with serious sub20 stance abuse disorder (as determined in ac21 cordance with criteria established by the 

22 Secretary); 

23 (ii) in the case of services described in 

24 section 1861(ff)(2)(C) of the Social Secu25 rity Act (42 U.S.C. 1395x(ff)(2)(C)), for 


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1 up to 180 days during any calendar year, 

2 except that such services may be furnished 

3 to the individual for a number of addi4 tional days during the year equal to the 

5 difference between the total number of 

6 days of intensive residential services which 

7 the individual may receive during the year 

8 under part A (as determined under sub9 paragraph (B)) and the number of days of 

10 such services which the individual has re11 ceived during the year; or 

12 (iii) in the case of any other such 

13 services, for up to 90 days during any cal14 endar year, except that such services may 

15 be furnished to the individual for the num16 ber of additional days during the year de17 scribed in clause (ii). 

18 (2) INTENSIVE RESIDENTIAL SERVICES DE19 FINED.— 

20 (A) IN GENERAL.—Subject to subpara21 graphs (B) and (C), the term ‘‘intensive resi22 dential services’’ means inpatient services pro23 vided in any of the following facilities: 

24 (i) Residential detoxification centers. 


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1 (ii) Crisis residential programs or 

2 mental illness residential treatment pro3 grams. 

4 (iii) Therapeutic family or group 

5 treatment homes. 

6 (iv) Residential centers for substance 

7 abuse treatment. 

8 (B) REQUIREMENTS FOR FACILITIES.—No 

9 service may be treated as an intensive residen10 tial service under subparagraph (A) unless the 

11 facility at which the service is provided— 

12 (i) is legally authorized to provide 

13 such service under the law of the State (or 

14 under a State regulatory mechanism pro15 vided by State law) in which the facility is 

16 located or is certified to provide such serv17 ice by an appropriate accreditation entity 

18 approved by the State in consultation with 

19 the Secretary; and 

20 (ii) meets such other requirements as 

21 the Secretary may impose to ensure the 

22 quality of the intensive residential services 

23 provided. 

24 (C) SERVICES FURNISHED TO AT-RISK

25 CHILDREN.—In the case of services furnished 


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

2 no service may be treated as an intensive resi3 dential service under this subsection unless the 

4 service is furnished in conformity with the plan 

5 of an organized system of care for mental 

6 health and substance abuse services in accord7 ance with section 204(b)(2). 

8 (D) MANAGEMENT STANDARDS.—No serv9 ice may be treated as an intensive residential 

10 service under subparagraph (A) unless the serv11 ice is furnished in accordance with standards 

12 established by the Secretary for the manage13 ment of such services. 

14 (3) INTENSIVE COMMUNITY-BASED SERVICES

15 DEFINED.— 

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

17 community-based services’’ means the items 

18 and services described in subparagraph (B) pre19 scribed by a physician (or, in the case of serv20 ices furnished to an individual described in sec21 tion 204(b)(1), by an organized system of care 

22 for mental health and substance abuse services 

23 in accordance with such section) and provided 

24 under a program described in subparagraph 

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


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1 the extent permitted under the law of the State 

2 in which the services are furnished, a non-phy3 sician mental health professional) pursuant to 

4 an individualized, written plan of treatment es5 tablished and periodically reviewed by a physi6 cian (in consultation with appropriate staff par7 ticipating in such program) which sets forth the 

8 physician’s diagnosis, the type, amount, fre9 quency, and duration of the items and services 

10 provided under the plan, and the goals for 

11 treatment under the plan, but does not include 

12 any item or service that is not furnished in ac13 cordance with standards established by the Sec14 retary for the management of such services. 

15 (B) ITEMS AND SERVICES DESCRIBED.— 

16 The items and services described in this sub17 paragraph are— 

18 (i) partial hospitalization services con19 sisting of the items and services described 

20 in subparagraph (C); 

21 (ii) psychiatric rehabilitation services; 

22 (iii) day treatment services for indi23 viduals under 19 years of age; 

24 (iv) in-home services; 


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1 (v) case management services, includ2 ing collateral services designated as such 

3 case management services by the Sec4 retary; 

5 (vi) ambulatory detoxification services; 

6 and 

7 (vii) such other items and services as 

8 the Secretary may provide (but in no event 

9 to include meals and transportation), 

10 that are reasonable and necessary for the diag11 nosis or active treatment of the individual’s 

12 condition, reasonably expected to improve or 

13 maintain the individual’s condition and func14 tional level and to prevent relapse or hos15 pitalization, and furnished pursuant to such 

16 guidelines relating to frequency and duration of 

17 services as the Secretary shall by regulation es18 tablish (taking into account accepted norms of 

19 medical practice and the reasonable expectation 

20 of patient improvement). 

21 (C) ITEMS AND SERVICES INCLUDED AS

22 PARTIAL HOSPITALIZATION SERVICES.—For 

23 purposes of subparagraph (B)(i), partial hos24 pitalization services consist of the following: 


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1 (i) Individual and group therapy with 

2 physicians or psychologists (or other men3 tal health professionals to the extent au4 thorized under State law). 

5 (ii) Occupational therapy requiring 

6 the skills of a qualified occupational thera7 pist. 

8 (iii) Services of social workers, trained 

9 psychiatric nurses, behavioral aides, and 

10 other staff trained to work with psychiatric 

11 patients (to the extent authorized under 

12 State law). 

13 (iv) Drugs and biologicals furnished 

14 for therapeutic purposes (which cannot, as 

15 determined in accordance with regulations, 

16 be self-administered). 

17 (v) Individualized activity therapies 

18 that are not primarily recreational or di19 versionary. 

20 (vi) Family counseling (the primary 

21 purpose of which is treatment of the indi22 vidual’s condition). 

23 (vii) Patient training and education 

24 (to the extent that training and edu25 cational activities are closely and clearly 


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1 related to the individual’s care and treat2 ment). 

3 (viii) Diagnostic services. 

4 (D) PROGRAMS DESCRIBED.—A program 

5 described in this subparagraph is a program 

6 (whether facility-based or freestanding) which is 

7 furnished by an entity— 

8 (i) legally authorized to furnish such a 

9 program under State law (or the State reg10 ulatory mechanism provided by State law) 

11 or certified to furnish such a program by 

12 an appropriate accreditation entity ap13 proved by the State in consultation with 

14 the Secretary; and 

15 (ii) meeting such other requirements 

16 as the Secretary may impose to ensure the 

17 quality of the intensive community-based 

18 services provided. 

19 (g) CARE COORDINATION SERVICES.— 

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

21 coordination services’’ means services provided by 

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

23 individuals described in paragraph (3) for the co24 ordination and monitoring of home and community25 based long-term care services to ensure appropriate, 


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1 cost-effective utilization of such services in a com2 prehensive and continuous manner, and includes— 

3 (A) transition management between inpa4 tient facilities and community-based services, 

5 including assisting patients in identifying and 

6 gaining access to appropriate ancillary services; 

7 and 

8 (B) evaluating and recommending appro9 priate treatment services, in cooperation with 

10 patients and other providers and in conjunction 

11 with any quality review program or plan of care 

12 under section 205. 

13 (2) CARE COORDINATOR.— 

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

15 ‘‘care coordinator’’ means an individual or non16 profit or public agency or organization which 

17 the State health security program determines— 

18 (i) is capable of performing directly, 

19 efficiently, and effectively the duties of a 

20 care coordinator described in paragraph 

21 (1); and 

22 (ii) demonstrates capability in estab23 lishing and periodically reviewing and re24 vising plans of care, and in arranging for 


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1 and monitoring the provision and quality 

2 of services under any plan. 

3 (B) INDEPENDENCE.—State health secu4 rity programs shall establish safeguards to en5 sure that care coordinators have no financial in6 terest in treatment decisions or placements. 

7 Care coordination may not be provided through 

8 any structure or mechanism through which 

9 quality review is performed. 

10 (3) ELIGIBLE INDIVIDUALS.—An individual de11 scribed in this paragraph is an individual described 

12 in section 203 (relating to individuals qualifying for 

13 long-term and chronic care services). 

14 (h) DENTAL SERVICES.— 

15 (1) IN GENERAL.—In this title, subject to sub16 section (b), the term ‘‘dental services’’ means the 

17 following: 

18 (A) Emergency dental treatment, including 

19 extractions, for bleeding, pain, acute infections, 

20 and injuries to the maxillofacial region. 

21 (B) Prevention and diagnosis of dental dis22 ease, including examinations of the hard and 

23 soft tissues of the oral cavity and related struc24 tures, radiographs, dental sealants, fluorides, 

25 and dental prophylaxis. 


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1 (C) Treatment of dental disease, including 

2 non-cast fillings, periodontal maintenance serv3 ices, and endodontic services. 

4 (D) Space maintenance procedures to pre5 vent orthodontic complications. 

6 (E) Orthodontic treatment to prevent se7 vere malocclusions. 

8 (F) Full dentures. 

9 (G) Medically necessary oral health care. 

10 (H) Any items and services for special 

11 needs patients that are not described in sub12 paragraphs (A) through (G) and that— 

13 (i) are required to provide such pa14 tients the items and services described in 

15 subparagraphs (A) through (G); 

16 (ii) are required to establish oral func17 tion (including general anesthesia for indi18 viduals with physical or emotional limita19 tions that prevent the provision of dental 

20 care without such anesthesia); 

21 (iii) consist of orthodontic care for se22 vere dentofacial abnormalities; or 

23 (iv) consist of prosthetic dental de24 vices for genetic or birth defects or fitting 

25 for such devices. 


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1 (I) Any dental care for individuals with a 

2 seizure disorder that is not described in sub3 paragraphs (A) through (H) and that is re4 quired because of an illness, injury, disorder, or 

5 other health condition that results from such 

6 seizure disorder. 

7 (2) LIMITATIONS.—Dental services are subject 

8 to the following limitations: 

9 (A) PREVENTION AND DIAGNOSIS.— 

10 (i) EXAMINATIONS AND PROPHY11 LAXIS.—The examinations and prophylaxis 

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

13 only consistent with a periodicity schedule 

14 established by the Board, which schedule 

15 may provide for special treatment of indi16 viduals less than 18 years of age and of 

17 special needs patients. 

18 (ii) DENTAL SEALANTS.—The dental 

19 sealants described in such paragraph are 

20 not covered for individuals 18 years of age 

21 or older. Such sealants are covered for in22 dividuals less than 10 years of age for pro23 tection of the 1st permanent molars. Such 

24 sealants are covered for individuals 10 


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1 years of age or older for protection of the 

2 2d permanent molars. 

3 (B) TREATMENT OF DENTAL DISEASE.— 

4 Prior to January 1, 2020, the items and serv5 ices described in paragraph (1)(C) are covered 

6 only for individuals less than 18 years of age 

7 and special needs patients. On or after such 

8 date, such items and services are covered for all 

9 individuals enrolled for benefits under this Act, 

10 except that endodontic services are not covered 

11 for individuals 18 years of age or older. 

12 (C) SPACE MAINTENANCE.—The items and 

13 services described in paragraph (1)(D) are cov14 ered only for individuals at least 3 years of age, 

15 but less than 13 years of age and— 

16 (i) are limited to posterior teeth; 

17 (ii) involve maintenance of a space or 

18 spaces for permanent posterior teeth that 

19 would otherwise be prevented from normal 

20 eruption if the space were not maintained; 

21 and 

22 (iii) do not include a space maintainer 

23 that is placed within 6 months of the ex24 pected eruption of the permanent posterior 

25 tooth concerned. 


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

2 (A) MEDICALLY NECESSARY ORAL HEALTH

3 CARE.—The term ‘‘medically necessary oral 

4 health care’’ means oral health care that is re5 quired as a direct result of, or would have a di6 rect impact on, an underlying medical condi7 tion. Such term includes oral health care di8 rected toward control or elimination of pain, in9 fection, or reestablishment of oral function. 

10 (B) SPECIAL NEEDS PATIENT.—The term 

11 ‘‘special needs patient’’ includes an individual 

12 with a genetic or birth defect, a developmental 

13 disability, or an acquired medical disability. 

14 (i) NURSING FACILITY; NURSING FACILITY SERV15 ICES.—Except as may be provided by the Board, the 

16 terms ‘‘nursing facility’’ and ‘‘nursing facility services’’ 

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

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

19 (j) SERVICES IN INTERMEDIATE CARE FACILITIES

20 FOR INDIVIDUALS WITH AN INTELLECTUAL DIS21 ABILITY.—Except as may be provided by the Board— 

22 (1) the term ‘‘intermediate care facility for indi23 viduals with an intellectual disability’’ has the mean24 ing given the term ‘‘intermediate care facility for in25 dividuals with mental retardation’’ in section 


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1 1905(d) of the Social Security Act (as in effect be2 fore the enactment of this Act); and 

3 (2) the term ‘‘services in intermediate care fa4 cilities for individuals with an intellectual disability’’ 

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

6 such Act (as so in effect) in an intermediate care fa7 cility for individuals with an intellectual disability to 

8 an individual determined to require such services in 

9 accordance with standards specified by the Board 

10 and comparable to the standards described in section 

11 1902(a)(31)(A) of such Act (as so in effect). 

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

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

14 Social Security Act shall apply. 

15 SEC. 203. SPECIAL RULES FOR HOME AND COMMUNITY16 BASED LONG-TERM CARE SERVICES. 

17 (a) QUALIFYING INDIVIDUALS.—For purposes of sec18 tion 201(a)(5)(C), individuals described in this subsection 

19 are the following individuals: 

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

21 older determined (in a manner specified by the 

22 Board)— 

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

24 assistance of an individual, at least 2 of the fol25 lowing 5 activities of daily living (or who has a 


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1 similar level of disability due to cognitive im2 pairment)— 

3 (i) bathing; 

4 (ii) eating; 

5 (iii) dressing; 

6 (iv) toileting; and 

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

8 in and out of a chair; 

9 (B) due to cognitive or mental impair10 ments, to require supervision because the indi11 vidual behaves in a manner that poses health or 

12 safety hazards to himself or herself or others; 

13 or 

14 (C) due to cognitive or mental impair15 ments, to require queuing to perform activities 

16 of daily living. 

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

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

19 to meet such alternative standard of disability for 

20 children as the Board develops. Such alternative 

21 standard shall be comparable to the standard for 

22 adults and appropriate for children. 

23 (b) LIMIT ON SERVICES.— 

24 (1) IN GENERAL.—The aggregate expenditures 

25 by a State health security program with respect to 


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1 home and community-based long-term care services 

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

3 65 percent (or such alternative ratio as the Board 

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

5 the amount of payment that would have been made 

6 under the program during the period if all the home7 based long-term care beneficiaries had been resi8 dents of nursing facilities in the same area in which 

9 the services were provided. 

10 (2) ALTERNATIVE RATIO.—The Board may es11 tablish for purposes of paragraph (1) an alternative 

12 ratio (of payments for home and community-based 

13 long-term care services to payments for nursing fa14 cility services) as the Board determines to be more 

15 consistent with the goal of providing cost-effective 

16 long-term care in the most appropriate and least re17 strictive setting. 

18 SEC. 204. EXCLUSIONS AND LIMITATIONS. 

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

20 for service are not available under this Act unless the serv21 ices meet the standards specified in section 201(a). 

22 (b) SPECIAL DELIVERY REQUIREMENTS FOR MEN23 TAL HEALTH AND SUBSTANCE ABUSE TREATMENT SERV24 ICES PROVIDED TO AT-RISK CHILDREN.— 


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1 (1) REQUIRING SERVICES TO BE PROVIDED

2 THROUGH ORGANIZED SYSTEMS OF CARE.—A State 

3 health security program shall ensure that mental 

4 health services and substance abuse treatment serv5 ices are furnished through an organized system of 

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

7 (A) the services are provided to an indi8 vidual less than 22 years of age; 

9 (B) the individual has a serious emotional 

10 disturbance or a substance abuse disorder; and 

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

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

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

14 serves the needs of children, including an agen15 cy involved with child welfare, special education, 

16 juvenile justice, or criminal justice. 

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

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

19 community-based service delivery network, which 

20 may consist of public and private providers, that 

21 meets the following requirements: 

22 (A) The system has established linkages 

23 with existing mental health services and sub24 stance abuse treatment service delivery pro25 grams in the plan service area (or is in the 


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1 process of developing or operating a system 

2 with appropriate public agencies in the area to 

3 coordinate the delivery of such services to indi4 viduals in the area). 

5 (B) The system provides for the participa6 tion and coordination of multiple agencies and 

7 providers that serve the needs of children in the 

8 area, including agencies and providers involved 

9 with child welfare, education, juvenile justice, 

10 criminal justice, health care, mental health, and 

11 substance abuse prevention and treatment. 

12 (C) The system provides for the involve13 ment of the families of children to whom mental 

14 health services and substance abuse treatment 

15 services are provided in the planning of treat16 ment and the delivery of services. 

17 (D) The system provides for the develop18 ment and implementation of individualized 

19 treatment plans by multidisciplinary and multi20 agency teams, which are recognized and fol21 lowed by the applicable agencies and providers 

22 in the area. 

23 (E) The system ensures the delivery and 

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1 quired by individuals under 22 years of age who 

2 have a serious emotional disturbance or a sub3 stance abuse disorder. 

4 (F) The system provides for the manage5 ment of the individualized treatment plans de6 scribed in subparagraph (D) and for a flexible 

7 response to changes in treatment needs over 

8 time. 

9 (c) TREATMENT OF EXPERIMENTAL SERVICES.—In 

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

11 coverage determinations with respect to those services that 

12 are experimental in nature. Such determinations shall be 

13 made consistent with a process that provides for input 

14 from representatives of health care professionals and pa15 tients and public comment. 

16 (d) APPLICATION OF PRACTICE GUIDELINES.—In 

17 the case of services for which the American Health Secu18 rity Quality Council (established under section 501) has 

19 recognized a national practice guideline, the services are 

20 considered to meet the standards specified in section 

21 201(a) if they have been provided in accordance with such 

22 guideline or in accordance with such guidelines as are pro23 vided by the State health security program consistent with 

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

25 be considered to have been provided in accordance with 


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1 a practice guideline if the health care provider providing 

2 the service exercised appropriate professional discretion to 

3 deviate from the guideline in a manner authorized or an4 ticipated by the guideline. 

5 (e) SPECIFIC LIMITATIONS.— 

6 (1) LIMITATIONS ON EYEGLASSES, CONTACT

7 LENSES, HEARING AIDS, AND DURABLE MEDICAL

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

9 may impose such limits relating to the costs and fre10 quency of replacement of eyeglasses, contact lenses, 

11 hearing aids, and durable medical equipment to 

12 which individuals enrolled for benefits under this Act 

13 are entitled to have payment made under a State 

14 health security program as the Board deems appro15 priate. 

16 (2) OVERLAP WITH PREVENTIVE SERVICES.— 

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

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

19 services are required to be covered only to the extent 

20 that they are required to be covered as preventive 

21 services. 

22 (3) MISCELLANEOUS EXCLUSIONS FROM COV23 ERED SERVICES.—Covered services under this Act 

24 do not include the following: 


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1 (A) Surgery and other procedures (such as 

2 orthodontia) performed solely for cosmetic pur3 poses (as defined in regulations) and hospital or 

4 other services incident thereto, unless— 

5 (i) required to correct a congenital 

6 anomaly; 

7 (ii) required to restore or correct a 

8 part of the body which has been altered as 

9 a result of accidental injury, disease, or 

10 surgery; or 

11 (iii) otherwise determined to be medi12 cally necessary and appropriate under sec13 tion 201(a). 

14 (B) Personal comfort items or private 

15 rooms in inpatient facilities, unless determined 

16 to be medically necessary and appropriate 

17 under section 201(a). 

18 (C) The services of a professional practi19 tioner if they are furnished in a hospital or 

20 other facility which is not a participating pro21 vider. 

22 (f) NURSING FACILITY SERVICES AND HOME

23 HEALTH SERVICES.—Nursing facility services and home 

24 health services (other than post-hospital services, as de25 fined by the Board) furnished to an individual who is not 


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

2 the services are determined to meet the standards speci3 fied in section 201(a) and, with respect to nursing facility 

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

5 appropriate setting. 

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

7 CARE. 

8 (a) CERTIFICATIONS.—State health security pro9 grams may require, as a condition of payment for institu10 tional health care services and other services of the type 

11 described in such sections 1814(a) and 1835(a) of the So12 cial Security Act, periodic professional certifications of the 

13 kind described in such sections. 

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

15 each State health security program establish a quality re16 view program that meets the requirements for such a pro17 gram under title V, see section 404(b)(1)(H). 

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

19 security program may require, consistent with standards 

20 established by the Board, that payment for services ex21 ceeding specified levels or duration be provided only as 

22 consistent with a plan of care or treatment formulated by 

23 one or more providers of the services or other qualified 

24 professionals. Such a plan may include, consistent with 


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

2 a further condition of payment for services. 

3 TITLE III—PROVIDER 

4 PARTICIPATION 

5 SEC. 301. PROVIDER PARTICIPATION AND STANDARDS. 

6 (a) IN GENERAL.—An individual or other entity fur7 nishing any covered service under a State health security 

8 program under this Act is not a qualified provider unless 

9 the individual or entity— 

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

11 section 302; 

12 (2) has filed with the State health security pro13 gram a participation agreement described in sub14 section (b); and 

15 (3) meets such other qualifications and condi16 tions as are established by the Board or the State 

17 health security program under this Act. 

18 (b) REQUIREMENTS IN PARTICIPATION AGREE19 MENT.— 

20 (1) IN GENERAL.—A participation agreement 

21 described in this subsection between a State health 

22 security program and a provider shall provide at 

23 least for the following: 

24 (A) Services to eligible persons will be fur25 nished by the provider without discrimination 


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

2 religion, age, sex or sexual orientation, dis3 ability, handicapping condition, or (subject to 

4 the professional qualifications of the provider) 

5 illness. Nothing in this subparagraph shall be 

6 construed as requiring the provision of a type 

7 or class of services which services are outside 

8 the scope of the provider’s normal practice. 

9 (B) No charge will be made for any cov10 ered services other than for payment authorized 

11 by this Act. 

12 (C) The provider agrees to furnish such in13 formation as may be reasonably required by the 

14 Board or a State health security program, in 

15 accordance with uniform reporting standards 

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

17 (i) quality review by designated enti18 ties; 

19 (ii) the making of payments under 

20 this Act (including the examination of 

21 records as may be necessary for the 

22 verification of information on which pay23 ments are based); 


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1 (iii) statistical or other studies re2 quired for the implementation of this Act; 

3 and 

4 (iv) such other purposes as the Board 

5 or State may specify. 

6 (D) The provider agrees not to bill the pro7 gram for any services for which benefits are not 

8 available because of section 204(d). 

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

10 an individual, the provider agrees not to employ 

11 or use for the provision of health services any 

12 individual or other provider who or which has 

13 had a participation agreement under this sub14 section terminated for cause. 

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

16 fee-for-service basis under section 612, the pro17 vider agrees to submit bills and any required 

18 supporting documentation relating to the provi19 sion of covered services within 30 days (or such 

20 shorter period as a State health security pro21 gram may require) after the date of providing 

22 such services. 

23 (2) TERMINATION OF PARTICIPATION AGREE24 MENTS.— 


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1 (A) IN GENERAL.—Participation agree2 ments may be terminated, with appropriate no3 tice— 

4 (i) by the Board or a State health se5 curity program for failure to meet the re6 quirements of this title; or 

7 (ii) by a provider. 

8 (B) TERMINATION PROCESS.—Providers 

9 shall be provided notice and a reasonable oppor10 tunity to correct deficiencies before the Board 

11 or a State health security program terminates 

12 an agreement unless a more immediate termi13 nation is required for public safety or similar 

14 reasons. 

15 SEC. 302. QUALIFICATIONS FOR PROVIDERS. 

16 (a) IN GENERAL.—A health care provider is consid17 ered to be qualified to provide covered services if the pro18 vider is licensed or certified and meets— 

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

20 such services; 

21 (2) applicable requirements of Federal law to 

22 provide such services; and 

23 (3) any applicable standards established under 

24 subsection (b). 

25 (b) MINIMUM PROVIDER STANDARDS.— 


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

2 evaluate, and update national minimum standards to 

3 ensure the quality of services provided under this 

4 Act and to monitor efforts by State health security 

5 programs to ensure the quality of such services. A 

6 State health security program may also establish ad7 ditional minimum standards which providers shall 

8 meet. 

9 (2) NATIONAL MINIMUM STANDARDS.—The na10 tional minimum standards under paragraph (1) shall 

11 be established for institutional providers of services, 

12 individual health care practitioners, and comprehen13 sive health service organizations. Except as the 

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

15 a hospital, nursing facility, or other institutional 

16 provider of services shall meet standards for such a 

17 facility under the medicare program under title 

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

19 seq.). Such standards also may include, where ap20 propriate, elements relating to— 

21 (A) adequacy and quality of facilities; 

22 (B) training and competence of personnel 

23 (including continuing education requirements); 

24 (C) comprehensiveness of service; 

25 (D) continuity of service; 


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1 (E) patient satisfaction (including waiting 

2 time and access to services); and 

3 (F) performance standards (including or4 ganization, facilities, structure of services, effi5 ciency of operation, and outcome in palliation, 

6 improvement of health, stabilization, cure, or 

7 rehabilitation). 

8 (3) TRANSITION IN APPLICATION.—If the 

9 Board provides for additional requirements for pro10 viders under this subsection, any such additional re11 quirement shall be implemented in a manner that 

12 provides for a reasonable period during which a pre13 viously qualified provider is permitted to meet such 

14 an additional requirement. 

15 (4) EXCHANGE OF INFORMATION.—The Board 

16 shall provide for an exchange, at least annually, 

17 among State health security programs of informa18 tion with respect to quality assurance and cost con19 tainment. 

20 SEC. 303. QUALIFICATIONS FOR COMPREHENSIVE HEALTH 

21 SERVICE ORGANIZATIONS. 

22 (a) IN GENERAL.—For purposes of this Act, a com23 prehensive health service organization (in this section re24 ferred to as a ‘‘CHSO’’) is a public or private organization 

25 which, in return for a capitated payment amount, underVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 takes to furnish, arrange for the provision of, or provide 

2 payment with respect to— 

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

4 by the Board), including at least hospital services 

5 and physicians services; and 

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

7 needed services; 

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

9 specified service area and which enrolls voluntarily in the 

10 organization. 

11 (b) ENROLLMENT.— 

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

13 or near the specified service area of a CHSO are eli14 gible to enroll in the organization; except that the 

15 number of enrollees may be limited to avoid over16 taxing the resources of the organization. 

17 (2) MINIMUM ENROLLMENT PERIOD.—Subject 

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

19 with a CHSO shall be 1 year, unless the enrolled in20 dividual becomes ineligible to enroll with the organi21 zation. 

22 (3) WITHDRAWAL FOR CAUSE.—Each CHSO 

23 shall permit an enrolled individual to disenroll from 

24 the organization for cause at any time. 

25 (c) REQUIREMENTS FOR CHSOS.— 


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

2 the maximum extent feasible, shall make all health 

3 services readily and promptly accessible to enrollees 

4 who live in the specified service area. 

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

6 furnish services in such manner as to provide con7 tinuity of care and (when services are furnished by 

8 different providers) shall provide ready referral of 

9 patients to such services and at such times as may 

10 be medically appropriate. 

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

12 CHSO that is a private organization— 

13 (A) CONSUMER REPRESENTATION.—At 

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

15 board of directors shall be consumer members 

16 with no direct or indirect, personal or family fi17 nancial relationship to the organization. 

18 (B) PROVIDER REPRESENTATION.—The 

19 CHSO’s board of directors shall include at least 

20 one member who represents health care pro21 viders. 

22 (4) PATIENT GRIEVANCE PROGRAM.—Each 

23 CHSO shall have in effect a patient grievance pro24 gram and shall conduct regularly surveys of the satVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 isfaction of members with services provided by or 

2 through the organization. 

3 (5) MEDICAL STANDARDS.—Each CHSO shall 

4 provide that a committee or committees of health 

5 care practitioners associated with the organization 

6 will promulgate medical standards, oversee the pro7 fessional aspects of the delivery of care, perform the 

8 functions of a pharmacy and drug therapeutics com9 mittee, and monitor and review the quality of all 

10 health services (including drugs, education, and pre11 ventive services). 

12 (6) QUALITY AND OTHER REPORTING REQUIRE13 MENTS.— 

14 (A) IN GENERAL.—The Board shall deter15 mine appropriate measures to assess the quality 

16 of care furnished by the CHSO, such as meas17 ures of— 

18 (i) clinical processes and outcomes; 

19 (ii) patient and, where practicable, 

20 caregiver experience of care; and 

21 (iii) utilization (such as rates of hos22 pital admissions for ambulatory care sen23 sitive conditions). 

24 (B) OTHER DUTIES.—The CHSO shall— 


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1 (i) define processes to promote evi2 dence-based medicine and patient engage3 ment, report on quality and cost measures, 

4 and coordinate care, such as through the 

5 use of telehealth, remote patient moni6 toring, and other such enabling tech7 nologies; and 

8 (ii) demonstrate to the Board that the 

9 CHSO meets patient-centeredness criteria 

10 specified by the Board, such as the use of 

11 patient and caregiver assessments or the 

12 use of individualized care plans. 

13 (C) REPORTING REQUIREMENTS.—A 

14 CHSO shall submit data in a form and manner 

15 specified by the Board on measures the Board 

16 determines necessary in order to evaluate the 

17 quality of care furnished by the CHSO. Such 

18 data may include care transitions across health 

19 care settings, including hospital discharge plan20 ning and post-hospital discharge follow-up by 

21 CHSO professionals, as the Board determines 

22 appropriate. 

23 (D) QUALITY PERFORMANCE STAND24 ARDS.—The Board shall establish quality per25 formance standards to assess the quality of care 


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1 furnished by CHSOs and shall seek to improve 

2 the quality of care furnished by CHSOs over 

3 time by specifying higher standards, new meas4 ures, or both for purposes of assessing such 

5 quality of care. 

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

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

8 shall be reasonable. 

9 (8) UTILIZATION AND BONUS INFORMATION.— 

10 Each CHSO shall— 

11 (A) comply with the requirements of sec12 tion 1876(i)(8) of the Social Security Act (re13 lating to prohibiting physician incentive plans 

14 that provide specific inducements to reduce or 

15 limit medically necessary services); and 

16 (B) make available to its membership utili17 zation information and data regarding financial 

18 performance, including bonus or incentive pay19 ment arrangements to practitioners. 

20 (9) PROVISION OF SERVICES TO ENROLLEES AT

21 INSTITUTIONS OPERATING UNDER GLOBAL BUDG22 ETS.—The organization shall arrange to reimburse 

23 for hospital services and other facility-based services 

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

25 members of the organization in accordance with the 


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1 global operating budget of the hospital or facility ap2 proved under section 611. 

3 (10) BROAD MARKETING.—Each CHSO shall 

4 provide for the marketing of its services (including 

5 dissemination of marketing materials) to potential 

6 enrollees in a manner that is designed to enroll indi7 viduals representative of the different population 

8 groups and geographic areas included within its 

9 service area and meets such requirements as the 

10 Board or a State health security program may speci11 fy. 

12 (11) ADDITIONAL REQUIREMENTS.—Each 

13 CHSO shall meet— 

14 (A) such requirements relating to min15 imum enrollment; 

16 (B) such requirements relating to financial 

17 solvency; 

18 (C) such requirements relating to quality 

19 and availability of care; and 

20 (D) such other requirements, 

21 as the Board or a State health security program 

22 may specify. 

23 (d) PROVISION OF EMERGENCY SERVICES TO NON24 ENROLLEES.—A CHSO may furnish emergency services 

25 to persons who are not enrolled in the organization. PayVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 ment for such services, if they are covered services to eligi2 ble persons, shall be made to the organization unless the 

3 organization requests that it be made to the individual 

4 provider who furnished the services. 

5 SEC. 304. LIMITATION ON CERTAIN PHYSICIAN REFERRALS. 

6 (a) APPLICATION TO AMERICAN HEALTH SECURITY

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

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

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

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

11 section under this Act any references in such section to 

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

13 deemed references to the Board and the American Health 

14 Security Program under this Act, respectively. 

15 (b) EXPANSION OF PROHIBITION TO CERTAIN ADDI16 TIONAL DESIGNATED SERVICES.—Section 1877(h)(6) of 

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

18 amended by adding at the end the following: 

19 ‘‘(M) Ambulance services. 

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

21 (c) CONFORMING AMENDMENTS.—Section 1877 of 

22 such Act is further amended— 

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

24 which payment otherwise may be made under this 

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


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

2 this title’’; 

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

4 (g) to read as follows: 

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

6 be made under a State health security program for 

7 a designated health service for which a claim is pre8 sented in violation of subsection (a)(1)(B). No indi9 vidual, third-party payor, or other entity is liable for 

10 payment for designated health services for which a 

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

12 and 

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

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

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

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

17 TITLE IV—ADMINISTRATION 

18 Subtitle A—General Administrative 

19 Provisions 

20 SEC. 401. AMERICAN HEALTH SECURITY STANDARDS 

21 BOARD. 

22 (a) ESTABLISHMENT.—There is hereby established 

23 an American Health Security Standards Board. 

24 (b) APPOINTMENT AND TERMS OF MEMBERS.— 


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1 (1) IN GENERAL.—The Board shall be com2 posed of— 

3 (A) the Secretary of Health and Human 

4 Services; and 

5 (B) 6 other individuals (described in para6 graph (2)) appointed by the President with the 

7 advice and consent of the Senate. 

8 The President shall first nominate individuals under 

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

10 for the operation of the Board by not later than 

11 January 1, 2014. 

12 (2) SELECTION OF APPOINTED MEMBERS.— 

13 With respect to the individuals appointed under 

14 paragraph (1)(B): 

15 (A) The members shall be chosen on the 

16 basis of backgrounds in health policy, health ec17 onomics, the healing professions, and the ad18 ministration of health care institutions. 

19 (B) The members shall provide a balanced 

20 point of view with respect to the various health 

21 care interests and at least 2 of them shall rep22 resent the interests of individual consumers. 

23 (C) At least 1 member shall have a nurs24 ing background. 


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1 (D) Not more than 3 members shall be 

2 from the same political party. 

3 (E) To the greatest extent feasible, the 

4 members shall represent the various geographic 

5 regions of the United States and shall reflect 

6 the racial, ethnic, and gender composition of 

7 the population of the United States. 

8 (3) TERMS OF APPOINTED MEMBERS.—Individ9 uals appointed under paragraph (1)(B) shall serve 

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

11 the individuals initially appointed shall be, as des12 ignated by the President at the time of their ap13 pointment, for 1, 2, 3, 4, and 5 years. During a 

14 term of membership on the Board, no member shall 

15 engage in any other business, vocation or employ16 ment. 

17 (c) VACANCIES.— 

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

19 vacancy in the membership of the Board 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 Board. 

23 (2) VACANCY APPOINTMENTS.—Any member 

24 appointed to fill a vacancy shall serve for the reVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00064 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 President may re4 appoint an appointed member of the Board for a 

5 second term in the same manner as the original ap6 pointment. A member who has served for 2 consecu7 tive 6-year terms shall not be eligible for reappoint8 ment until 2 years after the member has ceased to 

9 serve. 

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

11 members of the Board may not be removed except 

12 by the President for cause. 

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

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

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

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

17 than the Secretary) shall be entitled to compensation at 

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

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

20 Code. 

21 (f) GENERAL DUTIES OF THE BOARD.— 

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

23 policies, procedures, guidelines, and requirements to 

24 carry out this Act, including those related to— 

25 (A) eligibility; 


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1 (B) enrollment; 

2 (C) benefits; 

3 (D) provider participation standards and 

4 qualifications, as defined in title III; 

5 (E) national and State funding levels; 

6 (F) methods for determining amounts of 

7 payments to providers of covered services, con8 sistent with subtitle B of title VI; 

9 (G) the determination of medical necessity 

10 and appropriateness with respect to coverage of 

11 certain services; 

12 (H) assisting State health security pro13 grams with planning for capital expenditures 

14 and service delivery; 

15 (I) planning for health professional edu16 cation funding (as specified in title VI); 

17 (J) allocating funds provided under title 

18 VII; and 

19 (K) encouraging States to develop regional 

20 planning mechanisms (described in section 

21 404(a)(3)). 

22 (2) REGULATIONS.—Regulations authorized by 

23 this Act shall be issued by the Board in accordance 

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

25 States Code. 


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1 (g) UNIFORM REPORTING STANDARDS; ANNUAL RE2 PORT; STUDIES.— 

3 (1) UNIFORM REPORTING STANDARDS.— 

4 (A) IN GENERAL.—The Board shall estab5 lish uniform reporting requirements and stand6 ards to ensure an adequate national data base 

7 regarding health services practitioners, services 

8 and finances of State health security programs, 

9 approved plans, providers, and the costs of fa10 cilities and practitioners providing services. 

11 Such standards shall include, to the maximum 

12 extent feasible, health outcome measures. 

13 (B) REPORTS.—The Board shall analyze 

14 regularly information reported to it, and to 

15 State health security programs pursuant to 

16 such requirements and standards. 

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

18 of the second year beginning after the date of the 

19 enactment of this Act, the Board shall annually re20 port to Congress on the following: 

21 (A) The status of implementation of the 

22 Act. 

23 (B) Enrollment under this Act. 

24 (C) Benefits under this Act. 


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1 (D) Expenditures and financing under this 

2 Act. 

3 (E) Cost-containment measures and 

4 achievements under this Act. 

5 (F) Quality assurance. 

6 (G) Health care utilization patterns, in7 cluding any changes attributable to the pro8 gram. 

9 (H) Long-range plans and goals for the de10 livery of health services. 

11 (I) Differences in the health status of the 

12 populations of the different States, including in13 come and racial characteristics. 

14 (J) Necessary changes in the education of 

15 health personnel. 

16 (K) Plans for improving service to medi17 cally underserved populations. 

18 (L) Transition problems as a result of im19 plementation of this Act. 

20 (M) Opportunities for improvements under 

21 this Act. 

22 (3) STATISTICAL ANALYSES AND OTHER STUD23 IES.—The Board may, either directly or by con24 tract— 


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1 (A) make statistical and other studies, on 

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

3 any aspect of the operation of this Act, includ4 ing studies of the effect of the Act upon the 

5 health of the people of the United States and 

6 the effect of comprehensive health services upon 

7 the health of persons receiving such services; 

8 (B) develop and test methods of providing 

9 through payment for services or otherwise, ad10 ditional incentives for adherence by providers to 

11 standards of adequacy, access, and quality; 

12 methods of consumer and peer review and peer 

13 control of the utilization of drugs, of laboratory 

14 services, and of other services; and methods of 

15 consumer and peer review of the quality of serv16 ices; 

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

18 records and information retrieval systems and 

19 budget systems for health services administra20 tion, and develop and test model systems for 

21 use by providers of services; 

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

23 of services, records and information retrieval 

24 systems useful in the furnishing of preventive 

25 or diagnostic services; 


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1 (E) develop, in collaboration with the phar2 maceutical profession, and test, improved ad3 ministrative practices or improved methods for 

4 the reimbursement of independent pharmacies 

5 for the cost of furnishing drugs as a covered 

6 service; and 

7 (F) make such other studies as it may con8 sider necessary or promising for the evaluation, 

9 or for the improvement, of the operation of this 

10 Act. 

11 (4) REPORT ON USE OF EXISTING FEDERAL

12 HEALTH CARE FACILITIES.—Not later than 1 year 

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

14 Board shall recommend to Congress one or more 

15 proposals for the treatment of health care facilities 

16 of the Federal Government. 

17 (h) EXECUTIVE DIRECTOR.— 

18 (1) APPOINTMENT.—There is hereby estab19 lished the position of Executive Director of the 

20 Board. The Director shall be appointed by the 

21 Board and shall serve as secretary to the Board and 

22 perform such duties in the administration of this 

23 title as the Board may assign. 

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

25 delegate to the Director or to any other officer or 


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

2 Secretary of Health and Human Services (and sub3 ject to reimbursement of identifiable costs), to any 

4 other officer or employee of the Department of 

5 Health and Human Services, any of its functions or 

6 duties under this Act other than— 

7 (A) the issuance of regulations; or 

8 (B) the determination of the availability of 

9 funds and their allocation to implement this 

10 Act. 

11 (3) COMPENSATION.—The Executive Director 

12 of the Board shall be entitled to compensation at a 

13 level equivalent to level III of the Executive Sched14 ule, in accordance with section 5314 of title 5, 

15 United States Code. 

16 (i) INSPECTOR GENERAL.—The Inspector General 

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

18 (1) in section 12(1), by inserting after ‘‘Cor19 poration;’’ the first place it appears the following: 

20 ‘‘the Chair of the American Health Security Stand21 ards Board;’’; 

22 (2) in section 12(2), by inserting after ‘‘Resolu23 tion Trust Corporation,’’ the following: ‘‘the Amer24 ican Health Security Standards Board,’’; and 

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


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1 ‘‘SPECIAL PROVISIONS CONCERNING AMERICAN HEALTH

2 SECURITY STANDARDS BOARD

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

4 Health Security Standards Board, in addition to the other 

5 authorities vested by this Act, shall have the same author6 ity, with respect to the Board and the American Health 

7 Security Program under this Act, as the Inspector General 

8 for the Department of Health and Human Services has 

9 with respect to the Secretary of Health and Human Serv10 ices and the medicare and medicaid programs, respec11 tively.’’. 

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

13 Board may deem necessary. 

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

15 Health and Human Services shall make available to the 

16 Board all information available from sources within the 

17 Department or from other sources, pertaining to the du18 ties of the Board. 

19 SEC. 402. AMERICAN HEALTH SECURITY ADVISORY COUN20 CIL. 

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

22 American Health Security Advisory Council (in this sec23 tion referred to as the ‘‘Council’’) to advise the Board on 

24 its activities. 


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

2 of— 

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

4 Chair of the Council; and 

5 (2) 20 members, not otherwise in the employ of 

6 the United States, appointed by the Board without 

7 regard to the provisions of title 5, United States 

8 Code, governing appointments in the competitive 

9 service. 

10 The appointed members shall include, in accordance with 

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

12 health security programs, public health professionals, pro13 viders of health services, and of individuals (who shall con14 stitute a majority of the Council) who are representative 

15 of consumers of such services, including a balanced rep16 resentation of employers, unions, consumer organizations, 

17 and population groups with special health care needs. To 

18 the greatest extent feasible, the membership of the Council 

19 shall represent the various geographic regions of the 

20 United States and shall reflect the racial, ethnic, and gen21 der composition of the population of the United States. 

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

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

24 (1) any member appointed to fill a vacancy oc25 curring during the term for which the member’s 


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1 predecessor was appointed shall be appointed for the 

2 remainder of that term; and 

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

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

5 of appointment, at the end of the first year with re6 spect to 5 members, at the end of the second year 

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

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

9 the fourth year with respect to 5 members after the 

10 date of enactment of this Act. 

11 (d) VACANCIES.— 

12 (1) IN GENERAL.—The Board shall fill any va13 cancy in the membership of the Council in the same 

14 manner as the original appointment. The vacancy 

15 shall not affect the power of the remaining members 

16 to execute the duties of the Council. 

17 (2) VACANCY APPOINTMENTS.—Any member 

18 appointed to fill a vacancy shall serve for the re19 mainder of the term for which the predecessor of the 

20 member was appointed. 

21 (3) REAPPOINTMENT.—The Board may re22 appoint an appointed member of the Council for a 

23 second term in the same manner as the original ap24 pointment. 

25 (e) QUALIFICATIONS.— 


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1 (1) PUBLIC HEALTH REPRESENTATIVES.— 

2 Members of the Council who are representative of 

3 State health security programs and public health 

4 professionals shall be individuals who have extensive 

5 experience in the financing and delivery of care 

6 under public health programs. 

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

8 are representative of providers of health care shall 

9 be individuals who are outstanding in fields related 

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

11 who are representative of organizations or associa12 tions of professional health practitioners. 

13 (3) CONSUMERS.—Members who are represent14 ative of consumers of such care shall be individuals, 

15 not engaged in and having no financial interest in 

16 the furnishing of health services, who are familiar 

17 with the needs of various segments of the population 

18 for personal health services and are experienced in 

19 dealing with problems associated with the consump20 tion of such services. 

21 (f) DUTIES.— 

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

23 Council— 

24 (A) to advise the Board on matters of gen25 eral policy in the administration of this Act, in 


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1 the formulation of regulations, and in the per2 formance of the Board’s duties under section 

3 401; and 

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

5 the utilization of health services under it, with 

6 a view to recommending any changes in the ad7 ministration of the Act or in its provisions 

8 which may appear desirable. 

9 (2) REPORT.—The Council shall make an an10 nual report to the Board on the performance of its 

11 functions, including any recommendations it may 

12 have with respect thereto, and the Board shall 

13 promptly transmit the report to the Congress, to14 gether with a report by the Board on any rec15 ommendations of the Council that have not been fol16 lowed. 

17 (g) STAFF.—The Council, its members, and any com18 mittees of the Council shall be provided with such secre19 tarial, clerical, or other assistance as may be authorized 

20 by the Board for carrying out their respective functions. 

21 (h) MEETINGS.—The Council shall meet as fre22 quently as the Board deems necessary, but not less than 

23 4 times each year. Upon request by 7 or more members 

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

25 Council. 


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

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

3 lieu of subsistence expenses during the performance of du4 ties of the Board in accordance with subchapter I of chap5 ter 57 of title 5, United States Code. 

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

7 Federal Advisory Committee Act shall not apply to the 

8 Council. 

9 SEC. 403. CONSULTATION WITH PRIVATE ENTITIES. 

10 The Secretary and the Board shall consult with pri11 vate entities, such as professional societies, national asso12 ciations, nationally recognized associations of experts, 

13 medical schools and academic health centers, consumer 

14 groups, and labor and business organizations in the for15 mulation of guidelines, regulations, policy initiatives, and 

16 information gathering to ensure the broadest and most in17 formed input in the administration of this Act. Nothing 

18 in this Act shall prevent the Secretary from adopting 

19 guidelines developed by such a private entity if, in the Sec20 retary’s and Board’s judgment, such guidelines are gen21 erally accepted as reasonable and prudent and consistent 

22 with this Act. 

23 SEC. 404. STATE HEALTH SECURITY PROGRAMS. 

24 (a) SUBMISSION OF PLANS.— 


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

2 the Board a plan for a State health security pro3 gram for providing for health care services to the 

4 residents of the State in accordance with this Act. 

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

6 with 1 or more neighboring States to submit to the 

7 Board a plan for a regional health security program 

8 instead of separate State health security programs. 

9 (3) REGIONAL PLANNING MECHANISMS.—The 

10 Board shall provide incentives for States to develop 

11 regional planning mechanisms to promote the ration12 al distribution of, adequate access to, and efficient 

13 use of, tertiary care facilities, equipment, and serv14 ices. 

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

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

17 required under this subsection, the American Health 

18 Security Standards Board Authority shall develop a 

19 plan for a State health security program in such 

20 State. 

21 (b) REVIEW AND APPROVAL OF PLANS.— 

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

23 plans submitted under subsection (a) and determine 

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1 less it finds that the plan (or State law) provides, 

2 consistent with the provisions of this Act, for the fol3 lowing: 

4 (A) Payment for required health services 

5 for eligible individuals in the State in accord6 ance with this Act. 

7 (B) Adequate administration, including the 

8 designation of a single State agency responsible 

9 for the administration (or supervision of the ad10 ministration) of the program. 

11 (C) The establishment of a State health se12 curity budget. 

13 (D) Establishment of payment methodolo14 gies (consistent with subtitle B of title VII). 

15 (E) Assurances that individuals have the 

16 freedom to choose practitioners and other 

17 health care providers for services covered under 

18 this Act. 

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

20 regional management and planning functions 

21 with respect to the delivery and distribution of 

22 health care services that— 

23 (i) ensures participation of consumers 

24 of health services and providers of health 

25 services; and 


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1 (ii) gives priority to the most acute 

2 shortages and maldistributions of health 

3 personnel and facilities and the most seri4 ous deficiencies in the delivery of covered 

5 services and to the means for the speedy 

6 alleviation of these shortcomings. 

7 (G) The licensure and regulation of all 

8 health providers and facilities to ensure compli9 ance with Federal and State laws and to pro10 mote quality of care. 

11 (H) Establishment of a quality review sys12 tem in accordance with section 503. 

13 (I) Establishment of an independent om14 budsman for consumers to register complaints 

15 about the organization and administration of 

16 the State health security program and to help 

17 resolve complaints and disputes between con18 sumers and providers. 

19 (J) Publication of an annual report on the 

20 operation of the State health security program, 

21 which report shall include information on cost, 

22 progress towards achieving full enrollment, pub23 lic access to health services, quality review, 

24 health outcomes, health professional training, 


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1 and the needs of medically underserved popu2 lations. 

3 (K) Provision of a fraud and abuse preven4 tion and control unit that the Inspector General 

5 determines meets the requirements of section 

6 412(a). 

7 (L) Prohibit payment in cases of prohib8 ited physician referrals under section 304. 

9 (2) CONSEQUENCES OF FAILURE TO COMPLY.— 

10 If the Board finds that a State plan submitted 

11 under paragraph (1) does not meet the requirements 

12 for approval under this section or that a State 

13 health security program or specific portion of such 

14 program, the plan for which was previously ap15 proved, no longer meets such requirements, the 

16 Board shall provide notice to the State of such fail17 ure and that unless corrective action is taken within 

18 a period specified by the Board, the Board shall 

19 place the State health security program (or specific 

20 portions of such program) in receivership under the 

21 jurisdiction of the Board. 

22 (c) STATE HEALTH SECURITY ADVISORY COUN23 CILS.— 

24 (1) IN GENERAL.—For each State, the Gov25 ernor shall provide for appointment of a State 


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1 Health Security Advisory Council to advise and 

2 make recommendations to the Governor and State 

3 with respect to the implementation of the State 

4 health security program in the State. 

5 (2) MEMBERSHIP.—Each State Health Security 

6 Advisory Council shall be composed of at least 11 in7 dividuals. The appointed members shall include indi8 viduals who are representative of the State health 

9 security program, public health professionals, pro10 viders of health services, and of individuals (who 

11 shall constitute a majority) who are representative of 

12 consumers of such services, including a balanced 

13 representation of employers, unions and consumer 

14 organizations. To the greatest extent feasible, the 

15 membership of each State Health Security Advisory 

16 Council shall represent the various geographic re17 gions of the State and shall reflect the racial, ethnic, 

18 and gender composition of the population of the 

19 State. 

20 (3) DUTIES.— 

21 (A) IN GENERAL.—Each State Health Se22 curity Advisory Council shall review, and sub23 mit comments to the Governor concerning the 

24 implementation of the State health security pro25 gram in the State. 


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1 (B) ASSISTANCE.—Each State Health Se2 curity Advisory Council shall provide assistance 

3 and technical support to community organiza4 tions and public and private non-profit agencies 

5 submitting applications for funding under ap6 propriate State and Federal public health pro7 grams, with particular emphasis placed on as8 sisting those applicants with broad consumer 

9 representation. 

10 (d) STATE USE OF FISCAL AGENTS.— 

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

12 program, using competitive bidding procedures, may 

13 enter into such contracts with qualified entities, such 

14 as voluntary associations, as the State determines to 

15 be appropriate to process claims and to perform 

16 other related functions of fiscal agents under the 

17 State health security program. 

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

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

20 than 1 contract described in paragraph (1) be en21 tered into under a State health security program. 

22 SEC. 405. COMPLEMENTARY CONDUCT OF RELATED 

23 HEALTH PROGRAMS. 

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1 mental health, disability insurance, vocational rehabilita2 tion, the regulation of food and drugs, and all other mat3 ters pertaining to health, the Secretary of Health and 

4 Human Services shall direct all activities of the Depart5 ment of Health and Human Services toward contributions 

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

7 Subtitle B—Control Over Fraud 

8 and Abuse 

9 SEC. 411. APPLICATION OF FEDERAL SANCTIONS TO ALL 

10 FRAUD AND ABUSE UNDER AMERICAN 

11 HEALTH SECURITY PROGRAM. 

12 The following sections of the Social Security Act shall 

13 apply to State health security programs in the same man14 ner as they apply to State medical assistance plans under 

15 title XIX of such Act (except that in applying such provi16 sions any reference to the Secretary is deemed a reference 

17 to the Board): 

18 (1) Section 1128 (relating to exclusion of indi19 viduals and entities). 

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

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

22 (4) Section 1124 (relating to disclosure of own23 ership and related information). 

24 (5) Section 1126 (relating to disclosure of cer25 tain owners). 


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1 SEC. 412. REQUIREMENTS FOR OPERATION OF STATE 

2 HEALTH CARE FRAUD AND ABUSE CONTROL 

3 UNITS. 

4 (a) REQUIREMENT.—In order to meet the require5 ment of section 404(b)(1)(K), each State health security 

6 program shall establish and maintain a health care fraud 

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

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

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

10 State medicaid fraud control unit (described in section 

11 1903(q) of the Social Security Act). 

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

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

14 government; 

15 (2) be separate and distinct from the State 

16 agency with principal responsibility for the adminis17 tration of the State health security program; and 

18 (3) meet one of the following requirements: 

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

20 State Attorney General or of another depart21 ment of State government which possesses 

22 statewide authority to prosecute individuals for 

23 criminal violations. 

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

25 which does not provide for the criminal prosecu26 tion of individuals by a statewide authority and 


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1 has formal procedures, approved by the Board, 

2 that— 

3 (i) assure its referral of suspected 

4 criminal violations relating to the State 

5 health insurance plan to the appropriate 

6 authority or authorities in the States for 

7 prosecution; and 

8 (ii) assure its assistance of, and co9 ordination with, such authority or authori10 ties in such prosecutions. 

11 (C) It shall have a formal working relation12 ship with the office of the State Attorney Gen13 eral and have formal procedures (including pro14 cedures for its referral of suspected criminal 

15 violations to such office) which are approved by 

16 the Board and which provide effective coordina17 tion of activities between the fraud unit and 

18 such office with respect to the detection, inves19 tigation, and prosecution of suspected criminal 

20 violations relating to the State health insurance 

21 plan. 

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

23 (1) have the function of conducting a statewide 

24 program for the investigation and prosecution of vio25 lations of all applicable State laws regarding any 


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1 and all aspects of fraud in connection with any as2 pect of the provision of health care services and ac3 tivities of providers of such services under the State 

4 health security program; 

5 (2) have procedures for reviewing complaints of 

6 the abuse and neglect of patients of providers and 

7 facilities that receive payments under the State 

8 health security program, and, where appropriate, for 

9 acting upon such complaints under the criminal laws 

10 of the State or for referring them to other State 

11 agencies for action; and 

12 (3) provide for the collection, or referral for col13 lection to a single State agency, of overpayments 

14 that are made under the State health security pro15 gram to providers and that are discovered by the 

16 fraud unit in carrying out its activities. 

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

18 (1) employ such auditors, attorneys, investiga19 tors, and other necessary personnel; 

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

21 (3) provide sufficient resources (as specified by 

22 the Board), 

23 as is necessary to promote the effective and efficient con24 duct of the unit’s activities. 


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1 (e) COOPERATIVE AGREEMENTS.—The fraud unit 

2 shall have cooperative agreements (as specified by the 

3 Board) with— 

4 (1) similar fraud units in other States; 

5 (2) the Inspector General; and 

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

7 (f) REPORTS.—The fraud unit shall submit to the In8 spector General an application and annual reports con9 taining such information as the Inspector General deter10 mines to be necessary to determine whether the unit meets 

11 the previous requirements of this section. 

12 TITLE V—QUALITY ASSESSMENT 

13 SEC. 501. AMERICAN HEALTH SECURITY QUALITY COUNCIL. 

14 (a) ESTABLISHMENT.—There is hereby established 

15 an American Health Security Quality Council (in this title 

16 referred to as the ‘‘Council’’). 

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

18 perform the following duties: 

19 (1) PRACTICE GUIDELINES.—The Council shall 

20 review and evaluate each practice guideline devel21 oped under part B of title IX of the Public Health 

22 Service Act. The Council shall determine whether 

23 the guideline should be recognized as a national 

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


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1 for purposes of determining payments under a State 

2 health security program. 

3 (2) STANDARDS OF QUALITY, PERFORMANCE

4 MEASURES, AND MEDICAL REVIEW CRITERIA.—The 

5 Council shall review and evaluate each standard of 

6 quality, performance measure, and medical review 

7 criterion developed under part B of title IX of the 

8 Public Health Service Act. The Council shall deter9 mine whether the standard, measure, or criterion is 

10 appropriate for use in assessing or reviewing the 

11 quality of services provided by State health security 

12 programs, health care institutions, or health care 

13 professionals. 

14 (3) CRITERIA FOR ENTITIES CONDUCTING

15 QUALITY REVIEWS.—The Council shall develop min16 imum criteria for competence for entities that can 

17 qualify to conduct ongoing and continuous external 

18 quality review for State quality review programs 

19 under section 503. Such criteria shall require such 

20 an entity to be administratively independent of the 

21 individual or board that administers the State health 

22 security program and shall ensure that such entities 

23 do not provide financial incentives to reviewers to 

24 favor one pattern of practice over another. The 

25 Council shall ensure coordination and reporting by 


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1 such entities to ensure national consistency in qual2 ity standards. 

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

4 the Board annually on the conduct of activities 

5 under such title and shall report to the Board annu6 ally specifically on findings from outcomes research 

7 and development of practice guidelines that may af8 fect the Board’s determination of coverage of serv9 ices under section 401(f)(1)(G). 

10 (5) OTHER FUNCTIONS.—The Council shall 

11 perform the functions of the Council described in 

12 section 502. 

13 (c) APPOINTMENT AND TERMS OF MEMBERS.— 

14 (1) IN GENERAL.—The Council shall be com15 posed of 10 members appointed by the President. 

16 The President shall first appoint individuals on a 

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

18 Council by not later than January 1, 2014. 

19 (2) SELECTION OF MEMBERS.—Each member 

20 of the Council shall be a member of a health profes21 sion. Five members of the Council shall be physi22 cians. Individuals shall be appointed to the Council 

23 on the basis of national reputations for clinical and 

24 academic excellence. To the greatest extent feasible, 

25 the membership of the Council shall represent the 


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1 various geographic regions of the United States and 

2 shall reflect the racial, ethnic, and gender composi3 tion of the population of the United States. 

4 (3) TERMS OF MEMBERS.—Individuals ap5 pointed to the Council shall serve for a term of 5 

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

7 initially appointed shall be, as designated by the 

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

9 3, and 4 years. 

10 (d) VACANCIES.— 

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

12 vacancy in the membership of the Council in the 

13 same manner as the original appointment. The va14 cancy shall not affect the power of the remaining 

15 members to execute the duties of the Council. 

16 (2) VACANCY APPOINTMENTS.—Any member 

17 appointed to fill a vacancy shall serve for the re18 mainder of the term for which the predecessor of the 

19 member was appointed. 

20 (3) REAPPOINTMENT.—The President may re21 appoint a member of the Council for a second term 

22 in the same manner as the original appointment. A 

23 member who has served for 2 consecutive 5-year 

24 terms shall not be eligible for reappointment until 2 

25 years after the member has ceased to serve. 


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

2 members of the Council to serve at the will of the Presi3 dent as Chair of the Council. 

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

5 are not employees of the Federal Government shall be en6 titled to compensation at a level equivalent to level II of 

7 the Executive Schedule, in accordance with section 5313 

8 of title 5, United States Code. 

9 SEC. 502. DEVELOPMENT OF CERTAIN METHODOLOGIES, 

10 GUIDELINES, AND STANDARDS. 

11 (a) PROFILING OF PATTERNS OF PRACTICE; IDENTI12 FICATION OF OUTLIERS.—The Council shall adopt meth13 odologies for profiling the patterns of practice of health 

14 care professionals and for identifying outliers (as defined 

15 in subsection (e)). 

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

17 develop guidelines for certain medical procedures des18 ignated by the Board to be performed only at tertiary care 

19 centers which can meet standards for frequency of proce20 dure performance and intensity of support mechanisms 

21 that are consistent with the high probability of desired pa22 tient outcome. Reimbursement under this Act for such a 

23 designated procedure may only be provided if the proce24 dure was performed at a center that meets such stand25 ards. 


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

2 standards for education and sanctions with respect to 

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

4 provided under this Act. The Council shall develop criteria 

5 for referral of providers to the State licensing board if edu6 cation proves ineffective in correcting provider practice be7 havior. 

8 (d) DISSEMINATION.—The Council shall disseminate 

9 to the State— 

10 (1) the methodologies adopted under subsection 

11 (a); 

12 (2) the guidelines developed under subsection 

13 (b); and 

14 (3) the standards developed under subsection 

15 (c); 

16 for use by the States under section 503. 

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

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

19 practice, relative to applicable practice guidelines, suggests 

20 deficiencies in the quality of health care services being pro21 vided. 

22 SEC. 503. STATE QUALITY REVIEW PROGRAMS. 

23 (a) REQUIREMENT.—In order to meet the require24 ment of section 404(b)(1)(H), each State health security 

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1 duct quality reviews of persons providing covered services 

2 under the program, in accordance with standards estab3 lished under subsection (b)(1) (except as provided in sub4 section (b)(2)) and subsection (d). 

5 (b) FEDERAL STANDARDS.— 

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

7 standards with respect to— 

8 (A) the adoption of practice guidelines 

9 (whether developed by the Federal Government 

10 or other entities); 

11 (B) the identification of outliers (con12 sistent with methodologies adopted under sec13 tion 502(a)); 

14 (C) the development of remedial programs 

15 and monitoring for outliers; and 

16 (D) the application of sanctions (consistent 

17 with the standards developed under section 

18 502(c)). 

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

20 under subsection (a) standards other than those es21 tablished under paragraph (1) so long as the State 

22 demonstrates to the satisfaction of the Council on an 

23 annual basis that the standards applied have been as 

24 efficacious in promoting and achieving improved 

25 quality of care as the application of the standards 


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1 established under paragraph (1). Positive improve2 ments in quality shall be documented by reductions 

3 in the variations of clinical care process and im4 provement in patient outcomes. 

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

6 conduct quality reviews under subsection (a) unless the 

7 entity satisfies the criteria for competence for such entities 

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

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

10 section shall preclude an institutional provider from estab11 lishing its own internal quality review and enhancement 

12 programs. 

13 SEC. 504. ELIMINATION OF UTILIZATION REVIEW PRO14 GRAMS; TRANSITION. 

15 (a) INTENT.—It is the intention of this title to re16 place by January 1, 2017, random utilization controls with 

17 a systematic review of patterns of practice that com18 promise the quality of care. 

19 (b) SUPERSEDING CASE REVIEWS.— 

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

21 provisions of this subsection, the program of quality 

22 review provided under the previous sections of this 

23 title supersede all existing Federal requirements for 

24 utilization review programs, including requirements 

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1 quiring pre-certification of medical procedures on a 

2 case-by-case basis. 

3 (2) TRANSITION.—Before January 1, 2017, the 

4 Board and the States may employ existing utiliza5 tion review standards and mechanisms as may be 

6 necessary to effect the transition to pattern of prac7 tice-based reviews. 

8 (3) CONSTRUCTION.—Nothing in this sub9 section shall be construed— 

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

11 of the provision of care— 

12 (i) in individual incidents where the 

13 quality of care has significantly deviated 

14 from acceptable standards of practice; and 

15 (ii) with respect to a provider who has 

16 been determined to be an outlier; or 

17 (B) as precluding the case management of 

18 catastrophic, mental health, or substance abuse 

19 cases or long-term care where such manage20 ment is necessary to achieve appropriate, cost21 effective, and beneficial comprehensive medical 

22 care, as provided for in section 204. 


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1 TITLE VI—HEALTH SECURITY 

2 BUDGET; PAYMENTS; COST 

3 CONTAINMENT MEASURES 

4 Subtitle A—Budgeting and 

5 Payments to States 

6 SEC. 601. NATIONAL HEALTH SECURITY BUDGET. 

7 (a) NATIONAL HEALTH SECURITY BUDGET.— 

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

9 1 before the beginning of each year (beginning with 

10 2014), the Board shall establish a national health 

11 security budget, which— 

12 (A) specifies the total expenditures (includ13 ing expenditures for administrative costs) to be 

14 made by the Federal Government and the 

15 States for covered health care services under 

16 this Act; and 

17 (B) allocates those expenditures among the 

18 States consistent with section 604. 

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

20 shall not exceed the budget for the preceding year 

21 increased by the percentage increase in gross domes22 tic product. 

23 (2) DIVISION OF BUDGET INTO COMPONENTS.— 

24 The national health security budget shall consist of 

25 at least 4 components: 


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1 (A) A component for quality assessment 

2 activities (described in title V). 

3 (B) A component for health professional 

4 education expenditures. 

5 (C) A component for administrative costs. 

6 (D) A component for operating and other 

7 expenditures not described in subparagraphs 

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

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

10 not included in the other components. A State 

11 may provide for the allocation of this compo12 nent between capital expenditures and other ex13 penditures. 

14 (3) ALLOCATION AMONG COMPONENTS.—Tak15 ing into account the State health security budgets 

16 established and submitted under section 603, the 

17 Board shall allocate the national health security 

18 budget among the components in a manner that— 

19 (A) assures a fair allocation for quality as20 sessment activities (consistent with the national 

21 health security spending growth limit); and 

22 (B) assures that the health professional 

23 education expenditure component is sufficient 

24 to provide for the amount of health professional 

25 education expenditures sufficient to meet the 


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1 need for covered health care services (consistent 

2 with the national health security spending 

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

4 (b) BASIS FOR TOTAL EXPENDITURES.— 

5 (1) IN GENERAL.—The total expenditures speci6 fied in such budget shall be the sum of the capita7 tion amounts computed under section 602(a) and 

8 the amount of Federal administrative expenditures 

9 needed to carry out this Act. 

10 (2) NATIONAL HEALTH SECURITY SPENDING

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

12 national health security spending growth limit de13 scribed in this paragraph for a year is (A) zero, or, 

14 if greater, (B) the average annual percentage in15 crease in the gross domestic product (in current dol16 lars) during the 3-year period beginning with the 

17 first quarter of the fourth previous year to the first 

18 quarter of the previous year minus the percentage 

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

20 residing in any State the United States from the 

21 first quarter of the second previous year to the first 

22 quarter of the previous year. 

23 (c) DEFINITIONS.—In this title: 

24 (1) CAPITAL EXPENDITURES.—The term ‘‘cap25 ital expenditures’’ means expenses for the purchase, 


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1 lease, construction, or renovation of capital facilities 

2 and for equipment and includes return on equity 

3 capital. 

4 (2) HEALTH PROFESSIONAL EDUCATION EX5 PENDITURES.—The term ‘‘health professional edu6 cation expenditures’’ means expenditures in hospitals 

7 and other health care facilities to cover costs associ8 ated with teaching and related research activities. 

9 SEC. 602. COMPUTATION OF INDIVIDUAL AND STATE CAPI10 TATION AMOUNTS. 

11 (a) CAPITATION AMOUNTS.— 

12 (1) INDIVIDUAL CAPITATION AMOUNTS.—In es13 tablishing the national health security budget under 

14 section 601(a) and in computing the national aver15 age per capita cost under subsection (b) for each 

16 year, the Board shall establish a method for com17 puting the capitation amount for each eligible indi18 vidual residing in each State. The capitation amount 

19 for an eligible individual in a State classified within 

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

21 the product of— 

22 (A) a national average per capita cost for 

23 all covered health care services (computed 

24 under subsection (b)); 


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1 (B) the State adjustment factor (estab2 lished under subsection (c)) for the State; and 

3 (C) the risk adjustment factor (established 

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

5 (2) STATE CAPITATION AMOUNT.— 

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

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

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

9 capitation amounts computed under paragraph 

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

11 as estimated by the Board before the beginning 

12 of the year involved. 

13 (B) USE OF STATISTICAL MODEL.—The 

14 Board may provide for the computation of 

15 State capitation amounts based on statistical 

16 models that fairly reflect the elements that com17 prise the State capitation amount described in 

18 subparagraph (A). 

19 (C) POPULATION INFORMATION.—The Bu20 reau of the Census shall assist the Board in de21 termining the number, place of residence, and 

22 risk group classification of eligible individuals. 

23 (b) COMPUTATION OF NATIONAL AVERAGE PER CAP24 ITA COST.— 


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1 (1) FOR 2014.—For 2014, the national average 

2 per capita cost under this paragraph is equal to— 

3 (A) the average per capita health care ex4 penditures in the United States in 2012 (as es5 timated by the Board); 

6 (B) increased to 2013 by the Board’s esti7 mate of the actual amount of such per capita 

8 expenditures during 2013; and 

9 (C) updated to 2014 by the national health 

10 security spending growth limit specified in sec11 tion 601(b)(2) for 2014. 

12 (2) FOR SUCCEEDING YEARS.—For each suc13 ceeding year, the national average per capita cost 

14 under this subsection is equal to the national aver15 age per capita cost computed under this subsection 

16 for the previous year increased by the national 

17 health security spending growth limit (specified in 

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

19 (c) STATE ADJUSTMENT FACTORS.— 

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

21 paragraphs of this subsection, the Board shall de22 velop for each State a factor to adjust the national 

23 average per capita costs to reflect differences be24 tween the State and the United States in— 


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1 (A) average labor and nonlabor costs that 

2 are necessary to provide covered health services; 

3 (B) any social, environmental, or geo4 graphic condition affecting health status or the 

5 need for health care services, to the extent such 

6 a condition is not taken into account in the es7 tablishment of risk groups under subsection (d); 

8 (C) the geographic distribution of the 

9 State’s population, particularly the proportion 

10 of the population residing in medically under11 served areas, to the extent such a condition is 

12 not taken into account in the establishment of 

13 risk groups under subsection (d); and 

14 (D) any other factor relating to operating 

15 costs required to ensure equitable distribution 

16 of funds among the States. 

17 (2) MODIFICATION OF HEALTH PROFESSIONAL

18 EDUCATION COMPONENT.—With respect to the por19 tion of the national health security budget allocated 

20 to expenditures for health professional education, the 

21 Board shall modify the State adjustment factors so 

22 as to take into account— 

23 (A) differences among States in health 

24 professional education programs in operation as 

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


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1 (B) differences among States in their rel2 ative need for expenditures for health profes3 sional education, taking into account the health 

4 professional education expenditures proposed in 

5 State health security budgets under section 

6 603(a). 

7 (3) BUDGET NEUTRALITY.—The State adjust8 ment factors, as modified under paragraph (2), shall 

9 be applied under this subsection in a manner that 

10 results in neither an increase nor a decrease in the 

11 total amount of the Federal contributions to all 

12 State health security programs under subsection (b) 

13 as a result of the application of such factors. 

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

15 factors under this subsection during the 5-year pe16 riod beginning with 2014, the Board shall phase-in, 

17 over such period, the use of factors described in 

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

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

20 and a factor that reflects the relative actual average 

21 per capita costs of health services of the different 

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

23 (5) PERIODIC ADJUSTMENT.—In establishing 

24 the national health security budget before the begin25 ning of each year, the Board shall provide for approVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00104 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 priate adjustments in the State adjustment factors 

2 under this subsection. 

3 (d) ADJUSTMENTS FOR RISK GROUP CLASSIFICA4 TION.— 

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

6 adjustment factor to the national average per capita 

7 costs computed under subsection (b) for individuals 

8 classified in each risk group (as designated under 

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

10 average national average per capita costs and the 

11 national average per capita cost for individuals clas12 sified in the risk group. 

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

14 a series of risk groups, determined by age, health in15 dicators, and other factors that represent distinct 

16 patterns of health care services utilization and costs. 

17 (3) PERIODIC ADJUSTMENT.—In establishing 

18 the national health security budget before the begin19 ning of each year, the Board shall provide for appro20 priate adjustments in the risk adjustment factors 

21 under this subsection. 

22 SEC. 603. STATE HEALTH SECURITY BUDGETS. 

23 (a) ESTABLISHMENT AND SUBMISSION OF BUDG24 ETS.— 


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

2 program shall establish and submit to the Board for 

3 each year a proposed and a final State health secu4 rity budget, which specifies the following: 

5 (A) The total expenditures (including ex6 penditures for administrative costs) to be made 

7 under the program in the State for covered 

8 health care services under this Act, consistent 

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

10 (i) By the 4 components (described in 

11 section 601(a)(2)), consistent with sub12 section (b). 

13 (ii) Within the operating component— 

14 (I) expenditures for operating 

15 costs of hospitals and other facility16 based services in the State; 

17 (II) expenditures for payment to 

18 comprehensive health service organiza19 tions; 

20 (III) expenditures for payment of 

21 services provided by health care prac22 titioners; and 

23 (IV) expenditures for other cov24 ered items and services. 


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1 Amounts included in the operating compo2 nent include amounts that may be used by 

3 providers for capital expenditures. 

4 (B) The total revenues required to meet 

5 the State health security expenditures. 

6 (2) PROPOSED BUDGET DEADLINE.—The pro7 posed budget for a year shall be submitted under 

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

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

10 year shall— 

11 (A) be established and submitted under 

12 paragraph (1) not later than October 1 before 

13 the year, and 

14 (B) take into account the amounts estab15 lished under the national health security budget 

16 under section 601 for the year. 

17 (4) ADJUSTMENT IN ALLOCATIONS PER18 MITTED.— 

19 (A) IN GENERAL.—Subject to subpara20 graphs (B) and (C), in the case of a final budg21 et, a State may change the allocation of 

22 amounts among components. 

23 (B) NOTICE.—No such change may be 

24 made unless the State has provided prior notice 

25 of the change to the Board. 


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

2 made if the Board, within such time period as 

3 the Board specifies, disapproves such change. 

4 (b) EXPENDITURE LIMITS.— 

5 (1) IN GENERAL.—The total expenditures speci6 fied in each State health security budget under sub7 section (a)(1) shall take into account Federal con8 tributions made under section 604. 

9 (2) LIMIT ON CLAIMS PROCESSING AND BILL10 ING EXPENDITURES.—Each State health security 

11 budget shall provide that State administrative ex12 penditures, including expenditures for claims proc13 essing and billing, shall not exceed 3 percent of the 

14 total expenditures under the State health security 

15 program, unless the Board determines, on a case-by16 case basis, that additional administrative expendi17 tures would improve health care quality and cost ef18 fectiveness. 

19 (3) WORKER ASSISTANCE.—A State health se20 curity program may provide that, for budgets for 

21 years before 2017, up to 1 percent of the budget 

22 may be used for purposes of programs providing as23 sistance to workers who are currently performing 

24 functions in the administration of the health insur25 ance system and who may experience economic disVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 location as a result of the implementation of the pro2 gram. 

3 (c) APPROVAL PROCESS FOR CAPITAL EXPENDI4 TURES PERMITTED.—Nothing in this title shall be con5 strued as preventing a State health security program from 

6 providing for a process for the approval of capital expendi7 tures based on information derived from regional planning 

8 agencies. 

9 SEC. 604. FEDERAL PAYMENTS TO STATES. 

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

11 State health security program is entitled to receive, from 

12 amounts in the American Health Security Trust Fund, on 

13 a monthly basis each year, of an amount equal to one14 twelfth of the product of— 

15 (1) the State capitation amount (computed 

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

17 and 

18 (2) the Federal contribution percentage (estab19 lished under subsection (b)). 

20 (b) FEDERAL CONTRIBUTION PERCENTAGE.—The 

21 Board shall establish a formula for the establishment of 

22 a Federal contribution percentage for each State. Such 

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

24 income and revenue capacity and such other relevant eco25 nomic indicators as the Board determines to be approVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00109 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 priate. In addition, during the 5-year period beginning 

2 with 2014, the Board may provide for a transition adjust3 ment to the formula in order to take into account current 

4 expenditures by the State (and local governments thereof) 

5 for health services covered under the State health security 

6 program. The weighted-average Federal contribution per7 centage for all States shall equal 86 percent and in no 

8 event shall such percentage be less than 81 percent nor 

9 more than 91 percent. 

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

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

12 security program. 

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

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

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

16 fund covered health services from its own revenues. 

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

18 health services for less than the budgeted amount 

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

20 that year for uses consistent with this Act. 

21 SEC. 605. ACCOUNT FOR HEALTH PROFESSIONAL EDU22 CATION EXPENDITURES. 

23 (a) SEPARATE ACCOUNT.—Each State health secu24 rity program shall— 


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1 (1) include a separate account for health pro2 fessional education expenditures; and 

3 (2) specify the general manner, consistent with 

4 subsection (b), in which such expenditures are to be 

5 distributed among different types of institutions and 

6 the different areas of the State. 

7 (b) DISTRIBUTION RULES.—The distribution of 

8 funds to hospitals and other health care facilities from the 

9 account shall conform to the following principles: 

10 (1) The disbursement of funds shall be con11 sistent with achievement of the national and pro12 gram goals (specified in section 701(b)) within the 

13 State health security program and the distribution 

14 of funds from the account shall be conditioned upon 

15 the receipt of such reports as the Board may require 

16 in order to monitor compliance with such goals. 

17 (2) The distribution of funds from the account 

18 shall take into account the potentially higher costs 

19 of placing health professional students in clinical 

20 education programs in health professional shortage 

21 areas. 


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1 Subtitle B—Payments by States to 

2 Providers 

3 SEC. 611. PAYMENTS TO HOSPITALS AND OTHER FACILITY4 BASED SERVICES FOR OPERATING EXPENSES 

5 ON THE BASIS OF APPROVED GLOBAL BUDG6 ETS. 

7 (a) DIRECT PAYMENT UNDER GLOBAL BUDGET.— 

8 Payment for operating expenses for institutional and facil9 ity-based care, including hospital services and nursing fa10 cility services, under State health security programs shall 

11 be made directly to each institution or facility by each 

12 State health security program under an annual prospec13 tive global budget approved under the program. Such a 

14 budget shall include payment for outpatient care and non15 facility-based care that is furnished by or through the fa16 cility. In the case of a hospital that is wholly owned (or 

17 controlled) by a comprehensive health service organization 

18 that is paid under section 614 on the basis of a global 

19 budget, the global budget of the organization shall include 

20 the budget for the hospital. 

21 (b) ANNUAL NEGOTIATIONS; BUDGET APPROVAL.— 

22 (1) IN GENERAL.—The prospective global budg23 et for an institution or facility shall— 

24 (A) be developed through annual negotia25 tions between— 


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1 (i) a panel of individuals who are ap2 pointed by the Governor of the State and 

3 who represent consumers, labor, business, 

4 and the State government; and 

5 (ii) the institution or facility; and 

6 (B) be based on a nationally uniform sys7 tem of cost accounting established under stand8 ards of the Board. 

9 (2) CONSIDERATIONS.—In developing a budget 

10 through negotiations, there shall be taken into ac11 count at least the following: 

12 (A) With respect to inpatient hospital serv13 ices, the number, and classification by diag14 nosis-related group, of discharges. 

15 (B) An institution’s or facility’s past ex16 penditures. 

17 (C) The extent to which debt service for 

18 capital expenditures has been included in the 

19 proposed operating budget. 

20 (D) The extent to which capital expendi21 tures are financed directly or indirectly through 

22 reductions in direct care to patients, including 

23 reductions in registered nursing staffing pat24 terns or changes in emergency room or primary 

25 care services or availability. 


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1 (E) Change in the consumer price index 

2 and other price indices. 

3 (F) The cost of reasonable compensation 

4 to health care practitioners. 

5 (G) The compensation level of the institu6 tion’s or facility’s work force. 

7 (H) The extent to which the institution or 

8 facility is providing health care services to meet 

9 the needs of residents in the area served by the 

10 institution or facility, including the institution’s 

11 or facility’s occupancy level. 

12 (I) The institution’s or facility’s previous 

13 financial and clinical performance, based on uti14 lization and outcomes data provided under this 

15 Act. 

16 (J) The type of institution or facility, in17 cluding whether the institution or facility is 

18 part of a clinical education program or serves 

19 a health professional education, research or 

20 other training purpose. 

21 (K) Technological advances or changes. 

22 (L) Costs of the institution or facility asso23 ciated with meeting Federal and State regula24 tions. 


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1 (M) The costs associated with necessary 

2 public outreach activities. 

3 (N) In the case of a for-profit facility, a 

4 reasonable rate of return on equity capital, 

5 independent of those operating expenses nec6 essary to fulfill the objectives of this Act. 

7 (O) Incentives to facilities that maintain 

8 costs below previous reasonable budgeted levels 

9 without reducing the care provided. 

10 (P) With respect to facilities that provide 

11 mental health services and substance abuse 

12 treatment services, any additional costs involved 

13 in the treatment of dually diagnosed individ14 uals. 

15 The portion of such a budget that relates to expendi16 tures for health professional education shall be con17 sistent with the State health security budget for 

18 such expenditures. 

19 (3) PROVISION OF REQUIRED INFORMATION; DI20 AGNOSIS-RELATED GROUP.—No budget for an insti21 tution or facility for a year may be approved unless 

22 the institution or facility has submitted on a timely 

23 basis to the State health security program such in24 formation as the program or the Board shall specify, 


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1 including in the case of hospitals information on dis2 charges classified by diagnosis-related group. 

3 (c) ADJUSTMENTS IN APPROVED BUDGETS.— 

4 (1) ADJUSTMENTS TO GLOBAL BUDGETS THAT

5 CONTRACT WITH COMPREHENSIVE HEALTH SERVICE

6 ORGANIZATIONS.—Each State health security pro7 gram shall develop an administrative mechanism for 

8 reducing operating funds to institutions or facilities 

9 in proportion to payments made to such institutions 

10 or facilities for services contracted for by a com11 prehensive health service organization. 

12 (2) AMENDMENTS.—In accordance with stand13 ards established by the Board, an operating and 

14 capital budget approved under this section for a year 

15 may be amended before, during, or after the year if 

16 there is a substantial change in any of the factors 

17 relevant to budget approval. 

18 (d) DONATIONS PERMISSIBLE.—The States health 

19 security programs may permit institutions and facilities 

20 to raise funds from private sources to pay for newly con21 structed facilities, major renovations, and equipment. The 

22 expenditure of such funds, whether for operating or cap23 ital expenditures, does not obligate the State health secu24 rity program to provide for continued support for such ex25 penditures unless included in an approved global budget. 


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1 SEC. 612. PAYMENTS TO HEALTH CARE PRACTITIONERS 

2 BASED ON PROSPECTIVE FEE SCHEDULE. 

3 (a) FEE FOR SERVICE.— 

4 (1) IN GENERAL.—Every independent health 

5 care practitioner is entitled to be paid, for the provi6 sion of covered health services under the State 

7 health security program, a fee for each billable cov8 ered service. 

9 (2) GLOBAL FEE PAYMENT METHODOLOGIES.— 

10 The Board shall establish models and encourage 

11 State health security programs to implement alter12 native payment methodologies that incorporate glob13 al fees for related services (such as all outpatient 

14 procedures for treatment of a condition) or for a 

15 basic group of services (such as primary care serv16 ices) furnished to an individual over a period of 

17 time, in order to encourage continuity and efficiency 

18 in the provision of services. Such methodologies shall 

19 be designed to ensure a high quality of care. 

20 (3) BILLING DEADLINES; ELECTRONIC BILL21 ING.—A State health security program may deny 

22 payment for any service of an independent health 

23 care practitioner for which it did not receive a bill 

24 and appropriate supporting documentation (which 

25 had been previously specified) within 30 days after 

26 the date the service was provided. Such a program 


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1 may require that bills for services for which payment 

2 may be made under this section, or for any class of 

3 such services, be submitted electronically. 

4 (b) PAYMENT RATES BASED ON NEGOTIATED PRO5 SPECTIVE FEE SCHEDULES.—With respect to any pay6 ment method for a class of services of practitioners, the 

7 State health security program shall establish, on a pro8 spective basis, a payment schedule. The State health secu9 rity program may establish such a schedule after negotia10 tions with organizations representing the practitioners in11 volved. Such fee schedules shall be designed to provide in12 centives for practitioners to choose primary care medicine, 

13 including general internal medicine, family medicine, gyne14 cology, and pediatrics, over medical specialization. Noth15 ing in this section shall be construed as preventing a State 

16 from adjusting the payment schedule amounts on a quar17 terly or other periodic basis depending on whether expend18 itures under the schedule will exceed the budgeted amount 

19 with respect to such expenditures. 

20 (c) BILLABLE COVERED SERVICE DEFINED.—In this 

21 section, the term ‘‘billable covered service’’ means a service 

22 covered under section 201 for which a practitioner is enti23 tled to compensation by payment of a fee determined 

24 under this section. 


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1 SEC. 613. PAYMENTS TO COMPREHENSIVE HEALTH SERV2 ICE ORGANIZATIONS. 

3 (a) IN GENERAL.—Payment under a State health se4 curity program to a comprehensive health service organi5 zation to its enrollees shall be determined by the State— 

6 (1) based on a global budget described in sec7 tion 611; or 

8 (2) based on the basic capitation amount de9 scribed in subsection (b) for each of its enrollees. 

10 (b) BASIC CAPITATION AMOUNT.— 

11 (1) IN GENERAL.—The basic capitation amount 

12 described in this subsection for an enrollee shall be 

13 determined by the State health security program on 

14 the basis of the average amount of expenditures that 

15 is estimated would be made under the State health 

16 security program for covered health care services for 

17 an enrollee, based on actuarial characteristics (as de18 fined by the State health security program). 

19 (2) ADJUSTMENT FOR SPECIAL HEALTH

20 NEEDS.—The State health security program shall 

21 adjust such average amounts to take into account 

22 the special health needs, including a disproportionate 

23 number of medically underserved individuals, of pop24 ulations served by the organization. 

25 (3) ADJUSTMENT FOR SERVICES NOT PRO26 VIDED.—The State health security program shall adVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00119 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 just such average amounts to take into account the 

2 cost of covered health care services that are not pro3 vided by the comprehensive health service organiza4 tion under section 303(a). 

5 SEC. 614. PAYMENTS FOR COMMUNITY-BASED PRIMARY 

6 HEALTH SERVICES. 

7 (a) IN GENERAL.—In the case of community-based 

8 primary health services, subject to subsection (b), pay9 ments under a State health security program shall— 

10 (1) be based on a global budget described in 

11 section 611; 

12 (2) be based on the basic primary care capita13 tion amount described in subsection (c) for each in14 dividual enrolled with the provider of such services; 

15 or 

16 (3) be made on a fee-for-service basis under 

17 section 612. 

18 (b) PAYMENT ADJUSTMENT.—Payments under sub19 section (a) may include, consistent with the budgets devel20 oped under this title— 

21 (1) an additional amount, as set by the State 

22 health security program, to cover the costs incurred 

23 by a provider which serves persons not covered by 

24 this Act whose health care is essential to overall 

25 community health and the control of communicable 


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1 disease, and for whom the cost of such care is other2 wise uncompensated; 

3 (2) an additional amount, as set by the State 

4 health security program, to cover the reasonable 

5 costs incurred by a provider that furnishes case 

6 management services (as defined in section 

7 1915(g)(2) of the Social Security Act), transpor8 tation services, and translation services; and 

9 (3) an additional amount, as set by the State 

10 health security program, to cover the costs incurred 

11 by a provider in conducting health professional edu12 cation programs in connection with the provision of 

13 such services. 

14 (c) BASIC PRIMARY CARE CAPITATION AMOUNT.— 

15 (1) IN GENERAL.—The basic primary care capi16 tation amount described in this subsection for an en17 rollee with a provider of community-based primary 

18 health services shall be determined by the State 

19 health security program on the basis of the average 

20 amount of expenditures that is estimated would be 

21 made under the State health security program for 

22 such an enrollee, based on actuarial characteristics 

23 (as defined by the State health security program). 

24 (2) ADJUSTMENT FOR SPECIAL HEALTH

25 NEEDS.—The State health security program shall 


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1 adjust such average amounts to take into account 

2 the special health needs, including a disproportionate 

3 number of medically underserved individuals, of pop4 ulations served by the provider. 

5 (3) ADJUSTMENT FOR SERVICES NOT PRO6 VIDED.—The State health security program shall ad7 just such average amounts to take into account the 

8 cost of community-based primary health services 

9 that are not provided by the provider. 

10 (d) COMMUNITY-BASED PRIMARY HEALTH SERVICES

11 DEFINED.—In this section, the term ‘‘community-based 

12 primary health services’’ has the meaning given such term 

13 in section 202(a). 

14 SEC. 615. PAYMENTS FOR PRESCRIPTION DRUGS. 

15 (a) ESTABLISHMENT OF LIST.— 

16 (1) IN GENERAL.—The Board shall establish a 

17 list of approved prescription drugs and biologicals 

18 that the Board determines are necessary for the 

19 maintenance or restoration of health or of employ20 ability or self-management and eligible for coverage 

21 under this Act. 

22 (2) EXCLUSIONS.—The Board may exclude re23 imbursement under this Act for ineffective, unsafe, 

24 or over-priced products where better alternatives are 

25 determined to be available. 


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1 (b) PRICES.—For each such listed prescription drug 

2 or biological covered under this Act, for insulin, and for 

3 medical foods, the Board shall from time to time deter4 mine a product price or prices which shall constitute the 

5 maximum to be recognized under this Act as the cost of 

6 a drug to a provider thereof. The Board may conduct ne7 gotiations, on behalf of State health security programs, 

8 with product manufacturers and distributors in deter9 mining the applicable product price or prices. 

10 (c) CHARGES BY INDEPENDENT PHARMACIES.— 

11 Each State health security program shall provide for pay12 ment for a prescription drug or biological or insulin fur13 nished by an independent pharmacy based on the drug’s 

14 cost to the pharmacy (not in excess of the applicable prod15 uct price established under subsection (b)) plus a dis16 pensing fee. In accordance with standards established by 

17 the Board, each State health security program, after con18 sultation with representatives of the pharmaceutical pro19 fession, shall establish schedules of dispensing fees, de20 signed to afford reasonable compensation to independent 

21 pharmacies after taking into account variations in their 

22 cost of operation resulting from regional differences, dif23 ferences in the volume of prescription drugs dispensed, dif24 ferences in services provided, the need to maintain expendVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 itures within the budgets established under this title, and 

2 other relevant factors. 

3 SEC. 616. PAYMENTS FOR APPROVED DEVICES AND EQUIP4 MENT. 

5 (a) ESTABLISHMENT OF LIST.—The Board shall es6 tablish a list of approved durable medical equipment and 

7 therapeutic devices and equipment (including eyeglasses, 

8 hearing aids, and prosthetic appliances), that the Board 

9 determines are necessary for the maintenance or restora10 tion of health or of employability or self-management and 

11 eligible for coverage under this Act. 

12 (b) CONSIDERATIONS AND CONDITIONS.—In estab13 lishing the list under subsection (a), the Board shall take 

14 into consideration the efficacy, safety, and cost of each 

15 item contained on such list, and shall attach to any item 

16 such conditions as the Board determines appropriate with 

17 respect to the circumstances under which, or the frequency 

18 with which, the item may be prescribed. 

19 (c) PRICES.—For each such listed item covered under 

20 this Act, the Board shall from time to time determine a 

21 product price or prices which shall constitute the max22 imum to be recognized under this Act as the cost of the 

23 item to a provider thereof. The Board may conduct nego24 tiations, on behalf of State health security programs, with 


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1 equipment and device manufacturers and distributors in 

2 determining the applicable product price or prices. 

3 (d) EXCLUSIONS.—The Board may exclude from cov4 erage under this Act ineffective, unsafe, or overpriced 

5 products where better alternatives are determined to be 

6 available. 

7 SEC. 617. PAYMENTS FOR OTHER ITEMS AND SERVICES. 

8 In the case of payment for other covered health serv9 ices, the amount of payment under a State health security 

10 program shall be established by the program— 

11 (1) in accordance with payment methodologies 

12 which are specified by the Board, after consultation 

13 with the American Health Security Advisory Coun14 cil, or methodologies established by the State under 

15 section 620; and 

16 (2) consistent with the State health security 

17 budget. 

18 SEC. 618. PAYMENT INCENTIVES FOR MEDICALLY UNDER19 SERVED AREAS. 

20 (a) MODEL PAYMENT METHODOLOGIES.—In addi21 tion to the payment amounts otherwise provided in this 

22 title, the Board shall establish model payment methodolo23 gies and other incentives that promote the provision of 

24 covered health care services in medically underserved 


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1 areas, particularly in rural and inner-city underserved 

2 areas. 

3 (b) CONSTRUCTION.—Nothing in this title shall be 

4 construed as limiting the authority of State health security 

5 programs to increase payment amounts or otherwise pro6 vide additional incentives, consistent with the State health 

7 security budget, to encourage the provision of medically 

8 necessary and appropriate services in underserved areas. 

9 SEC. 619. AUTHORITY FOR ALTERNATIVE PAYMENT METH10 ODOLOGIES. 

11 A State health security program, as part of its plan 

12 under section 404(a), may use a payment methodology 

13 other than a methodology required under this subtitle so 

14 long as— 

15 (1) such payment methodology does not affect 

16 the entitlement of individuals to coverage, the 

17 weighting of fee schedules to encourage an increase 

18 in the number of primary care providers, the ability 

19 of individuals to choose among qualified providers, 

20 the benefits covered under the program, or the com21 pliance of the program with the State health security 

22 budget under subtitle A; and 

23 (2) the program submits periodic reports to the 

24 Board showing the operation and effectiveness of the 

25 alternative methodology, in order for the Board to 


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1 evaluate the appropriateness of applying the alter2 native methodology to other States. 

3 Subtitle C—Mandatory Assignment 

4 and Administrative Provisions 

5 SEC. 631. MANDATORY ASSIGNMENT. 

6 (a) NO BALANCE BILLING.—Payments for benefits 

7 under this Act shall constitute payment in full for such 

8 benefits and the entity furnishing an item or service for 

9 which payment is made under this Act shall accept such 

10 payment as payment in full for the item or service and 

11 may not accept any payment or impose any charge for 

12 any such item or service other than accepting payment 

13 from the State health security program in accordance with 

14 this Act. 

15 (b) ENFORCEMENT.—If an entity knowingly and will16 fully bills for an item or service or accepts payment in 

17 violation of subsection (a), the Board may apply sanctions 

18 against the entity in the same manner as sanctions could 

19 have been imposed under section 1842(j)(2) of the Social 

20 Security Act for a violation of section 1842(j)(1) of such 

21 Act. Such sanctions are in addition to any sanctions that 

22 a State may impose under its State health security pro23 gram. 


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1 SEC. 632. PROCEDURES FOR REIMBURSEMENT; APPEALS. 

2 (a) PROCEDURES FOR REIMBURSEMENT.—In accord3 ance with standards issued by the Board, a State health 

4 security program shall establish a timely and administra5 tively simple procedure to ensure payment within 60 days 

6 of the date of submission of clean claims by providers 

7 under this Act. 

8 (b) APPEALS PROCESS.—Each State health security 

9 program shall establish an appeals process to handle all 

10 grievances pertaining to payment to providers under this 

11 title. 

12 TITLE VII—PROMOTION OF PRI13 MARY HEALTH CARE; DEVEL14 OPMENT OF HEALTH SERV15 ICE CAPACITY; PROGRAMS TO 

16 ASSIST THE MEDICALLY UN17 DERSERVED 

18 Subtitle A—Promotion and Expan19 sion of Primary Care Profes20 sional Training 

21 SEC. 701. ROLE OF BOARD; ESTABLISHMENT OF PRIMARY 

22 CARE PROFESSIONAL OUTPUT GOALS. 

23 (a) IN GENERAL.—The Board is responsible for— 

24 (1) coordinating health professional education 

25 policies and goals, in consultation with the Secretary 

26 of Health and Human Services (in this title referred 


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1 to as the ‘‘Secretary’’), to achieve the national goals 

2 specified in subsection (b); 

3 (2) overseeing the health professional education 

4 expenditures of the State health security programs 

5 from the account established under section 602(c); 

6 (3) developing and maintaining, in cooperation 

7 with the Secretary, a system to monitor the number 

8 and specialties of individuals through their health 

9 professional education, any postgraduate training, 

10 and professional practice; and 

11 (4) developing, coordinating, and promoting 

12 other policies that expand the number of primary 

13 care practitioners. 

14 (b) NATIONAL GOALS.—The national goals specified 

15 in this subsection are as follows: 

16 (1) GRADUATE MEDICAL EDUCATION.—By not 

17 later than 5 years after the date of the enactment 

18 of this Act, at least 50 percent of the residents in 

19 medical residency education programs (as defined in 

20 subsection (e)(1)) are primary care residents (as de21 fined in subsection (e)(3)). 

22 (2) MIDLEVEL PRIMARY CARE PRACTI23 TIONERS.—To ensure an adequate supply of primary 

24 care practitioners, there shall be a number, specified 

25 by the Board, of midlevel primary care practitioners 


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1 (as defined in subsection (e)(2)) employed in the 

2 health care system as of January 1, 2017. 

3 (3) DENTISTRY.—To ensure an adequate sup4 ply of dental care practitioners, there shall be a 

5 number, specified by the Board, of dentists (as de6 fined in subsection (e)(1)) employed in the health 

7 care system as of January 1, 2017. 

8 (c) METHOD FOR ATTAINMENT OF NATIONAL GOAL

9 FOR GRADUATE MEDICAL EDUCATION; PROGRAM

10 GOALS.— 

11 (1) IN GENERAL.—The Board shall establish a 

12 method of applying the national goal in subsection 

13 (b)(1) to program goals for each medical residency 

14 education program or to medical residency education 

15 consortia. 

16 (2) CONSIDERATION.—The program goals 

17 under paragraph (1) shall be based on the distribu18 tion of medical schools and other teaching facilities 

19 within each State health security program, and the 

20 number of positions for graduate medical education. 

21 (3) MEDICAL RESIDENCY EDUCATION CONSOR22 TIUM.—In this subsection, the term ‘‘medical resi23 dency education consortium’’ means a consortium of 

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1 uous geographic area (which may be an interstate 

2 area) if the consortium— 

3 (A) includes at least 1 medical school with 

4 a teaching hospital and related teaching set5 tings; and 

6 (B) has an affiliation with qualified com7 munity-based primary health service providers 

8 described in section 202(a) and with at least 1 

9 comprehensive health service organization es10 tablished under section 303. 

11 (4) ENFORCEMENT THROUGH STATE HEALTH

12 SECURITY BUDGETS.—The Board shall develop a 

13 formula for reducing payments to State health secu14 rity programs (that provide for payments to a med15 ical residency education program) that failed to meet 

16 the goal for the program established under this sub17 section. 

18 (d) METHOD FOR ATTAINMENT OF NATIONAL GOAL

19 FOR MIDLEVEL PRIMARY CARE PRACTITIONERS.—To as20 sist in attaining the national goal identified in subsection 

21 (b)(2), the Board shall— 

22 (1) advise the Public Health Service on alloca23 tions of funding under titles VII and VIII of the 

24 Public Health Service Act, the National Health 

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1 crease the supply of midlevel primary care practi2 tioners; and 

3 (2) commission a study of the potential benefits 

4 and disadvantages of expanding the scope of practice 

5 authorized under State laws for any class of midlevel 

6 primary care practitioners. 

7 (e) DEFINITIONS.—In this title: 

8 (1) DENTIST.—The term ‘‘dentist’’ means a 

9 practitioner who performs the evaluation, diagnosis, 

10 prevention or treatment (nonsurgical, surgical, or re11 lated procedures) of diseases, disorders or conditions 

12 of the oral cavity, maxillofacial area or the adjacent 

13 and associated structures and their impact on the 

14 human body, within the scope of his or her edu15 cation, training and experience, in accordance with 

16 the ethics of the profession and applicable law. 

17 (2) MEDICAL RESIDENCY EDUCATION PRO18 GRAM.—The term ‘‘medical residency education pro19 gram’’ means a program that provides education 

20 and training to graduates of medical schools in order 

21 to meet requirements for licensing and certification 

22 as a physician, and includes the medical school su23 pervising the program and includes the hospital or 

24 other facility in which the program is operated. 


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1 (3) MIDLEVEL PRIMARY CARE PRACTI2 TIONER.—The term ‘‘midlevel primary care practi3 tioner’’ means a clinical nurse practitioner, certified 

4 nurse midwife, physician assistance, or other non5 physician practitioner, specified by the Board, as au6 thorized to practice under State law. 

7 (4) PRIMARY CARE RESIDENT.—The term ‘‘pri8 mary care resident’’ means (in accordance with cri9 teria established by the Board) a resident being 

10 trained in a distinct program of family practice med11 icine, general practice, general internal medicine, or 

12 general pediatrics. 

13 SEC. 702. ESTABLISHMENT OF ADVISORY COMMITTEE ON 

14 HEALTH PROFESSIONAL EDUCATION. 

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

16 Advisory Committee on Health Professional Education (in 

17 this section referred to as the ‘‘Committee’’) to advise the 

18 Board on its activities under section 701. 

19 (b) MEMBERSHIP.—The Committee shall be com20 posed of— 

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

22 Chair of the Committee; and 

23 (2) 12 members, not otherwise in the employ of 

24 the United States, appointed by the Board without 

25 regard to the provisions of title 5, United States 


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1 Code, governing appointments in the competitive 

2 service. 

3 The appointed members shall provide a balanced point of 

4 view with respect to health professional education, primary 

5 care disciplines, and health care policy and shall include 

6 individuals who are representative of medical schools, 

7 other health professional schools, residency programs, pri8 mary care practitioners, teaching hospitals, professional 

9 associations, public health organizations, State health se10 curity programs, and consumers. 

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

12 shall hold office for a term of 5 years, except that— 

13 (1) any member appointed to fill a vacancy oc14 curring during the term for which the member’s 

15 predecessor was appointed shall be appointed for the 

16 remainder of that term; and 

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

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

19 of appointment, 2 at the end of the second year, 2 

20 at the end of the third year, 2 at the end of the 

21 fourth year, and 3 at the end of the fifth year after 

22 the date of enactment of this Act. 

23 (d) VACANCIES.— 

24 (1) IN GENERAL.—The Board shall fill any va25 cancy in the membership of the Committee in the 


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1 same manner as the original appointment. The va2 cancy shall not affect the power of the remaining 

3 members to execute the duties of the Committee. 

4 (2) VACANCY APPOINTMENTS.—Any member 

5 appointed to fill a vacancy shall serve for the re6 mainder of the term for which the predecessor of the 

7 member was appointed. 

8 (3) REAPPOINTMENT.—The Board may re9 appoint an appointed member of the Committee for 

10 a second term in the same manner as the original 

11 appointment. 

12 (e) DUTIES.—It shall be the duty of the Committee 

13 to advise the Board concerning graduate medical edu14 cation policies under this title. 

15 (f) STAFF.—The Committee, its members, and any 

16 committees of the Committee shall be provided with such 

17 secretarial, clerical, or other assistance as may be author18 ized by the Board for carrying out their respective func19 tions. 

20 (g) MEETINGS.—The Committee shall meet as fre21 quently as the Board deems necessary, but not less than 

22 4 times each year. Upon request by 4 or more members 

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

24 Committee. 


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1 (h) COMPENSATION.—Members of the Committee 

2 shall be reimbursed by the Board for travel and per diem 

3 in lieu of subsistence expenses during the performance of 

4 duties of the Board in accordance with subchapter I of 

5 chapter 57 of title 5, United States Code. 

6 (i) FACA NOT APPLICABLE.—The provisions of the 

7 Federal Advisory Committee Act shall not apply to the 

8 Committee. 

9 SEC. 703. GRANTS FOR HEALTH PROFESSIONS EDUCATION, 

10 NURSE EDUCATION, AND THE NATIONAL 

11 HEALTH SERVICE CORPS. 

12 (a) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

13 (1) IN GENERAL.—The Board shall make trans14 fers from the American Health Security Trust Fund 

15 to the Public Health Service under subpart II of 

16 part D of title III, title VII, and title VIII of the 

17 Public Health Service Act for the support of the Na18 tional Health Service Corps, health professions edu19 cation, and nursing education, including education of 

20 clinical nurse practitioners, certified registered nurse 

21 anesthetists, certified nurse midwives, and physician 

22 assistants. 

23 (2) FISCAL YEAR 2018 AND SUBSEQUENT

24 YEARS.—The amount transferred for the support of 

25 the National Health Service Corps for fiscal year 


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1 2018 and each subsequent fiscal year shall be equal 

2 to the amount transferred for the preceding fiscal 

3 year adjusted by the product of— 

4 (A) one plus the average percentage in5 crease in the costs of health professions edu6 cation during the prior fiscal year; and 

7 (B) one plus the average percentage 

8 change in the number of individuals residing in 

9 health professions shortage areas designated 

10 under section 333 during the prior fiscal year, 

11 relative to the number of individuals residing in 

12 such areas during the previous fiscal year. 

13 (b) RANGE OF FUNDS.—The amount of transfers 

14 under subsection (a) for any fiscal year for title VII and 

15 VIII shall be an amount (specified by the Board each 

year) not less than 3⁄100 percent and not to exceed 4 16 ⁄100

17 percent of the amounts the Board estimates will be ex18 pended from the Trust Fund in the fiscal year. 

19 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

20 funds provided under this section with respect to provision 

21 of services are in addition to, and not in replacement of, 

22 funds made available under the provisions referred to in 

23 subsection (a) and shall be administered in accordance 

24 with the terms of such provisions. The Board shall make 

25 no transfer of funds under this section for any fiscal year 


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1 for which the total appropriations for the programs au2 thorized by such provisions are less than the total amount 

3 appropriated for such programs in fiscal year 2012. 

4 Subtitle B—Direct Health Care 

5 Delivery 

6 SEC. 711. SET-ASIDE FOR PUBLIC HEALTH. 

7 (a) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

8 From the amounts provided under subsection (c), the 

9 Board shall make transfers from the American Health Se10 curity Trust Fund to the Public Health Service for the 

11 following purposes (other than payment for services cov12 ered under title II): 

13 (1) For payments to States under the maternal 

14 and child health block grants under title V of the 

15 Social Security Act (42 U.S.C. 701 et seq.). 

16 (2) For prevention and treatment of tuber17 culosis under section 317 of the Public Health Serv18 ice Act (42 U.S.C. 247b). 

19 (3) For the prevention and treatment of sexu20 ally transmitted diseases under section 318 of the 

21 Public Health Service Act (42 U.S.C. 247c). 

22 (4) Preventive health block grants under part A 

23 of title XIX of the Public Health Service Act (42 

24 U.S.C. 300w et seq.). 


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1 (5) Grants to States for community mental 

2 health services under subpart I of part B of title 

3 XIX of the Public Health Service Act (42 U.S.C. 

4 300x et seq.). 

5 (6) Grants to States for prevention and treat6 ment of substance abuse under subpart II of part B 

7 of title XIX of the Public Health Service Act (42 

8 U.S.C. 300x–21 et seq.). 

9 (7) Grants for HIV health care services under 

10 parts A, B, and C of title XXVI of the Public 

11 Health Service Act (42 U.S.C. 300ff–11 et seq.). 

12 (8) Public health formula grants described in 

13 subsection (d). 

14 (b) RANGE OF FUNDS.—The amount of transfers 

15 under subsection (a) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 1 16 ⁄10 percent and not to exceed 14 17 ⁄100 percent of the amounts the 

18 Board estimates will be expended from the Trust Fund 

19 in the fiscal year. 

20 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

21 funds provided under this section with respect to provision 

22 of services are in addition to, and not in replacement of, 

23 funds made available under the programs referred to in 

24 subsection (a) and shall be administered in accordance 

25 with the terms of such programs. 


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1 (d) REQUIRED REPORTS ON HEALTH STATUS.—The 

2 Secretary shall require each State receiving funds under 

3 this section to submit annual reports to the Secretary on 

4 the health status of the population and measurable objec5 tives for improving the health of the public in the State. 

6 Such reports shall include the following: 

7 (1) A comparison of the measures of the State 

8 and local public health system compared to relevant 

9 objectives set forth in ‘‘Healthy People 2020’’ or 

10 subsequent national objectives set by the Secretary. 

11 (2) A description of health status measures to 

12 be improved within the State (at the State and local 

13 levels) through expanded public health functions and 

14 health promotion and disease prevention programs. 

15 (3) Measurable outcomes and process objectives 

16 for improving health status, and a report on out17 comes from the previous year. 

18 (4) Information regarding how Federal funding 

19 has improved population-based prevention activities 

20 and programs. 

21 (5) A description of the core public health func22 tions to be carried out at the local level. 

23 (6) A description of the relationship between 

24 the State’s public health system, community-based 


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1 health promotion and disease prevention providers, 

2 and the State health security program. 

3 (e) LIMITATION ON FUND TRANSFERS.—The Board 

4 shall make no transfer of funds under this section for any 

5 fiscal year for which the total appropriations for such pro6 grams are less than the total amount appropriated for 

7 such programs in fiscal year 2012. 

8 (f) PUBLIC HEALTH FORMULA GRANTS.—The Sec9 retary shall provide stable funds to States through for10 mula grants for the purpose of carrying out core public 

11 health functions to monitor and protect the health of com12 munities from communicable diseases and exposure to 

13 toxic environmental pollutants, occupational hazards, 

14 harmful products, and poor health outcomes. Such func15 tions include the following: 

16 (1) Data collection, analysis, and assessment of 

17 public health data, vital statistics, and personal 

18 health data to assess community health status and 

19 outcomes reporting. This function includes the ac20 quisition and installation of hardware and software, 

21 and personnel training and technical assistance to 

22 operate and support automated and integrated infor23 mation systems. 


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1 (2) Activities to protect the environment and to 

2 ensure the safety of housing, workplaces, food, and 

3 water. 

4 (3) Investigation and control of adverse health 

5 conditions, and threats to the health status of indi6 viduals and the community. This function includes 

7 the identification and control of outbreaks of infec8 tious disease, patterns of chronic disease and injury, 

9 and cooperative activities to reduce the levels of vio10 lence. 

11 (4) Health promotion and disease prevention 

12 activities for which there is a significant need and a 

13 high priority of the Public Health Service. 

14 (5) The provision of public health laboratory 

15 services to complement private clinical laboratory 

16 services, including— 

17 (A) screening tests for metabolic diseases 

18 in newborns; 

19 (B) toxicology assessments of blood lead 

20 levels and other environmental toxins; 

21 (C) tuberculosis and other diseases requir22 ing partner notification; and 

23 (D) testing for infectious and food-borne 

24 diseases. 


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1 (6) Training and education for the public 

2 health professions. 

3 (7) Research on effective and cost-effective pub4 lic health practices. This function includes the devel5 opment, testing, evaluation, and publication of re6 sults of new prevention and public health control 

7 interventions. 

8 (8) Integration and coordination of the preven9 tion programs and services of community-based pro10 viders, local and State health departments, and 

11 other sectors of State and local government that af12 fect health. 

13 SEC. 712. SET-ASIDE FOR PRIMARY HEALTH CARE DELIV14 ERY. 

15 (a) TRANSFERS TO SECTION 330 PROGRAM OF THE

16 PUBLIC HEALTH SERVICE ACT.— 

17 (1) IN GENERAL.—The Board shall make trans18 fers from the American Health Security Trust Fund 

19 to the Public Health Service for the program author20 ized under section 330 of the Public Health Service 

21 Act (42 U.S.C. 254b). 

22 (2) FISCAL YEAR 2018 AND SUBSEQUENT

23 YEARS.—The amount transferred for fiscal year 

24 2018 and each subsequent fiscal year shall be equal 


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1 to the amount transferred for the preceding fiscal 

2 year adjusted by the product of— 

3 (A) one plus the average percentage in4 crease in costs incurred per patient served by 

5 entities receiving funding under such section; 

6 and 

7 (B) one plus the average percentage in8 crease in the total number of patients served by 

9 entities receiving funding under such section. 

10 (b) TRANSFERS TO PUBLIC HEALTH SERVICE.— 

11 From the amounts provided under subsection (d), the 

12 Board shall make transfers from the American Health Se13 curity Trust Fund to the Public Health Service for the 

14 program of primary care service expansion grants under 

15 subpart V of part D of title III of the Public Health Serv16 ice Act (as added by section 713 of this Act). 

17 (c) RANGE OF FUNDS.—The amount of transfers 

18 under subsection (b) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 6 19 ⁄100 percent and not to exceed 1 20 ⁄10 percent of the amounts the 

21 Board estimates will be expended from the Trust Fund 

22 in the fiscal year. 

23 (d) FUNDS SUPPLEMENTAL TO OTHER FUNDS.— 

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1 ment of, funds made available under the sections 340A, 

2 1001, and 2655 of the Public Health Service Act. The 

3 Board shall make no transfer of funds under this section 

4 for any fiscal year for which the total appropriations for 

5 such sections are less than the total amount appropriated 

6 under such sections in fiscal year 2012. 

7 SEC. 713. PRIMARY CARE SERVICE EXPANSION GRANTS. 

8 (a) IN GENERAL.—Part D of title III of the Public 

9 Health Service Act (42 U.S.C. 254b et seq.) is amended 

10 by adding at the end the following new subpart: 

11 ‘‘Subpart XIII—Primary Care Expansion 

12 ‘‘SEC. 340J. EXPANDING PRIMARY CARE DELIVERY CAPAC13 ITY IN URBAN AND RURAL AREAS. 

14 ‘‘(a) GRANTS FOR PRIMARY CARE CENTERS.—From 

15 the amounts described in subsection (c), the American 

16 Health Security Standards Board shall make grants to 

17 public and nonprofit private entities for projects to plan 

18 and develop primary care centers which will serve medi19 cally underserved populations (as defined in section 

20 330(b)(3)) in urban and rural areas and to deliver primary 

21 care services to such populations in such areas. The funds 

22 provided under such a grant may be used for the same 

23 purposes for which a grant may be made under subsection 

24 (c), (e), (f), (g), (h), or (i) of section 330. 


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1 ‘‘(b) PROCESS OF AWARDING GRANTS.—The provi2 sions of subsection (k)(1) of section 330 shall apply to 

3 a grant under this section in the same manner as they 

4 apply to a grant under the corresponding subsection of 

5 such section. The provisions of subsection (r)(2)(A) of 

6 such section shall apply to grants for projects to plan and 

7 develop primary care centers under this section in the 

8 same manner as they apply to grants under such section. 

9 ‘‘(c) FUNDING AS SET-ASIDE FROM TRUST FUND.— 

10 Funds in the American Health Security Trust Fund (es11 tablished under section 801 of the act) shall be available 

12 to carry out this section. 

13 ‘‘(d) PRIMARY CARE CENTER DEFINED.—In this sec14 tion, the term ‘primary care center’ means— 

15 ‘‘(1) a health center (as defined in section 

16 330(a)(1)); 

17 ‘‘(2) an entity qualified to receive a grant under 

18 section 330, 1001, or 2651; or 

19 ‘‘(3) a Federally-qualified health center (as de20 fined in section 1905(l)(2)(B) of the Social Security 

21 Act).’’. 

22 (b) TECHNICAL AMENDMENTS.—Part D of title III 

23 of the Public Health Service Act (42 U.S.C. 254b et seq.) 

24 is amended— 


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1 (1) by redesignating subpart XI, as added by 

2 section 10333 of the Patient Protection and Afford3 able Care Act (Public Law 111–148), as subpart 

4 XII; and 

5 (2) by redesignating section 340H of the Public 

6 Health Service Act (42 U.S.C. 256i), as added by 

7 section 10333 of the Patient Protection and Afford8 able Care Act (Public Law 111–148), as section 

9 340I. 

10 Subtitle C—Primary Care and 

11 Outcomes Research 

12 SEC. 721. SET-ASIDE FOR OUTCOMES RESEARCH. 

13 (a) GRANTS FOR OUTCOMES RESEARCH.—The 

14 Board shall make transfers from the American Health Se15 curity Trust Fund to the Agency for Healthcare Research 

16 and Quality under title IX of the Public Health Service 

17 Act (42 U.S.C. 299 et seq.) for the purpose of carrying 

18 out activities under such title. The Secretary shall assure 

19 that there is a special emphasis placed on pediatric out20 comes research. 

21 (b) RANGE OF FUNDS.—The amount of transfers 

22 under subsection (a) for any fiscal year shall be an amount 

(specified by the Board each year) not less than 1 23 ⁄100 percent and not to exceed 2 24 ⁄100 percent of the amounts the 


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1 Board estimates will be expended from the Trust Fund 

2 in the fiscal year. 

3 (c) FUNDS SUPPLEMENTAL TO OTHER FUNDS.—The 

4 funds provided under this section with respect to provision 

5 of services are in addition to, and not in replacement of, 

6 funds made available to the Agency for Healthcare Re7 search and Quality under section 947 of the Public Health 

8 Service Act (42 U.S.C. 299c–6). The Board shall make 

9 no transfer of funds under this section for any fiscal year 

10 for which the total appropriations under such section are 

11 less than the total amount appropriated under such sec12 tion and title in fiscal year 2012. 

13 (d) CONFORMING AMENDMENT.—Section 947(b) of 

14 the Public Health Service Act (42 U.S.C. 299c–6(b)) is 

15 amended by inserting after ‘‘of the fiscal years 2001 

16 through 2005’’ the following: ‘‘and of fiscal year 2014 and 

17 each subsequent year’’. 

18 SEC. 722. OFFICE OF PRIMARY CARE AND PREVENTION RE19 SEARCH. 

20 (a) IN GENERAL.—Title IV of the Public Health 

21 Service Act is amended— 

22 (1) by redesignating parts G through I as parts 

23 H through J, respectively; and 

24 (2) by inserting after part F (42 U.S.C. 287d 

25 et seq.) the following new part: 


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1 ‘‘PART G—RESEARCH ON PRIMARY CARE AND 

2 PREVENTION 

3 ‘‘SEC. 486E. OFFICE OF PRIMARY CARE AND PREVENTION 

4 RESEARCH. 

5 ‘‘(a) ESTABLISHMENT.—There is established within 

6 the Office of the Director of NIH an office to be known 

7 as the Office of Primary Care and Prevention Research 

8 (in this part referred to as the ‘Office’). The Office shall 

9 be headed by a director, who shall be appointed by the 

10 Director of NIH. 

11 ‘‘(b) PURPOSE.—The Director of the Office shall— 

12 ‘‘(1) identify projects of research on primary 

13 care and prevention, for children as well as adults, 

14 that should be conducted or supported by the na15 tional research institutes, with particular emphasis 

16 on— 

17 ‘‘(A) clinical patient care, with special em18 phasis on pediatric clinical care and diagnosis; 

19 ‘‘(B) diagnostic effectiveness; 

20 ‘‘(C) primary care education; 

21 ‘‘(D) health and family planning services; 

22 ‘‘(E) medical effectiveness outcomes of pri23 mary care procedures and interventions; and 

24 ‘‘(F) the use of multidisciplinary teams of 

25 health care practitioners; 


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1 ‘‘(2) identify multidisciplinary research related 

2 to primary care and prevention that should be so 

3 conducted; 

4 ‘‘(3) promote coordination and collaboration 

5 among entities conducting research identified under 

6 any of paragraphs (1) and (2); 

7 ‘‘(4) encourage the conduct of such research by 

8 entities receiving funds from the national research 

9 institutes; 

10 ‘‘(5) recommend an agenda for conducting and 

11 supporting such research; 

12 ‘‘(6) promote the sufficient allocation of the re13 sources of the national research institutes for con14 ducting and supporting such research; and 

15 ‘‘(7) prepare the report required under section 

16 486G. 

17 ‘‘(c) PRIMARY CARE AND PREVENTION RESEARCH

18 DEFINED.—For purposes of this part, the term ‘primary 

19 care and prevention research’ means research on improve20 ment of the practice of family medicine, general internal 

21 medicine, and general pediatrics, and includes research re22 lating to— 

23 ‘‘(1) obstetrics and gynecology, dentistry, or 

24 mental health or substance abuse treatment when 


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1 provided by a primary care physician or other pri2 mary care practitioner; and 

3 ‘‘(2) primary care provided by multidisciplinary 

4 teams. 

5 ‘‘SEC. 486F. NATIONAL DATA SYSTEM AND CLEARINGHOUSE 

6 ON PRIMARY CARE AND PREVENTION RE7 SEARCH. 

8 ‘‘(a) DATA SYSTEM.—The Director of NIH, in con9 sultation with the Director of the Office, shall establish 

10 a data system for the collection, storage, analysis, re11 trieval, and dissemination of information regarding pri12 mary care and prevention research that is conducted or 

13 supported by the national research institutes. Information 

14 from the data system shall be available through informa15 tion systems available to health care professionals and pro16 viders, researchers, and members of the public. 

17 ‘‘(b) CLEARINGHOUSE.—The Director of NIH, in 

18 consultation with the Director of the Office and with the 

19 National Library of Medicine, shall establish, maintain, 

20 and operate a program to provide, and encourage the use 

21 of, information on research and prevention activities of the 

22 national research institutes that relate to primary care 

23 and prevention research. 


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1 ‘‘SEC. 486G. BIENNIAL REPORT. 

2 ‘‘(a) IN GENERAL.—With respect to primary care 

3 and prevention research, the Director of the Office shall, 

4 not later than 1 year after the date of the enactment of 

5 this part, and biennially thereafter, prepare a report— 

6 ‘‘(1) describing and evaluating the progress 

7 made during the preceding 2 fiscal years in research 

8 and treatment conducted or supported by the Na9 tional Institutes of Health; 

10 ‘‘(2) summarizing and analyzing expenditures 

11 made by the agencies of such Institutes (and by 

12 such Office) during the preceding 2 fiscal years; and 

13 ‘‘(3) making such recommendations for legisla14 tive and administrative initiatives as the Director of 

15 the Office determines to be appropriate. 

16 ‘‘(b) INCLUSION IN BIENNIAL REPORT OF DIRECTOR

17 OF NIH.—The Director of the Office shall submit each 

18 report prepared under subsection (a) to the Director of 

19 NIH for inclusion in the report submitted to the President 

20 and the Congress under section 403. 

21 ‘‘SEC. 486H. AUTHORIZATION OF APPROPRIATIONS. 

22 ‘‘For the Office of Primary Care and Prevention Re23 search, there are authorized to be appropriated 

24 $150,000,000 for fiscal year 2014, $180,000,000 for fis25 cal year 2015, and $216,000,000 for fiscal year 2016.’’. 


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1 (b) REQUIREMENT OF SUFFICIENT ALLOCATION OF

2 RESOURCES OF INSTITUTES.—Section 402(b) of the Pub3 lic Health Service Act (42 U.S.C. 282(b)) is amended— 

4 (1) in paragraph (23), by striking ‘‘and’’ after 

5 the semicolon at the end; 

6 (2) in paragraph (24), by striking the period at 

7 the end and inserting ‘‘; and’’; and 

8 (3) by inserting after paragraph (24) the fol9 lowing new paragraph: 

10 ‘‘(25) after consultation with the Director of 

11 the Office of Primary Care and Prevention Re12 search, shall ensure that resources of the National 

13 Institutes of Health are sufficiently allocated for 

14 projects on primary care and prevention research 

15 that are identified under section 486E(b).’’. 

16 Subtitle D—School-Related Health 

17 Services 

18 SEC. 731. AUTHORIZATIONS OF APPROPRIATIONS. 

19 (a) FUNDING FOR SCHOOL-RELATED HEALTH SERV20 ICES.—For the purpose of carrying out this subtitle, there 

21 are authorized to be appropriated $100,000,000 for fiscal 

22 year 2016, $275,000,000 for fiscal year 2017, 

23 $350,000,000 for fiscal year 2018, and $400,000,000 for 

24 each of the fiscal years 2019 and 2020. 


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1 (b) RELATION TO OTHER FUNDS.—The authoriza2 tions of appropriations established in subsection (a) are 

3 in addition to any other authorizations of appropriations 

4 that are available for the purpose described in such sub5 section. 

6 SEC. 732. ELIGIBILITY FOR DEVELOPMENT AND OPER7 ATION GRANTS. 

8 (a) IN GENERAL.—Entities eligible to apply for and 

9 receive grants under section 734 or 735 are the following: 

10 (1) State health agencies that apply on behalf 

11 of local community partnerships and other commu12 nities in need of health services for school-aged chil13 dren within the State. 

14 (2) Local community partnerships in States in 

15 which health agencies have not applied. 

16 (b) LOCAL COMMUNITY PARTNERSHIPS.— 

17 (1) IN GENERAL.—A local community partner18 ship under subsection (a)(2) is an entity that, at a 

19 minimum, includes— 

20 (A) a local health care provider with expe21 rience in delivering services to school-aged chil22 dren; 

23 (B) one or more local public schools; and 

24 (C) at least one community-based organi25 zation located in the community to be served 


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1 that has a history of providing services to 

2 school-aged children in the community who are 

3 at-risk. 

4 (2) PARTICIPATION.—A partnership described 

5 in paragraph (1) shall, to the maximum extent fea6 sible, involve broad based community participation 

7 from parents and adolescent children to be served, 

8 health and social service providers, teachers and 

9 other public school and school board personnel, de10 velopment and service organizations for adolescent 

11 children, and interested business leaders. Such par12 ticipation may be evidenced through an expanded 

13 partnership, or an advisory board to such partner14 ship. 

15 (c) DEFINITIONS REGARDING CHILDREN.—For pur16 poses of this subtitle: 

17 (1) The term ‘‘adolescent children’’ means 

18 school-aged children who are adolescents. 

19 (2) The term ‘‘school-aged children’’ means in20 dividuals who are between the ages of 4 and 19 (in21 clusive). 

22 SEC. 733. PREFERENCES. 

23 (a) IN GENERAL.—In making grants under sections 

24 734 and 735, the Secretary shall give preference to appli25 cants whose communities to be served show the most subVerDate Mar 15 2010 04:15 Mar 23, 2013 Jkt 029200 PO 00000 Frm 00155 Fmt 6652 Sfmt 6201 E:\BILLS\H1200.IH H1200

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1 stantial level of need for such services among school-aged 

2 children, as measured by indicators of community health 

3 including the following: 

4 (1) High levels of poverty. 

5 (2) The presence of a medically underserved 

6 population. 

7 (3) The presence of a health professional short8 age area. 

9 (4) High rates of indicators of health risk 

10 among school-aged children, including a high propor11 tion of such children receiving services through the 

12 Individuals with Disabilities Education Act, adoles13 cent pregnancy, sexually transmitted disease (includ14 ing infection with the human immunodeficiency 

15 virus), preventable disease, communicable disease, 

16 intentional and unintentional injuries, community 

17 and gang violence, unemployment among adolescent 

18 children, juvenile justice involvement, and high rates 

19 of drug and alcohol exposure. 

20 (b) LINKAGE TO COMMUNITY HEALTH CENTERS.— 

21 In making grants under sections 734 and 735, the Sec22 retary shall give preference to applicants that demonstrate 

23 a linkage to community health centers. 


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1 SEC. 734. GRANTS FOR DEVELOPMENT OF PROJECTS. 

2 (a) IN GENERAL.—The Secretary may make grants 

3 to State health agencies or to local community partner4 ships to develop school health service sites. 

5 (b) USE OF FUNDS.—A project for which a grant 

6 may be made under subsection (a) may include the cost 

7 of the following: 

8 (1) Planning for the provision of school health 

9 services. 

10 (2) Recruitment, compensation, and training of 

11 health and administrative staff. 

12 (3) The development of agreements, and the ac13 quisition and development of equipment and infor14 mation services, necessary to support information 

15 exchange between school health service sites and 

16 health plans, health providers, and other entities au17 thorized to collect information under this Act. 

18 (4) Other activities necessary to assume oper19 ational status. 

20 (c) APPLICATION FOR GRANT.— 

21 (1) IN GENERAL.—Applicants shall submit ap22 plications in a form and manner prescribed by the 

23 Secretary. 

24 (2) APPLICATIONS BY STATE HEALTH AGEN25 CIES.— 


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1 (A) In the case of applicants that are State 

2 health agencies, the application shall contain 

3 assurances that the State health agency is ap4 plying for funds— 

5 (i) on behalf of at least one local com6 munity partnership; and 

7 (ii) on behalf of at least one other 

8 community identified by the State as in 

9 need of the services funded under this sub10 title but without a local community part11 nership. 

12 (B) In the case of the communities identi13 fied in applications submitted by State health 

14 agencies that do not yet have local community 

15 partnerships (including the community identi16 fied under subparagraph (A)(ii)), the State 

17 shall describe the steps that will be taken to aid 

18 the communities in developing a local commu19 nity partnership. 

20 (C) A State applying on behalf of local 

21 community partnerships and other communities 

22 may retain not more than 10 percent of grants 

23 awarded under this subtitle for administrative 

24 costs. 


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1 (d) CONTENTS OF APPLICATION.—In order to receive 

2 a grant under this section, an applicant shall include in 

3 the application the following information: 

4 (1) An assessment of the need for school health 

5 services in the communities to be served, using the 

6 latest available health data and health goals and ob7 jectives established by the Secretary. 

8 (2) A description of how the applicant will de9 sign the proposed school health services to reach the 

10 maximum number of school-aged children who are at 

11 risk. 

12 (3) An explanation of how the applicant will in13 tegrate its services with those of other health and 

14 social service programs within the community. 

15 (4) A description of a quality assurance pro16 gram which complies with standards that the Sec17 retary may prescribe. 

18 (e) NUMBER OF GRANTS.—Not more than one plan19 ning grant may be made to a single applicant. A planning 

20 grant may not exceed 2 years in duration. 

21 SEC. 735. GRANTS FOR OPERATION OF PROJECTS. 

22 (a) IN GENERAL.—The Secretary may make grants 

23 to State health agencies or to local community partner24 ships for the cost of operating school health service sites. 


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1 (b) USE OF GRANT.—The costs for which a grant 

2 may be made under this section include the following: 

3 (1) The cost of furnishing health services that 

4 are not otherwise covered under this Act or by any 

5 other public or private insurer. 

6 (2) The cost of furnishing services whose pur7 pose is to increase the capacity of individuals to uti8 lize available health services, including transpor9 tation, community and patient outreach, patient 

10 education, translation services, and such other serv11 ices as the Secretary determines to be appropriate in 

12 carrying out such purpose. 

13 (3) Training, recruitment and compensation of 

14 health professionals and other staff. 

15 (4) Outreach services to school-aged children 

16 who are at risk and to the parents of such children. 

17 (5) Linkage of individuals to health plans, com18 munity health services and social services. 

19 (6) Other activities deemed necessary by the 

20 Secretary. 

21 (c) APPLICATION FOR GRANT.—Applicants shall sub22 mit applications in a form and manner prescribed by the 

23 Secretary. In order to receive a grant under this section, 

24 an applicant shall include in the application the following 

25 information: 


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1 (1) A description of the services to be furnished 

2 by the applicant. 

3 (2) The amounts and sources of funding that 

4 the applicant will expend, including estimates of the 

5 amount of payments the applicant will receive from 

6 sources other than the grant. 

7 (3) Such other information as the Secretary de8 termines to be appropriate. 

9 (d) ADDITIONAL CONTENTS OF APPLICATION.—In 

10 order to receive a grant under this section, an applicant 

11 shall meet the following conditions: 

12 (1) The applicant furnishes the following serv13 ices: 

14 (A) Diagnosis and treatment of simple ill15 nesses and minor injuries. 

16 (B) Preventive health services, including 

17 health screenings. 

18 (C) Services provided for the purpose de19 scribed in subsection (b)(2). 

20 (D) Referrals and followups in situations 

21 involving illness or injury. 

22 (E) Health and social services, counseling 

23 services, and necessary referrals, including re24 ferrals regarding mental health and substance 

25 abuse. 


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1 (F) Such other services as the Secretary 

2 determines to be appropriate. 

3 (2) The applicant is a participating provider in 

4 the State’s program for medical assistance under 

5 title XIX of the Social Security Act. 

6 (3) The applicant does not impose charges on 

7 students or their families for services (including col8 lection of any cost-sharing for services under the 

9 comprehensive benefit package that otherwise would 

10 be required). 

11 (4) The applicant has reviewed and will periodi12 cally review the needs of the population served by 

13 the applicant in order to ensure that its services are 

14 accessible to the maximum number of school-aged 

15 children in the area, and that, to the maximum ex16 tent possible, barriers to access to services of the ap17 plicant are removed (including barriers resulting 

18 from the area’s physical characteristics, its eco19 nomic, social and cultural grouping, the health care 

20 utilization patterns of such children, and available 

21 transportation). 

22 (5) In the case of an applicant which serves a 

23 population that includes a substantial proportion of 

24 individuals of limited English speaking ability, the 

25 applicant has developed a plan to meet the needs of 


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1 such population to the extent practicable in the lan2 guage and cultural context most appropriate to such 

3 individuals. 

4 (6) The applicant will provide non-Federal con5 tributions toward the cost of the project in an 

6 amount determined by the Secretary. 

7 (7) The applicant will operate a quality assur8 ance program consistent with section 734(d). 

9 (e) DURATION OF GRANT.—A grant under this sec10 tion shall be for a period determined by the Secretary. 

11 (f) REPORTS.—A recipient of funding under this sec12 tion shall provide such reports and information as are re13 quired in regulations of the Secretary. 

14 SEC. 736. FEDERAL ADMINISTRATIVE COSTS. 

15 Of the amounts made available under section 731, the 

16 Secretary may reserve not more than 5 percent for admin17 istrative expenses regarding this subtitle. 

18 SEC. 737. DEFINITIONS. 

19 For purposes of this subtitle: 

20 (1) The term ‘‘adolescent children’’ has the 

21 meaning given such term in section 732(c). 

22 (2) The term ‘‘at risk’’ means at-risk with re23 spect to health. 


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1 (3) The term ‘‘community health center’’ has 

2 the meaning given such term in section 330 of the 

3 Public Health Service Act. 

4 (4) The term ‘‘health professional shortage 

5 area’’ means a health professional shortage area des6 ignated under section 332 of the Public Health Serv7 ice Act. 

8 (5) The term ‘‘medically underserved popu9 lation’’ has the meaning given such term in section 

10 330 of the Public Health Service Act. 

11 (6) The term ‘‘school-aged children’’ has the 

12 meaning given such term in section 732(c). 

13 TITLE VIII—FINANCING PROVI14 SIONS; AMERICAN HEALTH 

15 SECURITY TRUST FUND 

16 SEC. 800. AMENDMENT OF 1986 CODE; SECTION 15 NOT TO 

17 APPLY. 

18 (a) AMENDMENT OF 1986 CODE.—Except as other19 wise expressly provided, whenever in this title an amend20 ment or repeal is expressed in terms of an amendment 

21 to, or repeal of, a section or other provision, the reference 

22 shall be considered to be made to a section or other provi23 sion of the Internal Revenue Code of 1986. 

24 (b) SECTION 15 NOT TO APPLY.—The amendments 

25 made by subtitle B shall not be treated as a change in 


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1 a rate of tax for purposes of section 15 of the Internal 

2 Revenue Code of 1986. 

3 Subtitle A—American Health 

4 Security Trust Fund 

5 SEC. 801. AMERICAN HEALTH SECURITY TRUST FUND. 

6 (a) IN GENERAL.—There is hereby created on the 

7 books of the Treasury of the United States a trust fund 

8 to be known as the American Health Security Trust Fund 

9 (in this section referred to as the ‘‘Trust Fund’’). The 

10 Trust Fund shall consist of such gifts and bequests as 

11 may be made and such amounts as may be deposited in, 

12 or appropriated to, such Trust Fund as provided in this 

13 Act. 

14 (b) APPROPRIATIONS INTO TRUST FUND.— 

15 (1) TAXES.—There are hereby appropriated to 

16 the Trust Fund for each fiscal year (beginning with 

17 fiscal year 2015), out of any moneys in the Treasury 

18 not otherwise appropriated, amounts equivalent to 

19 100 percent of the aggregate increase in tax liabil20 ities under the Internal Revenue Code of 1986 which 

21 is attributable to the application of the amendments 

22 made by this title. The amounts appropriated by the 

23 preceding sentence shall be transferred from time to 

24 time (but not less frequently than monthly) from the 

25 general fund in the Treasury to the Trust Fund, 


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1 such amounts to be determined on the basis of esti2 mates by the Secretary of the Treasury of the taxes 

3 paid to or deposited into the Treasury; and proper 

4 adjustments shall be made in amounts subsequently 

5 transferred to the extent prior estimates were in ex6 cess of or were less than the amounts that should 

7 have been so transferred. 

8 (2) CURRENT PROGRAM RECEIPTS.—Notwith9 standing any other provision of law, there are hereby 

10 appropriated to the Trust Fund for each fiscal year 

11 (beginning with fiscal year 2015) the amounts that 

12 would otherwise have been appropriated to carry out 

13 the following programs: 

14 (A) The Medicare program, under parts A, 

15 B, and D of title XVIII of the Social Security 

16 Act (other than amounts attributable to any 

17 premiums under such parts). 

18 (B) The Medicaid program, under State 

19 plans approved under title XIX of such Act. 

20 (C) The Federal employees health benefit 

21 program, under chapter 89 of title 5, United 

22 States Code. 

23 (D) The TRICARE program (formerly 

24 known as the CHAMPUS program), under 

25 chapter 55 of title 10, United States Code. 


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1 (E) The maternal and child health pro2 gram (under title V of the Social Security Act), 

3 vocational rehabilitation programs, programs 

4 for drug abuse and mental health services 

5 under the Public Health Service Act, programs 

6 providing general hospital or medical assistance, 

7 and any other Federal program identified by 

8 the Board, in consultation with the Secretary of 

9 the Treasury, to the extent the programs pro10 vide for payment for health services the pay11 ment of which may be made under this Act. 

12 (c) INCORPORATION OF PROVISIONS.—The provisions 

13 of subsections (b) through (i) of section 1817 of the Social 

14 Security Act shall apply to the Trust Fund under this Act 

15 in the same manner as they applied to the Federal Hos16 pital Insurance Trust Fund under part A of title XVIII 

17 of such Act, except that the American Health Security 

18 Standards Board shall constitute the Board of Trustees 

19 of the Trust Fund. 

20 (d) TRANSFER OF FUNDS.—Any amounts remaining 

21 in the Federal Hospital Insurance Trust Fund or the Fed22 eral Supplementary Medical Insurance Trust Fund after 

23 the settlement of claims for payments under title XVIII 

24 have been completed, shall be transferred into the Amer25 ican Health Security Trust Fund. 


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1 Subtitle B—Taxes Based on Income 

2 and Wages 

3 SEC. 811. PAYROLL TAX ON EMPLOYERS. 

4 (a) IN GENERAL.—Section 3111 (relating to tax on 

5 employers) is amended by redesignating subsections (c) 

6 and (d) as subsection (d) and (e), respectively, and by in7 serting after subsection (b) the following new subsection: 

8 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

9 there is hereby imposed on every employer an excise tax, 

10 with respect to having individuals in his employ, equal to 

11 6.7 percent of the wages (as defined in section 3121(a)) 

12 paid by him with respect to employment (as defined in 

13 section 3121(b)).’’. 

14 (b) SELF-EMPLOYMENT INCOME.—Section 1401 (re15 lating to rate of tax on self-employment income) is amend16 ed by redesignating subsection (c) as subsection (d) and 

17 inserting after subsection (b) the following new subsection: 

18 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

19 there shall be imposed for each taxable year, on the self20 employment income of every individual, a tax equal to 6.7 

21 percent of the amount of the self-employment income for 

22 such taxable year.’’. 

23 (c) COMPARABLE TAXES FOR RAILROAD SERV24 ICES.— 


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1 (1) TAX ON EMPLOYERS.—Section 3221 is 

2 amended by redesignating subsections (c) and (d) as 

3 subsections (d) and (e), respectively, and by insert4 ing after subsection (b) the following new subsection: 

5 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

6 there is hereby imposed on every employer an excise tax, 

7 with respect to having individuals in his employ, equal to 

8 6.7 percent of the compensation paid by such employer 

9 for services rendered to such employer.’’. 

10 (2) TAX ON EMPLOYEE REPRESENTATIVES.— 

11 Section 3211 (relating to tax on employee represent12 atives) is amended by redesignating subsection (c) as 

13 subsection (d) and inserting after subsection (b) the 

14 following new paragraph: 

15 ‘‘(c) HEALTH CARE.—In addition to other taxes, 

16 there is hereby imposed on the income of each employee 

17 representative a tax equal to 6.7 percent of the compensa18 tion received during the calendar year by such employee 

19 representative for services rendered by such employee rep20 resentative.’’. 

21 (3) NO APPLICABLE BASE.—Subparagraph (A) 

22 of section 3231(e)(2) is amended by adding at the 

23 end thereof the following new clause: 


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1 ‘‘(iv) HEALTH CARE TAXES.—Clause 

2 (i) shall not apply to the taxes imposed by 

3 sections 3221(c) and 3211(c).’’. 

4 (4) TECHNICAL AMENDMENT.— 

5 (A) Subsection (d) of section 3211, as re6 designated by paragraph (2), is amended by 

7 striking ‘‘and (b)’’ and inserting ‘‘, (b), and 

8 (c)’’. 

9 (B) Subsection (d) of section 3221, as re10 designated by paragraph (1), is amended by 

11 striking ‘‘and (b)’’ and inserting ‘‘, (b), and 

12 (c)’’. 

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

14 this section shall apply to remuneration paid after Decem15 ber 31, 2014. 

16 SEC. 812. HEALTH CARE INCOME TAX. 

17 (a) GENERAL RULE.—Subchapter A of chapter 1 (re18 lating to determination of tax liability) is amended by add19 ing at the end thereof the following new part: 

20 ‘‘PART VIII—HEALTH CARE RELATED TAXES 

‘‘SUBPART A.—HEALTH CARE INCOME TAX ON INDIVIDUALS

21 ‘‘Subpart A—Health Care Income Tax on Individuals 

‘‘Sec. 59B. Health care income tax. 


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1 ‘‘SEC. 59B. HEALTH CARE INCOME TAX. 

2 ‘‘(a) IMPOSITION OF TAX.—In the case of an indi3 vidual, there is hereby imposed on the taxable income of 

4 the taxpayer for the taxable year a tax (in addition to any 

5 other tax imposed by this subtitle) determined in accord6 ance with the following tables: 

7 ‘‘(1) MARRIED INDIVIDUALS FILING JOINT RE8 TURNS AND SURVIVING SPOUSES.—In the case of 

9 any taxpayer making a joint return under section 

10 6013 or a surviving spouse (as defined in section 

11 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. 

12 ‘‘(2) OTHER TAXPAYERS.—In the case of any 

13 taxpayer not described in paragraph (1), the fol14 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. 

15 ‘‘(b) INFLATION ADJUSTMENT.— 

16 ‘‘(1) IN GENERAL.—In the case of any taxable 

17 year beginning after 2015, each of the dollar 


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1 amounts set forth in the tables in subsection (a) 

2 shall be increased by an amount equal to— 

3 ‘‘(A) such dollar amount, multiplied by 

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for such calendar 

6 year by substituting ‘calendar year 2014’ for 

7 ‘calendar year 1992’ in subparagraph (B) 

8 thereof. 

9 ‘‘(2) ROUNDING.—If the amount as adjusted 

10 under paragraph (1) is not a multiple of $1,000, 

11 such amount shall be rounded to the next lowest 

12 multiple of $1,000. 

13 ‘‘(c) NO CREDITS AGAINST TAX; NO EFFECT ON

14 MINIMUM TAX.—The tax imposed by this section shall not 

15 be treated as a tax imposed by this chapter for purposes 

16 of determining— 

17 ‘‘(1) the amount of any credit allowable under 

18 this chapter, or 

19 ‘‘(2) the amount of the minimum tax imposed 

20 by section 55. 

21 ‘‘(d) SPECIAL RULES.— 

22 ‘‘(1) TAX TO BE WITHHELD, ETC.—For pur23 poses of this title, the tax imposed by this section 

24 shall be treated as imposed by section 1. 


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1 ‘‘(2) REIMBURSEMENT OF TAX BY EMPLOYER

2 NOT INCLUDIBLE IN GROSS INCOME.—The gross in3 come of an employee shall not include any payment 

4 by his employer to reimburse the employee for the 

5 tax paid by the employee under this section. 

6 ‘‘(3) OTHER RULES.—The rules of section 

7 59A(d) shall apply to the tax imposed by this sec8 tion.’’. 

9 (b) CLERICAL AMENDMENT.—The table of parts for 

10 subchapter A of chapter 1 is amended by adding at the 

11 end the following new item: 

‘‘PART VIII—HEALTH CARE RELATED TAXES’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2014. 

15 SEC. 813. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

16 (a) IN GENERAL.—Part VIII of subchapter A of 

17 chapter 1, as added by this title, is amended by adding 

18 at the end the following new subpart: 

19 ‘‘Subpart B—Surcharge on High Income Individuals 

‘‘Sec. 59C. Surcharge on high income individuals. 

20 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

21 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

22 other than a corporation, there is hereby imposed (in addi23 tion to any other tax imposed by this subtitle) a tax equal 


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1 to 5.4 percent of so much of the modified adjusted gross 

2 income of the taxpayer as exceeds $1,000,000. 

3 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 

4 In the case of any taxpayer other than a taxpayer making 

5 a joint return under section 6013 or a surviving spouse 

6 (as defined in section 2(a)), subsection (a) shall be applied 

7 by substituting ‘$500,000’ for ‘$1,000,000’. 

8 ‘‘(c) MODIFIED ADJUSTED GROSS INCOME.—For 

9 purposes of this section, the term ‘modified adjusted gross 

10 income’ means adjusted gross income reduced by any de11 duction (not taken into account in determining adjusted 

12 gross income) allowed for investment interest (as defined 

13 in section 163(d)). In the case of an estate or trust, ad14 justed gross income shall be determined as provided in sec15 tion 67(e). 

16 ‘‘(d) SPECIAL RULES.— 

17 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

18 nonresident alien individual, only amounts taken 

19 into account in connection with the tax imposed 

20 under section 871(b) shall be taken into account 

21 under this section. 

22 ‘‘(2) CITIZENS AND RESIDENTS LIVING

23 ABROAD.—The dollar amount in effect under sub24 section (a) (after the application of subsection (b)) 

25 shall be decreased by the excess of— 


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1 ‘‘(A) the amounts excluded from the tax2 payer’s gross income under section 911, over 

3 ‘‘(B) the amounts of any deductions or ex4 clusions disallowed under section 911(d)(6) 

5 with respect to the amounts described in sub6 paragraph (A). 

7 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

8 shall not apply to a trust all the unexpired interests 

9 in which are devoted to one or more of the purposes 

10 described in section 170(c)(2)(B). 

11 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

12 CHAPTER FOR CERTAIN PURPOSES.—The tax im13 posed under this section shall not be treated as tax 

14 imposed by this chapter for purposes of determining 

15 the amount of any credit under this chapter or for 

16 purposes of section 55.’’. 

17 (b) CLERICAL AMENDMENT.—The table of subparts 

18 for part VIII of subchapter A of chapter 1, as added by 

19 this title, is amended by inserting after the item relating 

20 to subpart A the following new item: 

‘‘SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS’’. 

21 (c) SECTION 15 NOT TO APPLY.—The amendment 

22 made by subsection (a) shall not be treated as a change 

23 in a rate of tax for purposes of section 15 of the Internal 

24 Revenue Code of 1986. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2014. 

4 Subtitle C—Other Financing 

5 Provisions 

6 SEC. 821. TAX ON SECURITIES TRANSACTIONS. 

7 (a) IN GENERAL.—Chapter 36 is amended by insert8 ing after subchapter B the following new subchapter: 

9 ‘‘Subchapter C—Tax on Securities 

10 Transactions 

‘‘Sec. 4475. Tax on securities transactions. 

11 ‘‘SEC. 4475. TAX ON SECURITIES TRANSACTIONS. 

12 ‘‘(a) IMPOSITION OF TAX.— 

13 ‘‘(1) STOCKS.—There is hereby imposed a tax 

14 on each covered transaction in a stock contract of 

15 0.25 percent of the value of the instruments involved 

16 in such transaction. 

17 ‘‘(2) FUTURES.—There is hereby imposed a tax 

18 on each covered transaction in a futures contract of 

19 0.02 percent of the value of the instruments involved 

20 in such transaction. 

21 ‘‘(3) SWAPS.—There is hereby imposed a tax on 

22 each covered transaction in a swaps contract of 0.02 

23 percent of the value of the instruments involved in 

24 such transaction. 


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1 ‘‘(4) CREDIT DEFAULT SWAPS.—There is here2 by imposed a tax on each covered transaction in a 

3 credit default swaps contract of 0.02 percent of the 

4 value of the instruments involved in such trans5 action. 

6 ‘‘(5) OPTIONS.—There is hereby imposed a tax 

7 on each covered transaction in an options contract 

8 with respect to a transaction described in paragraph 

9 (1), (2), (3), or (4) of— 

10 ‘‘(A) the rate imposed with respect to such 

11 underlying transaction under paragraph (1), 

12 (2), (3), or (4) (as the case may be), multiplied 

13 by 

14 ‘‘(B) the premium paid on such option. 

15 ‘‘(b) EXCEPTION FOR RETIREMENT ACCOUNTS, 

16 ETC.—No tax shall be imposed under subsection (a) with 

17 respect to any stock contract, futures contract, swaps con18 tract, credit default swap, or options contract which is 

19 held in any plan, account, or arrangement described in 

20 section 220, 223, 401(a), 403(a), 403(b), 408, 408A, 529, 

21 or 530. 

22 ‘‘(c) EXCEPTION FOR INTERESTS IN MUTUAL

23 FUNDS.—No tax shall be imposed under subsection (a) 

24 with respect to the purchase or sale of any interest in a 


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1 regulated investment company (as defined in section 851) 

2 or of any derivative of such an interest. 

3 ‘‘(d) BY WHOM PAID.— 

4 ‘‘(1) IN GENERAL.—The tax imposed by this 

5 section shall be paid by— 

6 ‘‘(A) in the case of a transaction which oc7 curs on a trading facility located in the United 

8 States, such trading facility, or 

9 ‘‘(B) in any other case, the purchaser with 

10 respect to the transaction. 

11 ‘‘(2) WITHHOLDING IF BUYER IS NOT A

12 UNITED STATES PERSON.—See section 1447 for 

13 withholding by seller if buyer is a foreign person. 

14 ‘‘(e) COVERED TRANSACTION.—The term ‘covered 

15 transaction’ means any purchase or sale if— 

16 ‘‘(1) such purchase or sale occurs on a trading 

17 facility located in the United States, or 

18 ‘‘(2) the purchaser or seller is a United States 

19 person. 

20 ‘‘(f) ADMINISTRATION.—The Secretary shall carry 

21 out this section in consultation with the Securities and Ex22 change Commission and the Commodity Futures Trading 

23 Commission.’’. 

24 (b) CREDIT FOR FIRST $100,000 OF STOCK TRANS25 ACTIONS PER YEAR.—Subpart C of part IV of subchapter 


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1 A of chapter 1 is amended by inserting after section 36A 

2 the following new section: 

3 ‘‘SEC. 36B. CREDIT FOR SECURITIES TRANSACTION TAXES. 

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of any 

5 purchaser with respect to a covered transaction, there 

6 shall be allowed as a credit against the tax imposed by 

7 this subtitle for the taxable year an amount equal to the 

8 lesser of— 

9 ‘‘(1) the aggregate amount of tax imposed 

10 under section 4475 on covered transactions during 

11 the taxable year with respect to which the taxpayer 

12 is the purchaser, or 

13 ‘‘(2) $250 ($500 in the case of a joint return). 

14 ‘‘(b) AGGREGATION RULE.—For purposes of this sec15 tion, all persons treated as a single employer under sub16 section (a) or (b) of section 52, or subsection (m) or (o) 

17 of section 414, shall be treated as one taxpayer. 

18 ‘‘(c) DEFINITIONS.—For purposes of this section, 

19 any term used in this section which is also used in section 

20 4475 shall have the same meaning as when used in section 

21 4475.’’. 

22 (c) WITHHOLDING.—Subchapter A of chapter 3 is 

23 amended by adding at the end the following new section: 


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1 ‘‘SEC. 1447. WITHHOLDING ON SECURITIES TRANSACTIONS. 

2 ‘‘(a) IN GENERAL.—In the case of any outbound se3 curities transaction, the transferor shall deduct and with4 hold a tax equal to the tax imposed under section 4475 

5 with respect to such transaction. 

6 ‘‘(b) OUTBOUND SECURITIES TRANSACTION.—For 

7 purposes of this section, the term ‘outbound securities 

8 transaction’ means any covered transaction to which sec9 tion 4475(a) applies if— 

10 ‘‘(1) such transaction does not occur on a trad11 ing facility located in the United States, and 

12 ‘‘(2) the purchaser with respect to such trans13 action is not a United States person.’’. 

14 (d) CONFORMING AMENDMENTS.— 

15 (1) Section 6211(b)(4)(A) is amended by insert16 ing ‘‘36B,’’ after ‘‘36A,’’. 

17 (2) Section 1324(b)(2) of title 31, United 

18 States Code, is amended by inserting ‘‘36B,’’ after 

19 ‘‘36A,’’. 

20 (3) The table of subchapters for chapter 36 is 

21 amended by inserting after the item relating to sub22 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 2013.’’. 

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 2013.’’. 

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 

22 (29 U.S.C. 1131 et seq.) is amended by adding at the end 

23 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 2013. 

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 

19 one or more employers and includes an employer or 

20 fund that is financially at risk for the provision of 

21 workers 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, 2016. 


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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 

16 (29 U.S.C. 1181 et seq.) is repealed and the items relating 

17 to such part in the table of contents in section 1 of such 

18 Act are repealed. 

19 (b) CONFORMING AMENDMENT.—Section 514(b) of 

20 such Act (29 U.S.C. 1144(b)) is amended by striking 

21 paragraph (9). 


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1 SEC. 1003. REPEAL OF CERTAIN PROVISIONS IN THE PUB2 LIC HEALTH SERVICE ACT AND RELATED 

3 PROVISIONS. 

4 (a) IN GENERAL.—Titles XXII and XXVII of the 

5 Public Health Service Act (42 U.S.C. 300bb–1 et seq., 

6 300gg et seq.) are repealed. 

7 (b) CERTAIN PPACA PROVISIONS.—Title I of the 

8 Patient Protection and Affordable Care Act (Public Law 

9 111–148) (and the amendments made by such title) is re10 pealed. 

11 (c) ADDITIONAL AMENDMENTS.— 

12 (1) Section 1301(b) of such Act (42 U.S.C. 

13 300e(b)) is amended by striking paragraph (6). 

14 (2) Sections 104 and 191 of the Health Insur15 ance Portability and Accountability Act of 1996 are 

16 repealed. 

17 SEC. 1004. EFFECTIVE DATE OF TITLE. 

18 The amendments made by this title shall take effect 

19 January 1, 2017. 

Æ 


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