II 

110TH CONGRESS 

2D SESSION S. 3408 

To amend title XI of the Social Security Act to provide for the conduct 

of comparative effectiveness research and to amend the Internal Revenue 

Code of 1986 to establish a Comparative Effectiveness Research Trust 

Fund, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 31, 2008 

Mr. BAUCUS (for himself and Mr. CONRAD) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XI of the Social Security Act to provide 

for the conduct of comparative effectiveness research and 

to amend the Internal Revenue Code of 1986 to establish 

a Comparative Effectiveness Research Trust Fund, and 

for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Comparative Effective5 ness Research Act of 2008’’. 


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1 SEC. 2. COMPARATIVE EFFECTIVENESS RESEARCH. 

2 (a) IN GENERAL.—Title XI of the Social Security Act 

3 (42 U.S.C. 1301 et seq.) is amended by adding at the end 

4 the following new part: 

5 ‘‘PART D—COMPARATIVE EFFECTIVENESS RESEARCH

6 ‘‘COMPARATIVE EFFECTIVENESS RESEARCH

7 ‘‘SEC. 1181. (a) DEFINITIONS.—In this section: 

8 ‘‘(1) BOARD.—The term ‘Board’ means the 

9 Board of Governors established under subsection (f). 

10 ‘‘(2) COMPARATIVE CLINICAL EFFECTIVENESS

11 RESEARCH.— 

12 ‘‘(A) IN GENERAL.—The term ‘compara13 tive clinical effectiveness research’ means re14 search evaluating and comparing the clinical ef15 fectiveness, risks, and benefits of 2 or more 

16 medical treatments, services, and items de17 scribed in subparagraph (B). 

18 ‘‘(B) MEDICAL TREATMENTS, SERVICES, 

19 AND ITEMS DESCRIBED.—The medical treat20 ments, services, and items described in this sub21 paragraph are health care interventions, proto22 cols for treatment, procedures, medical devices, 

23 diagnostic tools, pharmaceuticals (including 

24 drugs and biologicals), and any other processes 

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1 nosis of, or prevention of illness or injury in, 

2 patients. 

3 ‘‘(3) COMPARATIVE EFFECTIVENESS RE4 SEARCH.—The term ‘comparative effectiveness re5 search’ means research evaluating and comparing 

6 the implications and outcomes of 2 or more health 

7 care strategies to address a particular medical condi8 tion. 

9 ‘‘(4) CONFLICTS OF INTEREST.—The term 

10 ‘conflicts of interest’ means associations, including 

11 financial and personal, that may be reasonably as12 sumed to have the potential to bias an individual’s 

13 decisions in matters related to the Institute or the 

14 conduct of activities under this section. 

15 ‘‘(5) INSTITUTE.—The term ‘Institute’ means 

16 the ‘Health Care Comparative Effectiveness Re17 search Institute’ established under subsection (b)(1). 

18 ‘‘(b) HEALTH CARE COMPARATIVE EFFECTIVENESS

19 RESEARCH INSTITUTE.— 

20 ‘‘(1) ESTABLISHMENT.—There is authorized to 

21 be established a nonprofit corporation, to be known 

22 as the ‘‘Health Care Comparative Effectiveness Re23 search Institute’’ which is neither an agency nor es24 tablishment of the United States Government. 


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1 ‘‘(2) APPLICATION OF PROVISIONS.—The Insti2 tute shall be subject to the provisions of this section, 

3 and, to the extent consistent with this section, to the 

4 District of Columbia Nonprofit Corporation Act. 

5 ‘‘(3) FUNDING OF COMPARATIVE EFFECTIVE6 NESS RESEARCH.—For fiscal year 2009 and each 

7 subsequent fiscal year, amounts in the Comparative 

8 Effectiveness Research Trust Fund (referred to in 

9 this section as the ‘CERTF’) under section 9511 of 

10 the Internal Revenue Code of 1986 shall be avail11 able, without further appropriation, to the Institute 

12 to carry out this section. 

13 ‘‘(c) PURPOSE.—The purpose of the Institute is to 

14 improve health care delivered to individuals in the United 

15 States by advancing the quality and thoroughness of evi16 dence concerning the manner in which diseases, disorders, 

17 and other health conditions can effectively and appro18 priately be prevented, diagnosed, treated, and managed 

19 clinically through research and evidence synthesis, and the 

20 dissemination of research findings with respect to the rel21 ative outcomes, effectiveness, and appropriateness of the 

22 medical treatments, services, and items described in sub23 section (a)(2)(B). 

24 ‘‘(d) DUTIES.— 


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1 ‘‘(1) IDENTIFYING RESEARCH PRIORITIES AND

2 ESTABLISHING RESEARCH PROJECT AGENDA.— 

3 ‘‘(A) IDENTIFYING RESEARCH PRIOR4 ITIES.—The Institute shall identify national 

5 priorities for comparative clinical effectiveness 

6 research, taking into account factors, includ7 ing— 

8 ‘‘(i) disease incidence, prevalence, and 

9 burden in the United States; 

10 ‘‘(ii) evidence gaps in terms of clinical 

11 outcomes; 

12 ‘‘(iii) practice variations, including 

13 variations in delivery and outcomes by ge14 ography, treatment site, provider type, and 

15 patient subgroup; 

16 ‘‘(iv) the potential for new evidence 

17 concerning certain categories of health care 

18 services or treatments to improve patient 

19 health and well-being, and the quality of 

20 care; and 

21 ‘‘(v) the effect or potential for an ef22 fect on health expenditures associated with 

23 a health condition or the use of a par24 ticular medical treatment, service, or item. 


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1 ‘‘(B) ESTABLISHING RESEARCH PROJECT

2 AGENDA.— 

3 ‘‘(i) IN GENERAL.—The Institute shall 

4 establish and update a research project 

5 agenda to address the priorities identified 

6 under subparagraph (A), taking into con7 sideration the types of research that might 

8 address each priority and the relative value 

9 (determined based on the cost of con10 ducting such research compared to the po11 tential usefulness of the information pro12 duced by such research) associated with 

13 such different types of research, and such 

14 other factors as the Institute determines 

15 appropriate. 

16 ‘‘(ii) CONSIDERATION OF NEED TO

17 CONDUCT A SYSTEMATIC REVIEW.—In es18 tablishing and updating the research 

19 project agenda under clause (i), the Insti20 tute shall consider the need to conduct a 

21 systematic review of existing research be22 fore providing for the conduct of new re23 search under paragraph (2)(A). 

24 ‘‘(2) CARRYING OUT RESEARCH PROJECT AGEN25 DA.— 


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1 ‘‘(A) COMPARATIVE CLINICAL EFFECTIVE2 NESS RESEARCH.—In carrying out the research 

3 project agenda established under paragraph 

4 (1)(B), the Institute shall provide for the con5 duct of appropriate research and the synthesis 

6 of evidence, in accordance with the methodo7 logical standards adopted under paragraph (9), 

8 using methods, including the following: 

9 ‘‘(i) Systematic reviews and assess10 ments of existing research and evidence. 

11 ‘‘(ii) Clinical research, such as ran12 domized controlled trials and observational 

13 studies. 

14 ‘‘(iii) Any other methodologies rec15 ommended by the methodology committee 

16 established under paragraph (6) that are 

17 adopted by the Board under paragraph 

18 (9). 

19 ‘‘(B)(i) CONTRACTS WITH FEDERAL AGEN20 CIES AND INSTRUMENTALITIES.—The Institute 

21 shall give preference to agencies and instrumen22 talities of the Federal Government that have ex23 perience in conducting comparative clinical ef24 fectiveness research, such as the Agency for 

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1 ing into contracts for the management and con2 duct of research in accordance with the re3 search project agenda established under para4 graph (1)(B), to the extent that such contracts 

5 are authorized under the governing statutes of 

6 such agencies and instrumentalities. 

7 ‘‘(ii) CONTRACTS WITH OTHER ENTI8 TIES.—The Institute may enter into contracts 

9 with appropriate private sector research or 

10 study-conducting entities for the conduct of re11 search described in clause (i). 

12 ‘‘(iii) CONDITIONS FOR CONTRACTS.—A 

13 contract entered into under this subparagraph 

14 shall require that the agency, instrumentality, 

15 or other entity— 

16 ‘‘(I) abide by the transparency and 

17 conflicts of interest requirements that 

18 apply to the Institute with respect to the 

19 research managed or conducted under such 

20 contract; 

21 ‘‘(II) comply with the methodological 

22 standards adopted under paragraph (9) 

23 with respect to such research; and 

24 ‘‘(III) take into consideration public 

25 comments on the study design that are 


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1 transmitted by the Institute to the agency, 

2 instrumentality, or other entity under sub3 section (i)(1)(B) during the finalization of 

4 the study design and transmit responses to 

5 such comments to the Institute, which will 

6 publish such comments, responses, and fi7 nalized study design in accordance with 

8 subsection (i)(3)(A)(iii) prior to the con9 duct of such research. 

10 ‘‘(iv) COVERAGE OF COPAYMENTS OR COIN11 SURANCE.—A contract entered into under this 

12 subparagraph may allow for the coverage of co13 payments or co-insurance, or allow for other ap14 propriate measures, to the extent that such cov15 erage or other measures are necessary to pre16 serve the validity of a research project, such as 

17 in the case where the research project must be 

18 blinded. 

19 ‘‘(C) REVIEW AND UPDATE OF EVI20 DENCE.—The Institute shall review and update 

21 evidence on a periodic basis, in order to take 

22 into account new research and evolving evidence 

23 as they become available, as appropriate. 

24 ‘‘(D) TAKING INTO ACCOUNT POTENTIAL

25 DIFFERENCES.—Research shall— 


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1 ‘‘(i) be designed, as appropriate, to 

2 take into account the potential for dif3 ferences in the effectiveness of health care 

4 treatments, services, and items as used 

5 with various subpopulations, such as racial 

6 and ethnic minorities, women, different age 

7 groups, and individuals with different 

8 comorbidities; and 

9 ‘‘(ii) seek to include members of such 

10 subpopulations as subjects in the research 

11 as feasible and appropriate. 

12 ‘‘(3) STUDY AND REPORT ON FEASIBILITY OF

13 CONDUCTING RESEARCH IN-HOUSE.— 

14 ‘‘(A) STUDY.—The Institute shall conduct 

15 a study on the feasibility of conducting research 

16 in-house. 

17 ‘‘(B) REPORT.—Not later than 5 years 

18 after the date of enactment of this section, the 

19 Institute shall submit a report to Congress con20 taining the results of the study conducted under 

21 subparagraph (A). 

22 ‘‘(4) DATA COLLECTION.— 

23 ‘‘(A) IN GENERAL.—The Secretary shall, 

24 with appropriate safeguards for privacy, make 

25 available to the Institute such data collected by 


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1 the Centers for Medicare & Medicaid Services 

2 under the programs under titles XVIII, XIX, 

3 and XXI as the Institute may require to carry 

4 out this section. The Institute may also request 

5 and, if such request is granted, obtain data 

6 from Federal, State, or private entities. 

7 ‘‘(B) USE OF DATA.—The Institute shall 

8 only use data provided to the Institute under 

9 subparagraph (A) in accordance with laws and 

10 regulations governing the release and use of 

11 such data, including applicable confidentiality 

12 and privacy standards. 

13 ‘‘(5) APPOINTING ADVISORY PANELS.— 

14 ‘‘(A) IN GENERAL.—The Institute may ap15 point permanent or ad hoc advisory panels as 

16 determined appropriate by the Institute to as17 sist in the establishment and carrying out of 

18 the research project agenda under paragraphs 

19 (1) and (2), respectively. Panels may advise or 

20 guide the Institute in matters such as identi21 fying gaps in and updating medical evidence 

22 and identifying research priorities and potential 

23 study designs in order to ensure that the infor24 mation produced from such research is clinically 

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1 tients at the point of care and may provide ad2 vice throughout the conduct of research. 

3 ‘‘(B) COMPOSITION.—An advisory panel 

4 appointed under subparagraph (A) shall include 

5 representatives of clinicians and patients and 

6 may include experts in scientific and health 

7 services research, health services delivery, and 

8 the manufacture of health items who have expe9 rience in the relevant topic, project, or category 

10 for which the panel is established. 

11 ‘‘(6) ESTABLISHING METHODOLOGY COM12 MITTEE.— 

13 ‘‘(A) IN GENERAL.—The Institute shall es14 tablish a standing methodology committee to 

15 carry out the functions described in subpara16 graph (C). 

17 ‘‘(B) APPOINTMENT AND COMPOSITION.— 

18 Members shall be appointed to the methodology 

19 committee established under subparagraph (A) 

20 by the Comptroller General of the United 

21 States. Members appointed to the methodology 

22 committee shall be experts in their scientific 

23 field, such as health services research, clinical 

24 research, comparative effectiveness research, 

25 biostatistics, and research methodologies. 


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1 Stakeholders with such expertise may be ap2 pointed to the methodology committee. 

3 ‘‘(C) FUNCTIONS.—Subject to subpara4 graph (D), the methodology committee shall 

5 work to develop and improve the science of 

6 comparative effectiveness research by under7 taking the following activities: 

8 ‘‘(i) Not later than 1 year after the 

9 date on which the members of the method10 ology committee are appointed under sub11 paragraph (B), developing and periodically 

12 updating methodological standards regard13 ing outcomes measures, risk adjustment, 

14 statistical protocols, evaluation of evidence, 

15 conduct of research, and other aspects of 

16 research and assessment to be used when 

17 conducting research on comparative clinical 

18 effectiveness (and procedures for the use of 

19 such standards) in order to help ensure ac20 curate and effective comparisons. Such 

21 standards shall also include methods by 

22 which new information, data, or advances 

23 in technology are considered and incor24 porated into ongoing research projects by 

25 the Institute, as appropriate. In developing 


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1 and updating methodological standards 

2 under this clause, the methodology com3 mittee shall ensure that such standards are 

4 scientifically based. 

5 ‘‘(ii) Not later than 5 years after such 

6 date, examining the following: 

7 ‘‘(I) Methods by which various 

8 aspects of the health care delivery sys9 tem (such as benefit design and per10 formance, and health services organi11 zation, management, and delivery) 

12 could be assessed and compared for 

13 their relative effectiveness, benefits, 

14 risks, advantages, and disadvantages 

15 in a scientifically valid and standard16 ized way. 

17 ‘‘(II) Methods by which cost-ef18 fectiveness and value could be as19 sessed in a scientifically valid and 

20 standardized way. 

21 ‘‘(D) CONSULTATION AND CONDUCT OF

22 EXAMINATIONS.— 

23 ‘‘(i) IN GENERAL.—Subject to clause 

24 (iii), in undertaking the activities described 


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1 in subparagraph (C), the methodology 

2 committee shall— 

3 ‘‘(I) consult or contract with 1 or 

4 more of the entities described in 

5 clause (ii); and 

6 ‘‘(II) consult with stakeholders 

7 and other entities knowledgeable in 

8 relevant fields, as appropriate. 

9 ‘‘(ii) ENTITIES DESCRIBED.—The fol10 lowing entities are described in this clause: 

11 ‘‘(I) The Institute of Medicine of 

12 the National Academies. 

13 ‘‘(II) The Agency for Healthcare 

14 Research and Quality. 

15 ‘‘(III) The National Institutes of 

16 Health. 

17 ‘‘(iii) CONDUCT OF EXAMINATIONS.— 

18 The methodology committee shall contract 

19 with the Institute of Medicine of the Na20 tional Academies for the conduct of the ex21 aminations described in subclauses (I) and 

22 (II) of subparagraph (C)(ii). 

23 ‘‘(E) REPORTS.—The methodology com24 mittee shall submit reports to the Board on the 

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1 scribed in subparagraph (C). Reports submitted 

2 under the preceding sentence with respect to 

3 the functions described in clause (i) of such 

4 subparagraph shall contain recommendations— 

5 ‘‘(i) for the Institute to adopt meth6 odological standards developed and up7 dated by the methodology committee under 

8 such subparagraph; and 

9 ‘‘(ii) for such other action as the 

10 methodology committee determines is nec11 essary to comply with such methodological 

12 standards. 

13 ‘‘(7) PROVIDING FOR A PEER-REVIEW PROC14 ESS.— 

15 ‘‘(A) IN GENERAL.—The Institute shall en16 sure that there is a process for peer review of 

17 the research conducted under this section. 

18 Under such process— 

19 ‘‘(i) evidence from research conducted 

20 under this section shall be reviewed to as21 sess scientific integrity and adherence to 

22 methodological standards adopted under 

23 paragraph (9); and 

24 ‘‘(ii) a list of the names of individuals 

25 contributing to any peer-review process 


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1 during the preceding year or years shall be 

2 made public and included in annual reports 

3 in accordance with paragraph (11)(D). 

4 ‘‘(B) COMPOSITION.—Such peer-review 

5 process shall have been designed in a manner so 

6 as to avoid bias and conflicts of interest on the 

7 part of the reviewers and shall be composed of 

8 experts in the scientific field relevant to the re9 search under review. 

10 ‘‘(C) USE OF EXISTING PROCESSES.—In 

11 the case where the Institute enters into a con12 tract or other agreement with another entity for 

13 the conduct or management of research under 

14 this section, the Institute may utilize the peer15 review process of such entity if such process 

16 meets the requirements under subparagraphs 

17 (A) and (B). 

18 ‘‘(8) DISSEMINATION OF RESEARCH FIND19 INGS.— 

20 ‘‘(A) IN GENERAL.—The Institute shall 

21 disseminate research findings to clinicians, pa22 tients, and the general public in accordance 

23 with the dissemination protocols and strategies 

24 adopted under paragraph (9). Research findings 

25 disseminated— 


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1 ‘‘(i) shall convey findings of research 

2 so that they are comprehensible and useful 

3 to patients and providers in making health 

4 care decisions; 

5 ‘‘(ii) shall discuss findings and other 

6 considerations specific to certain sub7 populations, risk factors, and 

8 comorbidities, as appropriate; 

9 ‘‘(iii) shall include considerations such 

10 as limitations of research and what further 

11 research may be needed, as appropriate; 

12 ‘‘(iv) shall not include practice guide13 lines or policy recommendations; and 

14 ‘‘(v) shall not include any data the 

15 dissemination of which would violate the 

16 privacy of research participants or violate 

17 any confidentiality agreements made with 

18 respect to the use of data under this sec19 tion. 

20 ‘‘(B) DISSEMINATION PROTOCOLS AND

21 STRATEGIES.—The Institute shall develop pro22 tocols and strategies for the appropriate dis23 semination of research findings in order to en24 sure effective communication of such findings 

25 and the use and incorporation of such findings 


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1 into relevant activities for the purpose of in2 forming higher quality and more effective and 

3 efficient decisions regarding medical treat4 ments, services, and items. In developing and 

5 adopting such protocols and strategies, the In6 stitute shall consult with stakeholders con7 cerning the types of dissemination that will be 

8 most useful to the end users of the information 

9 and may provide for the utilization of multiple 

10 formats for conveying findings to different audi11 ences. 

12 ‘‘(C) DEFINITION OF RESEARCH FIND13 INGS.—In this paragraph, the term ‘research 

14 findings’ means the results of a study, ap15 praisal, or assessment. 

16 ‘‘(9) ADOPTION.—Subject to subsection 

17 (i)(1)(A)(i), the Institute shall adopt the national 

18 priorities identified under paragraph (1)(A), the re19 search project agenda established under paragraph 

20 (1)(B), the methodological standards developed and 

21 updated by the methodology committee under para22 graph (6)(C)(i), any peer-review process provided 

23 under paragraph (7), and dissemination protocols 

24 and strategies developed under paragraph (8)(B) by 

25 majority vote. In the case where the Institute does 


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1 not adopt such national priorities, research project 

2 agenda, methodological standards, peer-review proc3 ess, or dissemination protocols and strategies in ac4 cordance with the preceding sentence, the national 

5 priorities, research project agenda, methodological 

6 standards, peer-review process, or dissemination pro7 tocols and strategies shall be referred to the appro8 priate staff or entity within the Institute (or, in the 

9 case of the methodological standards, the method10 ology committee) for further review. 

11 ‘‘(10) COORDINATION OF RESEARCH AND RE12 SOURCES AND BUILDING CAPACITY FOR RE13 SEARCH.— 

14 ‘‘(A) COORDINATION OF RESEARCH AND

15 RESOURCES.—The Institute shall coordinate re16 search conducted, commissioned, or otherwise 

17 funded under this section with comparative clin18 ical effectiveness and other relevant research 

19 and related efforts conducted by public and pri20 vate agencies and organizations in order to en21 sure the most efficient use of the Institute’s re22 sources and that research is not duplicated un23 necessarily. 

24 ‘‘(B) BUILDING CAPACITY FOR RE25 SEARCH.—The Institute may build capacity for 


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1 comparative clinical effectiveness research and 

2 other relevant research and related efforts 

3 through appropriate activities, such as making 

4 payments, up to 5 percent of the amounts ap5 propriated or credited to the CERTF under 

6 section 9511(b) of the Internal Revenue Code 

7 of 1986 with respect to the fiscal year, to The 

8 Cochrane Collaboration (or a successor organi9 zation) to support the infrastructure of The 

10 Cochrane Collaboration (or a successor organi11 zation) or to provide for sets of reviews related 

12 to a particular topic or associated with a par13 ticular review group. 

14 ‘‘(C) INCLUSION IN ANNUAL REPORTS.— 

15 The Institute shall report on any coordination 

16 and capacity building conducted under this 

17 paragraph in annual reports in accordance with 

18 paragraph (11)(E). 

19 ‘‘(11) ANNUAL REPORTS.—The Institute shall 

20 submit an annual report to Congress and the Presi21 dent, and shall make the annual report available to 

22 the public. Such report shall contain— 

23 ‘‘(A) a description of the activities con24 ducted under this section during the preceding 

25 year, including the use of amounts appropriated 


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1 or credited to the CERTF under section 

2 9511(b) of the Internal Revenue Code of 1986 

3 to carry out this section, research projects com4 pleted and underway, and a summary of the 

5 findings of such projects; 

6 ‘‘(B) the research project agenda and 

7 budget of the Institute for the following year; 

8 ‘‘(C) a description of research priorities 

9 identified under paragraph (1)(A), dissemina10 tion protocols and strategies developed by the 

11 Institute under paragraph (8)(B), and meth12 odological standards developed and updated by 

13 the methodology committee under paragraph 

14 (6)(C)(i) that are adopted under paragraph (9) 

15 during the preceding year; 

16 ‘‘(D) the names of individuals contributing 

17 to any peer-review process provided under para18 graph (7) during the preceding year or years, in 

19 a manner such that those individuals cannot be 

20 identified with a particular research project; 

21 and 

22 ‘‘(E) a description of efforts by the Insti23 tute under paragraph (10) to— 

24 ‘‘(i) coordinate the research con25 ducted, commissioned, or otherwise funded 


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1 under this section and the resources of the 

2 Institute with research and related efforts 

3 conducted by other private and public enti4 ties; and 

5 ‘‘(ii) build capacity for comparative 

6 clinical effectiveness research and other 

7 relevant research and related efforts 

8 through appropriate activities. 

9 ‘‘(F) any other relevant information (in10 cluding information on the membership of the 

11 Board, advisory panels appointed under para12 graph (5), the methodology committee estab13 lished under paragraph (6), and the executive 

14 staff of the Institute, any conflicts of interest 

15 with respect to the members of such Board, ad16 visory panels, and methodology committee, or 

17 with respect to any individuals selected for em18 ployment as executive staff of the Institute, and 

19 any bylaws adopted by the Board during the 

20 preceding year). 

21 ‘‘(e) ADMINISTRATION.— 

22 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

23 the Board shall carry out the duties of the Institute. 


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1 ‘‘(2) NONDELEGABLE DUTIES.—The activities 

2 described in subsections (b)(3)(D), (d)(1), and 

3 (d)(9) are nondelegable. 

4 ‘‘(f) BOARD OF GOVERNORS.— 

5 ‘‘(1) IN GENERAL.—The Institute shall have a 

6 Board of Governors, which shall consist of the fol7 lowing members: 

8 ‘‘(A) The Secretary of Health and Human 

9 Services (or the Secretary’s designee). 

10 ‘‘(B) The Director of the Agency for 

11 Healthcare Research and Quality (or the Direc12 tor’s designee). 

13 ‘‘(C) The Director of the National Insti14 tutes of Health (or the Director’s designee). 

15 ‘‘(D) 18 members appointed by the Comp16 troller General of the United States not later 

17 than 6 months after the date of enactment of 

18 this section, as follows: 

19 ‘‘(i) 3 members representing patients 

20 and health care consumers. 

21 ‘‘(ii) 3 members representing prac22 ticing physicians, including surgeons. 

23 ‘‘(iii) 3 members representing agen24 cies that administer public programs, as 

25 follows: 


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1 ‘‘(I) 1 member representing the 

2 Centers for Medicare & Medicaid 

3 Services who has experience in admin4 istering the program under title 

5 XVIII. 

6 ‘‘(II) 1 member representing 

7 agencies that administer State health 

8 programs (who may represent the 

9 Centers for Medicare & Medicaid 

10 Services and have experience in ad11 ministering the program under title 

12 XIX or the program under title XXI 

13 or be a governor of a State). 

14 ‘‘(III) 1 member representing 

15 agencies that administer other Fed16 eral health programs (such as a 

17 health program of the Department of 

18 Defense under chapter 55 of title 10, 

19 United States Code, the Federal em20 ployees health benefits program under 

21 chapter 89 of title 5 of such Code, a 

22 health program of the Department of 

23 Veterans Affairs under chapter 17 of 

24 title 38 of such Code, or a medical 


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1 care program of the Indian Health 

2 Service or of a tribal organization). 

3 ‘‘(iv) 3 members representing private 

4 payers, of whom at least 1 member shall 

5 represent health insurance issuers and at 

6 least 1 member shall represent employers 

7 who self-insure employee benefits. 

8 ‘‘(v) 3 members representing pharma9 ceutical, device, and technology manufac10 turers or developers. 

11 ‘‘(vi) 1 member representing nonprofit 

12 organizations involved in health services re13 search. 

14 ‘‘(vii) 1 member representing organi15 zations that focus on quality measurement 

16 and improvement or decision support. 

17 ‘‘(viii) 1 member representing inde18 pendent health services researchers. 

19 ‘‘(2) QUALIFICATIONS.— 

20 ‘‘(A) DIVERSE REPRESENTATION OF PER21 SPECTIVES.—The Board shall represent a broad 

22 range of perspectives and collectively have sci23 entific expertise in clinical health sciences re24 search, including epidemiology, decisions 

25 sciences, health economics, and statistics. 


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1 ‘‘(B) CONFLICTS OF INTEREST.— 

2 ‘‘(i) IN GENERAL.—In appointing 

3 members of the Board under paragraph 

4 (1)(D), the Comptroller General of the 

5 United States shall take into consideration 

6 any conflicts of interest of potential ap7 pointees. Any conflicts of interest of mem8 bers appointed to the Board under para9 graph (1) shall be disclosed in accordance 

10 with subsection (i)(4)(B). 

11 ‘‘(ii) RECUSAL.—A member of the 

12 Board shall be recused from participating 

13 with respect to a particular research 

14 project or other matter considered by the 

15 Board in carrying out its research project 

16 agenda under subsection (d)(2) in the case 

17 where the member (or an immediate family 

18 member of such member) has a financial 

19 or personal interest directly related to the 

20 research project or the matter that could 

21 affect or be affected by such participation. 

22 ‘‘(3) TERMS.— 

23 ‘‘(A) IN GENERAL.—A member of the 

24 Board appointed under paragraph (1)(D) shall 

25 be appointed for a term of 6 years, except with 


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•S 3408 IS

1 respect to the members first appointed under 

2 such paragraph— 

3 ‘‘(i) 6 shall be appointed for a term of 

4 6 years; 

5 ‘‘(ii) 6 shall be appointed for a term 

6 of 4 years; and 

7 ‘‘(iii) 6 shall be appointed for a term 

8 of 2 years. 

9 ‘‘(B) LIMITATION.—No individual shall be 

10 appointed to the Board under paragraph (1)(D) 

11 for more than 2 terms. 

12 ‘‘(C) EXPIRATION OF TERM.—Any member 

13 of the Board whose term has expired may serve 

14 until such member’s successor has taken office, 

15 or until the end of the calendar year in which 

16 such member’s term has expired, whichever is 

17 earlier. 

18 ‘‘(D) VACANCIES.— 

19 ‘‘(i) IN GENERAL.—Any member ap20 pointed to fill a vacancy prior to the expi21 ration of the term for which such mem22 ber’s predecessor was appointed shall be 

23 appointed for the remainder of such term. 

24 ‘‘(ii) VACANCIES NOT TO AFFECT

25 POWER OF BOARD.—A vacancy on the 


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•S 3408 IS

1 Board shall not affect its powers, but shall 

2 be filled in the same manner as the origi3 nal appointment was made. 

4 ‘‘(4) CHAIRPERSON AND VICE-CHAIRPERSON.— 

5 ‘‘(A) IN GENERAL.—The Comptroller Gen6 eral of the United States shall designate a 

7 Chairperson and Vice-Chairperson of the Board 

8 from among the members of the Board ap9 pointed under paragraph (1)(D). 

10 ‘‘(B) TERM.—The members so designated 

11 shall serve as Chairperson and Vice-Chair12 person of the Board for a period of 3 years. 

13 ‘‘(5) COMPENSATION.— 

14 ‘‘(A) IN GENERAL.—A member of the 

15 Board shall be entitled to compensation at the 

16 per diem equivalent of the rate provided for 

17 level IV of the Executive Schedule under section 

18 5315 of title 5, United States Code. 

19 ‘‘(B) TRAVEL EXPENSES.—While away 

20 from home or regular place of business in the 

21 performance of duties for the Board, each mem22 ber of the Board may receive reasonable travel, 

23 subsistence, and other necessary expenses. 

24 ‘‘(6) DIRECTOR AND STAFF; EXPERTS AND

25 CONSULTANTS.—The Board may— 


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1 ‘‘(A) employ and fix the compensation of 

2 an executive director and such other personnel 

3 as may be necessary to carry out the duties of 

4 the Institute; 

5 ‘‘(B) seek such assistance and support as 

6 may be required in the performance of the du7 ties of the Institute from appropriate depart8 ments and agencies of the Federal Government; 

9 ‘‘(C) enter into contracts or make other ar10 rangements and make such payments as may 

11 be necessary for performance of the duties of 

12 the Institute; 

13 ‘‘(D) provide travel, subsistence, and per 

14 diem compensation for individuals performing 

15 the duties of the Institute, including members 

16 of any advisory panel appointed under sub17 section (d)(5), members of the methodology 

18 committee established under subsection (d)(6), 

19 and individuals selected to contribute to any 

20 peer-review process under subsection (d)(7); 

21 and 

22 ‘‘(E) prescribe such rules, regulations, and 

23 bylaws as the Board determines necessary with 

24 respect to the internal organization and oper25 ation of the Institute. 


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1 ‘‘(7) MEETINGS AND HEARINGS.—The Board 

2 shall meet and hold hearings at the call of the 

3 Chairperson or a majority of its members. In the 

4 case where the Board is meeting on matters not re5 lated to personnel, Board meetings shall be open to 

6 the public and advertised. 

7 ‘‘(8) QUORUM.—A majority of the members of 

8 the Board shall constitute a quorum for purposes of 

9 conducting the duties of the Institute, but a lesser 

10 number of members may meet and hold hearings. 

11 ‘‘(g) FINANCIAL OVERSIGHT.— 

12 ‘‘(1) CONTRACT FOR AUDIT.—The Institute 

13 shall provide for the conduct of financial audits of 

14 the Institute on an annual basis by a private entity 

15 with expertise in conducting financial audits. 

16 ‘‘(2) REVIEW OF AUDIT AND REPORT TO CON17 GRESS.—The Comptroller General of the United 

18 States shall— 

19 ‘‘(A) review the results of the audits con20 ducted under paragraph (1); and 

21 ‘‘(B) submit a report to Congress con22 taining the results of such audits and review. 

23 ‘‘(h) GOVERNMENTAL OVERSIGHT.— 

24 ‘‘(1) REVIEW AND REPORTS.— 


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1 ‘‘(A) IN GENERAL.—The Comptroller Gen2 eral of the United States shall review the fol3 lowing: 

4 ‘‘(i) Processes established by the In5 stitute, including those with respect to the 

6 identification of research priorities under 

7 subsection (d)(1)(A) and the conduct of re8 search projects under this section. Such re9 view shall determine whether information 

10 produced by such research projects— 

11 ‘‘(I) is objective and credible; 

12 ‘‘(II) is produced in a manner 

13 consistent with the requirements 

14 under this section; and 

15 ‘‘(III) is developed through a 

16 transparent process. 

17 ‘‘(ii) The overall effect of the Institute 

18 and the effectiveness of activities con19 ducted under this section, including an as20 sessment of— 

21 ‘‘(I) the utilization of the find22 ings of research conducted under this 

23 section by health care decision mak24 ers; and 


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1 ‘‘(II) the effect of the Institute 

2 and such activities on innovation and 

3 on the health economy of the United 

4 States. 

5 ‘‘(B) REPORTS.—Not later than 5 years 

6 after the date of enactment of this section, and 

7 not less frequently than every 5 years there8 after, the Comptroller General of the United 

9 States shall submit a report to Congress con10 taining the results of the review conducted 

11 under subparagraph (A), together with rec12 ommendations for such legislation and adminis13 trative action as the Comptroller General deter14 mines appropriate. 

15 ‘‘(2) FUNDING ASSESSMENT.— 

16 ‘‘(A) IN GENERAL.—The Comptroller Gen17 eral of the United States shall assess the ade18 quacy and use of funding for the Institute and 

19 activities conducted under this section under 

20 the CERTF under section 9511 of the Internal 

21 Revenue Code of 1986. Such assessment shall 

22 include a determination as to whether, based on 

23 the utilization of findings by public and private 

24 payers, each of the following are appropriate 

25 sources of funding for the Institute, including a 


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•S 3408 IS

1 determination of whether such sources of fund2 ing should be continued or adjusted: 

3 ‘‘(i) The transfer of funds from the 

4 Federal Hospital Insurance Trust Fund 

5 under section 1817 and the Federal Sup6 plementary Medical Insurance Trust Fund 

7 under section 1841 to the CERTF under 

8 section 1182. 

9 ‘‘(ii) The amounts appropriated under 

10 subparagraphs (A), (B), (C), (D)(ii), and 

11 (E)(ii) of subsection (b)(1) of such section 

12 9511. 

13 ‘‘(iii) Private sector contributions 

14 under subparagraphs (D)(i) and (E)(i) of 

15 such subsection (b)(1). 

16 ‘‘(B) REPORT.—Not later than 8 years 

17 after the date of enactment of this section, the 

18 Comptroller General of the United States shall 

19 submit a report to Congress containing the re20 sults of the assessment conducted under sub21 paragraph (A), together with recommendations 

22 for such legislation and administrative action as 

23 the Comptroller General determines appro24 priate. 


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1 ‘‘(i) ENSURING TRANSPARENCY, CREDIBILITY, AND

2 ACCESS.—The Institute shall establish procedures to en3 sure that the following requirements for ensuring trans4 parency, credibility, and access are met: 

5 ‘‘(1) PUBLIC COMMENT PERIODS.— 

6 ‘‘(A) IN GENERAL.—The Institute shall 

7 provide for a public comment period of not less 

8 than 30 and not more than 60 days at the fol9 lowing times: 

10 ‘‘(i) Prior to the adoption of the na11 tional priorities identified under subsection 

12 (d)(1)(A), the research project agenda es13 tablished under subsection (d)(1)(B), the 

14 methodological standards developed and 

15 updated by the methodology committee 

16 under subsection (d)(6)(C)(i), the peer-re17 view process generally provided under sub18 section (d)(7), and dissemination protocols 

19 and strategies developed by the Institute 

20 under subsection (d)(8)(B) in accordance 

21 with subsection (d)(9). 

22 ‘‘(ii) Prior to the finalization of indi23 vidual study designs. 

24 ‘‘(B) TRANSMISSION OF PUBLIC COM25 MENTS ON STUDY DESIGN.—The Institute shall 


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•S 3408 IS

1 transmit public comments submitted during the 

2 public comment period described in subpara3 graph (A)(ii) to the entity conducting research 

4 with respect to which the individual study de5 sign is being finalized. 

6 ‘‘(2) ADDITIONAL FORUMS.—The Institute 

7 shall, in addition to the public comment periods de8 scribed in paragraph (1)(A), support forums to in9 crease public awareness and obtain and incorporate 

10 public feedback through media (such as an Internet 

11 website) on the following: 

12 ‘‘(A) The identification of research prior13 ities and the establishment of the research 

14 project agenda under subparagraphs (A) and 

15 (B), respectively, of subsection (d)(1). 

16 ‘‘(B) Research findings. 

17 ‘‘(C) Any other duties, activities, or proc18 esses the Institute determines appropriate. 

19 ‘‘(3) PUBLIC AVAILABILITY.—The Institute 

20 shall make available to the public and disclose 

21 through the official public Internet website of the In22 stitute, and through other forums and media the In23 stitute determines appropriate, the following: 

24 ‘‘(A) The process and methods for the con25 duct of research under this section, including— 


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1 ‘‘(i) the identity of the entity con2 ducting such research; 

3 ‘‘(ii) any links the entity has to indus4 try (including such links that are not di5 rectly tied to the particular research being 

6 conducted under this section); 

7 ‘‘(iii) draft study designs (including 

8 research questions and the finalized study 

9 design, together with public comments on 

10 such study design and responses to such 

11 comments); 

12 ‘‘(iv) research protocols (including 

13 measures taken, methods of research, 

14 methods of analysis, research results, and 

15 such other information as the Institute de16 termines appropriate); 

17 ‘‘(v) the identity of investigators con18 ducting such research and any conflicts of 

19 interest of such investigators; and 

20 ‘‘(vi) any progress reports the Insti21 tute determines appropriate. 

22 ‘‘(B) Public comments submitted during 

23 each of the public comment periods under para24 graph (1)(A). 


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1 ‘‘(C) Bylaws, processes, and proceedings of 

2 the Institute, to the extent practicable and as 

3 the Institute determines appropriate. 

4 ‘‘(D) Not later than 90 days after receipt 

5 by the Institute of a relevant report or research 

6 findings, appropriate information contained in 

7 such report or findings. 

8 ‘‘(4) CONFLICTS OF INTEREST.—The Institute 

9 shall— 

10 ‘‘(A) in appointing members to an advisory 

11 panel under subsection (d)(5) and the method12 ology committee under subsection (d)(6), and in 

13 selecting individuals to contribute to any peer14 review process under subsection (d)(7) and for 

15 employment as executive staff of the Institute, 

16 take into consideration any conflicts of interest 

17 of potential appointees, participants, and staff; 

18 and 

19 ‘‘(B) include a description of any such con20 flicts of interest and conflicts of interest of 

21 Board members in the annual report under sub22 section (d)(11), except that, in the case of indi23 viduals contributing to any such peer review 

24 process, such description shall be in a manner 


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•S 3408 IS

1 such that those individuals cannot be identified 

2 with a particular research project. 

3 ‘‘(j) RULES.— 

4 ‘‘(1) GIFTS.—The Institute, or the Board and 

5 staff of the Institute acting on behalf of the Insti6 tute, may not accept gifts, bequeaths, or donations 

7 of services or property. 

8 ‘‘(2) ESTABLISHMENT AND PROHIBITION ON

9 ACCEPTING OUTSIDE FUNDING OR CONTRIBU10 TIONS.—The Institute may not— 

11 ‘‘(A) establish a corporation other than as 

12 provided under this section; or 

13 ‘‘(B) accept any funds or contributions 

14 other than as provided under this part. 

15 ‘‘(k) RULES OF CONSTRUCTION.— 

16 ‘‘(1) COVERAGE.—Nothing in this section shall 

17 be construed— 

18 ‘‘(A) to permit the Institute to mandate 

19 coverage, reimbursement, or other policies for 

20 any public or private payer; or 

21 ‘‘(B) as preventing the Secretary from cov22 ering the routine costs of clinical care received 

23 by an individual entitled to, or enrolled for, ben24 efits under title XVIII, XIX, or XXI in the case 

25 where such individual is participating in a clinVerDate Aug 31 2005 04:19 Aug 05, 2008 Jkt 069200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S3408.IS S3408

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1 ical trial and such costs would otherwise be cov2 ered under such title with respect to the bene3 ficiary. 

4 ‘‘(2) REPORTS AND FINDINGS.—None of the re5 ports submitted under this section or research find6 ings disseminated by the Institute shall be construed 

7 as mandates, guidelines, or recommendations for 

8 payment, coverage, or treatment. 

9 ‘‘TRUST FUND TRANSFERS TO COMPARATIVE

10 EFFECTIVENESS RESEARCH TRUST FUND

11 ‘‘SEC. 1182. (a) IN GENERAL.—The Secretary shall 

12 provide for the transfer, from the Federal Hospital Insur13 ance Trust Fund under section 1817 and the Federal Sup14 plementary Medical Insurance Trust Fund under section 

15 1841, in proportion (as estimated by the Secretary) to the 

16 total expenditures during such fiscal year that are made 

17 under title XVIII from the respective trust fund, to the 

18 Comparative Effectiveness Research Trust Fund (referred 

19 to in this section as the ‘CERTF’) under section 9511 

20 of the Internal Revenue Code of 1986, the following: 

21 ‘‘(1) For fiscal year 2012, an amount equal to 

22 50 cents multiplied by the average number of indi23 viduals entitled to benefits under part A, or enrolled 

24 under part B, of title XVIII during such fiscal year. 

25 ‘‘(2) For each of fiscal years 2013, 2014, 2015, 

26 2016, 2017, and 2018, an amount equal to $1 mulVerDate Aug 31 2005 04:19 Aug 05, 2008 Jkt 069200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S3408.IS S3408

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1 tiplied by the average number of individuals entitled 

2 to benefits under part A, or enrolled under part B, 

3 of title XVIII during such fiscal year. 

4 ‘‘(b) ADJUSTMENTS FOR INCREASES IN HEALTH

5 CARE SPENDING.—In the case of any fiscal year begin6 ning after September 30, 2013, the dollar amount in effect 

7 under subsection (a)(2) for such fiscal year shall be equal 

8 to the sum of such dollar amount for the previous fiscal 

9 year (determined after the application of this subsection), 

10 plus an amount equal to the product of— 

11 ‘‘(1) such dollar amount for the previous fiscal 

12 year, multiplied by 

13 ‘‘(2) the percentage increase in the projected 

14 per capita amount of National Health Expenditures 

15 from the calendar year in which the previous fiscal 

16 year ends to the calendar year in which the fiscal 

17 year involved ends, as most recently published by the 

18 Secretary before the beginning of the fiscal year.’’. 

19 (b) COORDINATION WITH PROVIDER EDUCATION

20 AND TECHNICAL ASSISTANCE.—Section 1889(a) of the 

21 Social Security Act (42 U.S.C. 1395zz(a)) is amended by 

22 inserting ‘‘and to enhance the understanding of and utili23 zation by providers of services and suppliers of research 

24 findings disseminated by the Health Care Comparative EfVerDate Aug 31 2005 04:19 Aug 05, 2008 Jkt 069200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S3408.IS S3408

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1 fectiveness Research Institute established under section 

2 1181’’ before the period at the end. 

3 (c) COMPARATIVE EFFECTIVENESS RESEARCH

4 TRUST FUND; FINANCING FOR TRUST FUND.— 

5 (1) ESTABLISHMENT OF TRUST FUND.— 

6 (A) IN GENERAL.—Subchapter A of chap7 ter 98 of the Internal Revenue Code of 1986 

8 (relating to establishment of trust funds) is 

9 amended by adding at the end the following 

10 new section: 

11 ‘‘SEC. 9511. COMPARATIVE EFFECTIVENESS RESEARCH 

12 TRUST FUND. 

13 ‘‘(a) CREATION OF TRUST FUND.—There is estab14 lished in the Treasury of the United States a trust fund 

15 to be known as the ‘Comparative Effectiveness Research 

16 Trust Fund’ (hereafter in this section referred to as the 

17 ‘CERTF’), consisting of such amounts as may be appro18 priated or credited to such Trust Fund as provided in this 

19 section and section 9602(b). 

20 ‘‘(b) TRANSFERS TO FUND.— 

21 ‘‘(1) APPROPRIATION.—There are hereby ap22 propriated to the Trust Fund the following: 

23 ‘‘(A) For fiscal year 2009, $5,000,000. 

24 ‘‘(B) For fiscal year 2010, $25,000,000. 

25 ‘‘(C) For fiscal year 2011, $75,000,000. 


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1 ‘‘(D) For fiscal year 2012— 

2 ‘‘(i) an amount equivalent to the net 

3 revenues received in the Treasury from the 

4 fees imposed under subchapter B of chap5 ter 34 (relating to fees on health insurance 

6 and self-insured plans) for such fiscal year; 

7 and 

8 ‘‘(ii) $75,000,000. 

9 ‘‘(E) For each of fiscal years 2013, 2014, 

10 2015, 2016, 2017, and 2018— 

11 ‘‘(i) an amount equivalent to the net 

12 revenues received in the Treasury from the 

13 fees imposed under subchapter B of chap14 ter 34 (relating to fees on health insurance 

15 and self-insured plans) for such fiscal year; 

16 and 

17 ‘‘(ii) $75,000,000. 

18 The amounts appropriated under subparagraphs 

19 (A), (B), (C), (D)(ii), and (E)(ii) shall be trans20 ferred from the general fund of the Treasury, from 

21 funds not otherwise appropriated. 

22 ‘‘(2) TRUST FUND TRANSFERS.—In addition to 

23 the amounts appropriated under paragraph (1), 

24 there shall be credited to the CERTF the amounts 


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1 transferred under section 1182 of the Social Secu2 rity Act. 

3 ‘‘(3) LIMITATION ON TRANSFERS TO CERTF.— 

4 No amount may be appropriated or transferred to 

5 the CERTF on and after the date of any expendi6 ture from the CERTF which is not an expenditure 

7 permitted under this section. The determination of 

8 whether an expenditure is so permitted shall be 

9 made without regard to— 

10 ‘‘(A) any provision of law which is not con11 tained or referenced in this chapter or in a rev12 enue Act, and 

13 ‘‘(B) whether such provision of law is a 

14 subsequently enacted provision or directly or in15 directly seeks to waive the application of this 

16 paragraph. 

17 ‘‘(c) TRUSTEE.—The Secretary of Health and 

18 Human Services shall be a trustee of the CERTF. 

19 ‘‘(d) EXPENDITURES FROM FUND.—Amounts in the 

20 CERTF are available, without further appropriation, to 

21 the Health Care Comparative Effectiveness Research In22 stitute established by section 2(a) of the Comparative Ef23 fectiveness Research Act of 2008 for carrying out part D 

24 of title XI of the Social Security Act (as in effect on the 


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1 date of enactment of the Comparative Effectiveness Re2 search Act of 2008). 

3 ‘‘(e) NET REVENUES.—For purposes of this section, 

4 the term ‘net revenues’ means the amount estimated by 

5 the Secretary of the Treasury based on the excess of— 

6 ‘‘(1) the fees received in the Treasury under 

7 subchapter B of chapter 34, over 

8 ‘‘(2) the decrease in the tax imposed by chapter 

9 1 resulting from the fees imposed by such sub10 chapter. 

11 ‘‘(f) TERMINATION.—No amounts shall be available 

12 for expenditure from the CERTF after September 30, 

13 2018, and any amounts in such Trust Fund after such 

14 date shall be transferred to the general fund of the Treas15 ury.’’. 

16 (B) CLERICAL AMENDMENT.—The table of 

17 sections for subchapter A of chapter 98 of such 

18 Code is amended by adding at the end the fol19 lowing new item: 

‘‘Sec. 9511. Comparative Effectiveness Research Trust Fund.’’. 

20 (2) FINANCING FOR FUND FROM FEES ON IN21 SURED AND SELF-INSURED HEALTH PLANS.— 

22 (A) GENERAL RULE.—Chapter 34 of the 

23 Internal Revenue Code of 1986 is amended by 

24 adding at the end the following new subchapter: 


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1 ‘‘Subchapter B—Insured and Self-Insured 

2 Health Plans 

‘‘Sec. 4375. Health insurance. 

‘‘Sec. 4376. Self-insured health plans. 

‘‘Sec. 4377. Definitions and special rules. 

3 ‘‘SEC. 4375. HEALTH INSURANCE. 

4 ‘‘(a) IMPOSITION OF FEE.—There is hereby imposed 

5 on each specified health insurance policy for each policy 

6 year ending after September 30, 2011, a fee equal to the 

7 product of $1 (50 cents in the case of policy years ending 

8 during fiscal year 2012) multiplied by the average number 

9 of lives covered under the policy. 

10 ‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub11 section (a) shall be paid by the issuer of the policy. 

12 ‘‘(c) SPECIFIED HEALTH INSURANCE POLICY.—For 

13 purposes of this section: 

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this section, the term ‘specified health in16 surance policy’ means any accident or health insur17 ance policy (including a policy under a group health 

18 plan) issued with respect to individuals residing in 

19 the United States. 

20 ‘‘(2) EXEMPTION FOR CERTAIN POLICIES.—The 

21 term ‘specified health insurance policy’ does not in22 clude any insurance if substantially all of its cov23 erage is of excepted benefits described in section 

24 9832(c). 


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1 ‘‘(3) TREATMENT OF PREPAID HEALTH COV2 ERAGE ARRANGEMENTS.— 

3 ‘‘(A) IN GENERAL.—In the case of any ar4 rangement described in subparagraph (B)— 

5 ‘‘(i) such arrangement shall be treated 

6 as a specified health insurance policy, and 

7 ‘‘(ii) the person referred to in such 

8 subparagraph shall be treated as the 

9 issuer. 

10 ‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 

11 An arrangement is described in this subpara12 graph if under such arrangement fixed pay13 ments or premiums are received as consider14 ation for any person’s agreement to provide or 

15 arrange for the provision of accident or health 

16 coverage to residents of the United States, re17 gardless of how such coverage is provided or ar18 ranged to be provided. 

19 ‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH

20 CARE SPENDING.—In the case of any policy year ending 

21 in any fiscal year beginning after September 30, 2013, the 

22 dollar amount in effect under subsection (a) for such pol23 icy year shall be equal to the sum of such dollar amount 

24 for policy years ending in the previous fiscal year (deterVerDate Aug 31 2005 04:19 Aug 05, 2008 Jkt 069200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S3408.IS S3408

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1 mined after the application of this subsection), plus an 

2 amount equal to the product of— 

3 ‘‘(1) such dollar amount for policy years ending 

4 in the previous fiscal year, multiplied by 

5 ‘‘(2) the percentage increase in the projected 

6 per capita amount of National Health Expenditures 

7 from the calendar year in which the previous fiscal 

8 year ends to the calendar year in which the fiscal 

9 year involved ends, as most recently published by the 

10 Secretary of Health and Human Services before the 

11 beginning of the fiscal year. 

12 ‘‘(e) TERMINATION.—This section shall not apply to 

13 policy years ending after September 30, 2018. 

14 ‘‘SEC. 4376. SELF-INSURED HEALTH PLANS. 

15 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli16 cable self-insured health plan for each plan year ending 

17 after September 30, 2011, there is hereby imposed a fee 

18 equal to $1 (50 cents in the case of plan years ending 

19 during fiscal year 2012) multiplied by the average number 

20 of lives covered under the plan. 

21 ‘‘(b) LIABILITY FOR FEE.— 

22 ‘‘(1) IN GENERAL.—The fee imposed by sub23 section (a) shall be paid by the plan sponsor. 

24 ‘‘(2) PLAN SPONSOR.—For purposes of para25 graph (1) the term ‘plan sponsor’ means— 


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1 ‘‘(A) the employer in the case of a plan es2 tablished or maintained by a single employer, 

3 ‘‘(B) the employee organization in the case 

4 of a plan established or maintained by an em5 ployee organization, 

6 ‘‘(C) in the case of— 

7 ‘‘(i) a plan established or maintained 

8 by 2 or more employers or jointly by 1 or 

9 more employers and 1 or more employee 

10 organizations, 

11 ‘‘(ii) a multiple employer welfare ar12 rangement, or 

13 ‘‘(iii) a voluntary employees’ bene14 ficiary association described in section 

15 501(c)(9), 

16 the association, committee, joint board of trust17 ees, or other similar group of representatives of 

18 the parties who establish or maintain the plan, 

19 or 

20 ‘‘(D) the cooperative or association de21 scribed in subsection (c)(2)(F) in the case of a 

22 plan established or maintained by such a coop23 erative or association. 

24 ‘‘(c) APPLICABLE SELF-INSURED HEALTH PLAN.— 

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1 sured health plan’ means any plan for providing accident 

2 or health coverage if— 

3 ‘‘(1) any portion of such coverage is provided 

4 other than through an insurance policy, and 

5 ‘‘(2) such plan is established or maintained— 

6 ‘‘(A) by one or more employers for the 

7 benefit of their employees or former employees, 

8 ‘‘(B) by one or more employee organiza9 tions for the benefit of their members or former 

10 members, 

11 ‘‘(C) jointly by 1 or more employers and 1 

12 or more employee organizations for the benefit 

13 of employees or former employees, 

14 ‘‘(D) by a voluntary employees’ beneficiary 

15 association described in section 501(c)(9), 

16 ‘‘(E) by any organization described in sec17 tion 501(c)(6), or 

18 ‘‘(F) in the case of a plan not described in 

19 the preceding subparagraphs, by a multiple em20 ployer welfare arrangement (as defined in sec21 tion 3(40) of Employee Retirement Income Se22 curity Act of 1974), a rural electric cooperative 

23 (as defined in section 3(40)(B)(iv) of such Act), 

24 or a rural telephone cooperative association (as 

25 defined in section 3(40)(B)(v) of such Act). 


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1 ‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH

2 CARE SPENDING.—In the case of any plan year ending 

3 in any fiscal year beginning after September 30, 2013, the 

4 dollar amount in effect under subsection (a) for such plan 

5 year shall be equal to the sum of such dollar amount for 

6 plan years ending in the previous fiscal year (determined 

7 after the application of this subsection), plus an amount 

8 equal to the product of— 

9 ‘‘(1) such dollar amount for plan years ending 

10 in the previous fiscal year, multiplied by 

11 ‘‘(2) the percentage increase in the projected 

12 per capita amount of National Health Expenditures 

13 from the calendar year in which the previous fiscal 

14 year ends to the calendar year in which the fiscal 

15 year involved ends, as most recently published by the 

16 Secretary of Health and Human Services before the 

17 beginning of the fiscal year. 

18 ‘‘(e) TERMINATION.—This section shall not apply to 

19 plan years ending after September 30, 2018. 

20 ‘‘SEC. 4377. DEFINITIONS AND SPECIAL RULES. 

21 ‘‘(a) DEFINITIONS.—For purposes of this sub22 chapter— 

23 ‘‘(1) ACCIDENT AND HEALTH COVERAGE.—The 

24 term ‘accident and health coverage’ means any cov25 erage which, if provided by an insurance policy, 


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1 would cause such policy to be a specified health in2 surance policy (as defined in section 4375(c)). 

3 ‘‘(2) INSURANCE POLICY.—The term ‘insurance 

4 policy’ means any policy or other instrument where5 by a contract of insurance is issued, renewed, or ex6 tended. 

7 ‘‘(3) UNITED STATES.—The term ‘United 

8 States’ includes any possession of the United States. 

9 ‘‘(b) TREATMENT OF GOVERNMENTAL ENTITIES.— 

10 ‘‘(1) IN GENERAL.—For purposes of this sub11 chapter— 

12 ‘‘(A) the term ‘person’ includes any gov13 ernmental entity, and 

14 ‘‘(B) notwithstanding any other law or rule 

15 of law, governmental entities shall not be ex16 empt from the fees imposed by this subchapter 

17 except as provided in paragraph (2). 

18 ‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL

19 PROGRAMS.—In the case of an exempt governmental 

20 program, no fee shall be imposed under section 4375 

21 or section 4376 on any covered life under such pro22 gram. 

23 ‘‘(3) EXEMPT GOVERNMENTAL PROGRAM DE24 FINED.—For purposes of this subchapter, the term 

25 ‘exempt governmental program’ means— 


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1 ‘‘(A) any insurance program established 

2 under title XVIII of the Social Security Act, 

3 ‘‘(B) the medical assistance program es4 tablished by title XIX or XXI of the Social Se5 curity Act, 

6 ‘‘(C) any program established by Federal 

7 law for providing medical care (other than 

8 through insurance policies) to individuals (or 

9 the spouses and dependents thereof) by reason 

10 of such individuals being— 

11 ‘‘(i) members of the Armed Forces of 

12 the United States, or 

13 ‘‘(ii) veterans, and 

14 ‘‘(D) any program established by Federal 

15 law for providing medical care (other than 

16 through insurance policies) to members of In17 dian tribes (as defined in section 4(d) of the In18 dian Health Care Improvement Act). 

19 ‘‘(c) TREATMENT AS TAX.—For purposes of subtitle 

20 F, the fees imposed by this subchapter shall be treated 

21 as if they were taxes. 

22 ‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith23 standing any other provision of law, no amount collected 

24 under this subchapter shall be covered over to any posses25 sion of the United States.’’. 


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1 (B) CLERICAL AMENDMENTS.— 

2 (i) Chapter 34 of such Code is amend3 ed by striking the chapter heading and in4 serting the following: 

5 ‘‘CHAPTER 34—TAXES ON CERTAIN 

6 INSURANCE POLICIES 

‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS

‘‘SUBCHAPTER B. INSURED AND SELF-INSURED HEALTH PLANS

7 ‘‘Subchapter A—Policies Issued By Foreign 

8 Insurers’’. 

9 (ii) The table of chapters for subtitle 

10 D of such Code is amended by striking the 

11 item relating to chapter 34 and inserting 

12 the following new item: 

‘‘CHAPTER 34—TAXES ON CERTAIN INSURANCE POLICIES’’. 

13 SEC. 3. GAO REPORT ON NATIONAL COVERAGE DETER14 MINATIONS PROCESS. 

15 Not later than 18 months after the date of enactment 

16 of this Act, the Comptroller General of the United States 

17 shall submit a report to Congress on the process for mak18 ing national coverage determinations (as defined in section 

19 1869(f)(1)(B) of the Social Security Act (42 U.S.C. 

20 1395ff(f)(1)(B)) under the Medicare program under title 

21 XVIII of the Social Security Act. Such report shall include 

22 a determination whether, in initiating and conducting such 

23 process, the Secretary of Health and Human Services has 


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1 complied with applicable law and regulations, including re2 quirements for consultation with appropriate outside ex3 perts, providing appropriate notice and comment opportu4 nities to the public, and making information and data 

5 (other than proprietary data) considered in making such 

6 determinations available to the public and to nonvoting 

7 members of any advisory committees established to advise 

8 the Secretary with respect to such determinations. 

Æ 


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