IB 

Union Calendar No. 256 

111TH CONGRESS 

2D SESSION H. R. 4872 

To provide for reconciliation pursuant to section 202 of the concurrent 

resolution on the budget for fiscal year 2010. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2010 

Mr. SPRATT from the Committee on the Budget, reported the following bill; 

which was committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

A BILL 

To provide for reconciliation pursuant to section 202 of 

the concurrent resolution on the budget for fiscal year 2010. 

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 ‘‘Reconciliation Act of 

5 2010’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of divisions is as follows: 

DIVISION I—HOUSE COMMITTEE ON WAYS AND MEANS: HEALTH 

CARE REFORM 


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DIVISION II—HOUSE COMMITTEE ON EDUCATION AND LABOR: 

HEALTH CARE REFORM 

DIVISION III—HOUSE COMMITTEE ON EDUCATION AND LABOR: 

INVESTING IN EDUCATION 

1 DIVISION I—COMMITTEE ON 

2 WAYS AND MEANS: HEALTH 

3 CARE REFORM 

4 SEC. 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TITLES, 

5 AND SUBTITLES. 

6 (a) SHORT TITLE.—This division may be cited as the 

7 ‘‘America’s Affordable Health Choices Act of 2009’’. 

8 (b) TABLE OF SUBDIVISIONS, TITLES, AND SUB9 TITLES.—This division is divided into subdivisions, titles, 

10 and subtitles as follows: 

SUBDIVISION A—AFFORDABLE HEALTH CARE CHOICES

Title I—Protections and Standards for Qualified Health Benefits Plans 

Subtitle A—General Standards 

Subtitle B—Standards Guaranteeing Access to Affordable Coverage 

Subtitle C—Standards Guaranteeing Access to Essential Benefits 

Subtitle D—Additional Consumer Protections 

Subtitle E—Governance 

Subtitle F—Relation to other requirements; Miscellaneous 

Subtitle G—Early Investments 

Title II—Health Insurance Exchange and Related Provisions 

Subtitle A—Health Insurance Exchange 

Subtitle B—Public health insurance option 

Subtitle C—Individual Affordability Credits 

Title III—Shared responsibility 

Subtitle A—Individual responsibility 

Subtitle B—Employer Responsibility 

Title IV—Amendments to Internal Revenue Code of 1986 

Subtitle A—Shared responsibility 

Subtitle B—Credit for small business employee health coverage expenses 

Subtitle C—Disclosures to carry out health insurance exchange subsidies 

Subtitle D—Other revenue provisions 

SUBDIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS

Title I—Improving Health Care Value 

Subtitle A—Provisions related to Medicare part A 

Subtitle B—Provisions Related to Part B 


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Subtitle C—Provisions Related to Medicare Parts A and B 

Subtitle D—Medicare Advantage Reforms 

Subtitle E—Improvements to Medicare Part D 

Subtitle F—Medicare Rural Access Protections 

Title II—Medicare Beneficiary Improvements 

Subtitle A—Improving and Simplifying Financial Assistance for Low Income 

Medicare Beneficiaries 

Subtitle B—Reducing Health Disparities 

Subtitle C—Miscellaneous Improvements 

Title III—Promoting Primary Care, Mental Health Services, and Coordinated 

Care 

Title IV—Quality 

Subtitle A—Comparative Effectiveness Research 

Subtitle B—Nursing Home Transparency 

Subtitle C—Quality Measurements 

Subtitle D—Physician Payments Sunshine Provision 

Subtitle E—Public Reporting on Health Care-Associated Infections 

Title V—Medicare Graduate Medical Education 

Title VI—Program Integrity 

Subtitle A—Increased funding to fight waste, fraud, and abuse 

Subtitle B—Enhanced penalties for fraud and abuse 

Subtitle C—Enhanced Program and Provider Protections 

Subtitle D—Access to Information Needed to Prevent Fraud, Waste, and Abuse 

Title VII—Medicaid and CHIP 

Subtitle A—Medicaid and Health Reform 

Subtitle B—Prevention 

Subtitle C—Access 

Subtitle D—Coverage 

Subtitle E—Financing 

Subtitle F—Waste, Fraud, and Abuse 

Subtitle G—Puerto Rico and the Territories 

Subtitle H—Miscellaneous 

Title VIII—Revenue-related provisions 

Title IX—Miscellaneous Provisions 

SUBDIVISION C—PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

Title I—Community Health Centers 

Title II—Workforce 

Subtitle A—Primary care workforce 

Subtitle B—Nursing workforce 

Subtitle C—Public Health Workforce 

Subtitle D—Adapting workforce to evolving health system needs 

Title III—Prevention and Wellness 

Title IV—Quality and Surveillance 

Title V—Other provisions 

Subtitle A—Drug discount for rural and other hospitals 

Subtitle B—School-Based health clinics 

Subtitle C—National medical device registry 

Subtitle D—Grants for comprehensive programs To provide education to nurses 

and create a pipeline to nursing 

Subtitle E—States failing To adhere to certain employment obligations 


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1 SUBDIVISION A—AFFORDABLE 

2 HEALTH CARE CHOICES 

3 SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; 

4 GENERAL DEFINITIONS. 

5 (a) PURPOSE.— 

6 (1) IN GENERAL.—The purpose of this subdivi7 sion is to provide affordable, quality health care for 

8 all Americans and reduce the growth in health care 

9 spending. 

10 (2) BUILDING ON CURRENT SYSTEM.—This 

11 subdivision achieves this purpose by building on 

12 what works in today’s health care system, while re13 pairing the aspects that are broken. 

14 (3) INSURANCE REFORMS.—This subdivision— 

15 (A) enacts strong insurance market re16 forms; 

17 (B) creates a new Health Insurance Ex18 change, with a public health insurance option 

19 alongside private plans; 

20 (C) includes sliding scale affordability 

21 credits; and 

22 (D) initiates shared responsibility among 

23 workers, employers, and the government; 

24 so that all Americans have coverage of essential 

25 health benefits. 


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1 (4) HEALTH DELIVERY REFORM.—This subdivi2 sion institutes health delivery system reforms both to 

3 increase quality and to reduce growth in health 

4 spending so that health care becomes more afford5 able for businesses, families, and government. 

6 (b) TABLE OF CONTENTS OF SUBDIVISION.—The 

7 table of contents of this subdivision is as follows: 

Sec. 100. Purpose; table of contents of subdivision; general definitions. 

TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED 

HEALTH BENEFITS PLANS 

Subtitle A—General Standards 

Sec. 101. Requirements reforming health insurance marketplace. 

Sec. 102. Protecting the choice to keep current coverage. 

Subtitle B—Standards Guaranteeing Access to Affordable Coverage 

Sec. 111. Prohibiting pre-existing condition exclusions. 

Sec. 112. Guaranteed issue and renewal for insured plans. 

Sec. 113. Insurance rating rules. 

Sec. 114. Nondiscrimination in benefits; parity in mental health and substance 

abuse disorder benefits. 

Sec. 115. Ensuring adequacy of provider networks. 

Sec. 116. Ensuring value and lower premiums. 

Subtitle C—Standards Guaranteeing Access to Essential Benefits 

Sec. 121. Coverage of essential benefits package. 

Sec. 122. Essential benefits package defined. 

Sec. 123. Health Benefits Advisory Committee. 

Sec. 124. Process for adoption of recommendations; adoption of benefit standards. 

Subtitle D—Additional Consumer Protections 

Sec. 131. Requiring fair marketing practices by health insurers. 

Sec. 132. Requiring fair grievance and appeals mechanisms. 

Sec. 133. Requiring information transparency and plan disclosure. 

Sec. 134. Application to qualified health benefits plans not offered through the 

Health Insurance Exchange. 

Sec. 135. Timely payment of claims. 

Sec. 136. Standardized rules for coordination and subrogation of benefits. 

Sec. 137. Application of administrative simplification. 

Subtitle E—Governance 

Sec. 141. Health Choices Administration; Health Choices Commissioner. 


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Sec. 142. Duties and authority of Commissioner. 

Sec. 143. Consultation and coordination. 

Sec. 144. Health Insurance Ombudsman. 

Subtitle F—Relation to Other Requirements; Miscellaneous 

Sec. 151. Relation to other requirements. 

Sec. 152. Prohibiting discrimination in health care. 

Sec. 153. Whistleblower protection. 

Sec. 154. Construction regarding collective bargaining. 

Sec. 155. Severability. 

Subtitle G—Early Investments 

Sec. 161. Ensuring value and lower premiums. 

Sec. 162. Ending health insurance rescission abuse. 

Sec. 163. Administrative simplification. 

Sec. 164. Reinsurance program for retirees. 

TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED 

PROVISIONS 

Subtitle A—Health Insurance Exchange 

Sec. 201. Establishment of Health Insurance Exchange; outline of duties; definitions. 

Sec. 202. Exchange-eligible individuals and employers. 

Sec. 203. Benefits package levels. 

Sec. 204. Contracts for the offering of Exchange-participating health benefits 

plans. 

Sec. 205. Outreach and enrollment of Exchange-eligible individuals and employers in Exchange-participating health benefits plan. 

Sec. 206. Other functions. 

Sec. 207. Health Insurance Exchange Trust Fund. 

Sec. 208. Optional operation of State-based health insurance exchanges. 

Subtitle B—Public Health Insurance Option 

Sec. 221. Establishment and administration of a public health insurance option 

as an Exchange-qualified health benefits plan. 

Sec. 222. Premiums and financing. 

Sec. 223. Payment rates for items and services. 

Sec. 224. Modernized payment initiatives and delivery system reform. 

Sec. 225. Provider participation. 

Sec. 226. Application of fraud and abuse provisions. 

Subtitle C—Individual Affordability Credits 

Sec. 241. Availability through Health Insurance Exchange. 

Sec. 242. Affordable credit eligible individual. 

Sec. 243. Affordable premium credit. 

Sec. 244. Affordability cost-sharing credit. 

Sec. 245. Income determinations. 

Sec. 246. No Federal payment for undocumented aliens. 

TITLE III—SHARED RESPONSIBILITY 

Subtitle A—Individual Responsibility 


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Sec. 301. Individual responsibility. 

Subtitle B—Employer Responsibility 

PART 1—HEALTH COVERAGE PARTICIPATION REQUIREMENTS

Sec. 311. Health coverage participation requirements. 

Sec. 312. Employer responsibility to contribute towards employee and dependent coverage. 

Sec. 313. Employer contributions in lieu of coverage. 

Sec. 314. Authority related to improper steering. 

PART 2—SATISFACTION OF HEALTH COVERAGE PARTICIPATION

REQUIREMENTS

Sec. 321. Satisfaction of health coverage participation requirements under the 

Employee Retirement Income Security Act of 1974. 

Sec. 322. Satisfaction of health coverage participation requirements under the 

Internal Revenue Code of 1986. 

Sec. 323. Satisfaction of health coverage participation requirements under the 

Public Health Service Act. 

Sec. 324. Additional rules relating to health coverage participation requirements. 

TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 

Subtitle A—Shared Responsibility 

PART 1—INDIVIDUAL RESPONSIBILITY

Sec. 401. Tax on individuals without acceptable health care coverage. 

PART 2—EMPLOYER RESPONSIBILITY

Sec. 411. Election to satisfy health coverage participation requirements. 

Sec. 412. Responsibilities of nonelecting employers. 

Subtitle B—Credit for Small Business Employee Health Coverage Expenses 

Sec. 421. Credit for small business employee health coverage expenses. 

Subtitle C—Disclosures to Carry Out Health Insurance Exchange Subsidies 

Sec. 431. Disclosures to carry out health insurance exchange subsidies. 

Subtitle D—Other Revenue Provisions 

PART 1—GENERAL PROVISIONS

Sec. 441. Surcharge on high income individuals. 

Sec. 442. Distributions for medicine qualified only if for prescribed drug or insulin. 

Sec. 443. Delay in application of worldwide allocation of interest. 

PART 2—PREVENTION OF TAX AVOIDANCE

Sec. 451. Limitation on treaty benefits for certain deductible payments. 

Sec. 452. Codification of economic substance doctrine. 

Sec. 453. Penalties for underpayments. 


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PART 3—PARITY IN HEALTH BENEFITS

Sec. 461. Certain health related benefits applicable to spouses and dependents 

extended to eligible beneficiaries. 

1 (c) GENERAL DEFINITIONS.—Except as otherwise 

2 provided, in this subdivision: 

3 (1) ACCEPTABLE COVERAGE.—The term ‘‘ac4 ceptable coverage’’ has the meaning given such term 

5 in section 202(d)(2). 

6 (2) BASIC PLAN.—The term ‘‘basic plan’’ has 

7 the meaning given such term in section 203(c). 

8 (3) COMMISSIONER.—The term ‘‘Commis9 sioner’’ means the Health Choices Commissioner es10 tablished under section 141. 

11 (4) COST-SHARING.—The term ‘‘cost-sharing’’ 

12 includes deductibles, coinsurance, copayments, and 

13 similar charges but does not include premiums or 

14 any network payment differential for covered serv15 ices or spending for non-covered services. 

16 (5) DEPENDENT.—The term ‘‘dependent’’ has 

17 the meaning given such term by the Commissioner 

18 and includes a spouse. 

19 (6) EMPLOYMENT-BASED HEALTH PLAN.—The 

20 term ‘‘employment-based health plan’’— 

21 (A) means a group health plan (as defined 

22 in section 733(a)(1) of the Employee Retire23 ment Income Security Act of 1974); and 


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1 (B) includes such a plan that is the fol2 lowing: 

3 (i) FEDERAL, STATE, AND TRIBAL

4 GOVERNMENTAL PLANS.—A governmental 

5 plan (as defined in section 3(32) of the 

6 Employee Retirement Income Security Act 

7 of 1974), including a health benefits plan 

8 offered under chapter 89 of title 5, United 

9 States Code. 

10 (ii) CHURCH PLANS.—A church plan 

11 (as defined in section 3(33) of the Em12 ployee Retirement Income Security Act of 

13 1974). 

14 (7) ENHANCED PLAN.—The term ‘‘enhanced 

15 plan’’ has the meaning given such term in section 

16 203(c). 

17 (8) ESSENTIAL BENEFITS PACKAGE.—The term 

18 ‘‘essential benefits package’’ is defined in section 

19 122(a). 

20 (9) FAMILY.—The term ‘‘family’’ means an in21 dividual and includes the individual’s dependents. 

22 (10) FEDERAL POVERTY LEVEL; FPL.—The 

23 terms ‘‘Federal poverty level’’ and ‘‘FPL’’ have the 

24 meaning given the term ‘‘poverty line’’ in section 

25 673(2) of the Community Services Block Grant Act 


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1 (42 U.S.C. 9902(2)), including any revision required 

2 by such section. 

3 (11) HEALTH BENEFITS PLAN.—The terms 

4 ‘‘health benefits plan’’ means health insurance cov5 erage and an employment-based health plan and in6 cludes the public health insurance option. 

7 (12) HEALTH INSURANCE COVERAGE; HEALTH

8 INSURANCE ISSUER.—The terms ‘‘health insurance 

9 coverage’’ and ‘‘health insurance issuer’’ have the 

10 meanings given such terms in section 2791 of the 

11 Public Health Service Act. 

12 (13) HEALTH INSURANCE EXCHANGE.—The 

13 term ‘‘Health Insurance Exchange’’ means the 

14 Health Insurance Exchange established under sec15 tion 201. 

16 (14) MEDICAID.—The term ‘‘Medicaid’’ means 

17 a State plan under title XIX of the Social Security 

18 Act (whether or not the plan is operating under a 

19 waiver under section 1115 of such Act). 

20 (15) MEDICARE.—The term ‘‘Medicare’’ means 

21 the health insurance programs under title XVIII of 

22 the Social Security Act. 

23 (16) PLAN SPONSOR.—The term ‘‘plan spon24 sor’’ has the meaning given such term in section 


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1 3(16)(B) of the Employee Retirement Income Secu2 rity Act of 1974. 

3 (17) PLAN YEAR.—The term ‘‘plan year’’ 

4 means— 

5 (A) with respect to an employment-based 

6 health plan, a plan year as specified under such 

7 plan; or 

8 (B) with respect to a health benefits plan 

9 other than an employment-based health plan, a 

10 12-month period as specified by the Commis11 sioner. 

12 (18) PREMIUM PLAN; PREMIUM-PLUS PLAN.— 

13 The terms ‘‘premium plan’’ and ‘‘premium-plus 

14 plan’’ have the meanings given such terms in section 

15 203(c). 

16 (19) QHBP OFFERING ENTITY.—The terms 

17 ‘‘QHBP offering entity’’ means, with respect to a 

18 health benefits plan that is— 

19 (A) a group health plan (as defined, sub20 ject to subsection (d), in section 733(a)(1) of 

21 the Employee Retirement Income Security Act 

22 of 1974), the plan sponsor in relation to such 

23 group health plan, except that, in the case of a 

24 plan maintained jointly by 1 or more employers 

25 and 1 or more employee organizations and with 


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1 respect to which an employer is the primary 

2 source of financing, such term means such em3 ployer; 

4 (B) health insurance coverage, the health 

5 insurance issuer offering the coverage; 

6 (C) the public health insurance option, the 

7 Secretary of Health and Human Services; 

8 (D) a non-Federal governmental plan (as 

9 defined in section 2791(d) of the Public Health 

10 Service Act), the State or political subdivision 

11 of a State (or agency or instrumentality of such 

12 State or subdivision) which establishes or main13 tains such plan; or 

14 (E) a Federal governmental plan (as de15 fined in section 2791(d) of the Public Health 

16 Service Act), the appropriate Federal official. 

17 (20) QUALIFIED HEALTH BENEFITS PLAN.— 

18 The term ‘‘qualified health benefits plan’’ means a 

19 health benefits plan that meets the requirements for 

20 such a plan under title I and includes the public 

21 health insurance option. 

22 (21) PUBLIC HEALTH INSURANCE OPTION.— 

23 The term ‘‘public health insurance option’’ means 

24 the public health insurance option as provided under 

25 subtitle B of title II. 


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1 (22) SERVICE AREA; PREMIUM RATING AREA.— 

2 The terms ‘‘service area’’ and ‘‘premium rating 

3 area’’ mean with respect to health insurance cov4 erage— 

5 (A) offered other than through the Health 

6 Insurance Exchange, such an area as estab7 lished by the QHBP offering entity of such cov8 erage in accordance with applicable State law; 

9 and 

10 (B) offered through the Health Insurance 

11 Exchange, such an area as established by such 

12 entity in accordance with applicable State law 

13 and applicable rules of the Commissioner for 

14 Exchange-participating health benefits plans. 

15 (23) STATE.—The term ‘‘State’’ means the 50 

16 States and the District of Columbia. 

17 (24) STATE MEDICAID AGENCY.—The term 

18 ‘‘State Medicaid agency’’ means, with respect to a 

19 Medicaid plan, the single State agency responsible 

20 for administering such plan under title XIX of the 

21 Social Security Act. 

22 (25) Y1, Y2, ETC..—The terms ‘‘Y1’’ , ‘‘Y2’’, 

23 ‘‘Y3’’, ‘‘Y4’’, ‘‘Y5’’, and similar subsequently num24 bered terms, mean 2013 and subsequent years, re25 spectively. 


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1 TITLE I—PROTECTIONS AND 

2 STANDARDS FOR QUALIFIED 

3 HEALTH BENEFITS PLANS 

4 Subtitle A—General Standards 

5 SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR6 ANCE MARKETPLACE. 

7 (a) PURPOSE.—The purpose of this title is to estab8 lish standards to ensure that new health insurance cov9 erage and employment-based health plans that are offered 

10 meet standards guaranteeing access to affordable cov11 erage, essential benefits, and other consumer protections. 

12 (b) REQUIREMENTS FOR QUALIFIED HEALTH BENE13 FITS PLANS.—On or after the first day of Y1, a health 

14 benefits plan shall not be a qualified health benefits plan 

15 under this subdivision unless the plan meets the applicable 

16 requirements of the following subtitles for the type of plan 

17 and plan year involved: 

18 (1) Subtitle B (relating to affordable coverage). 

19 (2) Subtitle C (relating to essential benefits). 

20 (3) Subtitle D (relating to consumer protec21 tion). 

22 (c) TERMINOLOGY.—In this subdivision: 

23 (1) ENROLLMENT IN EMPLOYMENT-BASED

24 HEALTH PLANS.—An individual shall be treated as 

25 being ‘‘enrolled’’ in an employment-based health 


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1 plan if the individual is a participant or beneficiary 

2 (as such terms are defined in section 3(7) and 3(8), 

3 respectively, of the Employee Retirement Income Se4 curity Act of 1974) in such plan. 

5 (2) INDIVIDUAL AND GROUP HEALTH INSUR6 ANCE COVERAGE.—The terms ‘‘individual health in7 surance coverage’’ and ‘‘group health insurance cov8 erage’’ mean health insurance coverage offered in 

9 the individual market or large or small group mar10 ket, respectively, as defined in section 2791 of the 

11 Public Health Service Act. 

12 SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT 

13 COVERAGE. 

14 (a) GRANDFATHERED HEALTH INSURANCE COV15 ERAGE DEFINED.—Subject to the succeeding provisions of 

16 this section, for purposes of establishing acceptable cov17 erage under this subdivision, the term ‘‘grandfathered 

18 health insurance coverage’’ means individual health insur19 ance coverage that is offered and in force and effect before 

20 the first day of Y1 if the following conditions are met: 

21 (1) LIMITATION ON NEW ENROLLMENT.— 

22 (A) IN GENERAL.—Except as provided in 

23 this paragraph, the individual health insurance 

24 issuer offering such coverage does not enroll 

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1 fective date of coverage is on or after the first 

2 day of Y1. 

3 (B) DEPENDENT COVERAGE PER4 MITTED.—Subparagraph (A) shall not affect 

5 the subsequent enrollment of a dependent of an 

6 individual who is covered as of such first day. 

7 (2) LIMITATION ON CHANGES IN TERMS OR

8 CONDITIONS.—Subject to paragraph (3) and except 

9 as required by law, the issuer does not change any 

10 of its terms or conditions, including benefits and 

11 cost-sharing, from those in effect as of the day be12 fore the first day of Y1. 

13 (3) RESTRICTIONS ON PREMIUM INCREASES.— 

14 The issuer cannot vary the percentage increase in 

15 the premium for a risk group of enrollees in specific 

16 grandfathered health insurance coverage without 

17 changing the premium for all enrollees in the same 

18 risk group at the same rate, as specified by the 

19 Commissioner. 

20 (b) GRACE PERIOD FOR CURRENT EMPLOYMENT21 BASED HEALTH PLANS.— 

22 (1) GRACE PERIOD.— 

23 (A) IN GENERAL.—The Commissioner 

24 shall establish a grace period whereby, for plan 

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1 riod beginning with Y1, an employment-based 

2 health plan in operation as of the day before 

3 the first day of Y1 must meet the same require4 ments as apply to a qualified health benefits 

5 plan under section 101, including the essential 

6 benefit package requirement under section 121. 

7 (B) EXCEPTION FOR LIMITED BENEFITS

8 PLANS.—Subparagraph (A) shall not apply to 

9 an employment-based health plan in which the 

10 coverage consists only of one or more of the fol11 lowing: 

12 (i) Any coverage described in section 

13 3001(a)(1)(B)(ii)(IV) of division B of the 

14 American Recovery and Reinvestment Act 

15 of 2009 (PL 111–5). 

16 (ii) Excepted benefits (as defined in 

17 section 733(c) of the Employee Retirement 

18 Income Security Act of 1974), including 

19 coverage under a specified disease or ill20 ness policy described in paragraph (3)(A) 

21 of such section. 

22 (iii) Such other limited benefits as the 

23 Commissioner may specify. 

24 In no case shall an employment-based health 

25 plan in which the coverage consists only of one 


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1 or more of the coverage or benefits described in 

2 clauses (i) through (iii) be treated as acceptable 

3 coverage under this subdivision 

4 (2) TRANSITIONAL TREATMENT AS ACCEPT5 ABLE COVERAGE.—During the grace period specified 

6 in paragraph (1)(A), an employment-based health 

7 plan that is described in such paragraph shall be 

8 treated as acceptable coverage under this subdivi9 sion. 

10 (c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE

11 COVERAGE.— 

12 (1) IN GENERAL.—Individual health insurance 

13 coverage that is not grandfathered health insurance 

14 coverage under subsection (a) may only be offered 

15 on or after the first day of Y1 as an Exchange-par16 ticipating health benefits plan. 

17 (2) SEPARATE, EXCEPTED COVERAGE PER18 MITTED.—Excepted benefits (as defined in section 

19 2791(c) of the Public Health Service Act) are not 

20 included within the definition of health insurance 

21 coverage. Nothing in paragraph (1) shall prevent the 

22 offering, other than through the Health Insurance 

23 Exchange, of excepted benefits so long as it is of24 fered and priced separately from health insurance 

25 coverage. 


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1 Subtitle B—Standards Guaran2 teeing Access to Affordable Cov3 erage 

4 SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLU5 SIONS. 

6 A qualified health benefits plan may not impose any 

7 pre-existing condition exclusion (as defined in section 

8 2701(b)(1)(A) of the Public Health Service Act) or other9 wise impose any limit or condition on the coverage under 

10 the plan with respect to an individual or dependent based 

11 on any health status-related factors (as defined in section 

12 2791(d)(9) of the Public Health Service Act) in relation 

13 to the individual or dependent. 

14 SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN15 SURED PLANS. 

16 The requirements of sections 2711 (other than sub17 sections (c) and (e)) and 2712 (other than paragraphs (3), 

18 and (6) of subsection (b) and subsection (e)) of the Public 

19 Health Service Act, relating to guaranteed availability and 

20 renewability of health insurance coverage, shall apply to 

21 individuals and employers in all individual and group 

22 health insurance coverage, whether offered to individuals 

23 or employers through the Health Insurance Exchange, 

24 through any employment-based health plan, or otherwise, 

25 in the same manner as such sections apply to employers 


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1 and health insurance coverage offered in the small group 

2 market, except that such section 2712(b)(1) shall apply 

3 only if, before nonrenewal or discontinuation of coverage, 

4 the issuer has provided the enrollee with notice of non5 payment of premiums and there is a grace period during 

6 which the enrollees has an opportunity to correct such 

7 nonpayment. Rescissions of such coverage shall be prohib8 ited except in cases of fraud as defined in sections 

9 2712(b)(2) of such Act. 

10 SEC. 113. INSURANCE RATING RULES. 

11 (a) IN GENERAL.—The premium rate charged for an 

12 insured qualified health benefits plan may not vary except 

13 as follows: 

14 (1) LIMITED AGE VARIATION PERMITTED.—By 

15 age (within such age categories as the Commissioner 

16 shall specify) so long as the ratio of the highest such 

17 premium to the lowest such premium does not ex18 ceed the ratio of 2 to 1. 

19 (2) BY AREA.—By premium rating area (as 

20 permitted by State insurance regulators or, in the 

21 case of Exchange-participating health benefits plans, 

22 as specified by the Commissioner in consultation 

23 with such regulators). 

24 (3) BY FAMILY ENROLLMENT.—By family en25 rollment (such as variations within categories and 


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1 compositions of families) so long as the ratio of the 

2 premium for family enrollment (or enrollments) to 

3 the premium for individual enrollment is uniform, as 

4 specified under State law and consistent with rules 

5 of the Commissioner. 

6 (b) STUDY AND REPORTS.— 

7 (1) STUDY.—The Commissioner, in coordina8 tion with the Secretary of Health and Human Serv9 ices and the Secretary of Labor, shall conduct a 

10 study of the large group insured and self-insured 

11 employer health care markets. Such study shall ex12 amine the following: 

13 (A) The types of employers by key charac14 teristics, including size, that purchase insured 

15 products versus those that self-insure. 

16 (B) The similarities and differences be17 tween typical insured and self-insured health 

18 plans. 

19 (C) The financial solvency and capital re20 serve levels of employers that self-insure by em21 ployer size. 

22 (D) The risk of self-insured employers not 

23 being able to pay obligations or otherwise be24 coming financially insolvent. 


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1 (E) The extent to which rating rules are 

2 likely to cause adverse selection in the large 

3 group market or to encourage small and mid 

4 size employers to self-insure 

5 (2) REPORTS.—Not later than 18 months after 

6 the date of the enactment of this Act, the Commis7 sioner shall submit to Congress and the applicable 

8 agencies a report on the study conducted under 

9 paragraph (1). Such report shall include any rec10 ommendations the Commissioner deems appropriate 

11 to ensure that the law does not provide incentives 

12 for small and mid-size employers to self-insure or 

13 create adverse selection in the risk pools of large 

14 group insurers and self-insured employers. Not later 

15 than 18 months after the first day of Y1, the Com16 missioner shall submit to Congress and the applica17 ble agencies an updated report on such study, in18 cluding updates on such recommendations. 

19 SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN 

20 MENTAL HEALTH AND SUBSTANCE ABUSE 

21 DISORDER BENEFITS. 

22 (a) NONDISCRIMINATION IN BENEFITS.—A qualified 

23 health benefits plan shall comply with standards estab24 lished by the Commissioner to prohibit discrimination in 

25 health benefits or benefit structures for qualifying health 


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1 benefits plans, building from sections 702 of Employee 

2 Retirement Income Security Act of 1974, 2702 of the 

3 Public Health Service Act, and section 9802 of the Inter4 nal Revenue Code of 1986. 

5 (b) PARITY IN MENTAL HEALTH AND SUBSTANCE

6 ABUSE DISORDER BENEFITS.—To the extent such provi7 sions are not superceded by or inconsistent with subtitle 

8 C, the provisions of section 2705 (other than subsections 

9 (a)(1), (a)(2), and (c)) of section 2705 of the Public 

10 Health Service Act shall apply to a qualified health bene11 fits plan, regardless of whether it is offered in the indi12 vidual or group market, in the same manner as such provi13 sions apply to health insurance coverage offered in the 

14 large group market. 

15 SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS. 

16 (a) IN GENERAL.—A qualified health benefits plan 

17 that uses a provider network for items and services shall 

18 meet such standards respecting provider networks as the 

19 Commissioner may establish to assure the adequacy of 

20 such networks in ensuring enrollee access to such items 

21 and services and transparency in the cost-sharing differen22 tials between in-network coverage and out-of-network cov23 erage. 

24 (b) PROVIDER NETWORK DEFINED.—In this subdivi25 sion, the term ‘‘provider network’’ means the providers 


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1 with respect to which covered benefits, treatments, and 

2 services are available under a health benefits plan. 

3 SEC. 116. ENSURING VALUE AND LOWER PREMIUMS. 

4 (a) IN GENERAL.—A qualified health benefits plan 

5 shall meet a medical loss ratio as defined by the Commis6 sioner. For any plan year in which the qualified health 

7 benefits plan does not meet such medical loss ratio, QHBP 

8 offering entity shall provide in a manner specified by the 

9 Commissioner for rebates to enrollees of payment suffi10 cient to meet such loss ratio. 

11 (b) BUILDING ON INTERIM RULES.—In imple12 menting subsection (a), the Commissioner shall build on 

13 the definition and methodology developed by the Secretary 

14 of Health and Human Services under the amendments 

15 made by section 161 for determining how to calculate the 

16 medical loss ratio. Such methodology shall be set at the 

17 highest level medical loss ratio possible that is designed 

18 to ensure adequate participation by QHBP offering enti19 ties, competition in the health insurance market in and 

20 out of the Health Insurance Exchange, and value for con21 sumers so that their premiums are used for services. 


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1 Subtitle C—Standards Guaran2 teeing Access to Essential Bene3 fits 

4 SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE. 

5 (a) IN GENERAL.—A qualified health benefits plan 

6 shall provide coverage that at least meets the benefit 

7 standards adopted under section 124 for the essential ben8 efits package described in section 122 for the plan year 

9 involved. 

10 (b) CHOICE OF COVERAGE.— 

11 (1) NON-EXCHANGE-PARTICIPATING HEALTH

12 BENEFITS PLANS.—In the case of a qualified health 

13 benefits plan that is not an Exchange-participating 

14 health benefits plan, such plan may offer such cov15 erage in addition to the essential benefits package as 

16 the QHBP offering entity may specify. 

17 (2) EXCHANGE-PARTICIPATING HEALTH BENE18 FITS PLANS.—In the case of an Exchange-partici19 pating health benefits plan, such plan is required 

20 under section 203 to provide specified levels of bene21 fits and, in the case of a plan offering a premium22 plus level of benefits, provide additional benefits. 

23 (3) CONTINUATION OF OFFERING OF SEPARATE

24 EXCEPTED BENEFITS COVERAGE.—Nothing in this 

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1 ing of health benefits in the form of excepted bene2 fits (described in section 102(b)(1)(B)(ii)) if such 

3 benefits are offered under a separate policy, con4 tract, or certificate of insurance. 

5 (c) NO RESTRICTIONS ON COVERAGE UNRELATED

6 TO CLINICAL APPROPRIATENESS.—A qualified health ben7 efits plan may not impose any restriction (other than cost8 sharing) unrelated to clinical appropriateness on the cov9 erage of the health care items and services. 

10 SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED. 

11 (a) IN GENERAL.—In this subdivision, the term ‘‘es12 sential benefits package’’ means health benefits coverage, 

13 consistent with standards adopted under section 124 to 

14 ensure the provision of quality health care and financial 

15 security, that— 

16 (1) provides payment for the items and services 

17 described in subsection (b) in accordance with gen18 erally accepted standards of medical or other appro19 priate clinical or professional practice; 

20 (2) limits cost-sharing for such covered health 

21 care items and services in accordance with such ben22 efit standards, consistent with subsection (c); 

23 (3) does not impose any annual or lifetime limit 

24 on the coverage of covered health care items and 

25 services; 


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1 (4) complies with section 115(a) (relating to 

2 network adequacy); and 

3 (5) is equivalent, as certified by Office of the 

4 Actuary of the Centers for Medicare & Medicaid 

5 Services, to the average prevailing employer-spon6 sored coverage. 

7 (b) MINIMUM SERVICES TO BE COVERED.—The 

8 items and services described in this subsection are the fol9 lowing: 

10 (1) Hospitalization. 

11 (2) Outpatient hospital and outpatient clinic 

12 services, including emergency department services. 

13 (3) Professional services of physicians and other 

14 health professionals. 

15 (4) Such services, equipment, and supplies inci16 dent to the services of a physician’s or a health pro17 fessional’s delivery of care in institutional settings, 

18 physician offices, patients’ homes or place of resi19 dence, or other settings, as appropriate. 

20 (5) Prescription drugs. 

21 (6) Rehabilitative and habilitative services. 

22 (7) Mental health and substance use disorder 

23 services. 

24 (8) Preventive services, including those services 

25 recommended with a grade of A or B by the Task 


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1 Force on Clinical Preventive Services and those vac2 cines recommended for use by the Director of the 

3 Centers for Disease Control and Prevention. 

4 (9) Maternity care. 

5 (10) Well baby and well child care and oral 

6 health, vision, and hearing services, equipment, and 

7 supplies at least for children under 21 years of age. 

8 (c) REQUIREMENTS RELATING TO COST-SHARING

9 AND MINIMUM ACTUARIAL VALUE.— 

10 (1) NO COST-SHARING FOR PREVENTIVE SERV11 ICES.—There shall be no cost-sharing under the es12 sential benefits package for preventive items and 

13 services (as specified under the benefit standards), 

14 including well baby and well child care. 

15 (2) ANNUAL LIMITATION.— 

16 (A) ANNUAL LIMITATION.—The cost-shar17 ing incurred under the essential benefits pack18 age with respect to an individual (or family) for 

19 a year does not exceed the applicable level spec20 ified in subparagraph (B). 

21 (B) APPLICABLE LEVEL.—The applicable 

22 level specified in this subparagraph for Y1 is 

23 $5,000 for an individual and $10,000 for a 

24 family. Such levels shall be increased (rounded 

25 to the nearest $100) for each subsequent year 


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1 by the annual percentage increase in the Con2 sumer Price Index (United States city average) 

3 applicable to such year. 

4 (C) USE OF COPAYMENTS.—In establishing 

5 cost-sharing levels for basic, enhanced, and pre6 mium plans under this subsection, the Sec7 retary shall, to the maximum extent possible, 

8 use only copayments and not coinsurance. 

9 (3) MINIMUM ACTUARIAL VALUE.— 

10 (A) IN GENERAL.—The cost-sharing under 

11 the essential benefits package shall be designed 

12 to provide a level of coverage that is designed 

13 to provide benefits that are actuarially equiva14 lent to approximately 70 percent of the full ac15 tuarial value of the benefits provided under the 

16 reference benefits package described in sub17 paragraph (B). 

18 (B) REFERENCE BENEFITS PACKAGE DE19 SCRIBED.—The reference benefits package de20 scribed in this subparagraph is the essential 

21 benefits package if there were no cost-sharing 

22 imposed. 

23 SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE. 

24 (a) ESTABLISHMENT.— 


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1 (1) IN GENERAL.—There is established a pri2 vate-public advisory committee which shall be a 

3 panel of medical and other experts to be known as 

4 the Health Benefits Advisory Committee to rec5 ommend covered benefits and essential, enhanced, 

6 and premium plans. 

7 (2) CHAIR.—The Surgeon General shall be a 

8 member and the chair of the Health Benefits Advi9 sory Committee. 

10 (3) MEMBERSHIP.—The Health Benefits Advi11 sory Committee shall be composed of the following 

12 members, in addition to the Surgeon General: 

13 (A) 9 members who are not Federal em14 ployees or officers and who are appointed by 

15 the President. 

16 (B) 9 members who are not Federal em17 ployees or officers and who are appointed by 

18 the Comptroller General of the United States in 

19 a manner similar to the manner in which the 

20 Comptroller General appoints members to the 

21 Medicare Payment Advisory Commission under 

22 section 1805(c) of the Social Security Act. 

23 (C) Such even number of members (not to 

24 exceed 8) who are Federal employees and offi25 cers, as the President may appoint. 


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1 Such initial appointments shall be made not later 

2 than 60 days after the date of the enactment of this 

3 Act. 

4 (4) TERMS.—Each member of the Health Bene5 fits Advisory Committee shall serve a 3-year term on 

6 the Committee, except that the terms of the initial 

7 members shall be adjusted in order to provide for a 

8 staggered term of appointment for all such mem9 bers. 

10 (5) PARTICIPATION.—The membership of the 

11 Health Benefits Advisory Committee shall at least 

12 reflect providers, consumer representatives, employ13 ers, labor, health insurance issuers, experts in health 

14 care financing and delivery, experts in racial and 

15 ethnic disparities, experts in care for those with dis16 abilities, representatives of relevant governmental 

17 agencies. and at least one practicing physician or 

18 other health professional and an expert on children’s 

19 health and shall represent a balance among various 

20 sectors of the health care system so that no single 

21 sector unduly influences the recommendations of 

22 such Committee. 

23 (b) DUTIES.— 

24 (1) RECOMMENDATIONS ON BENEFIT STAND25 ARDS.—The Health Benefits Advisory Committee 


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1 shall recommend to the Secretary of Health and 

2 Human Services (in this subtitle referred to as the 

3 ‘‘Secretary’’) benefit standards (as defined in para4 graph (4)), and periodic updates to such standards. 

5 In developing such recommendations, the Committee 

6 shall take into account innovation in health care and 

7 consider how such standards could reduce health dis8 parities. 

9 (2) DEADLINE.—The Health Benefits Advisory 

10 Committee shall recommend initial benefit standards 

11 to the Secretary not later than 1 year after the date 

12 of the enactment of this Act. 

13 (3) PUBLIC INPUT.—The Health Benefits Advi14 sory Committee shall allow for public input as a part 

15 of developing recommendations under this sub16 section. 

17 (4) BENEFIT STANDARDS DEFINED.—In this 

18 subtitle, the term ‘‘benefit standards’’ means stand19 ards respecting— 

20 (A) the essential benefits package de21 scribed in section 122, including categories of 

22 covered treatments, items and services within 

23 benefit classes, and cost-sharing; and 


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1 (B) the cost-sharing levels for enhanced 

2 plans and premium plans (as provided under 

3 section 203(c)) consistent with paragraph (5). 

4 (5) LEVELS OF COST-SHARING FOR ENHANCED

5 AND PREMIUM PLANS.— 

6 (A) ENHANCED PLAN.—The level of cost7 sharing for enhanced plans shall be designed so 

8 that such plans have benefits that are actuari9 ally equivalent to approximately 85 percent of 

10 the actuarial value of the benefits provided 

11 under the reference benefits package described 

12 in section 122(c)(3)(B). 

13 (B) PREMIUM PLAN.—The level of cost14 sharing for premium plans shall be designed so 

15 that such plans have benefits that are actuari16 ally equivalent to approximately 95 percent of 

17 the actuarial value of the benefits provided 

18 under the reference benefits package described 

19 in section 122(c)(3)(B). 

20 (c) OPERATIONS.— 

21 (1) PER DIEM PAY.—Each member of the 

22 Health Benefits Advisory Committee shall receive 

23 travel expenses, including per diem in accordance 

24 with applicable provisions under subchapter I of 


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1 chapter 57 of title 5, United States Code, and shall 

2 otherwise serve without additional pay. 

3 (2) MEMBERS NOT TREATED AS FEDERAL EM4 PLOYEES.—Members of the Health Benefits Advi5 sory Committee shall not be considered employees of 

6 the Federal government solely by reason of any serv7 ice on the Committee. 

8 (3) APPLICATION OF FACA.—The Federal Advi9 sory Committee Act (5 U.S.C. App.), other than sec10 tion 14, shall apply to the Health Benefits Advisory 

11 Committee. 

12 (d) PUBLICATION.—The Secretary shall provide for 

13 publication in the Federal Register and the posting on the 

14 Internet website of the Department of Health and Human 

15 Services of all recommendations made by the Health Ben16 efits Advisory Committee under this section. 

17 SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDA18 TIONS; ADOPTION OF BENEFIT STANDARDS. 

19 (a) PROCESS FOR ADOPTION OF RECOMMENDA20 TIONS.— 

21 (1) REVIEW OF RECOMMENDED STANDARDS.— 

22 Not later than 45 days after the date of receipt of 

23 benefit standards recommended under section 123 

24 (including such standards as modified under para25 graph (2)(B)), the Secretary shall review such 


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1 standards and shall determine whether to propose 

2 adoption of such standards as a package. 

3 (2) DETERMINATION TO ADOPT STANDARDS.— 

4 If the Secretary determines— 

5 (A) to propose adoption of benefit stand6 ards so recommended as a package, the Sec7 retary shall, by regulation under section 553 of 

8 title 5, United States Code, propose adoption 

9 such standards; or 

10 (B) not to propose adoption of such stand11 ards as a package, the Secretary shall notify 

12 the Health Benefits Advisory Committee in 

13 writing of such determination and the reasons 

14 for not proposing the adoption of such rec15 ommendation and provide the Committee with a 

16 further opportunity to modify its previous rec17 ommendations and submit new recommenda18 tions to the Secretary on a timely basis. 

19 (3) CONTINGENCY.—If, because of the applica20 tion of paragraph (2)(B), the Secretary would other21 wise be unable to propose initial adoption of such 

22 recommended standards by the deadline specified in 

23 subsection (b)(1), the Secretary shall, by regulation 

24 under section 553 of title 5, United States Code, 


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1 propose adoption of initial benefit standards by such 

2 deadline. 

3 (4) PUBLICATION.—The Secretary shall provide 

4 for publication in the Federal Register of all deter5 minations made by the Secretary under this sub6 section. 

7 (b) ADOPTION OF STANDARDS.— 

8 (1) INITIAL STANDARDS.—Not later than 18 

9 months after the date of the enactment of this Act, 

10 the Secretary shall, through the rulemaking process 

11 consistent with subsection (a), adopt an initial set of 

12 benefit standards. 

13 (2) PERIODIC UPDATING STANDARDS.—Under 

14 subsection (a), the Secretary shall provide for the 

15 periodic updating of the benefit standards previously 

16 adopted under this section. 

17 (3) REQUIREMENT.—The Secretary may not 

18 adopt any benefit standards for an essential benefits 

19 package or for level of cost-sharing that are incon20 sistent with the requirements for such a package or 

21 level under sections 122 and 123(b)(5). 


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1 Subtitle D—Additional Consumer 

2 Protections 

3 SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY 

4 HEALTH INSURERS. 

5 The Commissioner shall establish uniform marketing 

6 standards that all insured QHBP offering entities shall 

7 meet. 

8 SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS 

9 MECHANISMS. 

10 (a) IN GENERAL.—A QHBP offering entity shall pro11 vide for timely grievance and appeals mechanisms that the 

12 Commissioner shall establish. 

13 (b) INTERNAL CLAIMS AND APPEALS PROCESS.— 

14 Under a qualified health benefits plan the QHBP offering 

15 entity shall provide an internal claims and appeals process 

16 that initially incorporates the claims and appeals proce17 dures (including urgent claims) set forth at section 

18 2560.503–1 of title 29, Code of Federal Regulations, as 

19 published on November 21, 2000 (65 Fed. Reg. 70246) 

20 and shall update such process in accordance with any 

21 standards that the Commissioner may establish. 

22 (c) EXTERNAL REVIEW PROCESS.— 

23 (1) IN GENERAL.—The Commissioner shall es24 tablish an external review process (including proce25 dures for expedited reviews of urgent claims) that 


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1 provides for an impartial, independent, and de novo 

2 review of denied claims under this subdivision. 

3 (2) REQUIRING FAIR GRIEVANCE AND APPEALS

4 MECHANISMS.—A determination made, with respect 

5 to a qualified health benefits plan offered by a 

6 QHBP offering entity, under the external review 

7 process established under this subsection shall be 

8 binding on the plan and the entity. 

9 (d) CONSTRUCTION.—Nothing in this section shall be 

10 construed as affecting the availability of judicial review 

11 under State law for adverse decisions under subsection (b) 

12 or (c), subject to section 151. 

13 SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND 

14 PLAN DISCLOSURE. 

15 (a) ACCURATE AND TIMELY DISCLOSURE.— 

16 (1) IN GENERAL.—A qualified health benefits 

17 plan shall comply with standards established by the 

18 Commissioner for the accurate and timely disclosure 

19 of plan documents, plan terms and conditions, 

20 claims payment policies and practices, periodic fi21 nancial disclosure, data on enrollment, data on 

22 disenrollment, data on the number of claims denials, 

23 data on rating practices, information on cost-sharing 

24 and payments with respect to any out-of-network 

25 coverage, and other information as determined apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 propriate by the Commissioner. The Commissioner 

2 shall require that such disclosure be provided in 

3 plain language. 

4 (2) PLAIN LANGUAGE.—In this subsection, the 

5 term ‘‘plain language’’ means language that the in6 tended audience, including individuals with limited 

7 English proficiency, can readily understand and use 

8 because that language is clean, concise, well-orga9 nized, and follows other best practices of plain lan10 guage writing. 

11 (3) GUIDANCE.—The Commissioner shall de12 velop and issue guidance on best practices of plain 

13 language writing. 

14 (b) CONTRACTING REIMBURSEMENT.—A qualified 

15 health benefits plan shall comply with standards estab16 lished by the Commissioner to ensure transparency to each 

17 health care provider relating to reimbursement arrange18 ments between such plan and such provider. 

19 (c) ADVANCE NOTICE OF PLAN CHANGES.—A 

20 change in a qualified health benefits plan shall not be 

21 made without such reasonable and timely advance notice 

22 to enrollees of such change. 


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1 SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS 

2 PLANS NOT OFFERED THROUGH THE 

3 HEALTH INSURANCE EXCHANGE. 

4 The requirements of the previous provisions of this 

5 subtitle shall apply to qualified health benefits plans that 

6 are not being offered through the Health Insurance Ex7 change only to the extent specified by the Commissioner. 

8 SEC. 135. TIMELY PAYMENT OF CLAIMS. 

9 A QHBP offering entity shall comply with the re10 quirements of section 1857(f) of the Social Security Act 

11 with respect to a qualified health benefits plan it offers 

12 in the same manner an Medicare Advantage organization 

13 is required to comply with such requirements with respect 

14 to a Medicare Advantage plan it offers under part C of 

15 Medicare. 

16 SEC. 136. STANDARDIZED RULES FOR COORDINATION AND 

17 SUBROGATION OF BENEFITS. 

18 The Commissioner shall establish standards for the 

19 coordination and subrogation of benefits and reimburse20 ment of payments in cases involving individuals and mul21 tiple plan coverage. 

22 SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICA23 TION. 

24 A QHBP offering entity is required to comply with 

25 standards for electronic financial and administrative 


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1 transactions under section 1173A of the Social Security 

2 Act, added by section 163(a). 

3 Subtitle E—Governance 

4 SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH 

5 CHOICES COMMISSIONER. 

6 (a) IN GENERAL.—There is hereby established, as an 

7 independent agency in the executive branch of the Govern8 ment, a Health Choices Administration (in this subdivision 

9 referred to as the ‘‘Administration’’). 

10 (b) COMMISSIONER.— 

11 (1) IN GENERAL.—The Administration shall be 

12 headed by a Health Choices Commissioner (in this 

13 subdivision referred to as the ‘‘Commissioner’’) who 

14 shall be appointed by the President, by and with the 

15 advice and consent of the Senate. 

16 (2) COMPENSATION; ETC.—The provisions of 

17 paragraphs (2), (5), and (7) of subsection (a) (relat18 ing to compensation, terms, general powers, rule19 making, and delegation) of section 702 of the Social 

20 Security Act (42 U.S.C. 902) shall apply to the 

21 Commissioner and the Administration in the same 

22 manner as such provisions apply to the Commis23 sioner of Social Security and the Social Security Ad24 ministration. 


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1 SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER. 

2 (a) DUTIES.—The Commissioner is responsible for 

3 carrying out the following functions under this subdivi4 sion: 

5 (1) QUALIFIED PLAN STANDARDS.—The estab6 lishment of qualified health benefits plan standards 

7 under this title, including the enforcement of such 

8 standards in coordination with State insurance regu9 lators and the Secretaries of Labor and the Treas10 ury. 

11 (2) HEALTH INSURANCE EXCHANGE.—The es12 tablishment and operation of a Health Insurance 

13 Exchange under subtitle A of title II. 

14 (3) INDIVIDUAL AFFORDABILITY CREDITS.— 

15 The administration of individual affordability credits 

16 under subtitle C of title II, including determination 

17 of eligibility for such credits. 

18 (4) ADDITIONAL FUNCTIONS.—Such additional 

19 functions as may be specified in this subdivision. 

20 (b) PROMOTING ACCOUNTABILITY.— 

21 (1) IN GENERAL.—The Commissioner shall un22 dertake activities in accordance with this subtitle to 

23 promote accountability of QHBP offering entities in 

24 meeting Federal health insurance requirements, re25 gardless of whether such accountability is with re26 spect to qualified health benefits plans offered 


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1 through the Health Insurance Exchange or outside 

2 of such Exchange. 

3 (2) COMPLIANCE EXAMINATION AND AUDITS.— 

4 (A) IN GENERAL.—The commissioner 

5 shall, in coordination with States, conduct au6 dits of qualified health benefits plan compliance 

7 with Federal requirements. Such audits may 

8 include random compliance audits and targeted 

9 audits in response to complaints or other sus10 pected non-compliance. 

11 (B) RECOUPMENT OF COSTS IN CONNEC12 TION WITH EXAMINATION AND AUDITS.—The 

13 Commissioner is authorized to recoup from 

14 qualified health benefits plans reimbursement 

15 for the costs of such examinations and audit of 

16 such QHBP offering entities. 

17 (c) DATA COLLECTION.—The Commissioner shall 

18 collect data for purposes of carrying out the Commis19 sioner’s duties, including for purposes of promoting qual20 ity and value, protecting consumers, and addressing dis21 parities in health and health care and may share such data 

22 with the Secretary of Health and Human Services. 

23 (d) SANCTIONS AUTHORITY.— 

24 (1) IN GENERAL.—In the case that the Com25 missioner determines that a QHBP offering entity 


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1 violates a requirement of this title, the Commis2 sioner may, in coordination with State insurance 

3 regulators and the Secretary of Labor, provide, in 

4 addition to any other remedies authorized by law, 

5 for any of the remedies described in paragraph (2). 

6 (2) REMEDIES.—The remedies described in this 

7 paragraph, with respect to a qualified health benefits 

8 plan offered by a QHBP offering entity, are— 

9 (A) civil money penalties of not more than 

10 the amount that would be applicable under 

11 similar circumstances for similar violations 

12 under section 1857(g) of the Social Security 

13 Act; 

14 (B) suspension of enrollment of individuals 

15 under such plan after the date the Commis16 sioner notifies the entity of a determination 

17 under paragraph (1) and until the Commis18 sioner is satisfied that the basis for such deter19 mination has been corrected and is not likely to 

20 recur; 

21 (C) in the case of an Exchange-partici22 pating health benefits plan, suspension of pay23 ment to the entity under the Health Insurance 

24 Exchange for individuals enrolled in such plan 

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1 tity of a determination under paragraph (1) 

2 and until the Secretary is satisfied that the 

3 basis for such determination has been corrected 

4 and is not likely to recur; or 

5 (D) working with State insurance regu6 lators to terminate plans for repeated failure by 

7 the offering entity to meet the requirements of 

8 this title. 

9 (e) STANDARD DEFINITIONS OF INSURANCE AND

10 MEDICAL TERMS.—The Commissioner shall provide for 

11 the development of standards for the definitions of terms 

12 used in health insurance coverage, including insurance-re13 lated terms. 

14 (f) EFFICIENCY IN ADMINISTRATION.—The Commis15 sioner shall issue regulations for the effective and efficient 

16 administration of the Health Insurance Exchange and af17 fordability credits under subtitle C, including, with respect 

18 to the determination of eligibility for affordability credits, 

19 the use of personnel who are employed in accordance with 

20 the requirements of title 5, United States Code, to carry 

21 out the duties of the Commissioner or, in the case of sec22 tions 208 and 241(b)(2), the use of State personnel who 

23 are employed in accordance with standards prescribed by 

24 the Office of Personnel Management pursuant to section 


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1 208 of the Intergovernmental Personnel Act of 1970 (42 

2 U.S.C. 4728). 

3 SEC. 143. CONSULTATION AND COORDINATION. 

4 (a) CONSULTATION.—In carrying out the Commis5 sioner’s duties under this subdivision, the Commissioner, 

6 as appropriate, shall consult with at least with the fol7 lowing: 

8 (1) The National Association of Insurance 

9 Commissioners, State attorneys general, and State 

10 insurance regulators, including concerning the 

11 standards for insured qualified health benefits plans 

12 under this title and enforcement of such standards. 

13 (2) Appropriate State agencies, specifically con14 cerning the administration of individual affordability 

15 credits under subtitle C of title II and the offering 

16 of Exchange-participating health benefits plans, to 

17 Medicaid eligible individuals under subtitle A of such 

18 title. 

19 (3) Other appropriate Federal agencies. 

20 (4) Indian tribes and tribal organizations. 

21 (5) The National Association of Insurance 

22 Commissioners for purposes of using model guide23 lines established by such association for purposes of 

24 subtitles B and D. 

25 (b) COORDINATION.— 


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1 (1) IN GENERAL.—In carrying out the func2 tions of the Commissioner, including with respect to 

3 the enforcement of the provisions of this subdivision, 

4 the Commissioner shall work in coordination with 

5 existing Federal and State entities to the maximum 

6 extent feasible consistent with this subdivision and 

7 in a manner that prevents conflicts of interest in du8 ties and ensures effective enforcement. 

9 (2) UNIFORM STANDARDS.—The Commissioner, 

10 in coordination with such entities, shall seek to 

11 achieve uniform standards that adequately protect 

12 consumers in a manner that does not unreasonably 

13 affect employers and insurers. 

14 SEC. 144. HEALTH INSURANCE OMBUDSMAN. 

15 (a) IN GENERAL.—The Commissioner shall appoint 

16 within the Health Choices Administration a Qualified 

17 Health Benefits Plan Ombudsman who shall have exper18 tise and experience in the fields of health care and edu19 cation of (and assistance to) individuals. 

20 (b) DUTIES.—The Qualified Health Benefits Plan 

21 Ombudsman shall, in a linguistically appropriate man22 ner— 

23 (1) receive complaints, grievances, and requests 

24 for information submitted by individuals; 


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1 (2) provide assistance with respect to com2 plaints, grievances, and requests referred to in para3 graph (1), including— 

4 (A) helping individuals determine the rel5 evant information needed to seek an appeal of 

6 a decision or determination; 

7 (B) assistance to such individuals with any 

8 problems arising from disenrollment from such 

9 a plan; 

10 (C) assistance to such individuals in choos11 ing a qualified health benefits plan in which to 

12 enroll; and 

13 (D) assistance to such individuals in pre14 senting information under subtitle C (relating 

15 to affordability credits); and 

16 (3) submit annual reports to Congress and the 

17 Commissioner that describe the activities of the Om18 budsman and that include such recommendations for 

19 improvement in the administration of this subdivi20 sion as the Ombudsman determines appropriate. The 

21 Ombudsman shall not serve as an advocate for any 

22 increases in payments or new coverage of services, 

23 but may identify issues and problems in payment or 

24 coverage policies. 


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1 Subtitle F—Relation to Other 

2 Requirements; Miscellaneous 

3 SEC. 151. RELATION TO OTHER REQUIREMENTS. 

4 (a) COVERAGE NOT OFFERED THROUGH EX5 CHANGE.— 

6 (1) IN GENERAL.—In the case of health insur7 ance coverage not offered through the Health Insur8 ance Exchange (whether or not offered in connection 

9 with an employment-based health plan), and in the 

10 case of employment-based health plans, the require11 ments of this title do not supercede any require12 ments applicable under titles XXII and XXVII of 

13 the Public Health Service Act, parts 6 and 7 of sub14 title B of title I of the Employee Retirement Income 

15 Security Act of 1974, or State law, except insofar as 

16 such requirements prevent the application of a re17 quirement of this subdivision, as determined by the 

18 Commissioner. 

19 (2) CONSTRUCTION.—Nothing in paragraph (1) 

20 shall be construed as affecting the application of sec21 tion 514 of the Employee Retirement Income Secu22 rity Act of 1974. 

23 (b) COVERAGE OFFERED THROUGH EXCHANGE.— 


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1 (1) IN GENERAL.—In the case of health insur2 ance coverage offered through the Health Insurance 

3 Exchange— 

4 (A) the requirements of this title do not 

5 supercede any requirements (including require6 ments relating to genetic information non7 discrimination and mental health) applicable 

8 under title XXVII of the Public Health Service 

9 Act or under State law, except insofar as such 

10 requirements prevent the application of a re11 quirement of this subdivision, as determined by 

12 the Commissioner; and 

13 (B) individual rights and remedies under 

14 State laws shall apply. 

15 (2) CONSTRUCTION.—In the case of coverage 

16 described in paragraph (1), nothing in such para17 graph shall be construed as preventing the applica18 tion of rights and remedies under State laws with 

19 respect to any requirement referred to in paragraph 

20 (1)(A). 

21 SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE. 

22 (a) IN GENERAL.—Except as otherwise explicitly per23 mitted by this division and by subsequent regulations con24 sistent with this division, all health care and related serv25 ices (including insurance coverage and public health activiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ties) covered by this division shall be provided without re2 gard to personal characteristics extraneous to the provi3 sion of high quality health care or related services. 

4 (b) IMPLEMENTATION.—To implement the require5 ment set forth in subsection (a), the Secretary of Health 

6 and Human Services shall, not later than 18 months after 

7 the date of the enactment of this Act, promulgate such 

8 regulations as are necessary or appropriate to insure that 

9 all health care and related services (including insurance 

10 coverage and public health activities) covered by this divi11 sion are provided (whether directly or through contractual, 

12 licensing, or other arrangements) without regard to per13 sonal characteristics extraneous to the provision of high 

14 quality health care or related services. 

15 SEC. 153. WHISTLEBLOWER PROTECTION. 

16 (a) RETALIATION PROHIBITED.—No employer may 

17 discharge any employee or otherwise discriminate against 

18 any employee with respect to his compensation, terms, 

19 conditions, or other privileges of employment because the 

20 employee (or any person acting pursuant to a request of 

21 the employee)— 

22 (1) provided, caused to be provided, or is about 

23 to provide or cause to be provided to the employer, 

24 the Federal Government, or the attorney general of 

25 a State information relating to any violation of, or 


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1 any act or omission the employee reasonably believes 

2 to be a violation of any provision of this division or 

3 any order, rule, or regulation promulgated under 

4 this division; 

5 (2) testified or is about to testify in a pro6 ceeding concerning such violation; 

7 (3) assisted or participated or is about to assist 

8 or participate in such a proceeding; or 

9 (4) objected to, or refused to participate in, any 

10 activity, policy, practice, or assigned task that the 

11 employee (or other such person) reasonably believed 

12 to be in violation of any provision of this division or 

13 any order, rule, or regulation promulgated under 

14 this division. 

15 (b) ENFORCEMENT ACTION.—An employee covered 

16 by this section who alleges discrimination by an employer 

17 in violation of subsection (a) may bring an action governed 

18 by the rules, procedures, legal burdens of proof, and rem19 edies set forth in section 40(b) of the Consumer Product 

20 Safety Act (15 U.S.C. 2087(b)). 

21 (c) EMPLOYER DEFINED.—As used in this section, 

22 the term ‘‘employer’’ means any person (including one or 

23 more individuals, partnerships, associations, corporations, 

24 trusts, professional membership organization including a 

25 certification, disciplinary, or other professional body, uninVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 corporated organizations, nongovernmental organizations, 

2 or trustees) engaged in profit or nonprofit business or in3 dustry whose activities are governed by this division, and 

4 any agent, contractor, subcontractor, grantee, or consult5 ant of such person. 

6 (d) RULE OF CONSTRUCTION.—The rule of construc7 tion set forth in section 20109(h) of title 49, United 

8 States Code, shall also apply to this section. 

9 SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BAR10 GAINING. 

11 Nothing in this subdivision shall be construed to alter 

12 of supercede any statutory or other obligation to engage 

13 in collective bargaining over the terms and conditions of 

14 employment related to health care. 

15 SEC. 155. SEVERABILITY. 

16 If any provision of this division, or any application 

17 of such provision to any person or circumstance, is held 

18 to be unconstitutional, the remainder of the provisions of 

19 this division and the application of the provision to any 

20 other person or circumstance shall not be affected. 

21 Subtitle G—Early Investments 

22 SEC. 161. ENSURING VALUE AND LOWER PREMIUMS. 

23 (a) GROUP HEALTH INSURANCE COVERAGE.—Title 

24 XXVII of the Public Health Service Act is amended by 

25 inserting after section 2713 the following new section: 


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1 ‘‘SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS. 

2 ‘‘(a) IN GENERAL.—Each health insurance issuer 

3 that offers health insurance coverage in the small or large 

4 group market shall provide that for any plan year in which 

5 the coverage has a medical loss ratio below a level specified 

6 by the Secretary, the issuer shall provide in a manner 

7 specified by the Secretary for rebates to enrollees of pay8 ment sufficient to meet such loss ratio. Such methodology 

9 shall be set at the highest level medical loss ratio possible 

10 that is designed to ensure adequate participation by 

11 issuers, competition in the health insurance market, and 

12 value for consumers so that their premiums are used for 

13 services. 

14 ‘‘(b) UNIFORM DEFINITIONS.—The Secretary shall 

15 establish a uniform definition of medical loss ratio and 

16 methodology for determining how to calculate the medical 

17 loss ratio. Such methodology shall be designed to take into 

18 account the special circumstances of smaller plans, dif19 ferent types of plans, and newer plans.’’. 

20 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 

21 Such title is further amended by inserting after section 

22 2753 the following new section: 

23 ‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS. 

24 ‘‘The provisions of section 2714 shall apply to health 

25 insurance coverage offered in the individual market in the 


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1 same manner as such provisions apply to health insurance 

2 coverage offered in the small or large group market.’’. 

3 (c) IMMEDIATE IMPLEMENTATION.—The amend4 ments made by this section shall apply in the group and 

5 individual market for plan years beginning on or after 

6 January 1, 2011. 

7 SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE. 

8 (a) CLARIFICATION REGARDING APPLICATION OF

9 GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH

10 INSURANCE COVERAGE.—Section 2742 of the Public 

11 Health Service Act (42 U.S.C. 300gg–42) is amended— 

12 (1) in its heading, by inserting ‘‘AND CON13 TINUATION IN FORCE, INCLUDING PROHIBI14 TION OF RESCISSION,’’ after ‘‘GUARANTEED RE15 NEWABILITY’’; and 

16 (2) in subsection (a), by inserting ‘‘, including 

17 without rescission,’’ after ‘‘continue in force’’. 

18 (b) SECRETARIAL GUIDANCE REGARDING RESCIS19 SIONS.—Section 2742 of such Act (42 U.S.C. 300gg–42) 

20 is amended by adding at the end the following: 

21 ‘‘(f) RESCISSION.—A health insurance issuer may re22 scind health insurance coverage only upon clear and con23 vincing evidence of fraud described in subsection (b)(2). 

24 The Secretary, no later than July 1, 2010, shall issue 


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1 guidance implementing this requirement, including proce2 dures for independent, external third party review.’’. 

3 (c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL

4 THIRD PARTY REVIEW IN CERTAIN CASES.—Subpart 1 

5 of part B of title XXVII of such Act (42 U.S.C. 300gg– 

6 41 et seq.) is amended by adding at the end the following: 

7 ‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 

8 THIRD PARTY REVIEW IN CASES OF RESCIS9 SION. 

10 ‘‘(a) NOTICE AND REVIEW RIGHT.—If a health in11 surance issuer determines to rescind health insurance cov12 erage for an individual in the individual market, before 

13 such rescission may take effect the issuer shall provide the 

14 individual with notice of such proposed rescission and an 

15 opportunity for a review of such determination by an inde16 pendent, external third party under procedures specified 

17 by the Secretary under section 2742(f). 

18 ‘‘(b) INDEPENDENT DETERMINATION.—If the indi19 vidual requests such review by an independent, external 

20 third party of a rescission of health insurance coverage, 

21 the coverage shall remain in effect until such third party 

22 determines that the coverage may be rescinded under the 

23 guidance issued by the Secretary under section 2742(f).’’. 

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

25 this section shall apply on and after October 1, 2010, with 


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1 respect to health insurance coverage issued before, on, or 

2 after such date. 

3 SEC. 163. ADMINISTRATIVE SIMPLIFICATION. 

4 (a) STANDARDIZING ELECTRONIC ADMINISTRATIVE

5 TRANSACTIONS.— 

6 (1) IN GENERAL.—Part C of title XI of the So7 cial Security Act (42 U.S.C. 1320d et seq.) is 

8 amended by inserting after section 1173 the fol9 lowing new section: 

10 ‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 

11 TRANSACTIONS. 

12 ‘‘(a) STANDARDS FOR FINANCIAL AND ADMINISTRA13 TIVE TRANSACTIONS.— 

14 ‘‘(1) IN GENERAL.—The Secretary shall adopt 

15 and regularly update standards consistent with the 

16 goals described in paragraph (2). 

17 ‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA18 TIVE TRANSACTIONS.—The goals for standards 

19 under paragraph (1) are that such standards shall— 

20 ‘‘(A) be unique with no conflicting or re21 dundant standards; 

22 ‘‘(B) be authoritative, permitting no addi23 tions or constraints for electronic transactions, 

24 including companion guides; 


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1 ‘‘(C) be comprehensive, efficient and ro2 bust, requiring minimal augmentation by paper 

3 transactions or clarification by further commu4 nications; 

5 ‘‘(D) enable the real-time (or near real6 time) determination of an individual’s financial 

7 responsibility at the point of service and, to the 

8 extent possible, prior to service, including 

9 whether the individual is eligible for a specific 

10 service with a specific physician at a specific fa11 cility, which may include utilization of a ma12 chine-readable health plan beneficiary identi13 fication card; 

14 ‘‘(E) enable, where feasible, near real-time 

15 adjudication of claims; 

16 ‘‘(F) provide for timely acknowledgment, 

17 response, and status reporting applicable to any 

18 electronic transaction deemed appropriate by 

19 the Secretary; 

20 ‘‘(G) describe all data elements (such as 

21 reason and remark codes) in unambiguous 

22 terms, not permit optional fields, require that 

23 data elements be either required or conditioned 

24 upon set values in other fields, and prohibit ad25 ditional conditions; and 


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1 ‘‘(H) harmonize all common data elements 

2 across administrative and clinical transaction 

3 standards. 

4 ‘‘(3) TIME FOR ADOPTION.—Not later than 2 

5 years after the date of implementation of the X12 

6 Version 5010 transaction standards implemented 

7 under this part, the Secretary shall adopt standards 

8 under this section. 

9 ‘‘(4) REQUIREMENTS FOR SPECIFIC STAND10 ARDS.—The standards under this section shall be 

11 developed, adopted, and enforced so as to— 

12 ‘‘(A) clarify, refine, complete, and expand, 

13 as needed, the standards required under section 

14 1173; 

15 ‘‘(B) require paper versions of standard16 ized transactions to comply with the same 

17 standards as to data content such that a fully 

18 compliant, equivalent electronic transaction can 

19 be populated from the data from a paper 

20 version; 

21 ‘‘(C) enable electronic funds transfers, in 

22 order to allow automated reconciliation with the 

23 related health care payment and remittance ad24 vice; 


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1 ‘‘(D) require timely and transparent claim 

2 and denial management processes, including 

3 tracking, adjudication, and appeal processing ; 

4 ‘‘(E) require the use of a standard elec5 tronic transaction with which health care pro6 viders may quickly and efficiently enroll with a 

7 health plan to conduct the other electronic 

8 transactions provided for in this part; and 

9 ‘‘(F) provide for other requirements relat10 ing to administrative simplification as identified 

11 by the Secretary, in consultation with stake12 holders. 

13 ‘‘(5) BUILDING ON EXISTING STANDARDS.—In 

14 developing the standards under this section, the Sec15 retary shall build upon existing and planned stand16 ards. 

17 ‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 

18 Not later than 6 months after the date of the enact19 ment of this section, the Secretary shall submit to 

20 the appropriate committees of Congress a plan for 

21 the implementation and enforcement, by not later 

22 than 5 years after such date of enactment, of the 

23 standards under this section. Such plan shall in24 clude— 


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1 ‘‘(A) a process and timeframe with mile2 stones for developing the complete set of stand3 ards; 

4 ‘‘(B) an expedited upgrade program for 

5 continually developing and approving additions 

6 and modifications to the standards as often as 

7 annually to improve their quality and extend 

8 their functionality to meet evolving require9 ments in health care; 

10 ‘‘(C) programs to provide incentives for, 

11 and ease the burden of, implementation for cer12 tain health care providers, with special consid13 eration given to such providers serving rural or 

14 underserved areas and ensure coordination with 

15 standards, implementation specifications, and 

16 certification criteria being adopted under the 

17 HITECH Act; 

18 ‘‘(D) programs to provide incentives for, 

19 and ease the burden of, health care providers 

20 who volunteer to participate in the process of 

21 setting standards for electronic transactions; 

22 ‘‘(E) an estimate of total funds needed to 

23 ensure timely completion of the implementation 

24 plan; and 


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1 ‘‘(F) an enforcement process that includes 

2 timely investigation of complaints, random au3 dits to ensure compliance, civil monetary and 

4 programmatic penalties for non-compliance con5 sistent with existing laws and regulations, and 

6 a fair and reasonable appeals process building 

7 off of enforcement provisions under this part. 

8 ‘‘(b) LIMITATIONS ON USE OF DATA.—Nothing in 

9 this section shall be construed to permit the use of infor10 mation collected under this section in a manner that would 

11 adversely affect any individual. 

12 ‘‘(c) PROTECTION OF DATA.—The Secretary shall en13 sure (through the promulgation of regulations or other14 wise) that all data collected pursuant to subsection (a) 

15 are— 

16 ‘‘(1) used and disclosed in a manner that meets 

17 the HIPAA privacy and security law (as defined in 

18 section 3009(a)(2) of the Public Health Service 

19 Act), including any privacy or security standard 

20 adopted under section 3004 of such Act; and 

21 ‘‘(2) protected from all inappropriate internal 

22 use by any entity that collects, stores, or receives the 

23 data, including use of such data in determinations of 

24 eligibility (or continued eligibility) in health plans, 


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1 and from other inappropriate uses, as defined by the 

2 Secretary.’’. 

3 (2) DEFINITIONS.—Section 1171 of such Act 

4 (42 U.S.C. 1320d) is amended— 

5 (A) in paragraph (7), by striking ‘‘with 

6 reference to’’ and all that follows and inserting 

7 ‘‘with reference to a transaction or data ele8 ment of health information in section 1173 

9 means implementation specifications, certifi10 cation criteria, operating rules, messaging for11 mats, codes, and code sets adopted or estab12 lished by the Secretary for the electronic ex13 change and use of information’’; and 

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

15 paragraph: 

16 ‘‘(9) OPERATING RULES.—The term ‘operating 

17 rules’ means business rules for using and processing 

18 transactions. Operating rules should address the fol19 lowing: 

20 ‘‘(A) Requirements for data content using 

21 available and established national standards. 

22 ‘‘(B) Infrastructure requirements that es23 tablish best practices for streamlining data flow 

24 to yield timely execution of transactions. 


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1 ‘‘(C) Policies defining the transaction re2 lated rights and responsibilities for entities that 

3 are transmitting or receiving data.’’. 

4 (3) CONFORMING AMENDMENT.—Section 

5 1179(a) of such Act (42 U.S.C. 1320d–8(a)) is 

6 amended, in the matter before paragraph (1)— 

7 (A) by inserting ‘‘on behalf of an indi8 vidual’’ after ‘‘1978)’’; and 

9 (B) by inserting ‘‘on behalf of an indi10 vidual’’ after ‘‘for a financial institution’’ and 

11 (b) STANDARDS FOR CLAIMS ATTACHMENTS AND

12 COORDINATION OF BENEFITS .— 

13 (1) STANDARD FOR HEALTH CLAIMS ATTACH14 MENTS.—Not later than 1 year after the date of the 

15 enactment of this Act, the Secretary of Health and 

16 Human Services shall promulgate a final rule to es17 tablish a standard for health claims attachment 

18 transaction described in section 1173(a)(2)(B) of the 

19 Social Security Act (42 U.S.C. 1320d-2(a)(2)(B)) 

20 and coordination of benefits. 

21 (2) REVISION IN PROCESSING PAYMENT TRANS22 ACTIONS BY FINANCIAL INSTITUTIONS.— 

23 (A) IN GENERAL.—Section 1179 of the So24 cial Security Act (42 U.S.C. 1320d–8) is 

25 amended, in the matter before paragraph (1)— 


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1 (i) by striking ‘‘or is engaged’’ and in2 serting ‘‘and is engaged’’; and 

3 (ii) by inserting ‘‘(other than as a 

4 business associate for a covered entity)’’ 

5 after ‘‘for a financial institution’’. 

6 (B) EFFECTIVE DATE.—The amendments 

7 made by paragraph (1) shall apply to trans8 actions occurring on or after such date (not 

9 later than 6 months after the date of the enact10 ment of this Act) as the Secretary of Health 

11 and Human Services shall specify. 

12 SEC. 164. REINSURANCE PROGRAM FOR RETIREES. 

13 (a) ESTABLISHMENT.— 

14 (1) IN GENERAL.—Not later than 90 days after 

15 the date of the enactment of this Act, the Secretary 

16 of Health and Human Services shall establish a tem17 porary reinsurance program (in this section referred 

18 to as the ‘‘reinsurance program’’) to provide reim19 bursement to assist participating employment-based 

20 plans with the cost of providing health benefits to 

21 retirees and to eligible spouses, surviving spouses 

22 and dependents of such retirees. 

23 (2) DEFINITIONS.—For purposes of this sec24 tion: 


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1 (A) The term ‘‘eligible employment-based 

2 plan’’ means a group health benefits plan 

3 that— 

4 (i) is maintained by one or more em5 ployers, former employers or employee as6 sociations, or a voluntary employees’ bene7 ficiary association, or a committee or board 

8 of individuals appointed to administer such 

9 plan, and 

10 (ii) provides health benefits to retir11 ees. 

12 (B) The term ‘‘health benefits’’ means 

13 medical, surgical, hospital, prescription drug, 

14 and such other benefits as shall be determined 

15 by the Secretary, whether self-funded or deliv16 ered through the purchase of insurance or oth17 erwise. 

18 (C) The term ‘‘participating employment19 based plan’’ means an eligible employment20 based plan that is participating in the reinsur21 ance program. 

22 (D) The term ‘‘retiree’’ means, with re23 spect to a participating employment-benefit 

24 plan, an individual who— 

25 (i) is 55 years of age or older; 


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1 (ii) is not eligible for coverage under 

2 title XVIII of the Social Security Act; and 

3 (iii) is not an active employee of an 

4 employer maintaining the plan or of any 

5 employer that makes or has made substan6 tial contributions to fund such plan. 

7 (E) The term ‘‘Secretary’’ means Sec8 retary of Health and Human Services. 

9 (b) PARTICIPATION.—To be eligible to participate in 

10 the reinsurance program, an eligible employment-based 

11 plan shall submit to the Secretary an application for par12 ticipation in the program, at such time, in such manner, 

13 and containing such information as the Secretary shall re14 quire. 

15 (c) PAYMENT.— 

16 (1) SUBMISSION OF CLAIMS.— 

17 (A) IN GENERAL.—Under the reinsurance 

18 program, a participating employment-based 

19 plan shall submit claims for reimbursement to 

20 the Secretary which shall contain documenta21 tion of the actual costs of the items and serv22 ices for which each claim is being submitted. 

23 (B) BASIS FOR CLAIMS.—Each claim sub24 mitted under subparagraph (A) shall be based 

25 on the actual amount expended by the particiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 pating employment-based plan involved within 

2 the plan year for the appropriate employment 

3 based health benefits provided to a retiree or to 

4 the spouse, surviving spouse, or dependent of a 

5 retiree. In determining the amount of any claim 

6 for purposes of this subsection, the partici7 pating employment-based plan shall take into 

8 account any negotiated price concessions (such 

9 as discounts, direct or indirect subsidies, re10 bates, and direct or indirect remunerations) ob11 tained by such plan with respect to such health 

12 benefits. For purposes of calculating the 

13 amount of any claim, the costs paid by the re14 tiree or by the spouse, surviving spouse, or de15 pendent of the retiree in the form of 

16 deductibles, co-payments, and co-insurance shall 

17 be included along with the amounts paid by the 

18 participating employment-based plan. 

19 (2) PROGRAM PAYMENTS AND LIMIT.—If the 

20 Secretary determines that a participating employ21 ment-based plan has submitted a valid claim under 

22 paragraph (1), the Secretary shall reimburse such 

23 plan for 80 percent of that portion of the costs at24 tributable to such claim that exceeds $15,000, but is 

25 less than $90,000. Such amounts shall be adjusted 


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1 each year based on the percentage increase in the 

2 medical care component of the Consumer Price 

3 Index (rounded to the nearest multiple of $1,000) 

4 for the year involved. 

5 (3) USE OF PAYMENTS.—Amounts paid to a 

6 participating employment-based plan under this sub7 section shall be used to lower the costs borne di8 rectly by the participants and beneficiaries for health 

9 benefits provided under such plan in the form of 

10 premiums, co-payments, deductibles, co-insurance, or 

11 other out-of-pocket costs. Such payments shall not 

12 be used to reduce the costs of an employer maintain13 ing the participating employment-based plan. The 

14 Secretary shall develop a mechanism to monitor the 

15 appropriate use of such payments by such plans. 

16 (4) APPEALS AND PROGRAM PROTECTIONS.— 

17 The Secretary shall establish— 

18 (A) an appeals process to permit partici19 pating employment-based plans to appeal a de20 termination of the Secretary with respect to 

21 claims submitted under this section; and 

22 (B) procedures to protect against fraud, 

23 waste, and abuse under the program. 

24 (5) AUDITS.—The Secretary shall conduct an25 nual audits of claims data submitted by particiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 pating employment-based plans under this section to 

2 ensure that they are in compliance with the require3 ments of this section. 

4 (d) RETIREE RESERVE TRUST FUND.— 

5 (1) ESTABLISHMENT.— 

6 (A) IN GENERAL.—There is established in 

7 the Treasury of the United States a trust fund 

8 to be known as the ‘‘Retiree Reserve Trust 

9 Fund’’ (referred to in this section as the ‘‘Trust 

10 Fund’’), that shall consist of such amounts as 

11 may be appropriated or credited to the Trust 

12 Fund as provided for in this subsection to en13 able the Secretary to carry out the reinsurance 

14 program. Such amounts shall remain available 

15 until expended. 

16 (B) FUNDING.—There are hereby appro17 priated to the Trust Fund, out of any moneys 

18 in the Treasury not otherwise appropriated, an 

19 amount requested by the Secretary as necessary 

20 to carry out this section, except that the total 

21 of all such amounts requested shall not exceed 

22 $10,000,000,000. 

23 (C) APPROPRIATIONS FROM THE TRUST

24 FUND.— 


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1 (i) IN GENERAL.—Amounts in the 

2 Trust Fund are appropriated to provide 

3 funding to carry out the reinsurance pro4 gram and shall be used to carry out such 

5 program. 

6 (ii) BUDGETARY IMPLICATIONS.— 

7 Amounts appropriated under clause (i), 

8 and outlays flowing from such appropria9 tions, shall not be taken into account for 

10 purposes of any budget enforcement proce11 dures including allocations under section 

12 302(a) and (b) of the Balanced Budget 

13 and Emergency Deficit Control Act and 

14 budget resolutions for fiscal years during 

15 which appropriations are made from the 

16 Trust Fund. 

17 (iii) LIMITATION TO AVAILABLE

18 FUNDS.—The Secretary has the authority 

19 to stop taking applications for participa20 tion in the program or take such other 

21 steps in reducing expenditures under the 

22 reinsurance program in order to ensure 

23 that expenditures under the reinsurance 

24 program do not exceed the funds available 

25 under this subsection. 


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1 TITLE II—HEALTH INSURANCE 

2 EXCHANGE AND RELATED 

3 PROVISIONS 

4 Subtitle A—Health Insurance 

5 Exchange 

6 SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EX7 CHANGE; OUTLINE OF DUTIES; DEFINITIONS. 

8 (a) ESTABLISHMENT.—There is established within 

9 the Health Choices Administration and under the direc10 tion of the Commissioner a Health Insurance Exchange 

11 in order to facilitate access of individuals and employers, 

12 through a transparent process, to a variety of choices of 

13 affordable, quality health insurance coverage, including a 

14 public health insurance option. 

15 (b) OUTLINE OF DUTIES OF COMMISSIONER.—In ac16 cordance with this subtitle and in coordination with appro17 priate Federal and State officials as provided under sec18 tion 143(b), the Commissioner shall— 

19 (1) under section 204 establish standards for, 

20 accept bids from, and negotiate and enter into con21 tracts with, QHBP offering entities for the offering 

22 of health benefits plans through the Health Insur23 ance Exchange, with different levels of benefits re24 quired under section 203, and including with respect 

25 to oversight and enforcement; 


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1 (2) under section 205 facilitate outreach and 

2 enrollment in such plans of Exchange-eligible indi3 viduals and employers described in section 202; and 

4 (3) conduct such activities related to the Health 

5 Insurance Exchange as required, including establish6 ment of a risk pooling mechanism under section 206 

7 and consumer protections under subtitle D of title I. 

8 (c) EXCHANGE-PARTICIPATING HEALTH BENEFITS

9 PLAN DEFINED.—In this subdivision, the term ‘‘Ex10 change-participating health benefits plan’’ means a quali11 fied health benefits plan that is offered through the Health 

12 Insurance Exchange. 

13 SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOY14 ERS. 

15 (a) ACCESS TO COVERAGE.—In accordance with this 

16 section, all individuals are eligible to obtain coverage 

17 through enrollment in an Exchange-participating health 

18 benefits plan offered through the Health Insurance Ex19 change unless such individuals are enrolled in another 

20 qualified health benefits plan or other acceptable coverage. 

21 (b) DEFINITIONS.—In this subdivision: 

22 (1) EXCHANGE-ELIGIBLE INDIVIDUAL.—The 

23 term ‘‘Exchange-eligible individual’’ means an indi24 vidual who is eligible under this section to be en25 rolled through the Health Insurance Exchange in an 


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1 Exchange-participating health benefits plan and, 

2 with respect to family coverage, includes dependents 

3 of such individual. 

4 (2) EXCHANGE-ELIGIBLE EMPLOYER.—The 

5 term ‘‘Exchange-eligible employer’’ means an em6 ployer that is eligible under this section to enroll 

7 through the Health Insurance Exchange employees 

8 of the employer (and their dependents) in Exchange9 eligible health benefits plans. 

10 (3) EMPLOYMENT-RELATED DEFINITIONS.— 

11 The terms ‘‘employer’’, ‘‘employee’’, ‘‘full-time em12 ployee’’, and ‘‘part-time employee’’ have the mean13 ings given such terms by the Commissioner for pur14 poses of this subdivision. 

15 (c) TRANSITION.—Individuals and employers shall 

16 only be eligible to enroll or participate in the Health Insur17 ance Exchange in accordance with the following transition 

18 schedule: 

19 (1) FIRST YEAR.—In Y1 (as defined in section 

20 100(c))— 

21 (A) individuals described in subsection 

22 (d)(1), including individuals described in para23 graphs (3) and (4) of subsection (d); and 

24 (B) smallest employers described in sub25 section (e)(1). 


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1 (2) SECOND YEAR.—In Y2— 

2 (A) individuals and employers described in 

3 paragraph (1); and 

4 (B) smaller employers described in sub5 section (e)(2). 

6 (3) THIRD AND SUBSEQUENT YEARS.—In Y3 

7 and subsequent years— 

8 (A) individuals and employers described in 

9 paragraph (2); and 

10 (B) larger employers as permitted by the 

11 Commissioner under subsection (e)(3). 

12 (d) INDIVIDUALS.— 

13 (1) INDIVIDUAL DESCRIBED.—Subject to the 

14 succeeding provisions of this subsection, an indi15 vidual described in this paragraph is an individual 

16 who— 

17 (A) is not enrolled in coverage described in 

18 subparagraphs (C) through (F) of paragraph 

19 (2); and 

20 (B) is not enrolled in coverage as a full21 time employee (or as a dependent of such an 

22 employee) under a group health plan if the cov23 erage and an employer contribution under the 

24 plan meet the requirements of section 312. 


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1 For purposes of subparagraph (B), in the case of an 

2 individual who is self-employed, who has at least 1 

3 employee, and who meets the requirements of section 

4 312, such individual shall be deemed a full-time em5 ployee described in such subparagraph. 

6 (2) ACCEPTABLE COVERAGE.—For purposes of 

7 this subdivision, the term ‘‘acceptable coverage’’ 

8 means any of the following: 

9 (A) QUALIFIED HEALTH BENEFITS PLAN

10 COVERAGE.—Coverage under a qualified health 

11 benefits plan. 

12 (B) GRANDFATHERED HEALTH INSURANCE

13 COVERAGE; COVERAGE UNDER CURRENT GROUP

14 HEALTH PLAN.—Coverage under a grand15 fathered health insurance coverage (as defined 

16 in subsection (a) of section 102) or under a 

17 current group health plan (described in sub18 section (b) of such section). 

19 (C) MEDICARE.—Coverage under part A of 

20 title XVIII of the Social Security Act. 

21 (D) MEDICAID.—Coverage for medical as22 sistance under title XIX of the Social Security 

23 Act, excluding such coverage that is only avail24 able because of the application of subsection 

25 (u), (z), or (aa) of section 1902 of such Act 


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1 (E) MEMBERS OF THE ARMED FORCES

2 AND DEPENDENTS (INCLUDING TRICARE).— 

3 Coverage under chapter 55 of title 10, United 

4 States Code, including similar coverage fur5 nished under section 1781 of title 38 of such 

6 Code. 

7 (F) VA.—Coverage under the veteran’s 

8 health care program under chapter 17 of title 

9 38, United States Code, but only if the cov10 erage for the individual involved is determined 

11 by the Commissioner in coordination with the 

12 Secretary of Treasury to be not less than a level 

13 specified by the Commissioner and Secretary of 

14 Veteran’s Affairs, in coordination with the Sec15 retary of Treasury, based on the individual’s 

16 priority for services as provided under section 

17 1705(a) of such title. 

18 (G) OTHER COVERAGE.—Such other health 

19 benefits coverage, such as a State health bene20 fits risk pool, as the Commissioner, in coordina21 tion with the Secretary of the Treasury, recog22 nizes for purposes of this paragraph. 

23 The Commissioner shall make determinations under 

24 this paragraph in coordination with the Secretary of 

25 the Treasury. 


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1 (3) TREATMENT OF CERTAIN NON-TRADI2 TIONAL MEDICAID ELIGIBLE INDIVIDUALS.—An indi3 vidual who is a non-traditional Medicaid eligible in4 dividual (as defined in section 205(e)(4)(C)) in a 

5 State may be an Exchange-eligible individual if the 

6 individual was enrolled in a qualified health benefits 

7 plan, grandfathered health insurance coverage, or 

8 current group health plan during the 6 months be9 fore the individual became a non-traditional Med10 icaid eligible individual. During the period in which 

11 such an individual has chosen to enroll in an Ex12 change-participating health benefits plan, the indi13 vidual is not also eligible for medical assistance 

14 under Medicaid. 

15 (4) CONTINUING ELIGIBILITY PERMITTED.— 

16 (A) IN GENERAL.—Except as provided in 

17 subparagraph (B), once an individual qualifies 

18 as an Exchange-eligible individual under this 

19 subsection (including as an employee or depend20 ent of an employee of an Exchange-eligible em21 ployer) and enrolls under an Exchange-partici22 pating health benefits plan through the Health 

23 Insurance Exchange, the individual shall con24 tinue to be treated as an Exchange-eligible indi25 vidual until the individual is no longer enrolled 


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1 with an Exchange-participating health benefits 

2 plan. 

3 (B) EXCEPTIONS.— 

4 (i) IN GENERAL.—Subparagraph (A) 

5 shall not apply to an individual once the 

6 individual becomes eligible for coverage— 

7 (I) under part A of the Medicare 

8 program; 

9 (II) under the Medicaid program 

10 as a Medicaid eligible individual, ex11 cept as permitted under paragraph 

12 (3) or clause (ii); or 

13 (III) in such other circumstances 

14 as the Commissioner may provide. 

15 (ii) TRANSITION PERIOD.—In the case 

16 described in clause (i)(II), the Commis17 sioner shall permit the individual to con18 tinue treatment under subparagraph (A) 

19 until such limited time as the Commis20 sioner determines it is administratively fea21 sible, consistent with minimizing disruption 

22 in the individual’s access to health care. 

23 (e) EMPLOYERS.— 


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1 (1) SMALLEST EMPLOYER.—Subject to para2 graph (4), smallest employers described in this para3 graph are employers with 10 or fewer employees. 

4 (2) SMALLER EMPLOYERS.—Subject to para5 graph (4), smaller employers described in this para6 graph are employers that are not smallest employers 

7 described in paragraph (1) and have 20 or fewer em8 ployees. 

9 (3) LARGER EMPLOYERS.— 

10 (A) IN GENERAL.—Beginning with Y3, the 

11 Commissioner may permit employers not de12 scribed in paragraph (1) or (2) to be Exchange13 eligible employers. 

14 (B) PHASE-IN.—In applying subparagraph 

15 (A), the Commissioner may phase-in the appli16 cation of such subparagraph based on the num17 ber of full-time employees of an employer and 

18 such other considerations as the Commissioner 

19 deems appropriate. 

20 (4) CONTINUING ELIGIBILITY.—Once an em21 ployer is permitted to be an Exchange-eligible em22 ployer under this subsection and enrolls employees 

23 through the Health Insurance Exchange, the em24 ployer shall continue to be treated as an Exchange25 eligible employer for each subsequent plan year reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gardless of the number of employees involved unless 

2 and until the employer meets the requirement of sec3 tion 311(a) through paragraph (1) of such section 

4 by offering a group health plan and not through of5 fering an Exchange-participating health benefits 

6 plan. 

7 (5) EMPLOYER PARTICIPATION AND CONTRIBU8 TIONS.— 

9 (A) SATISFACTION OF EMPLOYER RESPON10 SIBILITY.—For any year in which an employer 

11 is an Exchange-eligible employer, such employer 

12 may meet the requirements of section 312 with 

13 respect to employees of such employer by offer14 ing such employees the option of enrolling with 

15 Exchange-participating health benefits plans 

16 through the Health Insurance Exchange con17 sistent with the provisions of subtitle B of title 

18 III. 

19 (B) EMPLOYEE CHOICE.—Any employee 

20 offered Exchange-participating health benefits 

21 plans by the employer of such employee under 

22 subparagraph (A) may choose coverage under 

23 any such plan. That choice includes, with re24 spect to family coverage, coverage of the de25 pendents of such employee. 


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1 (6) AFFILIATED GROUPS.—Any employer which 

2 is part of a group of employers who are treated as 

3 a single employer under subsection (b), (c), (m), or 

4 (o) of section 414 of the Internal Revenue Code of 

5 1986 shall be treated, for purposes of this subtitle, 

6 as a single employer. 

7 (7) OTHER COUNTING RULES.—The Commis8 sioner shall establish rules relating to how employees 

9 are counted for purposes of carrying out this sub10 section. 

11 (f) SPECIAL SITUATION AUTHORITY.—The Commis12 sioner shall have the authority to establish such rules as 

13 may be necessary to deal with special situations with re14 gard to uninsured individuals and employers participating 

15 as Exchange-eligible individuals and employers, such as 

16 transition periods for individuals and employers who gain, 

17 or lose, Exchange-eligible participation status, and to es18 tablish grace periods for premium payment. 

19 (g) SURVEYS OF INDIVIDUALS AND EMPLOYERS.— 

20 The Commissioner shall provide for periodic surveys of 

21 Exchange-eligible individuals and employers concerning 

22 satisfaction of such individuals and employers with the 

23 Health Insurance Exchange and Exchange-participating 

24 health benefits plans. 

25 (h) EXCHANGE ACCESS STUDY.— 


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1 (1) IN GENERAL.—The Commissioner shall con2 duct a study of access to the Health Insurance Ex3 change for individuals and for employers, including 

4 individuals and employers who are not eligible and 

5 enrolled in Exchange-participating health benefits 

6 plans. The goal of the study is to determine if there 

7 are significant groups and types of individuals and 

8 employers who are not Exchange eligible individuals 

9 or employers, but who would have improved benefits 

10 and affordability if made eligible for coverage in the 

11 Exchange. 

12 (2) ITEMS INCLUDED IN STUDY.—Such study 

13 also shall examine— 

14 (A) the terms, conditions, and affordability 

15 of group health coverage offered by employers 

16 and QHBP offering entities outside of the Ex17 change compared to Exchange-participating 

18 health benefits plans; and 

19 (B) the affordability-test standard for ac20 cess of certain employed individuals to coverage 

21 in the Health Insurance Exchange. 

22 (3) REPORT.—Not later than January 1 of Y3, 

23 in Y6, and thereafter, the Commissioner shall sub24 mit to Congress on the study conducted under this 

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1 ommendations regarding changes in standards for 

2 Exchange eligibility for individuals and employers. 

3 SEC. 203. BENEFITS PACKAGE LEVELS. 

4 (a) IN GENERAL.—The Commissioner shall specify 

5 the benefits to be made available under Exchange-partici6 pating health benefits plans during each plan year, con7 sistent with subtitle C of title I and this section. 

8 (b) LIMITATION ON HEALTH BENEFITS PLANS OF9 FERED BY OFFERING ENTITIES.—The Commissioner may 

10 not enter into a contract with a QHBP offering entity 

11 under section 204(c) for the offering of an Exchange-par12 ticipating health benefits plan in a service area unless the 

13 following requirements are met: 

14 (1) REQUIRED OFFERING OF BASIC PLAN.—The 

15 entity offers only one basic plan for such service 

16 area. 

17 (2) OPTIONAL OFFERING OF ENHANCED

18 PLAN.—If and only if the entity offers a basic plan 

19 for such service area, the entity may offer one en20 hanced plan for such area. 

21 (3) OPTIONAL OFFERING OF PREMIUM PLAN.— 

22 If and only if the entity offers an enhanced plan for 

23 such service area, the entity may offer one premium 

24 plan for such area. 


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1 (4) OPTIONAL OFFERING OF PREMIUM-PLUS

2 PLANS.—If and only if the entity offers a premium 

3 plan for such service area, the entity may offer one 

4 or more premium-plus plans for such area. 

5 All such plans may be offered under a single contract with 

6 the Commissioner. 

7 (c) SPECIFICATION OF BENEFIT LEVELS FOR

8 PLANS.— 

9 (1) IN GENERAL.—The Commissioner shall es10 tablish the following standards consistent with this 

11 subsection and title I: 

12 (A) BASIC, ENHANCED, AND PREMIUM

13 PLANS.—Standards for 3 levels of Exchange14 participating health benefits plans: basic, en15 hanced, and premium (in this subdivision re16 ferred to as a ‘‘basic plan’’, ‘‘enhanced plan’’, 

17 and ‘‘premium plan’’, respectively). 

18 (B) PREMIUM-PLUS PLAN BENEFITS.— 

19 Standards for additional benefits that may be 

20 offered, consistent with this subsection and sub21 title C of title I, under a premium plan (such 

22 a plan with additional benefits referred to in 

23 this subdivision as a ‘‘premium-plus plan’’) . 

24 (2) BASIC PLAN.— 


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1 (A) IN GENERAL.—A basic plan shall offer 

2 the essential benefits package required under 

3 title I for a qualified health benefits plan. 

4 (B) TIERED COST-SHARING FOR AFFORD5 ABLE CREDIT ELIGIBLE INDIVIDUALS.—In the 

6 case of an affordable credit eligible individual 

7 (as defined in section 242(a)(1)) enrolled in an 

8 Exchange-participating health benefits plan, the 

9 benefits under a basic plan are modified to pro10 vide for the reduced cost-sharing for the income 

11 tier applicable to the individual under section 

12 244(c). 

13 (3) ENHANCED PLAN.—An enhanced plan shall 

14 offer, in addition to the level of benefits under the 

15 basic plan, a lower level of cost-sharing as provided 

16 under title I consistent with section 123(b)(5)(A). 

17 (4) PREMIUM PLAN.—A premium plan shall 

18 offer, in addition to the level of benefits under the 

19 basic plan, a lower level of cost-sharing as provided 

20 under title I consistent with section 123(b)(5)(B). 

21 (5) PREMIUM-PLUS PLAN.—A premium-plus 

22 plan is a premium plan that also provides additional 

23 benefits, such as adult oral health and vision care, 

24 approved by the Commissioner. The portion of the 


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1 premium that is attributable to such additional ben2 efits shall be separately specified. 

3 (6) RANGE OF PERMISSIBLE VARIATION IN

4 COST-SHARING.—The Commissioner shall establish a 

5 permissible range of variation of cost-sharing for 

6 each basic, enhanced, and premium plan, except with 

7 respect to any benefit for which there is no cost8 sharing permitted under the essential benefits pack9 age. Such variation shall permit a variation of not 

10 more than plus (or minus) 10 percent in cost-shar11 ing with respect to each benefit category specified 

12 under section 122. 

13 (d) TREATMENT OF STATE BENEFIT MANDATES.— 

14 Insofar as a State requires a health insurance issuer offer15 ing health insurance coverage to include benefits beyond 

16 the essential benefits package, such requirement shall con17 tinue to apply to an Exchange-participating health bene18 fits plan, if the State has entered into an arrangement 

19 satisfactory to the Commissioner to reimburse the Com20 missioner for the amount of any net increase in afford21 ability premium credits under subtitle C as a result of an 

22 increase in premium in basic plans as a result of applica23 tion of such requirement. 


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1 SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE2 PARTICIPATING HEALTH BENEFITS PLANS. 

3 (a) CONTRACTING DUTIES.—In carrying out section 

4 201(b)(1) and consistent with this subtitle: 

5 (1) OFFERING ENTITY AND PLAN STAND6 ARDS.—The Commissioner shall— 

7 (A) establish standards necessary to imple8 ment the requirements of this title and title I 

9 for— 

10 (i) QHBP offering entities for the of11 fering of an Exchange-participating health 

12 benefits plan; and 

13 (ii) for Exchange-participating health 

14 benefits plans; and 

15 (B) certify QHBP offering entities and 

16 qualified health benefits plans as meeting such 

17 standards and requirements of this title and 

18 title I for purposes of this subtitle. 

19 (2) SOLICITING AND NEGOTIATING BIDS; CON20 TRACTS.—The Commissioner shall— 

21 (A) solicit bids from QHBP offering enti22 ties for the offering of Exchange-participating 

23 health benefits plans; 

24 (B) based upon a review of such bids, ne25 gotiate with such entities for the offering of 

26 such plans; and 


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1 (C) enter into contracts with such entities 

2 for the offering of such plans through the 

3 Health Insurance Exchange under terms (con4 sistent with this title) negotiated between the 

5 Commissioner and such entities. 

6 (3) FAR NOT APPLICABLE.—The provisions of 

7 the Federal Acquisition Regulation shall not apply to 

8 contracts between the Commissioner and QHBP of9 fering entities for the offering of Exchange-partici10 pating health benefits plans under this title. 

11 (b) STANDARDS FOR QHBP OFFERING ENTITIES TO

12 OFFER EXCHANGE-PARTICIPATING HEALTH BENEFITS

13 PLANS.—The standards established under subsection 

14 (a)(1)(A) shall require that, in order for a QHBP offering 

15 entity to offer an Exchange-participating health benefits 

16 plan, the entity must meet the following requirements: 

17 (1) LICENSED.—The entity shall be licensed to 

18 offer health insurance coverage under State law for 

19 each State in which it is offering such coverage. 

20 (2) DATA REPORTING.—The entity shall pro21 vide for the reporting of such information as the 

22 Commissioner may specify, including information 

23 necessary to administer the risk pooling mechanism 

24 described in section 206(b) and information to ad25 dress disparities in health and health care. 


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1 (3) IMPLEMENTING AFFORDABILITY CRED2 ITS.—The entity shall provide for implementation of 

3 the affordability credits provided for enrollees under 

4 subtitle C, including the reduction in cost-sharing 

5 under section 244(c). 

6 (4) ENROLLMENT.—The entity shall accept all 

7 enrollments under this subtitle, subject to such ex8 ceptions (such as capacity limitations) in accordance 

9 with the requirements under title I for a qualified 

10 health benefits plan. The entity shall notify the 

11 Commissioner if the entity projects or anticipates 

12 reaching such a capacity limitation that would result 

13 in a limitation in enrollment. 

14 (5) RISK POOLING PARTICIPATION.—The entity 

15 shall participate in such risk pooling mechanism as 

16 the Commissioner establishes under section 206(b). 

17 (6) ESSENTIAL COMMUNITY PROVIDERS.—With 

18 respect to the basic plan offered by the entity, the 

19 entity shall contract for outpatient services with cov20 ered entities (as defined in section 340B(a)(4) of the 

21 Public Health Service Act, as in effect as of July 1, 

22 2009). The Commissioner shall specify the extent to 

23 which and manner in which the previous sentence 

24 shall apply in the case of a basic plan with respect 

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1 stantially all benefits through a health maintenance 

2 organization, as defined in section 2791(b)(3) of the 

3 Public Health Service Act. 

4 (7) CULTURALLY AND LINGUISTICALLY APPRO5 PRIATE SERVICES AND COMMUNICATIONS.—The en6 tity shall provide for culturally and linguistically ap7 propriate communication and health services. 

8 (8) ADDITIONAL REQUIREMENTS.—The entity 

9 shall comply with other applicable requirements of 

10 this title, as specified by the Commissioner, which 

11 shall include standards regarding billing and collec12 tion practices for premiums and related grace peri13 ods and which may include standards to ensure that 

14 the entity does not use coercive practices to force 

15 providers not to contract with other entities offering 

16 coverage through the Health Insurance Exchange. 

17 (c) CONTRACTS.— 

18 (1) BID APPLICATION.—To be eligible to enter 

19 into a contract under this section, a QHBP offering 

20 entity shall submit to the Commissioner a bid at 

21 such time, in such manner, and containing such in22 formation as the Commissioner may require. 

23 (2) TERM.—Each contract with a QHBP offer24 ing entity under this section shall be for a term of 

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1 cally renewable from term to term in the absence of 

2 notice of termination by either party. 

3 (3) ENFORCEMENT OF NETWORK ADEQUACY.— 

4 In the case of a health benefits plan of a QHBP of5 fering entity that uses a provider network, the con6 tract under this section with the entity shall provide 

7 that if— 

8 (A) the Commissioner determines that 

9 such provider network does not meet such 

10 standards as the Commissioner shall establish 

11 under section 115; and 

12 (B) an individual enrolled in such plan re13 ceives an item or service from a provider that 

14 is not within such network; 

15 then any cost-sharing for such item or service shall 

16 be equal to the amount of such cost-sharing that 

17 would be imposed if such item or service was fur18 nished by a provider within such network. 

19 (4) OVERSIGHT AND ENFORCEMENT RESPON20 SIBILITIES.—The Commissioner shall establish proc21 esses, in coordination with State insurance regu22 lators, to oversee, monitor, and enforce applicable re23 quirements of this title with respect to QHBP offer24 ing entities offering Exchange-participating health 

25 benefits plans and such plans, including the marVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00092 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 keting of such plans. Such processes shall include 

2 the following: 

3 (A) GRIEVANCE AND COMPLAINT MECHA4 NISMS.—The Commissioner shall establish, in 

5 coordination with State insurance regulators, a 

6 process under which Exchange-eligible individ7 uals and employers may file complaints con8 cerning violations of such standards. 

9 (B) ENFORCEMENT.—In carrying out au10 thorities under this subdivision relating to the 

11 Health Insurance Exchange, the Commissioner 

12 may impose one or more of the intermediate 

13 sanctions described in section 142(c). 

14 (C) TERMINATION.— 

15 (i) IN GENERAL.—The Commissioner 

16 may terminate a contract with a QHBP of17 fering entity under this section for the of18 fering of an Exchange-participating health 

19 benefits plan if such entity fails to comply 

20 with the applicable requirements of this 

21 title. Any determination by the Commis22 sioner to terminate a contract shall be 

23 made in accordance with formal investiga24 tion and compliance procedures established 

25 by the Commissioner under which— 


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1 (I) the Commissioner provides 

2 the entity with the reasonable oppor3 tunity to develop and implement a 

4 corrective action plan to correct the 

5 deficiencies that were the basis of the 

6 Commissioner’s determination; and 

7 (II) the Commissioner provides 

8 the entity with reasonable notice and 

9 opportunity for hearing (including the 

10 right to appeal an initial decision) be11 fore terminating the contract. 

12 (ii) EXCEPTION FOR IMMINENT AND

13 SERIOUS RISK TO HEALTH.—Clause (i) 

14 shall not apply if the Commissioner deter15 mines that a delay in termination, result16 ing from compliance with the procedures 

17 specified in such clause prior to termi18 nation, would pose an imminent and seri19 ous risk to the health of individuals en20 rolled under the qualified health benefits 

21 plan of the QHBP offering entity. 

22 (D) CONSTRUCTION.—Nothing in this sub23 section shall be construed as preventing the ap24 plication of other sanctions under subtitle E of 


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1 title I with respect to an entity for a violation 

2 of such a requirement. 

3 SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-EL4 IGIBLE INDIVIDUALS AND EMPLOYERS IN EX5 CHANGE-PARTICIPATING HEALTH BENEFITS 

6 PLAN. 

7 (a) IN GENERAL.— 

8 (1) OUTREACH.—The Commissioner shall con9 duct outreach activities consistent with subsection 

10 (c), including through use of appropriate entities as 

11 described in paragraph (4) of such subsection, to in12 form and educate individuals and employers about 

13 the Health Insurance Exchange and Exchange-par14 ticipating health benefits plan options. Such out15 reach shall include outreach specific to vulnerable 

16 populations, such as children, individuals with dis17 abilities, individuals with mental illness, and individ18 uals with other cognitive impairments. 

19 (2) ELIGIBILITY.—The Commissioner shall 

20 make timely determinations of whether individuals 

21 and employers are Exchange-eligible individuals and 

22 employers (as defined in section 202). 

23 (3) ENROLLMENT.—The Commissioner shall es24 tablish and carry out an enrollment process for Ex25 change-eligible individuals and employers, including 


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1 at community locations, in accordance with sub2 section (b). 

3 (b) ENROLLMENT PROCESS.— 

4 (1) IN GENERAL.—The Commissioner shall es5 tablish a process consistent with this title for enroll6 ments in Exchange-participating health benefits 

7 plans. Such process shall provide for enrollment 

8 through means such as the mail, by telephone, elec9 tronically, and in person. 

10 (2) ENROLLMENT PERIODS.— 

11 (A) OPEN ENROLLMENT PERIOD.—The 

12 Commissioner shall establish an annual open 

13 enrollment period during which an Exchange-el14 igible individual or employer may elect to enroll 

15 in an Exchange-participating health benefits 

16 plan for the following plan year and an enroll17 ment period for affordability credits under sub18 title C. Such periods shall be during September 

19 through November of each year, or such other 

20 time that would maximize timeliness of income 

21 verification for purposes of such subtitle. The 

22 open enrollment period shall not be less than 30 

23 days. 

24 (B) SPECIAL ENROLLMENT.—The Com25 missioner shall also provide for special enrollVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00096 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ment periods to take into account special cir2 cumstances of individuals and employers, such 

3 as an individual who— 

4 (i) loses acceptable coverage; 

5 (ii) experiences a change in marital or 

6 other dependent status; 

7 (iii) moves outside the service area of 

8 the Exchange-participating health benefits 

9 plan in which the individual is enrolled; or 

10 (iv) experiences a significant change 

11 in income. 

12 (C) ENROLLMENT INFORMATION.—The 

13 Commissioner shall provide for the broad dis14 semination of information to prospective enroll15 ees on the enrollment process, including before 

16 each open enrollment period. In carrying out 

17 the previous sentence, the Commissioner may 

18 work with other appropriate entities to facilitate 

19 such provision of information. 

20 (3) AUTOMATIC ENROLLMENT FOR NON-MED21 ICAID ELIGIBLE INDIVIDUALS.— 

22 (A) IN GENERAL.—The Commissioner 

23 shall provide for a process under which individ24 uals who are Exchange-eligible individuals de25 scribed in subparagraph (B) are automatically 


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1 enrolled under an appropriate Exchange-partici2 pating health benefits plan. Such process may 

3 involve a random assignment or some other 

4 form of assignment that takes into account the 

5 health care providers used by the individual in6 volved or such other relevant factors as the 

7 Commissioner may specify. 

8 (B) SUBSIDIZED INDIVIDUALS DE9 SCRIBED.—An individual described in this sub10 paragraph is an Exchange-eligible individual 

11 who is either of the following: 

12 (i) AFFORDABILITY CREDIT ELIGIBLE

13 INDIVIDUALS.—The individual— 

14 (I) has applied for, and been de15 termined eligible for, affordability 

16 credits under subtitle C; 

17 (II) has not opted out from re18 ceiving such affordability credit; and 

19 (III) does not otherwise enroll in 

20 another Exchange-participating health 

21 benefits plan. 

22 (ii) INDIVIDUALS ENROLLED IN A

23 TERMINATED PLAN.—The individual is en24 rolled in an Exchange-participating health 

25 benefits plan that is terminated (during or 


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1 at the end of a plan year) and who does 

2 not otherwise enroll in another Exchange3 participating health benefits plan. 

4 (4) DIRECT PAYMENT OF PREMIUMS TO

5 PLANS.—Under the enrollment process, individuals 

6 enrolled in an Exchange-participating health benefits 

7 plan shall pay such plans directly, and not through 

8 the Commissioner or the Health Insurance Ex9 change. 

10 (c) COVERAGE INFORMATION AND ASSISTANCE.— 

11 (1) COVERAGE INFORMATION.—The Commis12 sioner shall provide for the broad dissemination of 

13 information on Exchange-participating health bene14 fits plans offered under this title. Such information 

15 shall be provided in a comparative manner, and shall 

16 include information on benefits, premiums, cost17 sharing, quality, provider networks, and consumer 

18 satisfaction. 

19 (2) CONSUMER ASSISTANCE WITH CHOICE.—To 

20 provide assistance to Exchange-eligible individuals 

21 and employers, the Commissioner shall— 

22 (A) provide for the operation of a toll-free 

23 telephone hotline to respond to requests for as24 sistance and maintain an Internet website 

25 through which individuals may obtain informaVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion on coverage under Exchange-participating 

2 health benefits plans and file complaints; 

3 (B) develop and disseminate information to 

4 Exchange-eligible enrollees on their rights and 

5 responsibilities; 

6 (C) assist Exchange-eligible individuals in 

7 selecting Exchange-participating health benefits 

8 plans and obtaining benefits through such 

9 plans; and 

10 (D) ensure that the Internet website de11 scribed in subparagraph (A) and the informa12 tion described in subparagraph (B) is developed 

13 using plain language (as defined in section 

14 133(a)(2)). 

15 (3) USE OF OTHER ENTITIES.—In carrying out 

16 this subsection, the Commissioner may work with 

17 other appropriate entities to facilitate the dissemina18 tion of information under this subsection and to pro19 vide assistance as described in paragraph (2). 

20 (d) SPECIAL DUTIES RELATED TO MEDICAID AND

21 CHIP.— 

22 (1) COVERAGE FOR CERTAIN NEWBORNS.— 

23 (A) IN GENERAL.—In the case of a child 

24 born in the United States who at the time of 

25 birth is not otherwise covered under acceptable 


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1 coverage, for the period of time beginning on 

2 the date of birth and ending on the date the 

3 child otherwise is covered under acceptable cov4 erage (or, if earlier, the end of the month in 

5 which the 60-day period, beginning on the date 

6 of birth, ends), the child shall be deemed— 

7 (i) to be a non-traditional Medicaid el8 igible individual (as defined in subsection 

9 (e)(5)) for purposes of this subdivision and 

10 Medicaid; and 

11 (ii) to have elected to enroll in Med12 icaid through the application of paragraph 

13 (3). 

14 (B) EXTENDED TREATMENT AS TRADI15 TIONAL MEDICAID ELIGIBLE INDIVIDUAL.—In 

16 the case of a child described in subparagraph 

17 (A) who at the end of the period referred to in 

18 such subparagraph is not otherwise covered 

19 under acceptable coverage, the child shall be 

20 deemed (until such time as the child obtains 

21 such coverage or the State otherwise makes a 

22 determination of the child’s eligibility for med23 ical assistance under its Medicaid plan pursuant 

24 to section 1943(c)(1) of the Social Security 

25 Act) to be a traditional Medicaid eligible indiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vidual described in section 1902(l)(1)(B) of 

2 such Act. 

3 (2) CHIP TRANSITION.—A child who, as of the 

4 day before the first day of Y1, is eligible for child 

5 health assistance under title XXI of the Social Secu6 rity Act (including a child receiving coverage under 

7 an arrangement described in section 2101(a)(2) of 

8 such Act) is deemed as of such first day to be an 

9 Exchange-eligible individual unless the individual is 

10 a traditional Medicaid eligible individual as of such 

11 day. 

12 (3) AUTOMATIC ENROLLMENT OF MEDICAID EL13 IGIBLE INDIVIDUALS INTO MEDICAID.—The Com14 missioner shall provide for a process under which an 

15 individual who is described in section 202(d)(3) and 

16 has not elected to enroll in an Exchange-partici17 pating health benefits plan is automatically enrolled 

18 under Medicaid. 

19 (4) NOTIFICATIONS.—The Commissioner shall 

20 notify each State in Y1 and for purposes of section 

21 1902(gg)(1) of the Social Security Act (as added by 

22 section 1703(a)) whether the Health Insurance Ex23 change can support enrollment of children described 

24 in paragraph (2) in such State in such year. 


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1 (e) MEDICAID COVERAGE FOR MEDICAID ELIGIBLE

2 INDIVIDUALS.— 

3 (1) IN GENERAL.— 

4 (A) CHOICE FOR LIMITED EXCHANGE-ELI5 GIBLE INDIVIDUALS.—As part of the enrollment 

6 process under subsection (b), the Commissioner 

7 shall provide the option, in the case of an Ex8 change-eligible individual described in section 

9 202(d)(3), for the individual to elect to enroll 

10 under Medicaid instead of under an Exchange11 participating health benefits plan. Such an indi12 vidual may change such election during an en13 rollment period under subsection (b)(2). 

14 (B) MEDICAID ENROLLMENT OBLIGA15 TION.—An Exchange eligible individual may 

16 apply, in the manner described in section 

17 241(b)(1), for a determination of whether the 

18 individual is a Medicaid-eligible individual. If 

19 the individual is determined to be so eligible, 

20 the Commissioner, through the Medicaid memo21 randum of understanding, shall provide for the 

22 enrollment of the individual under the State 

23 Medicaid plan in accordance with the Medicaid 

24 memorandum of understanding under para25 graph (4). In the case of such an enrollment, 


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1 the State shall provide for the same periodic re2 determination of eligibility under Medicaid as 

3 would otherwise apply if the individual had di4 rectly applied for medical assistance to the 

5 State Medicaid agency. 

6 (2) NON-TRADITIONAL MEDICAID ELIGIBLE IN7 DIVIDUALS.—In the case of a non-traditional Med8 icaid eligible individual described in section 

9 202(d)(3) who elects to enroll under Medicaid under 

10 paragraph (1)(A), the Commissioner shall provide 

11 for the enrollment of the individual under the State 

12 Medicaid plan in accordance with the Medicaid 

13 memorandum of understanding under paragraph 

14 (4). 

15 (3) COORDINATED ENROLLMENT WITH STATE

16 THROUGH MEMORANDUM OF UNDERSTANDING.— 

17 The Commissioner, in consultation with the Sec18 retary of Health and Human Services, shall enter 

19 into a memorandum of understanding with each 

20 State (each in this subdivision referred to as a 

21 ‘‘Medicaid memorandum of understanding’’) with re22 spect to coordinating enrollment of individuals in 

23 Exchange-participating health benefits plans and 

24 under the State’s Medicaid program consistent with 

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1 mentation of the provisions of this subdivision with 

2 respect to the Medicaid program. Such memo3 randum shall permit the exchange of information 

4 consistent with the limitations described in section 

5 1902(a)(7) of the Social Security Act. Nothing in 

6 this section shall be construed as permitting such 

7 memorandum to modify or vitiate any requirement 

8 of a State Medicaid plan. 

9 (4) MEDICAID ELIGIBLE INDIVIDUALS.—For 

10 purposes of this subdivision: 

11 (A) MEDICAID ELIGIBLE INDIVIDUAL.— 

12 The term ‘‘Medicaid eligible individual’’ means 

13 an individual who is eligible for medical assist14 ance under Medicaid. 

15 (B) TRADITIONAL MEDICAID ELIGIBLE IN16 DIVIDUAL.—The term ‘‘traditional Medicaid eli17 gible individual’’ means a Medicaid eligible indi18 vidual other than an individual who is— 

19 (i) a Medicaid eligible individual by 

20 reason of the application of subclause 

21 (VIII) of section 1902(a)(10)(A)(i) of the 

22 Social Security Act; or 

23 (ii) a childless adult not described in 

24 section 1902(a)(10)(A) or (C) of such Act 


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1 (as in effect as of the day before the date 

2 of the enactment of this Act). 

3 (C) NON-TRADITIONAL MEDICAID ELIGI4 BLE INDIVIDUAL.—The term ‘‘non-traditional 

5 Medicaid eligible individual’’ means a Medicaid 

6 eligible individual who is not a traditional Med7 icaid eligible individual. 

8 (f) EFFECTIVE CULTURALLY AND LINGUISTICALLY

9 APPROPRIATE COMMUNICATION.—In carrying out this 

10 section, the Commissioner shall establish effective methods 

11 for communicating in plain language and a culturally and 

12 linguistically appropriate manner. 

13 SEC. 206. OTHER FUNCTIONS. 

14 (a) COORDINATION OF AFFORDABILITY CREDITS.— 

15 The Commissioner shall coordinate the distribution of af16 fordability premium and cost-sharing credits under sub17 title C to QHBP offering entities offering Exchange-par18 ticipating health benefits plans. 

19 (b) COORDINATION OF RISK POOLING.—The Com20 missioner shall establish a mechanism whereby there is an 

21 adjustment made of the premium amounts payable among 

22 QHBP offering entities offering Exchange-participating 

23 health benefits plans of premiums collected for such plans 

24 that takes into account (in a manner specified by the Com25 missioner) the differences in the risk characteristics of inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 dividuals and employers enrolled under the different Ex2 change-participating health benefits plans offered by such 

3 entities so as to minimize the impact of adverse selection 

4 of enrollees among the plans offered by such entities. 

5 (c) SPECIAL INSPECTOR GENERAL FOR THE HEALTH

6 INSURANCE EXCHANGE.— 

7 (1) ESTABLISHMENT; APPOINTMENT.—There is 

8 hereby established the Office of the Special Inspec9 tor General for the Health Insurance Exchange, to 

10 be headed by a Special Inspector General for the 

11 Health Insurance Exchange (in this subsection re12 ferred to as the ‘‘Special Inspector General’’) to be 

13 appointed by the President, by and with the advice 

14 and consent of the Senate. The nomination of an in15 dividual as Special Inspector General shall be made 

16 as soon as practicable after the establishment of the 

17 program under this subtitle. 

18 (2) DUTIES.—The Special Inspector General 

19 shall— 

20 (A) conduct, supervise, and coordinate au21 dits, evaluations and investigations of the 

22 Health Insurance Exchange to protect the in23 tegrity of the Health Insurance Exchange, as 

24 well as the health and welfare of participants in 

25 the Exchange; 


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1 (B) report both to the Commissioner and 

2 to the Congress regarding program and man3 agement problems and recommendations to cor4 rect them; 

5 (C) have other duties (described in para6 graphs (2) and (3) of section 121 of division A 

7 of Public Law 110–343) in relation to the du8 ties described in the previous subparagraphs; 

9 and 

10 (D) have the authorities provided in sec11 tion 6 of the Inspector General Act of 1978 in 

12 carrying out duties under this paragraph. 

13 (3) APPLICATION OF OTHER SPECIAL INSPEC14 TOR GENERAL PROVISIONS.—The provisions of sub15 sections (b) (other than paragraphs (1) and (3)), (d) 

16 (other than paragraph (1)), and (e) of section 121 

17 of division A of the Emergency Economic Stabiliza18 tion Act of 2009 (Public Law 110–343) shall apply 

19 to the Special Inspector General under this sub20 section in the same manner as such provisions apply 

21 to the Special Inspector General under such section. 

22 (4) REPORTS.—Not later than one year after 

23 the confirmation of the Special Inspector General, 

24 and annually thereafter, the Special Inspector Gen25 eral shall submit to the appropriate committees of 


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1 Congress a report summarizing the activities of the 

2 Special Inspector General during the one year period 

3 ending on the date such report is submitted. 

4 (5) TERMINATION.—The Office of the Special 

5 Inspector General shall terminate five years after 

6 the date of the enactment of this Act. 

7 SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND. 

8 (a) ESTABLISHMENT OF HEALTH INSURANCE EX9 CHANGE TRUST FUND.—There is created within the 

10 Treasury of the United States a trust fund to be known 

11 as the ‘‘Health Insurance Exchange Trust Fund’’ (in this 

12 section referred to as the ‘‘Trust Fund’’), consisting of 

13 such amounts as may be appropriated or credited to the 

14 Trust Fund under this section or any other provision of 

15 law. 

16 (b) PAYMENTS FROM TRUST FUND.—The Commis17 sioner shall pay from time to time from the Trust Fund 

18 such amounts as the Commissioner determines are nec19 essary to make payments to operate the Health Insurance 

20 Exchange, including payments under subtitle C (relating 

21 to affordability credits). 

22 (c) TRANSFERS TO TRUST FUND.— 

23 (1) DEDICATED PAYMENTS.—There is hereby 

24 appropriated to the Trust Fund amounts equivalent 

25 to the following: 


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1 (A) TAXES ON INDIVIDUALS NOT OBTAIN2 ING ACCEPTABLE COVERAGE.—The amounts re3 ceived in the Treasury under section 59B of the 

4 Internal Revenue Code of 1986 (relating to re5 quirement of health insurance coverage for indi6 viduals). 

7 (B) EMPLOYMENT TAXES ON EMPLOYERS

8 NOT PROVIDING ACCEPTABLE COVERAGE.—The 

9 amounts received in the Treasury under section 

10 3111(c) of the Internal Revenue Code of 1986 

11 (relating to employers electing to not provide 

12 health benefits). 

13 (C) EXCISE TAX ON FAILURES TO MEET

14 CERTAIN HEALTH COVERAGE REQUIRE15 MENTS.—The amounts received in the Treasury 

16 under section 4980H(b) (relating to excise tax 

17 with respect to failure to meet health coverage 

18 participation requirements). 

19 (2) APPROPRIATIONS TO COVER GOVERNMENT

20 CONTRIBUTIONS.—There are hereby appropriated, 

21 out of any moneys in the Treasury not otherwise ap22 propriated, to the Trust Fund, an amount equivalent 

23 to the amount of payments made from the Trust 

24 Fund under subsection (b) plus such amounts as are 


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1 necessary reduced by the amounts deposited under 

2 paragraph (1). 

3 (d) APPLICATION OF CERTAIN RULES.—Rules simi4 lar to the rules of subchapter B of chapter 98 of the Inter5 nal Revenue Code of 1986 shall apply with respect to the 

6 Trust Fund. 

7 SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH 

8 INSURANCE EXCHANGES. 

9 (a) IN GENERAL.—If— 

10 (1) a State (or group of States, subject to the 

11 approval of the Commissioner) applies to the Com12 missioner for approval of a State-based Health In13 surance Exchange to operate in the State (or group 

14 of States); and 

15 (2) the Commissioner approves such State16 based Health Insurance Exchange, 

17 then, subject to subsections (c) and (d), the State-based 

18 Health Insurance Exchange shall operate, instead of the 

19 Health Insurance Exchange, with respect to such State 

20 (or group of States). The Commissioner shall approve a 

21 State-based Health Insurance Exchange if it meets the re22 quirements for approval under subsection (b). 

23 (b) REQUIREMENTS FOR APPROVAL.—The Commis24 sioner may not approve a State-based Health Insurance 


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1 Exchange under this section unless the following require2 ments are met: 

3 (1) The State-based Health Insurance Ex4 change must demonstrate the capacity to and pro5 vide assurances satisfactory to the Commissioner 

6 that the State-based Health Insurance Exchange will 

7 carry out the functions specified for the Health In8 surance Exchange in the State (or States) involved, 

9 including— 

10 (A) negotiating and contracting with 

11 QHBP offering entities for the offering of Ex12 change-participating health benefits plan, which 

13 satisfy the standards and requirements of this 

14 title and title I; 

15 (B) enrolling Exchange-eligible individuals 

16 and employers in such State in such plans; 

17 (C) the establishment of sufficient local of18 fices to meet the needs of Exchange-eligible in19 dividuals and employers; 

20 (D) administering affordability credits 

21 under subtitle B using the same methodologies 

22 (and at least the same income verification 

23 methods) as would otherwise apply under such 

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1 ment which does exceed the cost to the Federal 

2 Government if this section did not apply; and 

3 (E) enforcement activities consistent with 

4 federal requirements. 

5 (2) There is no more than one Health Insur6 ance Exchange operating with respect to any one 

7 State. 

8 (3) The State provides assurances satisfactory 

9 to the Commissioner that approval of such an Ex10 change will not result in any net increase in expendi11 tures to the Federal Government. 

12 (4) The State provides for reporting of such in13 formation as the Commissioner determines and as14 surances satisfactory to the Commissioner that it 

15 will vigorously enforce violations of applicable re16 quirements. 

17 (5) Such other requirements as the Commis18 sioner may specify. 

19 (c) CEASING OPERATION.— 

20 (1) IN GENERAL.—A State-based Health Insur21 ance Exchange may, at the option of each State in22 volved, and only after providing timely and reason23 able notice to the Commissioner, cease operation as 

24 such an Exchange, in which case the Health Insur25 ance Exchange shall operate, instead of such StateVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00113 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 based Health Insurance Exchange, with respect to 

2 such State (or States). 

3 (2) TERMINATION; HEALTH INSURANCE EX4 CHANGE RESUMPTION OF FUNCTIONS.—The Com5 missioner may terminate the approval (for some or 

6 all functions) of a State-based Health Insurance Ex7 change under this section if the Commissioner deter8 mines that such Exchange no longer meets the re9 quirements of subsection (b) or is no longer capable 

10 of carrying out such functions in accordance with 

11 the requirements of this subtitle. In lieu of termi12 nating such approval, the Commissioner may tempo13 rarily assume some or all functions of the State14 based Health Insurance Exchange until such time as 

15 the Commissioner determines the State-based 

16 Health Insurance Exchange meets such require17 ments of subsection (b) and is capable of carrying 

18 out such functions in accordance with the require19 ments of this subtitle. 

20 (3) EFFECTIVENESS.—The ceasing or termi21 nation of a State-based Health Insurance Exchange 

22 under this subsection shall be effective in such time 

23 and manner as the Commissioner shall specify. 

24 (d) RETENTION OF AUTHORITY.— 


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1 (1) AUTHORITY RETAINED.—Enforcement au2 thorities of the Commissioner shall be retained by 

3 the Commissioner. 

4 (2) DISCRETION TO RETAIN ADDITIONAL AU5 THORITY.—The Commissioner may specify functions 

6 of the Health Insurance Exchange that— 

7 (A) may not be performed by a State8 based Health Insurance Exchange under this 

9 section; or 

10 (B) may be performed by the Commis11 sioner and by such a State-based Health Insur12 ance Exchange. 

13 (e) REFERENCES.—In the case of a State-based 

14 Health Insurance Exchange, except as the Commissioner 

15 may otherwise specify under subsection (d), any references 

16 in this subtitle to the Health Insurance Exchange or to 

17 the Commissioner in the area in which the State-based 

18 Health Insurance Exchange operates shall be deemed a 

19 reference to the State-based Health Insurance Exchange 

20 and the head of such Exchange, respectively. 

21 (f) FUNDING.—In the case of a State-based Health 

22 Insurance Exchange, there shall be assistance provided for 

23 the operation of such Exchange in the form of a matching 

24 grant with a State share of expenditures required. 


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1 Subtitle B—Public Health 

2 Insurance Option 

3 SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A 

4 PUBLIC HEALTH INSURANCE OPTION AS AN 

5 EXCHANGE-QUALIFIED HEALTH BENEFITS 

6 PLAN. 

7 (a) ESTABLISHMENT.—For years beginning with Y1, 

8 the Secretary of Health and Human Services (in this sub9 title referred to as the ‘‘Secretary’’) shall provide for the 

10 offering of an Exchange-participating health benefits plan 

11 (in this subdivision referred to as the ‘‘public health insur12 ance option’’) that ensures choice, competition, and sta13 bility of affordable, high quality coverage throughout the 

14 United States in accordance with this subtitle. In design15 ing the option, the Secretary’s primary responsibility is 

16 to create a low-cost plan without compromising quality or 

17 access to care. 

18 (b) OFFERING AS AN EXCHANGE-PARTICIPATING

19 HEALTH BENEFITS PLAN.— 

20 (1) EXCLUSIVE TO THE EXCHANGE.—The pub21 lic health insurance option shall only be made avail22 able through the Health Insurance Exchange. 

23 (2) ENSURING A LEVEL PLAYING FIELD.—Con24 sistent with this subtitle, the public health insurance 

25 option shall comply with requirements that are apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plicable under this title to an Exchange-participating 

2 health benefits plan, including requirements related 

3 to benefits, benefit levels, provider networks, notices, 

4 consumer protections, and cost sharing. 

5 (3) PROVISION OF BENEFIT LEVELS.—The pub6 lic health insurance option— 

7 (A) shall offer basic, enhanced, and pre8 mium plans; and 

9 (B) may offer premium-plus plans. 

10 (c) ADMINISTRATIVE CONTRACTING.—The Secretary 

11 may enter into contracts for the purpose of performing 

12 administrative functions (including functions described in 

13 subsection (a)(4) of section 1874A of the Social Security 

14 Act) with respect to the public health insurance option in 

15 the same manner as the Secretary may enter into con16 tracts under subsection (a)(1) of such section. The Sec17 retary has the same authority with respect to the public 

18 health insurance option as the Secretary has under sub19 sections (a)(1) and (b) of section 1874A of the Social Se20 curity Act with respect to title XVIII of such Act. Con21 tracts under this subsection shall not involve the transfer 

22 of insurance risk to such entity. 

23 (d) OMBUDSMAN.—The Secretary shall establish an 

24 office of the ombudsman for the public health insurance 

25 option which shall have duties with respect to the public 


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1 health insurance option similar to the duties of the Medi2 care Beneficiary Ombudsman under section 1808(c)(2) of 

3 the Social Security Act. 

4 (e) DATA COLLECTION.—The Secretary shall collect 

5 such data as may be required to establish premiums and 

6 payment rates for the public health insurance option and 

7 for other purposes under this subtitle, including to im8 prove quality and to reduce racial, ethnic, and other dis9 parities in health and health care. 

10 (f) TREATMENT OF PUBLIC HEALTH INSURANCE OP11 TION.—With respect to the public health insurance option, 

12 the Secretary shall be treated as a QHBP offering entity 

13 offering an Exchange-participating health benefits plan. 

14 (g) ACCESS TO FEDERAL COURTS.—The provisions 

15 of Medicare (and related provisions of title II of the Social 

16 Security Act) relating to access of Medicare beneficiaries 

17 to Federal courts for the enforcement of rights under 

18 Medicare, including with respect to amounts in con19 troversy, shall apply to the public health insurance option 

20 and individuals enrolled under such option under this title 

21 in the same manner as such provisions apply to Medicare 

22 and Medicare beneficiaries. 

23 SEC. 222. PREMIUMS AND FINANCING. 

24 (a) ESTABLISHMENT OF PREMIUMS.— 


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1 (1) IN GENERAL.—The Secretary shall establish 

2 geographically-adjusted premium rates for the public 

3 health insurance option in a manner— 

4 (A) that complies with the premium rules 

5 established by the Commissioner under section 

6 113 for Exchange-participating health benefit 

7 plans; and 

8 (B) at a level sufficient to fully finance the 

9 costs of— 

10 (i) health benefits provided by the 

11 public health insurance option; and 

12 (ii) administrative costs related to op13 erating the public health insurance option. 

14 (2) CONTINGENCY MARGIN.—In establishing 

15 premium rates under paragraph (1), the Secretary 

16 shall include an appropriate amount for a contin17 gency margin. 

18 (b) ACCOUNT.— 

19 (1) ESTABLISHMENT.—There is established in 

20 the Treasury of the United States an Account for 

21 the receipts and disbursements attributable to the 

22 operation of the public health insurance option, in23 cluding the start-up funding under paragraph (2). 

24 Section 1854(g) of the Social Security Act shall 

25 apply to receipts described in the previous sentence 


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1 in the same manner as such section applies to pay2 ments or premiums described in such section. 

3 (2) START-UP FUNDING.— 

4 (A) IN GENERAL.—In order to provide for 

5 the establishment of the public health insurance 

6 option there is hereby appropriated to the Sec7 retary, out of any funds in the Treasury not 

8 otherwise appropriated, $2,000,000,000. In 

9 order to provide for initial claims reserves be10 fore the collection of premiums, there is hereby 

11 appropriated to the Secretary, out of any funds 

12 in the Treasury not otherwise appropriated, 

13 such sums as necessary to cover 90 days worth 

14 of claims reserves based on projected enroll15 ment. 

16 (B) AMORTIZATION OF START-UP FUND17 ING.—The Secretary shall provide for the re18 payment of the startup funding provided under 

19 subparagraph (A) to the Treasury in an amor20 tized manner over the 10-year period beginning 

21 with Y1. 

22 (C) LIMITATION ON FUNDING.—Nothing in 

23 this section shall be construed as authorizing 

24 any additional appropriations to the Account, 

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1 vided with respect to other Exchange-partici2 pating health benefits plans. 

3 SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES. 

4 (a) RATES ESTABLISHED BY SECRETARY.— 

5 (1) IN GENERAL.—The Secretary shall establish 

6 payment rates for the public health insurance option 

7 for services and health care providers consistent with 

8 this section and may change such payment rates in 

9 accordance with section 224. 

10 (2) INITIAL PAYMENT RULES.— 

11 (A) IN GENERAL.—Except as provided in 

12 subparagraph (B) and subsection (b)(1), during 

13 Y1, Y2, and Y3, the Secretary shall base the 

14 payment rates under this section for services 

15 and providers described in paragraph (1) on the 

16 payment rates for similar services and providers 

17 under parts A and B of Medicare. 

18 (B) EXCEPTIONS.— 

19 (i) PRACTITIONERS’ SERVICES.—Pay20 ment rates for practitioners’ services other21 wise established under the fee schedule 

22 under section 1848 of the Social Security 

23 Act shall be applied without regard to the 

24 provisions under subsection (f) of such sec25 tion and the update under subsection 


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1 (d)(4) under such section for a year as ap2 plied under this paragraph shall be not less 

3 than 1 percent. 

4 (ii) ADJUSTMENTS.—The Secretary 

5 may determine the extent to which Medi6 care adjustments applicable to base pay7 ment rates under parts A and B of Medi8 care shall apply under this subtitle. 

9 (3) FOR NEW SERVICES.—The Secretary shall 

10 modify payment rates described in paragraph (2) in 

11 order to accommodate payments for services, such as 

12 well-child visits, that are not otherwise covered 

13 under Medicare. 

14 (4) PRESCRIPTION DRUGS.—Payment rates 

15 under this section for prescription drugs that are not 

16 paid for under part A or part B of Medicare shall 

17 be at rates negotiated by the Secretary. 

18 (b) INCENTIVES FOR PARTICIPATING PROVIDERS.— 

19 (1) INITIAL INCENTIVE PERIOD.— 

20 (A) IN GENERAL.—The Secretary shall 

21 provide, in the case of services described in sub22 paragraph (B) furnished during Y1, Y2, and 

23 Y3, for payment rates that are 5 percent great24 er than the rates established under subsection 

25 (a). 


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1 (B) SERVICES DESCRIBED.—The services 

2 described in this subparagraph are items and 

3 professional services, under the public health in4 surance option by a physician or other health 

5 care practitioner who participates in both Medi6 care and the public health insurance option. 

7 (C) SPECIAL RULES.—A pediatrician and 

8 any other health care practitioner who is a type 

9 of practitioner that does not typically partici10 pate in Medicare (as determined by the Sec11 retary) shall also be eligible for the increased 

12 payment rates under subparagraph (A). 

13 (2) SUBSEQUENT PERIODS.— Beginning with 

14 Y4 and for subsequent years, the Secretary shall 

15 continue to use an administrative process to set such 

16 rates in order to promote payment accuracy, to en17 sure adequate beneficiary access to providers, and to 

18 promote affordability and the efficient delivery of 

19 medical care consistent with section 221(a). Such 

20 rates shall not be set at levels expected to increase 

21 overall medical costs under the option beyond what 

22 would be expected if the process under subsection 

23 (a)(2) and paragraph (1) of this subsection were 

24 continued. 


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1 (3) ESTABLISHMENT OF A PROVIDER NET2 WORK.—Health care providers participating under 

3 Medicare are participating providers in the public 

4 health insurance option unless they opt out in a 

5 process established by the Secretary. 

6 (c) ADMINISTRATIVE PROCESS FOR SETTING

7 RATES.—Chapter 5 of title 5, United States Code shall 

8 apply to the process for the initial establishment of pay9 ment rates under this section but not to the specific meth10 odology for establishing such rates or the calculation of 

11 such rates. 

12 (d) CONSTRUCTION.—Nothing in this subtitle shall 

13 be construed as limiting the Secretary’s authority to cor14 rect for payments that are excessive or deficient, taking 

15 into account the provisions of section 221(a) and the 

16 amounts paid for similar health care providers and serv17 ices under other Exchange-participating health benefits 

18 plans. 

19 (e) CONSTRUCTION.—Nothing in this subtitle shall be 

20 construed as affecting the authority of the Secretary to 

21 establish payment rates, including payments to provide for 

22 the more efficient delivery of services, such as the initia23 tives provided for under section 224. 

24 (f) LIMITATIONS ON REVIEW.—There shall be no ad25 ministrative or judicial review of a payment rate or methVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 odology established under this section or under section 

2 224. 

3 SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIV4 ERY SYSTEM REFORM. 

5 (a) IN GENERAL.—For plan years beginning with Y1, 

6 the Secretary may utilize innovative payment mechanisms 

7 and policies to determine payments for items and services 

8 under the public health insurance option. The payment 

9 mechanisms and policies under this section may include 

10 patient-centered medical home and other care manage11 ment payments, accountable care organizations, value12 based purchasing, bundling of services, differential pay13 ment rates, performance or utilization based payments, 

14 partial capitation, and direct contracting with providers. 

15 (b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 

16 The Secretary shall design and implement the payment 

17 mechanisms and policies under this section in a manner 

18 that— 

19 (1) seeks to— 

20 (A) improve health outcomes; 

21 (B) reduce health disparities (including ra22 cial, ethnic, and other disparities); 

23 (C) provide efficient and affordable care; 

24 (D) address geographic variation in the 

25 provision of health services; or 


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1 (E) prevent or manage chronic illness; and 

2 (2) promotes care that is integrated, patient3 centered, quality, and efficient. 

4 (c) ENCOURAGING THE USE OF HIGH VALUE SERV5 ICES.—To the extent allowed by the benefit standards ap6 plied to all Exchange-participating health benefits plans, 

7 the public health insurance option may modify cost shar8 ing and payment rates to encourage the use of services 

9 that promote health and value. 

10 (d) NON-UNIFORMITY PERMITTED.—Nothing in this 

11 subtitle shall prevent the Secretary from varying payments 

12 based on different payment structure models (such as ac13 countable care organizations and medical homes) under 

14 the public health insurance option for different geographic 

15 areas. 

16 SEC. 225. PROVIDER PARTICIPATION. 

17 (a) IN GENERAL.—The Secretary shall establish con18 ditions of participation for health care providers under the 

19 public health insurance option. 

20 (b) LICENSURE OR CERTIFICATION.—The Secretary 

21 shall not allow a health care provider to participate in the 

22 public health insurance option unless such provider is ap23 propriately licensed or certified under State law. 

24 (c) PAYMENT TERMS FOR PROVIDERS.— 


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1 (1) PHYSICIANS.—The Secretary shall provide 

2 for the annual participation of physicians under the 

3 public health insurance option, for which payment 

4 may be made for services furnished during the year, 

5 in one of 2 classes: 

6 (A) PREFERRED PHYSICIANS.—Those phy7 sicians who agree to accept the payment rate 

8 established under section 223 (without regard 

9 to cost-sharing) as the payment in full. 

10 (B) PARTICIPATING, NON-PREFERRED

11 PHYSICIANS.—Those physicians who agree not 

12 to impose charges (in relation to the payment 

13 rate described in section 223 for such physi14 cians) that exceed the ratio permitted under 

15 section 1848(g)(2)(C) of the Social Security 

16 Act. 

17 (2) OTHER PROVIDERS.—The Secretary shall 

18 provide for the participation (on an annual or other 

19 basis specified by the Secretary) of health care pro20 viders (other than physicians) under the public 

21 health insurance option under which payment shall 

22 only be available if the provider agrees to accept the 

23 payment rate established under section 223 (without 

24 regard to cost-sharing) as the payment in full. 


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1 (d) EXCLUSION OF CERTAIN PROVIDERS.—The Sec2 retary shall exclude from participation under the public 

3 health insurance option a health care provider that is ex4 cluded from participation in a Federal health care pro5 gram (as defined in section 1128B(f) of the Social Secu6 rity Act). 

7 SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVI8 SIONS. 

9 Provisions of law (other than criminal law provisions) 

10 identified by the Secretary by regulation, in consultation 

11 with the Inspector General of the Department of Health 

12 and Human Services, that impose sanctions with respect 

13 to waste, fraud, and abuse under Medicare, such as the 

14 False Claims Act (31 U.S.C. 3729 et seq.), shall also 

15 apply to the public health insurance option. 

16 Subtitle C—Individual 

17 Affordability Credits 

18 SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX19 CHANGE. 

20 (a) IN GENERAL.—Subject to the succeeding provi21 sions of this subtitle, in the case of an affordable credit 

22 eligible individual enrolled in an Exchange-participating 

23 health benefits plan— 


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1 (1) the individual shall be eligible for, in accord2 ance with this subtitle, affordability credits con3 sisting of— 

4 (A) an affordability premium credit under 

5 section 243 to be applied against the premium 

6 for the Exchange-participating health benefits 

7 plan in which the individual is enrolled; and 

8 (B) an affordability cost-sharing credit 

9 under section 244 to be applied as a reduction 

10 of the cost-sharing otherwise applicable to such 

11 plan; and 

12 (2) the Commissioner shall pay the QHBP of13 fering entity that offers such plan from the Health 

14 Insurance Exchange Trust Fund the aggregate 

15 amount of affordability credits for all affordable 

16 credit eligible individuals enrolled in such plan. 

17 (b) APPLICATION.— 

18 (1) IN GENERAL.—An Exchange eligible indi19 vidual may apply to the Commissioner through the 

20 Health Insurance Exchange or through another enti21 ty under an arrangement made with the Commis22 sioner, in a form and manner specified by the Com23 missioner. The Commissioner through the Health 

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1 sioner shall make a determination as to eligibility of 

2 an individual for affordability credits under this sub3 title. The Commissioner shall establish a process 

4 whereby, on the basis of information otherwise avail5 able, individuals may be deemed to be affordable 

6 credit eligible individuals. In carrying this subtitle, 

7 the Commissioner shall establish effective methods 

8 that ensure that individuals with limited English 

9 proficiency are able to apply for affordability credits. 

10 (2) USE OF STATE MEDICAID AGENCIES.—If 

11 the Commissioner determines that a State Medicaid 

12 agency has the capacity to make a determination of 

13 eligibility for affordability credits under this subtitle 

14 and under the same standards as used by the Com15 missioner, under the Medicaid memorandum of un16 derstanding (as defined in section 205(c)(4))— 

17 (A) the State Medicaid agency is author18 ized to conduct such determinations for any Ex19 change-eligible individual who requests such a 

20 determination; and 

21 (B) the Commissioner shall reimburse the 

22 State Medicaid agency for the costs of con23 ducting such determinations. 

24 (3) MEDICAID SCREEN AND ENROLL OBLIGA25 TION.—In the case of an application made under 


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1 paragraph (1), there shall be a determination of 

2 whether the individual is a Medicaid-eligible indi3 vidual. If the individual is determined to be so eligi4 ble, the Commissioner, through the Medicaid memo5 randum of understanding, shall provide for the en6 rollment of the individual under the State Medicaid 

7 plan in accordance with the Medicaid memorandum 

8 of understanding. In the case of such an enrollment, 

9 the State shall provide for the same periodic redeter10 mination of eligibility under Medicaid as would oth11 erwise apply if the individual had directly applied for 

12 medical assistance to the State Medicaid agency. 

13 (c) USE OF AFFORDABILITY CREDITS.— 

14 (1) IN GENERAL.—In Y1 and Y2 an affordable 

15 credit eligible individual may use an affordability 

16 credit only with respect to a basic plan. 

17 (2) FLEXIBILITY IN PLAN ENROLLMENT AU18 THORIZED.—Beginning with Y3, the Commissioner 

19 shall establish a process to allow an affordability 

20 credit to be used for enrollees in enhanced or pre21 mium plans. In the case of an affordable credit eligi22 ble individual who enrolls in an enhanced or pre23 mium plan, the individual shall be responsible for 

24 any difference between the premium for such plan 


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1 and the affordability credit amount otherwise appli2 cable if the individual had enrolled in a basic plan. 

3 (d) ACCESS TO DATA.—In carrying out this subtitle, 

4 the Commissioner shall request from the Secretary of the 

5 Treasury consistent with section 6103 of the Internal Rev6 enue Code of 1986 such information as may be required 

7 to carry out this subtitle. 

8 (e) NO CASH REBATES.—In no case shall an afford9 able credit eligible individual receive any cash payment as 

10 a result of the application of this subtitle. 

11 SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. 

12 (a) DEFINITION.— 

13 (1) IN GENERAL.—For purposes of this subdivi14 sion, the term ‘‘affordable credit eligible individual’’ 

15 means, subject to subsection (b), an individual who 

16 is lawfully present in a State in the United States 

17 (other than as a nonimmigrant described in a sub18 paragraph (excluding subparagraphs (K), (T), (U), 

19 and (V)) of section 101(a)(15) of the Immigration 

20 and Nationality Act)— 

21 (A) who is enrolled under an Exchange22 participating health benefits plan and is not en23 rolled under such plan as an employee (or de24 pendent of an employee) through an employer 


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1 qualified health benefits plan that meets the re2 quirements of section 312; 

3 (B) with family income below 400 percent 

4 of the Federal poverty level for a family of the 

5 size involved; and 

6 (C) who is not a Medicaid eligible indi7 vidual, other than an individual described in 

8 section 202(d)(3) or an individual during a 

9 transition period under section 202(d)(4)(B)(ii). 

10 (2) TREATMENT OF FAMILY.—Except as the 

11 Commissioner may otherwise provide, members of 

12 the same family who are affordable credit eligible in13 dividuals shall be treated as a single affordable cred14 it individual eligible for the applicable credit for such 

15 a family under this subtitle. 

16 (b) LIMITATIONS ON EMPLOYEE AND DEPENDENT

17 DISQUALIFICATION.— 

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

19 the term ‘‘affordable credit eligible individual’’ does 

20 not include a full-time employee of an employer if 

21 the employer offers the employee coverage (for the 

22 employee and dependents) as a full-time employee 

23 under a group health plan if the coverage and em24 ployer contribution under the plan meet the require25 ments of section 312. 


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1 (2) EXCEPTIONS.— 

2 (A) FOR CERTAIN FAMILY CIR3 CUMSTANCES.—The Commissioner shall estab4 lish such exceptions and special rules in the 

5 case described in paragraph (1) as may be ap6 propriate in the case of a divorced or separated 

7 individual or such a dependent of an employee 

8 who would otherwise be an affordable credit eli9 gible individual. 

10 (B) FOR UNAFFORDABLE EMPLOYER COV11 ERAGE.—Beginning in Y2, in the case of full12 time employees for which the cost of the em13 ployee premium for coverage under a group 

14 health plan would exceed 11 percent of current 

15 family income (determined by the Commissioner 

16 on the basis of verifiable documentation and 

17 without regard to section 245), paragraph (1) 

18 shall not apply. 

19 (c) INCOME DEFINED.— 

20 (1) IN GENERAL.—In this title, the term ‘‘in21 come’’ means modified adjusted gross income (as de22 fined in section 59B of the Internal Revenue Code 

23 of 1986). 

24 (2) STUDY OF INCOME DISREGARDS.—The 

25 Commissioner shall conduct a study that examines 


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1 the application of income disregards for purposes of 

2 this subtitle. Not later than the first day of Y2, the 

3 Commissioner shall submit to Congress a report on 

4 such study and shall include such recommendations 

5 as the Commissioner determines appropriate. 

6 (d) CLARIFICATION OF TREATMENT OF AFFORD7 ABILITY CREDITS.—Affordability credits under this sub8 title shall not be treated, for purposes of title IV of the 

9 Personal Responsibility and Work Opportunity Reconcili10 ation Act of 1996, to be a benefit provided under section 

11 403 of such title. 

12 SEC. 243. AFFORDABILITY PREMIUM CREDIT. 

13 (a) IN GENERAL.—The affordability premium credit 

14 under this section for an affordable credit eligible indi15 vidual enrolled in an Exchange-participating health bene16 fits plan is in an amount equal to the amount (if any) 

17 by which the premium for the plan (or, if less, the ref18 erence premium amount specified in subsection (c)), ex19 ceeds the affordable premium amount specified in sub20 section (b) for the individual. 

21 (b) AFFORDABLE PREMIUM AMOUNT.— 

22 (1) IN GENERAL.—The affordable premium 

23 amount specified in this subsection for an individual 

24 for monthly premium in a plan year shall be equal 

to 1 25 ⁄12 of the product of— 


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1 (A) the premium percentage limit specified 

2 in paragraph (2) for the individual based upon 

3 the individual’s family income for the plan year; 

4 and 

5 (B) the individual’s family income for such 

6 plan year. 

7 (2) PREMIUM PERCENTAGE LIMITS BASED ON

8 TABLE.—The Commissioner shall establish premium 

9 percentage limits so that for individuals whose fam10 ily income is within an income tier specified in the 

11 table in subsection (d) such percentage limits shall 

12 increase, on a sliding scale in a linear manner, from 

13 the initial premium percentage to the final premium 

14 percentage specified in such table for such income 

15 tier. 

16 (c) REFERENCE PREMIUM AMOUNT.—The reference 

17 premium amount specified in this subsection for a plan 

18 year for an individual in a premium rating area is equal 

19 to the average premium for the 3 basic plans in the area 

20 for the plan year with the lowest premium levels. In com21 puting such amount the Commissioner may exclude plans 

22 with extremely limited enrollments. 

23 (d) TABLE OF PREMIUM PERCENTAGE LIMITS AND

24 ACTUARIAL VALUE PERCENTAGES BASED ON INCOME

25 TIER.— 


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1 (1) IN GENERAL.—For purposes of this sub2 title, the table specified in this subsection is as fol3 lows: 

In the case of family income (expressed as a 

percent of FPL) within 

the following income 

tier: 

The initial premium percentage is— The final premium percentage is— The actuarial 

value percentage is— 

133% through 150% 1.5% 3% 97% 

150% through 200% 3% 5% 93% 

200% through 250% 5% 7% 85% 

250% through 300% 7% 9% 78% 

300% through 350% 9% 10% 72% 

350% through 400% 10% 11% 70% 

4 (2) SPECIAL RULES.—For purposes of applying 

5 the table under paragraph (1)— 

6 (A) FOR LOWEST LEVEL OF INCOME.—In 

7 the case of an individual with income that does 

8 not exceed 133 percent of FPL, the individual 

9 shall be considered to have income that is 133% 

10 of FPL. 

11 (B) APPLICATION OF HIGHER ACTUARIAL

12 VALUE PERCENTAGE AT TIER TRANSITION

13 POINTS.—If two actuarial value percentages 

14 may be determined with respect to an indi15 vidual, the actuarial value percentage shall be 

16 the higher of such percentages. 

17 SEC. 244. AFFORDABILITY COST-SHARING CREDIT. 

18 (a) IN GENERAL.—The affordability cost-sharing 

19 credit under this section for an affordable credit eligible 

20 individual enrolled in an Exchange-participating health 


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1 benefits plan is in the form of the cost-sharing reduction 

2 described in subsection (b) provided under this section for 

3 the income tier in which the individual is classified based 

4 on the individual’s family income. 

5 (b) COST-SHARING REDUCTIONS.—The Commis6 sioner shall specify a reduction in cost-sharing amounts 

7 and the annual limitation on cost-sharing specified in sec8 tion 122(c)(2)(B) under a basic plan for each income tier 

9 specified in the table under section 243(d), with respect 

10 to a year, in a manner so that, as estimated by the Com11 missioner, the actuarial value of the coverage with such 

12 reduced cost-sharing amounts (and the reduced annual 

13 cost-sharing limit) is equal to the actuarial value percent14 age (specified in the table under section 243(d) for the 

15 income tier involved) of the full actuarial value if there 

16 were no cost-sharing imposed under the plan. 

17 (c) DETERMINATION AND PAYMENT OF COST-SHAR18 ING AFFORDABILITY CREDIT.—In the case of an afford19 able credit eligible individual in a tier enrolled in an Ex20 change-participating health benefits plan offered by a 

21 QHBP offering entity, the Commissioner shall provide for 

22 payment to the offering entity of an amount equivalent 

23 to the increased actuarial value of the benefits under the 

24 plan provided under section 203(c)(2)(B) resulting from 

25 the reduction in cost-sharing described in subsection (b). 


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1 SEC. 245. INCOME DETERMINATIONS. 

2 (a) IN GENERAL.—In applying this subtitle for an 

3 affordability credit for an individual for a plan year, the 

4 individual’s income shall be the income (as defined in sec5 tion 242(c)) for the individual for the most recent taxable 

6 year (as determined in accordance with rules of the Com7 missioner). The Federal poverty level applied shall be such 

8 level in effect as of the date of the application. 

9 (b) PROGRAM INTEGRITY; INCOME VERIFICATION

10 PROCEDURES.— 

11 (1) PROGRAM INTEGRITY.—The Commissioner 

12 shall take such steps as may be appropriate to en13 sure the accuracy of determinations and redeter14 minations under this subtitle. 

15 (2) INCOME VERIFICATION.— 

16 (A) IN GENERAL.—Upon an initial applica17 tion of an individual for an affordability credit 

18 under this subtitle (or in applying section 

19 242(b)) or upon an application for a change in 

20 the affordability credit based upon a significant 

21 change in family income described in subpara22 graph (A)— 

23 (i) the Commissioner shall request 

24 from the Secretary of the Treasury the dis25 closure to the Commissioner of such infor26 mation as may be permitted to verify the 


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1 information contained in such application; 

2 and 

3 (ii) the Commissioner shall use the in4 formation so disclosed to verify such infor5 mation. 

6 (B) ALTERNATIVE PROCEDURES.—The 

7 Commissioner shall establish procedures for the 

8 verification of income for purposes of this sub9 title if no income tax return is available for the 

10 most recent completed tax year. 

11 (c) SPECIAL RULES.— 

12 (1) CHANGES IN INCOME AS A PERCENT OF

13 FPL.—In the case that an individual’s income (ex14 pressed as a percentage of the Federal poverty level 

15 for a family of the size involved) for a plan year is 

16 expected (in a manner specified by the Commis17 sioner) to be significantly different from the income 

18 (as so expressed) used under subsection (a), the 

19 Commissioner shall establish rules requiring an indi20 vidual to report, consistent with the mechanism es21 tablished under paragraph (2), significant changes 

22 in such income (including a significant change in 

23 family composition) to the Commissioner and requir24 ing the substitution of such income for the income 

25 otherwise applicable. 


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1 (2) REPORTING OF SIGNIFICANT CHANGES IN

2 INCOME.—The Commissioner shall establish rules 

3 under which an individual determined to be an af4 fordable credit eligible individual would be required 

5 to inform the Commissioner when there is a signifi6 cant change in the family income of the individual 

7 (expressed as a percentage of the FPL for a family 

8 of the size involved) and of the information regard9 ing such change. Such mechanism shall provide for 

10 guidelines that specify the circumstances that qual11 ify as a significant change, the verifiable information 

12 required to document such a change, and the process 

13 for submission of such information. If the Commis14 sioner receives new information from an individual 

15 regarding the family income of the individual, the 

16 Commissioner shall provide for a redetermination of 

17 the individual’s eligibility to be an affordable credit 

18 eligible individual. 

19 (3) TRANSITION FOR CHIP.—In the case of a 

20 child described in section 202(d)(2), the Commis21 sioner shall establish rules under which the family 

22 income of the child is deemed to be no greater than 

23 the family income of the child as most recently de24 termined before Y1 by the State under title XXI of 

25 the Social Security Act. 


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1 (4) STUDY OF GEOGRAPHIC VARIATION IN AP2 PLICATION OF FPL.—The Commissioner shall exam3 ine the feasibility and implication of adjusting the 

4 application of the Federal poverty level under this 

5 subtitle for different geographic areas so as to re6 flect the variations in cost-of-living among different 

7 areas within the United States. If the Commissioner 

8 determines that an adjustment is feasible, the study 

9 should include a methodology to make such an ad10 justment. Not later than the first day of Y2, the 

11 Commissioner shall submit to Congress a report on 

12 such study and shall include such recommendations 

13 as the Commissioner determines appropriate. 

14 (d) PENALTIES FOR MISREPRESENTATION.—In the 

15 case of an individual intentionally misrepresents family in16 come or the individual fails (without regard to intent) to 

17 disclose to the Commissioner a significant change in fam18 ily income under subsection (c) in a manner that results 

19 in the individual becoming an affordable credit eligible in20 dividual when the individual is not or in the amount of 

21 the affordability credit exceeding the correct amount— 

22 (1) the individual is liable for repayment of the 

23 amount of the improper affordability credit; ;and 

24 (2) in the case of such an intentional misrepre25 sentation or other egregious circumstances specified 


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1 by the Commissioner, the Commissioner may impose 

2 an additional penalty. 

3 SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED 

4 ALIENS. 

5 Nothing in this subtitle shall allow Federal payments 

6 for affordability credits on behalf of individuals who are 

7 not lawfully present in the United States. 

8 TITLE III—SHARED 

9 RESPONSIBILITY 

10 Subtitle A—Individual 

11 Responsibility 

12 SEC. 301. INDIVIDUAL RESPONSIBILITY. 

13 For an individual’s responsibility to obtain acceptable 

14 coverage, see section 59B of the Internal Revenue Code 

15 of 1986 (as added by section 401 of this division). 

16 Subtitle B—Employer 

17 Responsibility 

18 PART 1—HEALTH COVERAGE PARTICIPATION 

19 REQUIREMENTS 

20 SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE21 MENTS. 

22 An employer meets the requirements of this section 

23 if such employer does all of the following: 

24 (1) OFFER OF COVERAGE.—The employer of25 fers each employee individual and family coverage 


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1 under a qualified health benefits plan (or under a 

2 current employment-based health plan (within the 

3 meaning of section 102(b))) in accordance with sec4 tion 312. 

5 (2) CONTRIBUTION TOWARDS COVERAGE.—If 

6 an employee accepts such offer of coverage, the em7 ployer makes timely contributions towards such cov8 erage in accordance with section 312. 

9 (3) CONTRIBUTION IN LIEU OF COVERAGE.— 

10 Beginning with Y2, if an employee declines such 

11 offer but otherwise obtains coverage in an Exchange12 participating health benefits plan (other than by rea13 son of being covered by family coverage as a spouse 

14 or dependent of the primary insured), the employer 

15 shall make a timely contribution to the Health In16 surance Exchange with respect to each such em17 ployee in accordance with section 313. 

18 SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TO19 WARDS EMPLOYEE AND DEPENDENT COV20 ERAGE. 

21 (a) IN GENERAL.—An employer meets the require22 ments of this section with respect to an employee if the 

23 following requirements are met: 

24 (1) OFFERING OF COVERAGE.—The employer 

25 offers the coverage described in section 311(1) either 


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1 through an Exchange-participating health benefits 

2 plan or other than through such a plan. 

3 (2) EMPLOYER REQUIRED CONTRIBUTION.— 

4 The employer timely pays to the issuer of such cov5 erage an amount not less than the employer required 

6 contribution specified in subsection (b) for such cov7 erage. 

8 (3) PROVISION OF INFORMATION.—The em9 ployer provides the Health Choices Commissioner, 

10 the Secretary of Labor, the Secretary of Health and 

11 Human Services, and the Secretary of the Treasury, 

12 as applicable, with such information as the Commis13 sioner may require to ascertain compliance with the 

14 requirements of this section. 

15 (4) AUTOENROLLMENT OF EMPLOYEES.—The 

16 employer provides for autoenrollment of the em17 ployee in accordance with subsection (c). 

18 (b) REDUCTION OF EMPLOYEE PREMIUMS THROUGH

19 MINIMUM EMPLOYER CONTRIBUTION.— 

20 (1) FULL-TIME EMPLOYEES.—The minimum 

21 employer contribution described in this subsection 

22 for coverage of a full-time employee (and, if any, the 

23 employee’s spouse and qualifying children (as de24 fined in section 152(c) of the Internal Revenue Code 


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1 of 1986) under a qualified health benefits plan (or 

2 current employment-based health plan) is equal to— 

3 (A) in case of individual coverage, not less 

4 than 72.5 percent of the applicable premium 

5 (as defined in section 4980B(f)(4) of such 

6 Code, subject to paragraph (2)) of the lowest 

7 cost plan offered by the employer that is a 

8 qualified health benefits plan (or is such cur9 rent employment-based health plan); and 

10 (B) in the case of family coverage which 

11 includes coverage of such spouse and children, 

12 not less 65 percent of such applicable premium 

13 of such lowest cost plan. 

14 (2) APPLICABLE PREMIUM FOR EXCHANGE COV15 ERAGE.—In this subtitle, the amount of the applica16 ble premium of the lowest cost plan with respect to 

17 coverage of an employee under an Exchange-partici18 pating health benefits plan is the reference premium 

19 amount under section 243(c) for individual coverage 

20 (or, if elected, family coverage) for the premium rat21 ing area in which the individual or family resides. 

22 (3) MINIMUM EMPLOYER CONTRIBUTION FOR

23 EMPLOYEES OTHER THAN FULL-TIME EMPLOY24 EES.—In the case of coverage for an employee who 

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1 imum employer contribution under this subsection 

2 shall be a proportion (as determined in accordance 

3 with rules of the Health Choices Commissioner, the 

4 Secretary of Labor, the Secretary of Health and 

5 Human Services, and the Secretary of the Treasury, 

6 as applicable) of the minimum employer contribution 

7 under this subsection with respect to a full-time em8 ployee that reflects the proportion of— 

9 (A) the average weekly hours of employ10 ment of the employee by the employer, to 

11 (B) the minimum weekly hours specified 

12 by the Commissioner for an employee to be a 

13 full-time employee. 

14 (4) SALARY REDUCTIONS NOT TREATED AS EM15 PLOYER CONTRIBUTIONS.—For purposes of this sec16 tion, any contribution on behalf of an employee with 

17 respect to which there is a corresponding reduction 

18 in the compensation of the employee shall not be 

19 treated as an amount paid by the employer. 

20 (c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPON21 SORED HEALTH BENEFITS.— 

22 (1) IN GENERAL.—The requirement of this sub23 section with respect to an employer and an employee 

24 is that the employer automatically enroll such em25 ployee into the employment-based health benefits 


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1 plan for individual coverage under the plan option 

2 with the lowest applicable employee premium. 

3 (2) OPT-OUT.—In no case may an employer 

4 automatically enroll an employee in a plan under 

5 paragraph (1) if such employee makes an affirmative 

6 election to opt out of such plan or to elect coverage 

7 under an employment-based health benefits plan of8 fered by such employer. An employer shall provide 

9 an employee with a 30-day period to make such an 

10 affirmative election before the employer may auto11 matically enroll the employee in such a plan. 

12 (3) NOTICE REQUIREMENTS.— 

13 (A) IN GENERAL.—Each employer de14 scribed in paragraph (1) who automatically en15 rolls an employee into a plan as described in 

16 such paragraph shall provide the employees, 

17 within a reasonable period before the beginning 

18 of each plan year (or, in the case of new em19 ployees, within a reasonable period before the 

20 end of the enrollment period for such a new em21 ployee), written notice of the employees’ rights 

22 and obligations relating to the automatic enroll23 ment requirement under such paragraph. Such 

24 notice must be comprehensive and understood 


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1 by the average employee to whom the automatic 

2 enrollment requirement applies. 

3 (B) INCLUSION OF SPECIFIC INFORMA4 TION.—The written notice under subparagraph 

5 (A) must explain an employee’s right to opt out 

6 of being automatically enrolled in a plan and in 

7 the case that more than one level of benefits or 

8 employee premium level is offered by the em9 ployer involved, the notice must explain which 

10 level of benefits and employee premium level the 

11 employee will be automatically enrolled in the 

12 absence of an affirmative election by the em13 ployee. 

14 SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV15 ERAGE. 

16 (a) IN GENERAL.—A contribution is made in accord17 ance with this section with respect to an employee if such 

18 contribution is equal to an amount equal to 8 percent of 

19 the average wages paid by the employer during the period 

20 of enrollment (determined by taking into account all em21 ployees of the employer and in such manner as the Com22 missioner provides, including rules providing for the ap23 propriate aggregation of related employers). Any such con24 tribution— 


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1 (1) shall be paid to the Health Choices Com2 missioner for deposit into the Health Insurance Ex3 change Trust Fund, and 

4 (2) shall not be applied against the premium of 

5 the employee under the Exchange-participating 

6 health benefits plan in which the employee is en7 rolled. 

8 (b) SPECIAL RULES FOR SMALL EMPLOYERS.— 

9 (1) IN GENERAL.—In the case of any employer 

10 who is a small employer for any calendar year, sub11 section (a) shall be applied by substituting the appli12 cable percentage determined in accordance with the 

13 following table for ‘‘8 percent’’: 

If the annual payroll of such employer for 

the preceding calendar year: 

The applicable 

percentage is: 

Does not exceed $250,000 ..................................... 0 percent 

Exceeds $250,000, but does not exceed $300,000 2 percent 

Exceeds $300,000, but does not exceed $350,000 4 percent 

Exceeds $350,000, but does not exceed $400,000 6 percent 

14 (2) SMALL EMPLOYER.—For purposes of this 

15 subsection, the term ‘‘small employer’’ means any 

16 employer for any calendar year if the annual payroll 

17 of such employer for the preceding calendar year 

18 does not exceed $400,000. 

19 (3) ANNUAL PAYROLL.—For purposes of this 

20 paragraph, the term ‘‘annual payroll’’ means, with 

21 respect to any employer for any calendar year, the 


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1 aggregate wages paid by the employer during such 

2 calendar year. 

3 (4) AGGREGATION RULES.—Related employers 

4 and predecessors shall be treated as a single em5 ployer for purposes of this subsection. 

6 SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING. 

7 The Health Choices Commissioner (in coordination 

8 with the Secretary of Labor, the Secretary of Health and 

9 Human Services, and the Secretary of the Treasury) shall 

10 have authority to set standards for determining whether 

11 employers or insurers are undertaking any actions to af12 fect the risk pool within the Health Insurance Exchange 

13 by inducing individuals to decline coverage under a quali14 fied health benefits plan (or current employment-based 

15 health plan (within the meaning of section 102(b)) offered 

16 by the employer and instead to enroll in an Exchange-par17 ticipating health benefits plan. An employer violating such 

18 standards shall be treated as not meeting the require19 ments of this section. 


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1 PART 2—SATISFACTION OF HEALTH COVERAGE 

2 PARTICIPATION REQUIREMENTS 

3 SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICI4 PATION REQUIREMENTS UNDER THE EM5 PLOYEE RETIREMENT INCOME SECURITY 

6 ACT OF 1974. 

7 (a) IN GENERAL.—Subtitle B of title I of the Em8 ployee Retirement Income Security Act of 1974 is amend9 ed by adding at the end the following new part: 

10 ‘‘PART 8—NATIONAL HEALTH COVERAGE 

11 PARTICIPATION REQUIREMENTS 

12 ‘‘SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NA13 TIONAL HEALTH COVERAGE PARTICIPATION 

14 REQUIREMENTS. 

15 ‘‘(a) IN GENERAL.—An employer may make an elec16 tion with the Secretary to be subject to the health coverage 

17 participation requirements. 

18 ‘‘(b) TIME AND MANNER.—An election under sub19 section (a) may be made at such time and in such form 

20 and manner as the Secretary may prescribe. 

21 ‘‘SEC. 802. TREATMENT OF COVERAGE RESULTING FROM 

22 ELECTION. 

23 ‘‘(a) IN GENERAL.—If an employer makes an election 

24 to the Secretary under section 801— 

25 ‘‘(1) such election shall be treated as the estab26 lishment and maintenance of a group health plan (as 


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1 defined in section 733(a)) for purposes of this title, 

2 subject to section 151 of the America’s Affordable 

3 Health Choices Act of 2009, and 

4 ‘‘(2) the health coverage participation require5 ments shall be deemed to be included as terms and 

6 conditions of such plan. 

7 ‘‘(b) PERIODIC INVESTIGATIONS TO DISCOVER NON8 COMPLIANCE.—The Secretary shall regularly audit a rep9 resentative sampling of employers and group health plans 

10 and conduct investigations and other activities under sec11 tion 504 with respect to such sampling of plans so as to 

12 discover noncompliance with the health coverage participa13 tion requirements in connection with such plans. The Sec14 retary shall communicate findings of noncompliance made 

15 by the Secretary under this subsection to the Secretary 

16 of the Treasury and the Health Choices Commissioner. 

17 The Secretary shall take such timely enforcement action 

18 as appropriate to achieve compliance. 

19 ‘‘SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIRE20 MENTS. 

21 ‘‘For purposes of this part, the term ‘health coverage 

22 participation requirements’ means the requirements of 

23 part 1 of subtitle B of title III of subdivision A of Amer24 ica’s Affordable Health Choices Act of 2009 (as in effect 

25 on the date of the enactment of such Act). 


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1 ‘‘SEC. 804. RULES FOR APPLYING REQUIREMENTS. 

2 ‘‘(a) AFFILIATED GROUPS.—In the case of any em3 ployer which is part of a group of employers who are treat4 ed as a single employer under subsection (b), (c), (m), or 

5 (o) of section 414 of the Internal Revenue Code of 1986, 

6 the election under section 801 shall be made by such em7 ployer as the Secretary may provide. Any such election, 

8 once made, shall apply to all members of such group. 

9 ‘‘(b) SEPARATE ELECTIONS.—Under regulations pre10 scribed by the Secretary, separate elections may be made 

11 under section 801 with respect to— 

12 ‘‘(1) separate lines of business, and 

13 ‘‘(2) full-time employees and employees who are 

14 not full-time employees. 

15 ‘‘SEC. 805. TERMINATION OF ELECTION IN CASES OF SUB16 STANTIAL NONCOMPLIANCE. 

17 ‘‘The Secretary may terminate the election of any em18 ployer under section 801 if the Secretary (in coordination 

19 with the Health Choices Commissioner) determines that 

20 such employer is in substantial noncompliance with the 

21 health coverage participation requirements and shall refer 

22 any such determination to the Secretary of the Treasury 

23 as appropriate. 

24 ‘‘SEC. 806. REGULATIONS. 

25 ‘‘The Secretary may promulgate such regulations as 

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1 sions of this part, in accordance with section 324(a) of 

2 the America’s Affordable Health Choices Act of 2009. The 

3 Secretary may promulgate any interim final rules as the 

4 Secretary determines are appropriate to carry out this 

5 part.’’. 

6 (b) ENFORCEMENT OF HEALTH COVERAGE PARTICI7 PATION REQUIREMENTS.—Section 502 of such Act (29 

8 U.S.C. 1132) is amended— 

9 (1) in subsection (a)(6), by striking ‘‘para10 graph’’ and all that follows through ‘‘subsection (c)’’ 

11 and inserting ‘‘paragraph (2), (4), (5), (6), (7), (8), 

12 (9), (10), or (11) of subsection (c)’’; and 

13 (2) in subsection (c), by redesignating the sec14 ond paragraph (10) as paragraph (12) and by in15 serting after the first paragraph (10) the following 

16 new paragraph: 

17 ‘‘(11) HEALTH COVERAGE PARTICIPATION RE18 QUIREMENTS.— 

19 ‘‘(A) CIVIL PENALTIES.—In the case of 

20 any employer who fails (during any period with 

21 respect to which an election under section 

22 801(a) is in effect) to satisfy the health cov23 erage participation requirements with respect to 

24 any employee, the Secretary may assess a civil 

25 penalty against the employer of $100 for each 


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1 day in the period beginning on the date such 

2 failure first occurs and ending on the date such 

3 failure is corrected. 

4 ‘‘(B) HEALTH COVERAGE PARTICIPATION

5 REQUIREMENTS.—For purposes of this para6 graph, the term ‘health coverage participation 

7 requirements’ has the meaning provided in sec8 tion 803. 

9 ‘‘(C) LIMITATIONS ON AMOUNT OF PEN10 ALTY.— 

11 ‘‘(i) PENALTY NOT TO APPLY WHERE

12 FAILURE NOT DISCOVERED EXERCISING

13 REASONABLE DILIGENCE.—No penalty 

14 shall be assessed under subparagraph (A) 

15 with respect to any failure during any pe16 riod for which it is established to the satis17 faction of the Secretary that the employer 

18 did not know, or exercising reasonable dili19 gence would not have known, that such 

20 failure existed. 

21 ‘‘(ii) PENALTY NOT TO APPLY TO

22 FAILURES CORRECTED WITHIN 30 DAYS.— 

23 No penalty shall be assessed under sub24 paragraph (A) with respect to any failure 

25 if— 


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1 ‘‘(I) such failure was due to rea2 sonable cause and not to willful ne3 glect, and 

4 ‘‘(II) such failure is corrected 

5 during the 30-day period beginning on 

6 the 1st date that the employer knew, 

7 or exercising reasonable diligence 

8 would have known, that such failure 

9 existed. 

10 ‘‘(iii) OVERALL LIMITATION FOR UN11 INTENTIONAL FAILURES.—In the case of 

12 failures which are due to reasonable cause 

13 and not to willful neglect, the penalty as14 sessed under subparagraph (A) for failures 

15 during any 1-year period shall not exceed 

16 the amount equal to the lesser of— 

17 ‘‘(I) 10 percent of the aggregate 

18 amount paid or incurred by the em19 ployer (or predecessor employer) dur20 ing the preceding 1-year period for 

21 group health plans, or 

22 ‘‘(II) $500,000. 

23 ‘‘(D) ADVANCE NOTIFICATION OF FAILURE

24 PRIOR TO ASSESSMENT.—Before a reasonable 

25 time prior to the assessment of any penalty 


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1 under this paragraph with respect to any failure 

2 by an employer, the Secretary shall inform the 

3 employer in writing of such failure and shall 

4 provide the employer information regarding ef5 forts and procedures which may be undertaken 

6 by the employer to correct such failure. 

7 ‘‘(E) COORDINATION WITH EXCISE TAX.— 

8 Under regulations prescribed in accordance 

9 with section 324 of the America’s Affordable 

10 Health Choices Act of 2009, the Secretary and 

11 the Secretary of the Treasury shall coordinate 

12 the assessment of penalties under this section 

13 in connection with failures to satisfy health cov14 erage participation requirements with the impo15 sition of excise taxes on such failures under sec16 tion 4980H(b) of the Internal Revenue Code of 

17 1986 so as to avoid duplication of penalties 

18 with respect to such failures. 

19 ‘‘(F) DEPOSIT OF PENALTY COLLECTED.— 

20 Any amount of penalty collected under this 

21 paragraph shall be deposited as miscellaneous 

22 receipts in the Treasury of the United States.’’. 

23 (c) CLERICAL AMENDMENTS.—The table of contents 

24 in section 1 of such Act is amended by inserting after the 

25 item relating to section 734 the following new items: 

‘‘PART 8—NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS


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‘‘Sec. 801. Election of employer to be subject to national health coverage participation requirements. 

‘‘Sec. 802. Treatment of coverage resulting from election. 

‘‘Sec. 803. Health coverage participation requirements. 

‘‘Sec. 804. Rules for applying requirements. 

‘‘Sec. 805. Termination of election in cases of substantial noncompliance. 

‘‘Sec. 806. Regulations.’’. 

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

2 this section shall apply to periods beginning after Decem3 ber 31, 2012. 

4 SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICI5 PATION REQUIREMENTS UNDER THE INTER6 NAL REVENUE CODE OF 1986. 

7 (a) FAILURE TO ELECT, OR SUBSTANTIALLY COM8 PLY WITH, HEALTH COVERAGE PARTICIPATION RE9 QUIREMENTS.—For employment tax on employers who fail 

10 to elect, or substantially comply with, the health coverage 

11 participation requirements described in part 1, see section 

12 3111(c) of the Internal Revenue Code of 1986 (as added 

13 by section 412 of this division). 

14 (b) OTHER FAILURES.—For excise tax on other fail15 ures of electing employers to comply with such require16 ments, see section 4980H of the Internal Revenue Code 

17 of 1986 (as added by section 411 of this division). 


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1 SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICI2 PATION REQUIREMENTS UNDER THE PUBLIC 

3 HEALTH SERVICE ACT. 

4 (a) IN GENERAL.—Part C of title XXVII of the Pub5 lic Health Service Act is amended by adding at the end 

6 the following new section: 

7 ‘‘SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION 

8 REQUIREMENTS. 

9 ‘‘(a) ELECTION OF EMPLOYER TO BE SUBJECT TO

10 NATIONAL HEALTH COVERAGE PARTICIPATION REQUIRE11 MENTS.— 

12 ‘‘(1) IN GENERAL.—An employer may make an 

13 election with the Secretary to be subject to the 

14 health coverage participation requirements. 

15 ‘‘(2) TIME AND MANNER.—An election under 

16 paragraph (1) may be made at such time and in 

17 such form and manner as the Secretary may pre18 scribe. 

19 ‘‘(b) TREATMENT OF COVERAGE RESULTING FROM

20 ELECTION.— 

21 ‘‘(1) IN GENERAL.—If an employer makes an 

22 election to the Secretary under subsection (a)— 

23 ‘‘(A) such election shall be treated as the 

24 establishment and maintenance of a group 

25 health plan for purposes of this title, subject to 


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1 section 151 of the America’s Affordable Health 

2 Choices Act of 2009, and 

3 ‘‘(B) the health coverage participation re4 quirements shall be deemed to be included as 

5 terms and conditions of such plan. 

6 ‘‘(2) PERIODIC INVESTIGATIONS TO DETERMINE

7 COMPLIANCE WITH HEALTH COVERAGE PARTICIPA8 TION REQUIREMENTS.—The Secretary shall regu9 larly audit a representative sampling of employers 

10 and conduct investigations and other activities with 

11 respect to such sampling of employers so as to dis12 cover noncompliance with the health coverage par13 ticipation requirements in connection with such em14 ployers (during any period with respect to which an 

15 election under subsection (a) is in effect). The Sec16 retary shall communicate findings of noncompliance 

17 made by the Secretary under this subsection to the 

18 Secretary of the Treasury and the Health Choices 

19 Commissioner. The Secretary shall take such timely 

20 enforcement action as appropriate to achieve compli21 ance. 

22 ‘‘(c) HEALTH COVERAGE PARTICIPATION REQUIRE23 MENTS.—For purposes of this section, the term ‘health 

24 coverage participation requirements’ means the require25 ments of part 1 of subtitle B of title III of subdivision 


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1 A of the America’s Affordable Health Choices Act of 2009 

2 (as in effect on the date of the enactment of this section). 

3 ‘‘(d) SEPARATE ELECTIONS.—Under regulations pre4 scribed by the Secretary, separate elections may be made 

5 under subsection (a) with respect to full-time employees 

6 and employees who are not full-time employees. 

7 ‘‘(e) TERMINATION OF ELECTION IN CASES OF SUB8 STANTIAL NONCOMPLIANCE.—The Secretary may termi9 nate the election of any employer under subsection (a) if 

10 the Secretary (in coordination with the Health Choices 

11 Commissioner) determines that such employer is in sub12 stantial noncompliance with the health coverage participa13 tion requirements and shall refer any such determination 

14 to the Secretary of the Treasury as appropriate. 

15 ‘‘(f) ENFORCEMENT OF HEALTH COVERAGE PAR16 TICIPATION REQUIREMENTS.— 

17 ‘‘(1) CIVIL PENALTIES.—In the case of any em18 ployer who fails (during any period with respect to 

19 which the election under subsection (a) is in effect) 

20 to satisfy the health coverage participation require21 ments with respect to any employee, the Secretary 

22 may assess a civil penalty against the employer of 

23 $100 for each day in the period beginning on the 

24 date such failure first occurs and ending on the date 

25 such failure is corrected. 


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1 ‘‘(2) LIMITATIONS ON AMOUNT OF PENALTY.— 

2 ‘‘(A) PENALTY NOT TO APPLY WHERE

3 FAILURE NOT DISCOVERED EXERCISING REA4 SONABLE DILIGENCE.—No penalty shall be as5 sessed under paragraph (1) with respect to any 

6 failure during any period for which it is estab7 lished to the satisfaction of the Secretary that 

8 the employer did not know, or exercising rea9 sonable diligence would not have known, that 

10 such failure existed. 

11 ‘‘(B) PENALTY NOT TO APPLY TO FAIL12 URES CORRECTED WITHIN 30 DAYS.—No pen13 alty shall be assessed under paragraph (1) with 

14 respect to any failure if— 

15 ‘‘(i) such failure was due to reason16 able cause and not to willful neglect, and 

17 ‘‘(ii) such failure is corrected during 

18 the 30-day period beginning on the 1st 

19 date that the employer knew, or exercising 

20 reasonable diligence would have known, 

21 that such failure existed. 

22 ‘‘(C) OVERALL LIMITATION FOR UNINTEN23 TIONAL FAILURES.—In the case of failures 

24 which are due to reasonable cause and not to 

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1 graph (1) for failures during any 1-year period 

2 shall not exceed the amount equal to the lesser 

3 of— 

4 ‘‘(i) 10 percent of the aggregate 

5 amount paid or incurred by the employer 

6 (or predecessor employer) during the pre7 ceding taxable year for group health plans, 

8 or 

9 ‘‘(ii) $500,000. 

10 ‘‘(3) ADVANCE NOTIFICATION OF FAILURE

11 PRIOR TO ASSESSMENT.—Before a reasonable time 

12 prior to the assessment of any penalty under para13 graph (1) with respect to any failure by an em14 ployer, the Secretary shall inform the employer in 

15 writing of such failure and shall provide the em16 ployer information regarding efforts and procedures 

17 which may be undertaken by the employer to correct 

18 such failure. 

19 ‘‘(4) ACTIONS TO ENFORCE ASSESSMENTS.— 

20 The Secretary may bring a civil action in any Dis21 trict Court of the United States to collect any civil 

22 penalty under this subsection. 

23 ‘‘(5) COORDINATION WITH EXCISE TAX.— 

24 Under regulations prescribed in accordance with sec25 tion 324 of the America’s Affordable Health Choices 


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1 Act of 2009, the Secretary and the Secretary of the 

2 Treasury shall coordinate the assessment of pen3 alties under paragraph (1) in connection with fail4 ures to satisfy health coverage participation require5 ments with the imposition of excise taxes on such 

6 failures under section 4980H(b) of the Internal Rev7 enue Code of 1986 so as to avoid duplication of pen8 alties with respect to such failures. 

9 ‘‘(6) DEPOSIT OF PENALTY COLLECTED.—Any 

10 amount of penalty collected under this subsection 

11 shall be deposited as miscellaneous receipts in the 

12 Treasury of the United States. 

13 ‘‘(g) REGULATIONS.—The Secretary may promulgate 

14 such regulations as may be necessary or appropriate to 

15 carry out the provisions of this section, in accordance with 

16 section 324(a) of the America’s Affordable Health Choices 

17 Act of 2009. The Secretary may promulgate any interim 

18 final rules as the Secretary determines are appropriate to 

19 carry out this section.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 subsection (a) shall apply to periods beginning after De22 cember 31, 2012. 


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1 SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COV2 ERAGE PARTICIPATION REQUIREMENTS. 

3 (a) ASSURING COORDINATION.—The officers con4 sisting of the Secretary of Labor, the Secretary of the 

5 Treasury, the Secretary of Health and Human Services, 

6 and the Health Choices Commissioner shall ensure, 

7 through the execution of an interagency memorandum of 

8 understanding among such officers, that— 

9 (1) regulations, rulings, and interpretations 

10 issued by such officers relating to the same matter 

11 over which two or more of such officers have respon12 sibility under subpart B of part 6 of subtitle B of 

13 title I of the Employee Retirement Income Security 

14 Act of 1974, section 4980H of the Internal Revenue 

15 Code of 1986, and section 2793 of the Public Health 

16 Service Act are administered so as to have the same 

17 effect at all times; and 

18 (2) coordination of policies relating to enforcing 

19 the same requirements through such officers in 

20 order to have a coordinated enforcement strategy 

21 that avoids duplication of enforcement efforts and 

22 assigns priorities in enforcement. 

23 (b) MULTIEMPLOYER PLANS.—In the case of a group 

24 health plan that is a multiemployer plan (as defined in 

25 section 3(37) of the Employee Retirement Income Secu26 rity Act of 1974), the regulations prescribed in accordance 


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1 with subsection (a) by the officers referred to in subsection 

2 (a) shall provide for the application of the health coverage 

3 participation requirements to the plan sponsor and con4 tributing sponsors of such plan. 

5 TITLE IV—AMENDMENTS TO IN6 TERNAL REVENUE CODE OF 

7 1986 

8 Subtitle A—Shared Responsibility 

9 PART 1—INDIVIDUAL RESPONSIBILITY 

10 SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE 

11 HEALTH CARE COVERAGE. 

12 (a) IN GENERAL.—Subchapter A of chapter 1 of the 

13 Internal Revenue Code of 1986 is amended by adding at 

14 the end the following new part: 

15 ‘‘PART VIII—HEALTH CARE RELATED TAXES 

‘‘SUBPART A. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE

COVERAGE. 

16 ‘‘Subpart A—Tax on Individuals Without Acceptable 

17 Health Care Coverage 

‘‘Sec. 59B. Tax on individuals without acceptable health care coverage. 

18 ‘‘SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE 

19 HEALTH CARE COVERAGE. 

20 ‘‘(a) TAX IMPOSED.—In the case of any individual 

21 who does not meet the requirements of subsection (d) at 

22 any time during the taxable year, there is hereby imposed 

23 a tax equal to 2.5 percent of the excess of— 


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1 ‘‘(1) the taxpayer’s modified adjusted gross in2 come for the taxable year, over 

3 ‘‘(2) the amount of gross income specified in 

4 section 6012(a)(1) with respect to the taxpayer. 

5 ‘‘(b) LIMITATIONS.— 

6 ‘‘(1) TAX LIMITED TO AVERAGE PREMIUM.— 

7 ‘‘(A) IN GENERAL.—The tax imposed 

8 under subsection (a) with respect to any tax9 payer for any taxable year shall not exceed the 

10 applicable national average premium for such 

11 taxable year. 

12 ‘‘(B) APPLICABLE NATIONAL AVERAGE

13 PREMIUM.— 

14 ‘‘(i) IN GENERAL.—For purposes of 

15 subparagraph (A), the ‘applicable national 

16 average premium’ means, with respect to 

17 any taxable year, the average premium (as 

18 determined by the Secretary, in coordina19 tion with the Health Choices Commis20 sioner) for self-only coverage under a basic 

21 plan which is offered in a Health Insur22 ance Exchange for the calendar year in 

23 which such taxable year begins. 

24 ‘‘(ii) FAILURE TO PROVIDE COVERAGE

25 FOR MORE THAN ONE INDIVIDUAL.—In the 


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1 case of any taxpayer who fails to meet the 

2 requirements of subsection (e) with respect 

3 to more than one individual during the tax4 able year, clause (i) shall be applied by 

5 substituting ‘family coverage’ for ‘self-only 

6 coverage’. 

7 ‘‘(2) PRORATION FOR PART YEAR FAILURES.— 

8 The tax imposed under subsection (a) with respect 

9 to any taxpayer for any taxable year shall not exceed 

10 the amount which bears the same ratio to the 

11 amount of tax so imposed (determined without re12 gard to this paragraph and after application of para13 graph (1)) as— 

14 ‘‘(A) the aggregate periods during such 

15 taxable year for which such individual failed to 

16 meet the requirements of subsection (d), bears 

17 to 

18 ‘‘(B) the entire taxable year. 

19 ‘‘(c) EXCEPTIONS.— 

20 ‘‘(1) DEPENDENTS.—Subsection (a) shall not 

21 apply to any individual for any taxable year if a de22 duction is allowable under section 151 with respect 

23 to such individual to another taxpayer for any tax24 able year beginning in the same calendar year as 

25 such taxable year. 


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1 ‘‘(2) NONRESIDENT ALIENS.—Subsection (a) 

2 shall not apply to any individual who is a non3 resident alien. 

4 ‘‘(3) INDIVIDUALS RESIDING OUTSIDE UNITED

5 STATES.—Any qualified individual (as defined in 

6 section 911(d)) (and any qualifying child residing 

7 with such individual) shall be treated for purposes of 

8 this section as covered by acceptable coverage during 

9 the period described in subparagraph (A) or (B) of 

10 section 911(d)(1), whichever is applicable. 

11 ‘‘(4) INDIVIDUALS RESIDING IN POSSESSIONS

12 OF THE UNITED STATES.—Any individual who is a 

13 bona fide resident of any possession of the United 

14 States (as determined under section 937(a)) for any 

15 taxable year (and any qualifying child residing with 

16 such individual) shall be treated for purposes of this 

17 section as covered by acceptable coverage during 

18 such taxable year. 

19 ‘‘(5) RELIGIOUS CONSCIENCE EXEMPTION.— 

20 ‘‘(A) IN GENERAL.—Subsection (a) shall 

21 not apply to any individual (and any qualifying 

22 child residing with such individual) for any pe23 riod if such individual has in effect an exemp24 tion which certifies that such individual is a 

25 member of a recognized religious sect or diviVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00170 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sion thereof described in section 1402(g)(1) and 

2 an adherent of established tenets or teachings 

3 of such sect or division as described in such sec4 tion. 

5 ‘‘(B) EXEMPTION.—An application for the 

6 exemption described in subparagraph (A) shall 

7 be filed with the Secretary at such time and in 

8 such form and manner as the Secretary may 

9 prescribe. Any such exemption granted by the 

10 Secretary shall be effective for such period as 

11 the Secretary determines appropriate. 

12 ‘‘(d) ACCEPTABLE COVERAGE REQUIREMENT.— 

13 ‘‘(1) IN GENERAL.—The requirements of this 

14 subsection are met with respect to any individual for 

15 any period if such individual (and each qualifying 

16 child of such individual) is covered by acceptable 

17 coverage at all times during such period. 

18 ‘‘(2) ACCEPTABLE COVERAGE.—For purposes 

19 of this section, the term ‘acceptable coverage’ means 

20 any of the following: 

21 ‘‘(A) QUALIFIED HEALTH BENEFITS PLAN

22 COVERAGE.—Coverage under a qualified health 

23 benefits plan (as defined in section 100(c) of 

24 the America’s Affordable Health Choices Act of 

25 2009). 


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1 ‘‘(B) GRANDFATHERED HEALTH INSUR2 ANCE COVERAGE; COVERAGE UNDER GRAND3 FATHERED EMPLOYMENT-BASED HEALTH

4 PLAN.—Coverage under a grandfathered health 

5 insurance coverage (as defined in subsection (a) 

6 of section 102 of the America’s Affordable 

7 Health Choices Act of 2009) or under a current 

8 employment-based health plan (within the 

9 meaning of subsection (b) of such section). 

10 ‘‘(C) MEDICARE.—Coverage under part A 

11 of title XVIII of the Social Security Act. 

12 ‘‘(D) MEDICAID.—Coverage for medical as13 sistance under title XIX of the Social Security 

14 Act. 

15 ‘‘(E) MEMBERS OF THE ARMED FORCES

16 AND DEPENDENTS (INCLUDING TRICARE).— 

17 Coverage under chapter 55 of title 10, United 

18 States Code, including similar coverage fur19 nished under section 1781 of title 38 of such 

20 Code. 

21 ‘‘(F) VA.—Coverage under the veteran’s 

22 health care program under chapter 17 of title 

23 38, United States Code, but only if the cov24 erage for the individual involved is determined 

25 by the Secretary in coordination with the 


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1 Health Choices Commissioner to be not less 

2 than the level specified by the Secretary of the 

3 Treasury, in coordination with the Secretary of 

4 Veteran’s Affairs and the Health Choices Com5 missioner, based on the individual’s priority for 

6 services as provided under section 1705(a) of 

7 such title. 

8 ‘‘(G) OTHER COVERAGE.—Such other 

9 health benefits coverage as the Secretary, in co10 ordination with the Health Choices Commis11 sioner, recognizes for purposes of this sub12 section. 

13 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 

14 ‘‘(1) QUALIFYING CHILD.—For purposes of this 

15 section, the term ‘qualifying child’ has the meaning 

16 given such term by section 152(c). With respect to 

17 any period during which health coverage for a child 

18 must be provided by an individual pursuant to a 

19 child support order, such child shall be treated as a 

20 qualifying child of such individual (and not as a 

21 qualifying child of any other individual). 

22 ‘‘(2) BASIC PLAN.—For purposes of this sec23 tion, the term ‘basic plan’ has the meaning given 

24 such term under section 100(c) of the America’s Af25 fordable Health Choices Act of 2009. 


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1 ‘‘(3) HEALTH INSURANCE EXCHANGE.—For 

2 purposes of this section, the term ‘Health Insurance 

3 Exchange’ has the meaning given such term under 

4 section 100(c) of the America’s Affordable Health 

5 Choices Act of 2009, including any State-based 

6 health insurance exchange approved for operation 

7 under section 208 of such Act. 

8 ‘‘(4) FAMILY COVERAGE.—For purposes of this 

9 section, the term ‘family coverage’ means any cov10 erage other than self-only coverage. 

11 ‘‘(5) MODIFIED ADJUSTED GROSS INCOME.— 

12 For purposes of this section, the term ‘modified ad13 justed gross income’ means adjusted gross income— 

14 ‘‘(A) determined without regard to section 

15 911, and 

16 ‘‘(B) increased by the amount of interest 

17 received or accrued by the taxpayer during the 

18 taxable year which is exempt from tax. 

19 ‘‘(6) NOT TREATED AS TAX IMPOSED BY THIS

20 CHAPTER FOR CERTAIN PURPOSES.—The tax im21 posed under this section shall not be treated as tax 

22 imposed by this chapter for purposes of determining 

23 the amount of any credit under this chapter or for 

24 purposes of section 55. 


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1 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

2 such regulations or other guidance as may be necessary 

3 or appropriate to carry out the purposes of this section, 

4 including regulations or other guidance (developed in co5 ordination with the Health Choices Commissioner) which 

6 provide— 

7 ‘‘(1) exemption from the tax imposed under 

8 subsection (a) in cases of de minimis lapses of ac9 ceptable coverage, and 

10 ‘‘(2) a process for applying for a waiver of the 

11 application of subsection (a) in cases of hardship.’’. 

12 (b) INFORMATION REPORTING.— 

13 (1) IN GENERAL.—Subpart B of part III of 

14 subchapter A of chapter 61 of such Code is amended 

15 by inserting after section 6050W the following new 

16 section: 

17 ‘‘SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE 

18 COVERAGE. 

19 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

20 who provides acceptable coverage (as defined in section 

21 59B(d)) to any individual during any calendar year shall, 

22 at such time as the Secretary may prescribe, make the 

23 return described in subsection (b) with respect to such in24 dividual. 


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1 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

2 is described in this subsection if such return— 

3 ‘‘(1) is in such form as the Secretary may pre4 scribe, and 

5 ‘‘(2) contains— 

6 ‘‘(A) the name, address, and TIN of the 

7 primary insured and the name of each other in8 dividual obtaining coverage under the policy, 

9 ‘‘(B) the period for which each such indi10 vidual was provided with the coverage referred 

11 to in subsection (a), and 

12 ‘‘(C) such other information as the Sec13 retary may require. 

14 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID15 UALS WITH RESPECT TO WHOM INFORMATION IS RE16 QUIRED.—Every person required to make a return under 

17 subsection (a) shall furnish to each primary insured whose 

18 name is required to be set forth in such return a written 

19 statement showing— 

20 ‘‘(1) the name and address of the person re21 quired to make such return and the phone number 

22 of the information contact for such person, and 

23 ‘‘(2) the information required to be shown on 

24 the return with respect to such individual. 


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1 The written statement required under the preceding sen2 tence shall be furnished on or before January 31 of the 

3 year following the calendar year for which the return 

4 under subsection (a) is required to be made. 

5 ‘‘(d) COVERAGE PROVIDED BY GOVERNMENTAL

6 UNITS.—In the case of coverage provided by any govern7 mental unit or any agency or instrumentality thereof, the 

8 officer or employee who enters into the agreement to pro9 vide such coverage (or the person appropriately designated 

10 for purposes of this section) shall make the returns and 

11 statements required by this section.’’. 

12 (2) PENALTY FOR FAILURE TO FILE.— 

13 (A) RETURN.—Subparagraph (B) of sec14 tion 6724(d)(1) of such Code is amended by 

15 striking ‘‘or’’ at the end of clause (xxii), by 

16 striking ‘‘and’’ at the end of clause (xxiii) and 

17 inserting ‘‘or’’, and by adding at the end the 

18 following new clause: 

19 ‘‘(xxiv) section 6050X (relating to re20 turns relating to health insurance cov21 erage), and’’. 

22 (B) STATEMENT.—Paragraph (2) of sec23 tion 6724(d) of such Code is amended by strik24 ing ‘‘or’’ at the end of subparagraph (EE), by 

25 striking the period at the end of subparagraph 


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1 (FF) and inserting ‘‘, or’’, and by inserting 

2 after subparagraph (FF) the following new sub3 paragraph: 

4 ‘‘(GG) section 6050X (relating to returns 

5 relating to health insurance coverage).’’. 

6 (c) RETURN REQUIREMENT.—Subsection (a) of sec7 tion 6012 of such Code is amended by inserting after 

8 paragraph (9) the following new paragraph: 

9 ‘‘(10) Every individual to whom section 59B(a) 

10 applies and who fails to meet the requirements of 

11 section 59B(d) with respect to such individual or 

12 any qualifying child (as defined in section 152(c)) of 

13 such individual.’’. 

14 (d) CLERICAL AMENDMENTS.— 

15 (1) The table of parts for subchapter A of chap16 ter 1 of the Internal Revenue Code of 1986 is 

17 amended by adding at the end the following new 

18 item: 

‘‘PART VIII. HEALTH CARE RELATED TAXES.’’. 

19 (2) The table of sections for subpart B of part 

20 III of subchapter A of chapter 61 is amended by 

21 adding at the end the following new item: 

‘‘Sec. 6050X. Returns relating to health insurance coverage.’’. 

22 (e) SECTION 15 NOT TO APPLY.—The amendment 

23 made by subsection (a) shall not be treated as a change 


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1 in a rate of tax for purposes of section 15 of the Internal 

2 Revenue Code of 1986. 

3 (f) EFFECTIVE DATE.— 

4 (1) IN GENERAL.—The amendments made by 

5 this section shall apply to taxable years beginning 

6 after December 31, 2012. 

7 (2) RETURNS.—The amendments made by sub8 section (b) shall apply to calendar years beginning 

9 after December 31, 2012. 

10 PART 2—EMPLOYER RESPONSIBILITY 

11 SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PAR12 TICIPATION REQUIREMENTS. 

13 (a) IN GENERAL.—Chapter 43 of the Internal Rev14 enue Code of 1986 is amended by adding at the end the 

15 following new section: 

16 ‘‘SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COV17 ERAGE PARTICIPATION REQUIREMENTS. 

18 ‘‘(a) ELECTION OF EMPLOYER RESPONSIBILITY TO

19 PROVIDE HEALTH COVERAGE.— 

20 ‘‘(1) IN GENERAL.—Subsection (b) shall apply 

21 to any employer with respect to whom an election 

22 under paragraph (2) is in effect. 

23 ‘‘(2) TIME AND MANNER.—An employer may 

24 make an election under this paragraph at such time 


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1 and in such form and manner as the Secretary may 

2 prescribe. 

3 ‘‘(3) AFFILIATED GROUPS.—In the case of any 

4 employer which is part of a group of employers who 

5 are treated as a single employer under subsection 

6 (b), (c), (m), or (o) of section 414, the election 

7 under paragraph (2) shall be made by such person 

8 as the Secretary may provide. Any such election, 

9 once made, shall apply to all members of such 

10 group. 

11 ‘‘(4) SEPARATE ELECTIONS.—Under regula12 tions prescribed by the Secretary, separate elections 

13 may be made under paragraph (2) with respect to— 

14 ‘‘(A) separate lines of business, and 

15 ‘‘(B) full-time employees and employees 

16 who are not full-time employees. 

17 ‘‘(5) TERMINATION OF ELECTION IN CASES OF

18 SUBSTANTIAL NONCOMPLIANCE.—The Secretary 

19 may terminate the election of any employer under 

20 paragraph (2) if the Secretary (in coordination with 

21 the Health Choices Commissioner) determines that 

22 such employer is in substantial noncompliance with 

23 the health coverage participation requirements. 


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1 ‘‘(b) EXCISE TAX WITH RESPECT TO FAILURE TO

2 MEET HEALTH COVERAGE PARTICIPATION REQUIRE3 MENTS.— 

4 ‘‘(1) IN GENERAL.—In the case of any employer 

5 who fails (during any period with respect to which 

6 the election under subsection (a) is in effect) to sat7 isfy the health coverage participation requirements 

8 with respect to any employee to whom such election 

9 applies, there is hereby imposed on each such failure 

10 with respect to each such employee a tax of $100 for 

11 each day in the period beginning on the date such 

12 failure first occurs and ending on the date such fail13 ure is corrected. 

14 ‘‘(2) LIMITATIONS ON AMOUNT OF TAX.— 

15 ‘‘(A) TAX NOT TO APPLY WHERE FAILURE

16 NOT DISCOVERED EXERCISING REASONABLE

17 DILIGENCE.—No tax shall be imposed by para18 graph (1) on any failure during any period for 

19 which it is established to the satisfaction of the 

20 Secretary that the employer neither knew, nor 

21 exercising reasonable diligence would have 

22 known, that such failure existed. 

23 ‘‘(B) TAX NOT TO APPLY TO FAILURES

24 CORRECTED WITHIN 30 DAYS.—No tax shall be 

25 imposed by paragraph (1) on any failure if— 


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1 ‘‘(i) such failure was due to reason2 able cause and not to willful neglect, and 

3 ‘‘(ii) such failure is corrected during 

4 the 30-day period beginning on the 1st 

5 date that the employer knew, or exercising 

6 reasonable diligence would have known, 

7 that such failure existed. 

8 ‘‘(C) OVERALL LIMITATION FOR UNINTEN9 TIONAL FAILURES.—In the case of failures 

10 which are due to reasonable cause and not to 

11 willful neglect, the tax imposed by subsection 

12 (a) for failures during the taxable year of the 

13 employer shall not exceed the amount equal to 

14 the lesser of— 

15 ‘‘(i) 10 percent of the aggregate 

16 amount paid or incurred by the employer 

17 (or predecessor employer) during the pre18 ceding taxable year for employment-based 

19 health plans, or 

20 ‘‘(ii) $500,000. 

21 ‘‘(D) COORDINATION WITH OTHER EN22 FORCEMENT PROVISIONS.—The tax imposed 

23 under paragraph (1) with respect to any failure 

24 shall be reduced (but not below zero) by the 

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1 tion 502(c)(11) of the Employee Retirement In2 come Security Act of 1974 or section 2793(g) 

3 of the Public Health Service Act with respect to 

4 such failure. 

5 ‘‘(c) HEALTH COVERAGE PARTICIPATION REQUIRE6 MENTS.—For purposes of this section, the term ‘health 

7 coverage participation requirements’ means the require8 ments of part I of subtitle B of title III of the America’s 

9 Affordable Health Choices Act of 2009 (as in effect on 

10 the date of the enactment of this section).’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 for chapter 43 of such Code is amended by adding at the 

13 end the following new item: 

‘‘Sec. 4980H. Election with respect to health coverage participation requirements.’’. 

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

15 this section shall apply to periods beginning after Decem16 ber 31, 2012. 

17 SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOY18 ERS. 

19 (a) IN GENERAL.—Section 3111 of the Internal Rev20 enue Code of 1986 is amended by redesignating subsection 

21 (c) as subsection (d) and by inserting after subsection (b) 

22 the following new subsection: 

23 ‘‘(c) EMPLOYERS ELECTING TO NOT PROVIDE

24 HEALTH BENEFITS.— 


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1 ‘‘(1) IN GENERAL.—In addition to other taxes, 

2 there is hereby imposed on every nonelecting em3 ployer an excise tax, with respect to having individ4 uals in his employ, equal to 8 percent of the wages 

5 (as defined in section 3121(a)) paid by him with re6 spect to employment (as defined in section 3121(b)). 

7 ‘‘(2) SPECIAL RULES FOR SMALL EMPLOY8 ERS.— 

9 ‘‘(A) IN GENERAL.—In the case of any em10 ployer who is small employer for any calendar 

11 year, paragraph (1) shall be applied by sub12 stituting the applicable percentage determined 

13 in accordance with the following table for ‘8 

14 percent’: 

‘‘If the annual payroll of such employer for 

the preceding calendar year: 

The applicable 

percentage is: 

Does not exceed $250,000 ..................................... 0 percent 

Exceeds $250,000, but does not exceed $300,000 2 percent 

Exceeds $300,000, but does not exceed $350,000 4 percent 

Exceeds $350,000, but does not exceed $400,000 6 percent 

15 ‘‘(B) SMALL EMPLOYER.—For purposes of 

16 this paragraph, the term ‘small employer’ 

17 means any employer for any calendar year if 

18 the annual payroll of such employer for the pre19 ceding calendar year does not exceed $400,000. 

20 ‘‘(C) ANNUAL PAYROLL.—For purposes of 

21 this paragraph, the term ‘annual payroll’ 

22 means, with respect to any employer for any 


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1 calendar year, the aggregate wages (as defined 

2 in section 3121(a)) paid by him with respect to 

3 employment (as defined in section 3121(b)) 

4 during such calendar year. 

5 ‘‘(3) NONELECTING EMPLOYER.—For purposes 

6 of paragraph (1), the term ‘nonelecting employer’ 

7 means any employer for any period with respect to 

8 which such employer does not have an election under 

9 section 4980H(a) in effect. 

10 ‘‘(4) SPECIAL RULE FOR SEPARATE ELEC11 TIONS.—In the case of an employer who makes a 

12 separate election described in section 4980H(a)(4) 

13 for any period, paragraph (1) shall be applied for 

14 such period by taking into account only the wages 

15 paid to employees who are not subject to such elec16 tion. 

17 ‘‘(5) AGGREGATION; PREDECESSORS.—For pur18 poses of this subsection— 

19 ‘‘(A) all persons treated as a single em20 ployer under subsection (b), (c), (m), or (o) of 

21 section 414 shall be treated as 1 employer, and 

22 ‘‘(B) any reference to any person shall be 

23 treated as including a reference to any prede24 cessor of such person.’’. 


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1 (b) DEFINITIONS.—Section 3121 of such Code is 

2 amended by adding at the end the following new sub3 section: 

4 ‘‘(aa) SPECIAL RULES FOR TAX ON EMPLOYERS

5 ELECTING NOT TO PROVIDE HEALTH BENEFITS.—For 

6 purposes of section 3111(c)— 

7 ‘‘(1) Paragraphs (1), (5), and (19) of sub8 section (b) shall not apply. 

9 ‘‘(2) Paragraph (7) of subsection (b) shall apply 

10 by treating all services as not covered by the retire11 ment systems referred to in subparagraphs (C) and 

12 (F) thereof. 

13 ‘‘(3) Subsection (e) shall not apply and the 

14 term ‘State’ shall include the District of Columbia.’’. 

15 (c) CONFORMING AMENDMENT.—Subsection (d) of 

16 section 3111 of such Code, as redesignated by this section, 

17 is amended by striking ‘‘this section’’ and inserting ‘‘sub18 sections (a) and (b)’’. 

19 (d) APPLICATION TO RAILROADS.— 

20 (1) IN GENERAL.—Section 3221 of such Code 

21 is amended by redesignating subsection (c) as sub22 section (d) and by inserting after subsection (b) the 

23 following new subsection: 

24 ‘‘(c) EMPLOYERS ELECTING TO NOT PROVIDE

25 HEALTH BENEFITS.— 


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1 ‘‘(1) IN GENERAL.—In addition to other taxes, 

2 there is hereby imposed on every nonelecting em3 ployer an excise tax, with respect to having individ4 uals in his employ, equal to 8 percent of the com5 pensation paid during any calendar year by such em6 ployer for services rendered to such employer. 

7 ‘‘(2) EXCEPTION FOR SMALL EMPLOYERS.— 

8 Rules similar to the rules of section 3111(c)(2) shall 

9 apply for purposes of this subsection. 

10 ‘‘(3) NONELECTING EMPLOYER.—For purposes 

11 of paragraph (1), the term ‘nonelecting employer’ 

12 means any employer for any period with respect to 

13 which such employer does not have an election under 

14 section 4980H(a) in effect. 

15 ‘‘(4) SPECIAL RULE FOR SEPARATE ELEC16 TIONS.—In the case of an employer who makes a 

17 separate election described in section 4980H(a)(4) 

18 for any period, subsection (a) shall be applied for 

19 such period by taking into account only the wages 

20 paid to employees who are not subject to such elec21 tion.’’. 

22 (2) DEFINITIONS.—Subsection (e) of section 

23 3231 of such Code is amended by adding at the end 

24 the following new paragraph: 


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1 ‘‘(13) SPECIAL RULES FOR TAX ON EMPLOYERS

2 ELECTING NOT TO PROVIDE HEALTH BENEFITS.— 

3 For purposes of section 3221(c)— 

4 ‘‘(A) Paragraph (1) shall be applied with5 out regard to the third sentence thereof. 

6 ‘‘(B) Paragraph (2) shall not apply.’’. 

7 (3) CONFORMING AMENDMENT.—Subsection (d) 

8 of section 3221 of such Code, as redesignated by 

9 this section, is amended by striking ‘‘subsections (a) 

10 and (b), see section 3231(e)(2)’’ and inserting ‘‘this 

11 section, see paragraphs (2) and (13)(B) of section 

12 3231(e)’’. 

13 (e) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to periods beginning after Decem15 ber 31, 2012. 

16 Subtitle B—Credit for Small Busi17 ness Employee Health Coverage 

18 Expenses 

19 SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE 

20 HEALTH COVERAGE EXPENSES. 

21 (a) IN GENERAL.—Subpart D of part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code of 

23 1986 (relating to business-related credits) is amended by 

24 adding at the end the following new section: 


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1 ‘‘SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COV2 ERAGE CREDIT. 

3 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

4 the case of a qualified small employer, the small business 

5 employee health coverage credit determined under this sec6 tion for the taxable year is an amount equal to the applica7 ble percentage of the qualified employee health coverage 

8 expenses of such employer for such taxable year. 

9 ‘‘(b) APPLICABLE PERCENTAGE.— 

10 ‘‘(1) IN GENERAL.—For purposes of this sec11 tion, the applicable percentage is 50 percent. 

12 ‘‘(2) PHASEOUT BASED ON AVERAGE COM13 PENSATION OF EMPLOYEES.—In the case of an em14 ployer whose average annual employee compensation 

15 for the taxable year exceeds $20,000, the percentage 

16 specified in paragraph (1) shall be reduced by a 

17 number of percentage points which bears the same 

18 ratio to 50 as such excess bears to $20,000. 

19 ‘‘(c) LIMITATIONS.— 

20 ‘‘(1) PHASEOUT BASED ON EMPLOYER SIZE.— 

21 In the case of an employer who employs more than 

22 10 qualified employees during the taxable year, the 

23 credit determined under subsection (a) shall be re24 duced by an amount which bears the same ratio to 

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1 gard to this paragraph and after the application of 

2 the other provisions of this section) as— 

3 ‘‘(A) the excess of— 

4 ‘‘(i) the number of qualified employees 

5 employed by the employer during the tax6 able year, over 

7 ‘‘(ii) 10, bears to 

8 ‘‘(B) 15. 

9 ‘‘(2) CREDIT NOT ALLOWED WITH RESPECT TO

10 CERTAIN HIGHLY COMPENSATED EMPLOYEES.—No 

11 credit shall be allowed under subsection (a) with re12 spect to qualified employee health coverage expenses 

13 paid or incurred with respect to any employee for 

14 any taxable year if the aggregate compensation paid 

15 by the employer to such employee during such tax16 able year exceeds $80,000. 

17 ‘‘(d) QUALIFIED EMPLOYEE HEALTH COVERAGE EX18 PENSES.—For purposes of this section— 

19 ‘‘(1) IN GENERAL.—The term ‘qualified em20 ployee health coverage expenses’ means, with respect 

21 to any employer for any taxable year, the aggregate 

22 amount paid or incurred by such employer during 

23 such taxable year for coverage of any qualified em24 ployee of the employer (including any family covVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00190 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erage which covers such employee) under qualified 

2 health coverage. 

3 ‘‘(2) QUALIFIED HEALTH COVERAGE.—The 

4 term ‘qualified health coverage’ means acceptable 

5 coverage (as defined in section 59B(d)) which— 

6 ‘‘(A) is provided pursuant to an election 

7 under section 4980H(a), and 

8 ‘‘(B) satisfies the requirements referred to 

9 in section 4980H(c). 

10 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

11 section— 

12 ‘‘(1) QUALIFIED SMALL EMPLOYER.—For pur13 poses of this section, the term ‘qualified small em14 ployer’ means any employer for any taxable year 

15 if— 

16 ‘‘(A) the number of qualified employees 

17 employed by such employer during the taxable 

18 year does not exceed 25, and 

19 ‘‘(B) the average annual employee com20 pensation of such employer for such taxable 

21 year does not exceed the sum of the dollar 

22 amounts in effect under subsection (b)(2). 

23 ‘‘(2) QUALIFIED EMPLOYEE.—The term ‘quali24 fied employee’ means any employee of an employer 

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1 ployee received at least $5,000 of compensation from 

2 such employer for services performed in the trade or 

3 business of such employer during such taxable year. 

4 ‘‘(3) AVERAGE ANNUAL EMPLOYEE COMPENSA5 TION.—The term ‘average annual employee com6 pensation’ means, with respect to any employer for 

7 any taxable year, the average amount of compensa8 tion paid by such employer to qualified employees of 

9 such employer during such taxable year. 

10 ‘‘(4) COMPENSATION.—The term ‘compensa11 tion’ has the meaning given such term in section 

12 408(p)(6)(A). 

13 ‘‘(5) FAMILY COVERAGE.—The term ‘family 

14 coverage’ means any coverage other than self-only 

15 coverage. 

16 ‘‘(f) SPECIAL RULES.—For purposes of this sec17 tion— 

18 ‘‘(1) SPECIAL RULE FOR PARTNERSHIPS AND

19 SELF-EMPLOYED.—In the case of a partnership (or 

20 a trade or business carried on by an individual) 

21 which has one or more qualified employees (deter22 mined without regard to this paragraph) with re23 spect to whom the election under 4980H(a) applies, 

24 each partner (or, in the case of a trade or business 


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1 carried on by an individual, such individual) shall be 

2 treated as an employee. 

3 ‘‘(2) AGGREGATION RULE.—All persons treated 

4 as a single employer under subsection (b), (c), (m), 

5 or (o) of section 414 shall be treated as 1 employer. 

6 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—Any de7 duction otherwise allowable with respect to amounts 

8 paid or incurred for health insurance coverage to 

9 which subsection (a) applies shall be reduced by the 

10 amount of the credit determined under this section. 

11 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

12 any taxable year beginning after 2013, each of the 

13 dollar amounts in subsections (b)(2), (c)(2), and 

14 (e)(2) shall be increased by an amount equal to— 

15 ‘‘(A) such dollar amount, multiplied by 

16 ‘‘(B) the cost of living adjustment deter17 mined under section 1(f)(3) for the calendar 

18 year in which the taxable year begins deter19 mined by substituting ‘calendar year 2012’ for 

20 ‘calendar year 1992’ in subparagraph (B) 

21 thereof. 

22 If any increase determined under this paragraph is 

23 not a multiple of $50, such increase shall be rounded 

24 to the next lowest multiple of $50.’’. 


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1 (b) CREDIT TO BE PART OF GENERAL BUSINESS

2 CREDIT.—Subsection (b) of section 38 of such Code (re3 lating to general business credit) is amended by striking 

4 ‘‘plus’’ at the end of paragraph (34), by striking the period 

5 at the end of paragraph (35) and inserting ‘‘, plus’’ , and 

6 by adding at the end the following new paragraph: 

7 ‘‘(36) in the case of a qualified small employer 

8 (as defined in section 45R(e)), the small business 

9 employee health coverage credit determined under 

10 section 45R(a).’’. 

11 (c) CLERICAL AMENDMENT.—The table of sections 

12 for subpart D of part IV of subchapter A of chapter 1 

13 of such Code is amended by inserting after the item relat14 ing to section 45Q the following new item: 

‘‘Sec. 45R. Small business employee health coverage credit.’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2012. 

18 Subtitle C—Disclosures to Carry 

19 Out Health Insurance Exchange 

20 Subsidies 

21 SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSUR22 ANCE EXCHANGE SUBSIDIES. 

23 (a) IN GENERAL.—Subsection (l) of section 6103 of 

24 the Internal Revenue Code of 1986 is amended by adding 

25 at the end the following new paragraph: 


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1 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

2 TO CARRY OUT HEALTH INSURANCE EXCHANGE SUB3 SIDIES.— 

4 ‘‘(A) IN GENERAL.—The Secretary, upon 

5 written request from the Health Choices Com6 missioner or the head of a State-based health 

7 insurance exchange approved for operation 

8 under section 208 of the America’s Affordable 

9 Health Choices Act of 2009, shall disclose to of10 ficers and employees of the Health Choices Ad11 ministration or such State-based health insur12 ance exchange, as the case may be, return in13 formation of any taxpayer whose income is rel14 evant in determining any affordability credit de15 scribed in subtitle C of title II of the America’s 

16 Affordable Health Choices Act of 2009. Such 

17 return information shall be limited to— 

18 ‘‘(i) taxpayer identity information 

19 with respect to such taxpayer, 

20 ‘‘(ii) the filing status of such tax21 payer, 

22 ‘‘(iii) the modified adjusted gross in23 come of such taxpayer (as defined in sec24 tion 59B(e)(5)), 


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1 ‘‘(iv) the number of dependents of the 

2 taxpayer, 

3 ‘‘(v) such other information as is pre4 scribed by the Secretary by regulation as 

5 might indicate whether the taxpayer is eli6 gible for such affordability credits (and the 

7 amount thereof), and 

8 ‘‘(vi) the taxable year with respect to 

9 which the preceding information relates or, 

10 if applicable, the fact that such informa11 tion is not available. 

12 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

13 INFORMATION.—Return information disclosed 

14 under subparagraph (A) may be used by offi15 cers and employees of the Health Choices Ad16 ministration or such State-based health insur17 ance exchange, as the case may be, only for the 

18 purposes of, and to the extent necessary in, es19 tablishing and verifying the appropriate amount 

20 of any affordability credit described in subtitle 

21 C of title II of the America’s Affordable Health 

22 Choices Act of 2009 and providing for the re23 payment of any such credit which was in excess 

24 of such appropriate amount.’’. 


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1 (b) PROCEDURES AND RECORDKEEPING RELATED

2 TO DISCLOSURES.—Paragraph (4) of section 6103(p) of 

3 such Code is amended— 

4 (1) by inserting ‘‘, or any entity described in 

5 subsection (l)(21),’’ after ‘‘or (20)’’ in the matter 

6 preceding subparagraph (A), 

7 (2) by inserting ‘‘or any entity described in sub8 section (l)(21),’’ after ‘‘or (o)(1)(A),’’ in subpara9 graph (F)(ii), and 

10 (3) by inserting ‘‘or any entity described in sub11 section (l)(21),’’ after ‘‘or (20),’’ both places it ap12 pears in the matter after subparagraph (F). 

13 (c) UNAUTHORIZED DISCLOSURE OR INSPECTION.— 

14 Paragraph (2) of section 7213(a) of such Code is amended 

15 by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

16 Subtitle D—Other Revenue 

17 Provisions 

18 PART 1—GENERAL PROVISIONS 

19 SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

20 (a) IN GENERAL.—Part VIII of subchapter A of 

21 chapter 1 of the Internal Revenue Code of 1986, as added 

22 by this title, is amended by adding at the end the following 

23 new subpart: 

24 ‘‘Subpart B—Surcharge on High Income Individuals 

‘‘Sec. 59C. Surcharge on high income individuals. 


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1 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

2 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

3 other than a corporation, there is hereby imposed (in addi4 tion to any other tax imposed by this subtitle) a tax equal 

5 to— 

6 ‘‘(1) 1 percent of so much of the modified ad7 justed gross income of the taxpayer as exceeds 

8 $350,000 but does not exceed $500,000, 

9 ‘‘(2) 1.5 percent of so much of the modified ad10 justed gross income of the taxpayer as exceeds 

11 $500,000 but does not exceed $1,000,000, and 

12 ‘‘(3) 5.4 percent of so much of the modified ad13 justed gross income of the taxpayer as exceeds 

14 $1,000,000. 

15 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 

16 In the case of any taxpayer other than a taxpayer making 

17 a joint return under section 6013 or a surviving spouse 

18 (as defined in section 2(a)), subsection (a) shall be applied 

19 by substituting for each of the dollar amounts therein 

20 (after any increase determined under subsection (e)) a dol21 lar amount equal to— 

22 ‘‘(1) 50 percent of the dollar amount so in ef23 fect in the case of a married individual filing a sepa24 rate return, and 

25 ‘‘(2) 80 percent of the dollar amount so in ef26 fect in any other case. 


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1 ‘‘(c) ADJUSTMENTS BASED ON FEDERAL HEALTH

2 REFORM SAVINGS.— 

3 ‘‘(1) IN GENERAL.—Except as provided in para4 graph (2), in the case of any taxable year beginning 

5 after December 31, 2012, subsection (a) shall be ap6 plied— 

7 ‘‘(A) by substituting ‘2 percent’ for ‘1 per8 cent’, and 

9 ‘‘(B) by substituting ‘3 percent’ for ‘1.5 

10 percent’. 

11 ‘‘(2) ADJUSTMENTS BASED ON EXCESS FED12 ERAL HEALTH REFORM SAVINGS.— 

13 ‘‘(A) EXCEPTION IF FEDERAL HEALTH RE14 FORM SAVINGS SIGNIFICANTLY EXCEEDS BASE

15 AMOUNT.—If the excess Federal health reform 

16 savings is more than $150,000,000,000 but not 

17 more than $175,000,000,000, paragraph (1) 

18 shall not apply. 

19 ‘‘(B) FURTHER ADJUSTMENT FOR ADDI20 TIONAL FEDERAL HEALTH REFORM SAVINGS.— 

21 If the excess Federal health reform savings is 

22 more than $175,000,000,000, paragraphs (1) 

23 and (2) of subsection (a) (and paragraph (1) of 

24 this subsection) shall not apply to any taxable 

25 year beginning after December 31, 2012. 


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1 ‘‘(C) EXCESS FEDERAL HEALTH REFORM

2 SAVINGS.—For purposes of this subsection, the 

3 term ‘excess Federal health reform savings’ 

4 means the excess of— 

5 ‘‘(i) the Federal health reform sav6 ings, over 

7 ‘‘(ii) $525,000,000,000. 

8 ‘‘(D) FEDERAL HEALTH REFORM SAV9 INGS.—The term ‘Federal health reform sav10 ings’ means the sum of the amounts described 

11 in subparagraphs (A) and (B) of paragraph (3). 

12 ‘‘(3) DETERMINATION OF FEDERAL HEALTH

13 REFORM SAVINGS.—Not later than December 1, 

14 2012, the Director of the Office of Management and 

15 Budget shall— 

16 ‘‘(A) determine, on the basis of the study 

17 conducted under paragraph (4), the aggregate 

18 reductions in Federal expenditures which have 

19 been achieved as a result of the provisions of, 

20 and amendments made by, subdivision B of the 

21 America’s Affordable Health Choices Act of 

22 2009 during the period beginning on October 1, 

23 2009, and ending with the latest date with re24 spect to which the Director has sufficient data 

25 to make such determination, and 


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1 ‘‘(B) estimate, on the basis of such study 

2 and the determination under subparagraph (A), 

3 the aggregate reductions in Federal expendi4 tures which will be achieved as a result of such 

5 provisions and amendments during so much of 

6 the period beginning with fiscal year 2010 and 

7 ending with fiscal year 2019 as is not taken 

8 into account under subparagraph (A). 

9 ‘‘(4) STUDY OF FEDERAL HEALTH REFORM

10 SAVINGS.—The Director of the Office of Manage11 ment and Budget shall conduct a study of the reduc12 tions in Federal expenditures during fiscal years 

13 2010 through 2019 which are attributable to the 

14 provisions of, and amendments made by, subdivision 

15 B of the America’s Affordable Health Choices Act of 

16 2009. The Director shall complete such study not 

17 later than December 1, 2012. 

18 ‘‘(5) REDUCTIONS IN FEDERAL EXPENDITURES

19 DETERMINED WITHOUT REGARD TO PROGRAM IN20 VESTMENTS.—For purposes of paragraphs (3) and 

21 (4), reductions in Federal expenditures shall be de22 termined without regard to section 1121 of the 

23 America’s Affordable Health Choices Act of 2009 

24 and other program investments under subdivision B 

25 thereof. 


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1 ‘‘(d) MODIFIED ADJUSTED GROSS INCOME.—For 

2 purposes of this section, the term ‘modified adjusted gross 

3 income’ means adjusted gross income reduced by any de4 duction (not taken into account in determining adjusted 

5 gross income) allowed for investment interest (as defined 

6 in section 163(d)). In the case of an estate or trust, ad7 justed gross income shall be determined as provided in sec8 tion 67(e). 

9 ‘‘(e) INFLATION ADJUSTMENTS.— 

10 ‘‘(1) IN GENERAL.—In the case of taxable years 

11 beginning after 2011, the dollar amounts in sub12 section (a) shall be increased by an amount equal 

13 to— 

14 ‘‘(A) such dollar amount, multiplied by 

15 ‘‘(B) the cost-of-living adjustment deter16 mined under section 1(f)(3) for the calendar 

17 year in which the taxable year begins, by sub18 stituting ‘calendar year 2010’ for ‘calendar year 

19 1992’ in subparagraph (B) thereof. 

20 ‘‘(2) ROUNDING.—If any amount as adjusted 

21 under paragraph (1) is not a multiple of $5,000, 

22 such amount shall be rounded to the next lowest 

23 multiple of $5,000. 

24 ‘‘(f) SPECIAL RULES.— 


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1 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

2 nonresident alien individual, only amounts taken 

3 into account in connection with the tax imposed 

4 under section 871(b) shall be taken into account 

5 under this section. 

6 ‘‘(2) CITIZENS AND RESIDENTS LIVING

7 ABROAD.—The dollar amounts in effect under sub8 section (a) (after the application of subsections (b) 

9 and (e)) shall be decreased by the excess of— 

10 ‘‘(A) the amounts excluded from the tax11 payer’s gross income under section 911, over 

12 ‘‘(B) the amounts of any deductions or ex13 clusions disallowed under section 911(d)(6) 

14 with respect to the amounts described in sub15 paragraph (A). 

16 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

17 shall not apply to a trust all the unexpired interests 

18 in which are devoted to one or more of the purposes 

19 described in section 170(c)(2)(B). 

20 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

21 CHAPTER FOR CERTAIN PURPOSES.—The tax im22 posed under this section shall not be treated as tax 

23 imposed by this chapter for purposes of determining 

24 the amount of any credit under this chapter or for 

25 purposes of section 55.’’. 


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1 (b) CLERICAL AMENDMENT.—The table of subparts 

2 for part VIII of subchapter A of chapter 1 of such Code, 

3 as added by this title, is amended by inserting after the 

4 item relating to subpart A the following new item: 

‘‘SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS.’’. 

5 (c) SECTION 15 NOT TO APPLY.—The amendment 

6 made by subsection (a) shall not be treated as a change 

7 in a rate of tax for purposes of section 15 of the Internal 

8 Revenue Code of 1986. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2010. 

12 SEC. 442. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY 

13 IF FOR PRESCRIBED DRUG OR INSULIN. 

14 (a) HSAS.—Subparagraph (A) of section 223(d)(2) 

15 of the Internal Revenue Code of 1986 is amended by add16 ing at the end the following: ‘‘Such term shall include an 

17 amount paid for medicine or a drug only if such medicine 

18 or drug is a prescribed drug or is insulin.’’. 

19 (b) ARCHER MSAS.—Subparagraph (A) of section 

20 220(d)(2) of such Code is amended by adding at the end 

21 the following: ‘‘Such term shall include an amount paid 

22 for medicine or a drug only if such medicine or drug is 

23 a prescribed drug or is insulin.’’. 

24 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

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1 tion 106 of such Code is amended by adding at the end 

2 the following new subsection: 

3 ‘‘(f) REIMBURSEMENTS FOR MEDICINE RESTRICTED

4 TO PRESCRIBED DRUGS AND INSULIN.—For purposes of 

5 this section and section 105, reimbursement for expenses 

6 incurred for a medicine or a drug shall be treated as a 

7 reimbursement for medical expenses only if such medicine 

8 or drug is a prescribed drug or is insulin.’’. 

9 (d) EFFECTIVE DATES.—The amendment made by 

10 this section shall apply to expenses incurred after Decem11 ber 31, 2009. 

12 SEC. 443. DELAY IN APPLICATION OF WORLDWIDE ALLOCA13 TION OF INTEREST. 

14 (a) IN GENERAL.—Paragraphs (5)(D) and (6) of sec15 tion 864(f) of the Internal Revenue Code of 1986 are each 

16 amended by striking ‘‘December 31, 2010’’ and inserting 

17 ‘‘December 31, 2019’’. 

18 (b) TRANSITION.—Subsection (f) of section 864 of 

19 such Code is amended by striking paragraph (7). 

20 PART 2—PREVENTION OF TAX AVOIDANCE 

21 SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN 

22 DEDUCTIBLE PAYMENTS. 

23 (a) IN GENERAL.—Section 894 of the Internal Rev24 enue Code of 1986 (relating to income affected by treaty) 


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1 is amended by adding at the end the following new sub2 section: 

3 ‘‘(d) LIMITATION ON TREATY BENEFITS FOR CER4 TAIN DEDUCTIBLE PAYMENTS.— 

5 ‘‘(1) IN GENERAL.—In the case of any deduct6 ible related-party payment, any withholding tax im7 posed under chapter 3 (and any tax imposed under 

8 subpart A or B of this part) with respect to such 

9 payment may not be reduced under any treaty of the 

10 United States unless any such withholding tax would 

11 be reduced under a treaty of the United States if 

12 such payment were made directly to the foreign par13 ent corporation. 

14 ‘‘(2) DEDUCTIBLE RELATED-PARTY PAY15 MENT.—For purposes of this subsection, the term 

16 ‘deductible related-party payment’ means any pay17 ment made, directly or indirectly, by any person to 

18 any other person if the payment is allowable as a de19 duction under this chapter and both persons are 

20 members of the same foreign controlled group of en21 tities. 

22 ‘‘(3) FOREIGN CONTROLLED GROUP OF ENTI23 TIES.—For purposes of this subsection— 

24 ‘‘(A) IN GENERAL.—The term ‘foreign 

25 controlled group of entities’ means a controlled 


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1 group of entities the common parent of which 

2 is a foreign corporation. 

3 ‘‘(B) CONTROLLED GROUP OF ENTITIES.— 

4 The term ‘controlled group of entities’ means a 

5 controlled group of corporations as defined in 

6 section 1563(a)(1), except that— 

7 ‘‘(i) ‘more than 50 percent’ shall be 

8 substituted for ‘at least 80 percent’ each 

9 place it appears therein, and 

10 ‘‘(ii) the determination shall be made 

11 without regard to subsections (a)(4) and 

12 (b)(2) of section 1563. 

13 A partnership or any other entity (other than a 

14 corporation) shall be treated as a member of a 

15 controlled group of entities if such entity is con16 trolled (within the meaning of section 

17 954(d)(3)) by members of such group (includ18 ing any entity treated as a member of such 

19 group by reason of this sentence). 

20 ‘‘(4) FOREIGN PARENT CORPORATION.—For 

21 purposes of this subsection, the term ‘foreign parent 

22 corporation’ means, with respect to any deductible 

23 related-party payment, the common parent of the 

24 foreign controlled group of entities referred to in 

25 paragraph (3)(A). 


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1 ‘‘(5) REGULATIONS.—The Secretary may pre2 scribe such regulations or other guidance as are nec3 essary or appropriate to carry out the purposes of 

4 this subsection, including regulations or other guid5 ance which provide for— 

6 ‘‘(A) the treatment of two or more persons 

7 as members of a foreign controlled group of en8 tities if such persons would be the common par9 ent of such group if treated as one corporation, 

10 and 

11 ‘‘(B) the treatment of any member of a 

12 foreign controlled group of entities as the com13 mon parent of such group if such treatment is 

14 appropriate taking into account the economic 

15 relationships among such entities.’’. 

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

17 this section shall apply to payments made after the date 

18 of the enactment of this Act. 

19 SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOC20 TRINE. 

21 (a) IN GENERAL.—Section 7701 of the Internal Rev22 enue Code of 1986 is amended by redesignating subsection 

23 (o) as subsection (p) and by inserting after subsection (n) 

24 the following new subsection: 


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1 ‘‘(o) CLARIFICATION OF ECONOMIC SUBSTANCE

2 DOCTRINE.— 

3 ‘‘(1) APPLICATION OF DOCTRINE.—In the case 

4 of any transaction to which the economic substance 

5 doctrine is relevant, such transaction shall be treated 

6 as having economic substance only if— 

7 ‘‘(A) the transaction changes in a mean8 ingful way (apart from Federal income tax ef9 fects) the taxpayer’s economic position, and 

10 ‘‘(B) the taxpayer has a substantial pur11 pose (apart from Federal income tax effects) 

12 for entering into such transaction. 

13 ‘‘(2) SPECIAL RULE WHERE TAXPAYER RELIES

14 ON PROFIT POTENTIAL.— 

15 ‘‘(A) IN GENERAL.—The potential for 

16 profit of a transaction shall be taken into ac17 count in determining whether the requirements 

18 of subparagraphs (A) and (B) of paragraph (1) 

19 are met with respect to the transaction only if 

20 the present value of the reasonably expected 

21 pre-tax profit from the transaction is substan22 tial in relation to the present value of the ex23 pected net tax benefits that would be allowed if 

24 the transaction were respected. 


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1 ‘‘(B) TREATMENT OF FEES AND FOREIGN

2 TAXES.—Fees and other transaction expenses 

3 and foreign taxes shall be taken into account as 

4 expenses in determining pre-tax profit under 

5 subparagraph (A). 

6 ‘‘(3) STATE AND LOCAL TAX BENEFITS.—For 

7 purposes of paragraph (1), any State or local income 

8 tax effect which is related to a Federal income tax 

9 effect shall be treated in the same manner as a Fed10 eral income tax effect. 

11 ‘‘(4) FINANCIAL ACCOUNTING BENEFITS.—For 

12 purposes of paragraph (1)(B), achieving a financial 

13 accounting benefit shall not be taken into account as 

14 a purpose for entering into a transaction if the ori15 gin of such financial accounting benefit is a reduc16 tion of Federal income tax. 

17 ‘‘(5) DEFINITIONS AND SPECIAL RULES.—For 

18 purposes of this subsection— 

19 ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.— 

20 The term ‘economic substance doctrine’ means 

21 the common law doctrine under which tax bene22 fits under subtitle A with respect to a trans23 action are not allowable if the transaction does 

24 not have economic substance or lacks a business 

25 purpose. 


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1 ‘‘(B) EXCEPTION FOR PERSONAL TRANS2 ACTIONS OF INDIVIDUALS.—In the case of an 

3 individual, paragraph (1) shall apply only to 

4 transactions entered into in connection with a 

5 trade or business or an activity engaged in for 

6 the production of income. 

7 ‘‘(C) OTHER COMMON LAW DOCTRINES

8 NOT AFFECTED.—Except as specifically pro9 vided in this subsection, the provisions of this 

10 subsection shall not be construed as altering or 

11 supplanting any other rule of law, and the re12 quirements of this subsection shall be construed 

13 as being in addition to any such other rule of 

14 law. 

15 ‘‘(D) DETERMINATION OF APPLICATION OF

16 DOCTRINE NOT AFFECTED.—The determination 

17 of whether the economic substance doctrine is 

18 relevant to a transaction (or series of trans19 actions) shall be made in the same manner as 

20 if this subsection had never been enacted. 

21 ‘‘(6) REGULATIONS.—The Secretary shall pre22 scribe such regulations as may be necessary or ap23 propriate to carry out the purposes of this sub24 section.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to transactions entered into after 

3 the date of the enactment of this Act. 

4 SEC. 453. PENALTIES FOR UNDERPAYMENTS. 

5 (a) PENALTY FOR UNDERPAYMENTS ATTRIBUTABLE

6 TO TRANSACTIONS LACKING ECONOMIC SUBSTANCE.— 

7 (1) IN GENERAL.—Subsection (b) of section 

8 6662 of the Internal Revenue Code of 1986 is 

9 amended by inserting after paragraph (5) the fol10 lowing new paragraph: 

11 ‘‘(6) Any disallowance of claimed tax benefits 

12 by reason of a transaction lacking economic sub13 stance (within the meaning of section 7701(o)) or 

14 failing to meet the requirements of any similar rule 

15 of law.’’. 

16 (2) INCREASED PENALTY FOR NONDISCLOSED

17 TRANSACTIONS.—Section 6662 of such Code is 

18 amended by adding at the end the following new 

19 subsection: 

20 ‘‘(i) INCREASE IN PENALTY IN CASE OF NONDIS21 CLOSED NONECONOMIC SUBSTANCE TRANSACTIONS.— 

22 ‘‘(1) IN GENERAL.—In the case of any portion 

23 of an underpayment which is attributable to one or 

24 more nondisclosed noneconomic substance trans25 actions, subsection (a) shall be applied with respect 


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1 to such portion by substituting ‘40 percent’ for ‘20 

2 percent’. 

3 ‘‘(2) NONDISCLOSED NONECONOMIC SUB4 STANCE TRANSACTIONS.—For purposes of this sub5 section, the term ‘nondisclosed noneconomic sub6 stance transaction’ means any portion of a trans7 action described in subsection (b)(6) with respect to 

8 which the relevant facts affecting the tax treatment 

9 are not adequately disclosed in the return nor in a 

10 statement attached to the return. 

11 ‘‘(3) SPECIAL RULE FOR AMENDED RE12 TURNS.—Except as provided in regulations, in no 

13 event shall any amendment or supplement to a re14 turn of tax be taken into account for purposes of 

15 this subsection if the amendment or supplement is 

16 filed after the earlier of the date the taxpayer is first 

17 contacted by the Secretary regarding the examina18 tion of the return or such other date as is specified 

19 by the Secretary.’’. 

20 (3) CONFORMING AMENDMENT.—Subparagraph 

21 (B) of section 6662A(e)(2) of such Code is amend22 ed— 

23 (A) by striking ‘‘section 6662(h)’’ and in24 serting ‘‘subsections (h) or (i) of section 6662’’, 

25 and 


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1 (B) by striking ‘‘GROSS VALUATION

2 MISSTATEMENT PENALTY’’ in the heading and 

3 inserting ‘‘CERTAIN INCREASED UNDER4 PAYMENT PENALTIES’’. 

5 (b) REASONABLE CAUSE EXCEPTION NOT APPLICA6 BLE TO NONECONOMIC SUBSTANCE TRANSACTIONS, TAX

7 SHELTERS, AND CERTAIN LARGE OR PUBLICLY TRADED

8 PERSONS.—Subsection (c) of section 6664 of such Code 

9 is amended— 

10 (1) by redesignating paragraphs (2) and (3) as 

11 paragraphs (3) and (4), respectively, 

12 (2) by striking ‘‘paragraph (2)’’ in paragraph 

13 (4)(A), as so redesignated, and inserting ‘‘paragraph 

14 (3)’’, and 

15 (3) by inserting after paragraph (1) the fol16 lowing new paragraph: 

17 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

18 apply to— 

19 ‘‘(A) to any portion of an underpayment 

20 which is attributable to one or more tax shelters 

21 (as defined in section 6662(d)(2)(C)) or trans22 actions described in section 6662(b)(6), and 

23 ‘‘(B) to any taxpayer if such taxpayer is a 

24 specified person (as defined in section 

25 6662(d)(2)(D)(ii)).’’. 


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1 (c) APPLICATION OF PENALTY FOR ERRONEOUS

2 CLAIM FOR REFUND OR CREDIT TO NONECONOMIC SUB3 STANCE TRANSACTIONS.—Section 6676 of such Code is 

4 amended by redesignating subsection (c) as subsection (d) 

5 and inserting after subsection (b) the following new sub6 section: 

7 ‘‘(c) NONECONOMIC SUBSTANCE TRANSACTIONS

8 TREATED AS LACKING REASONABLE BASIS.—For pur9 poses of this section, any excessive amount which is attrib10 utable to any transaction described in section 6662(b)(6) 

11 shall not be treated as having a reasonable basis.’’. 

12 (d) SPECIAL UNDERSTATEMENT REDUCTION RULE

13 FOR CERTAIN LARGE OR PUBLICLY TRADED PERSONS.— 

14 (1) IN GENERAL.—Paragraph (2) of section 

15 6662(d) of such Code is amended by adding at the 

16 end the following new subparagraph: 

17 ‘‘(D) SPECIAL REDUCTION RULE FOR CER18 TAIN LARGE OR PUBLICLY TRADED PERSONS.— 

19 ‘‘(i) IN GENERAL.—In the case of any 

20 specified person— 

21 ‘‘(I) subparagraph (B) shall not 

22 apply, and 

23 ‘‘(II) the amount of the under24 statement under subparagraph (A) 

25 shall be reduced by that portion of the 


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1 understatement which is attributable 

2 to any item with respect to which the 

3 taxpayer has a reasonable belief that 

4 the tax treatment of such item by the 

5 taxpayer is more likely than not the 

6 proper tax treatment of such item. 

7 ‘‘(ii) SPECIFIED PERSON.—For pur8 poses of this subparagraph, the term ‘spec9 ified person’ means— 

10 ‘‘(I) any person required to file 

11 periodic or other reports under section 

12 13 of the Securities Exchange Act of 

13 1934, and 

14 ‘‘(II) any corporation with gross 

15 receipts in excess of $100,000,000 for 

16 the taxable year involved. 

17 All persons treated as a single employer 

18 under section 52(a) shall be treated as one 

19 person for purposes of subclause (II).’’. 

20 (2) CONFORMING AMENDMENT.—Subparagraph 

21 (C) of section 6662(d)(2) of such Code is amended 

22 by striking ‘‘Subparagraph (B)’’ and inserting ‘‘Sub23 paragraphs (B) and (D)(i)(II)’’. 


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to transactions entered into after 

3 the date of the enactment of this Act. 

4 PART 3—PARITY IN HEALTH BENEFITS 

5 SEC. 461. CERTAIN HEALTH RELATED BENEFITS APPLICA6 BLE TO SPOUSES AND DEPENDENTS EX7 TENDED TO ELIGIBLE BENEFICIARIES. 

8 (a) APPLICATION OF ACCIDENT AND HEALTH PLANS

9 TO ELIGIBLE BENEFICIARIES.— 

10 (1) EXCLUSION OF CONTRIBUTIONS.—Section 

11 106 of the Internal Revenue Code of 1986, as 

12 amended by section 442, (relating to contributions 

13 by employer to accident and health plans) is amend14 ed by adding at the end the following new sub15 section: 

16 ‘‘(g) COVERAGE PROVIDED FOR ELIGIBLE BENE17 FICIARIES OF EMPLOYEES.— 

18 ‘‘(1) IN GENERAL.—Subsection (a) shall apply 

19 with respect to any eligible beneficiary of the em20 ployee. 

21 ‘‘(2) ELIGIBLE BENEFICIARY.—For purposes of 

22 this subsection, the term ‘eligible beneficiary’ means 

23 any individual who is eligible to receive benefits or 

24 coverage under an accident or health plan.’’. 


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1 (2) EXCLUSION OF AMOUNTS EXPENDED FOR

2 MEDICAL CARE.—The first sentence of section 

3 105(b) of such Code (relating to amounts expended 

4 for medical care) is amended— 

5 (A) by striking ‘‘and his dependents’’ and 

6 inserting ‘‘his dependents’’, and 

7 (B) by inserting before the period the fol8 lowing: ‘‘and any eligible beneficiary (within the 

9 meaning of section 106(f)) with respect to the 

10 taxpayer’’. 

11 (3) PAYROLL TAXES.— 

12 (A) Section 3121(a)(2) of such Code is 

13 amended— 

14 (i) by striking ‘‘or any of his depend15 ents’’ in the matter preceding subpara16 graph (A) and inserting ‘‘, any of his de17 pendents, or any eligible beneficiary (with18 in the meaning of section 106(g)) with re19 spect to the employee’’, 

20 (ii) by striking ‘‘or any of his depend21 ents,’’ in subparagraph (A) and inserting 

22 ‘‘, any of his dependents, or any eligible 

23 beneficiary (within the meaning of section 

24 106(g)) with respect to the employee,’’, 

25 and 


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1 (iii) by striking ‘‘and their depend2 ents’’ both places it appears and inserting 

3 ‘‘and such employees’ dependents and eligi4 ble beneficiaries (within the meaning of 

5 section 106(g))’’. 

6 (B) Section 3231(e)(1) of such Code is 

7 amended— 

8 (i) by striking ‘‘or any of his depend9 ents’’ and inserting ‘‘, any of his depend10 ents, or any eligible beneficiary (within the 

11 meaning of section 106(g)) with respect to 

12 the employee,’’, and 

13 (ii) by striking ‘‘and their depend14 ents’’ both places it appears and inserting 

15 ‘‘and such employees’ dependents and eligi16 ble beneficiaries (within the meaning of 

17 section 106(g))’’. 

18 (C) Section 3306(b)(2) of such Code is 

19 amended— 

20 (i) by striking ‘‘or any of his depend21 ents’’ in the matter preceding subpara22 graph (A) and inserting ‘‘, any of his de23 pendents, or any eligible beneficiary (with24 in the meaning of section 106(g)) with re25 spect to the employee,’’, 


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1 (ii) by striking ‘‘or any of his depend2 ents’’ in subparagraph (A) and inserting ‘‘, 

3 any of his dependents, or any eligible bene4 ficiary (within the meaning of section 

5 106(g)) with respect to the employee’’, and 

6 (iii) by striking ‘‘and their depend7 ents’’ both places it appears and inserting 

8 ‘‘and such employees’ dependents and eligi9 ble beneficiaries (within the meaning of 

10 section 106(g))’’. 

11 (D) Section 3401(a) of such Code is 

12 amended by striking ‘‘or’’ at the end of para13 graph (22), by striking the period at the end of 

14 paragraph (23) and inserting ‘‘; or’’, and by in15 serting after paragraph (23) the following new 

16 paragraph: 

17 ‘‘(24) for any payment made to or for the ben18 efit of an employee or any eligible beneficiary (within 

19 the meaning of section 106(g)) if at the time of such 

20 payment it is reasonable to believe that the employee 

21 will be able to exclude such payment from income 

22 under section 106 or under section 105 by reference 

23 in section 105(b) to section 106(g).’’. 


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1 (b) EXPANSION OF DEPENDENCY FOR PURPOSES OF

2 DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF3 EMPLOYED INDIVIDUALS.— 

4 (1) IN GENERAL.—Paragraph (1) of section 

5 162(l) of the Internal Revenue Code of 1986 (relat6 ing to special rules for health insurance costs of self7 employed individuals) is amended to read as follows: 

8 ‘‘(1) ALLOWANCE OF DEDUCTION.—In the case 

9 of a taxpayer who is an employee within the mean10 ing of section 401(c)(1), there shall be allowed as a 

11 deduction under this section an amount equal to the 

12 amount paid during the taxable year for insurance 

13 which constitutes medical care for— 

14 ‘‘(A) the taxpayer, 

15 ‘‘(B) the taxpayer’s spouse, 

16 ‘‘(C) the taxpayer’s dependents, and 

17 ‘‘(D) any individual who— 

18 ‘‘(i) satisfies the age requirements of 

19 section 152(c)(3)(A), 

20 ‘‘(ii) bears a relationship to the tax21 payer described in section 152(d)(2)(H), 

22 and 

23 ‘‘(iii) meets the requirements of sec24 tion 152(d)(1)(C), and 

25 ‘‘(E) one individual who— 


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1 ‘‘(i) does not satisfy the age require2 ments of section 152(c)(3)(A), 

3 ‘‘(ii) bears a relationship to the tax4 payer described in section 152(d)(2)(H), 

5 ‘‘(iii) meets the requirements of sec6 tion 152(d)(1)(D), and 

7 ‘‘(iv) is not the spouse of the taxpayer 

8 and does not bear any relationship to the 

9 taxpayer described in subparagraphs (A) 

10 through (G) of section 152(d)(2).’’. 

11 (2) CONFORMING AMENDMENT.—Subparagraph 

12 (B) of section 162(l)(2) of such Code is amended by 

13 inserting ‘‘, any dependent, or individual described 

14 in subparagraph (D) or (E) of paragraph (1) with 

15 respect to’’ after ‘‘spouse’’. 

16 (c) EXTENSION TO ELIGIBLE BENEFICIARIES OF

17 SICK AND ACCIDENT BENEFITS PROVIDED TO MEMBERS

18 OF A VOLUNTARY EMPLOYEES’ BENEFICIARY ASSOCIA19 TION AND THEIR DEPENDENTS.—Section 501(c)(9) of 

20 the Internal Revenue Code of 1986 (relating to list of ex21 empt organizations) is amended by adding at the end the 

22 following new sentence: ‘‘For purposes of providing for the 

23 payment of sick and accident benefits to members of such 

24 an association and their dependents, the term ‘dependents’ 

25 shall include any individual who is an eligible beneficiary 


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1 (within the meaning of section 106(f)), as determined 

2 under the terms of a medical benefit, health insurance, 

3 or other program under which members and their depend4 ents are entitled to sick and accident benefits.’’. 

5 (d) FLEXIBLE SPENDING ARRANGEMENTS AND

6 HEALTH REIMBURSEMENT ARRANGEMENTS.—The Sec7 retary of Treasury shall issue guidance of general applica8 bility providing that medical expenses that otherwise qual9 ify— 

10 (1) for reimbursement from a flexible spending 

11 arrangement under regulations in effect on the date 

12 of the enactment of this Act may be reimbursed 

13 from an employee’s flexible spending arrangement, 

14 notwithstanding the fact that such expenses are at15 tributable to any individual who is not the employ16 ee’s spouse or dependent (within the meaning of sec17 tion 105(b) of the Internal Revenue Code of 1986) 

18 but is an eligible beneficiary (within the meaning of 

19 section 106(f) of such Code) under the flexible 

20 spending arrangement with respect to the employee, 

21 and 

22 (2) for reimbursement from a health reimburse23 ment arrangement under regulations in effect on the 

24 date of the enactment of this Act may be reimbursed 

25 from an employee’s health reimbursement arrangeVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ment, notwithstanding the fact that such expenses 

2 are attributable to an individual who is not a spouse 

3 or dependent (within the meaning of section 105(b) 

4 of such Code) but is an eligible beneficiary (within 

5 the meaning of section 106(f) of such Code) under 

6 the health reimbursement arrangement with respect 

7 to the employee. 

8 (e) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2009. 

11 SUBDIVISION B—MEDICARE AND 

12 MEDICAID IMPROVEMENTS 

13 SEC. 1001. TABLE OF CONTENTS OF SUBDIVISION. 

14 The table of contents for this subdivision is as fol15 lows: 

Sec. 1001. Table of contents of subdivision. 

TITLE I—IMPROVING HEALTH CARE VALUE 

Subtitle A—Provisions Related to Medicare Part A 

PART 1—MARKET BASKET UPDATES

Sec. 1101. Skilled nursing facility payment update. 

Sec. 1102. Inpatient rehabilitation facility payment update. 

Sec. 1103. Incorporating productivity improvements into market basket updates 

that do not already incorporate such improvements. 

PART 2—OTHER MEDICARE PART A PROVISIONS

Sec. 1111. Payments to skilled nursing facilities. 

Sec. 1112. Medicare DSH report and payment adjustments in response to coverage expansion. 

Sec. 1113. Extension of hospice regulation moratorium. 

Subtitle B—Provisions Related to Part B 

PART 1—PHYSICIANS’ SERVICES


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Sec. 1121. Sustainable growth rate reform. 

Sec. 1122. Misvalued codes under the physician fee schedule. 

Sec. 1123. Payments for efficient areas. 

Sec. 1124. Modifications to the Physician Quality Reporting Initiative (PQRI). 

Sec. 1125. Adjustment to Medicare payment localities. 

PART 2—MARKET BASKET UPDATES

Sec. 1131. Incorporating productivity improvements into market basket updates 

that do not already incorporate such improvements. 

PART 3—OTHER PROVISIONS

Sec. 1141. Rental and purchase of power-driven wheelchairs. 

Sec. 1142. Extension of payment rule for brachytherapy. 

Sec. 1143. Home infusion therapy report to congress. 

Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost data and 

other data. 

Sec. 1145. Treatment of certain cancer hospitals. 

Sec. 1146. Medicare Improvement Fund. 

Sec. 1147. Payment for imaging services. 

Sec. 1148. Durable medical equipment program improvements. 

Sec. 1149. MedPAC study and report on bone mass measurement. 

Subtitle C—Provisions Related to Medicare Parts A and B 

Sec. 1151. Reducing potentially preventable hospital readmissions. 

Sec. 1152. Post acute care services payment reform plan and bundling pilot 

program. 

Sec. 1153. Home health payment update for 2010. 

Sec. 1154. Payment adjustments for home health care. 

Sec. 1155. Incorporating productivity improvements into market basket update 

for home health services. 

Sec. 1156. Limitation on Medicare exceptions to the prohibition on certain physician referrals made to hospitals. 

Sec. 1157. Institute of Medicine study of geographic adjustment factors under 

Medicare. 

Sec. 1158. Revision of medicare payment systems to address geographic inequities. 

Sec. 1159. Institute of Medicine study of geographic variation in health care 

spending and promoting high-value health care. 

Subtitle D—Medicare Advantage Reforms 

PART 1—PAYMENT AND ADMINISTRATION

Sec. 1161. Phase-in of payment based on fee-for-service costs. 

Sec. 1162. Quality bonus payments. 

Sec. 1163. Extension of Secretarial coding intensity adjustment authority. 

Sec. 1164. Simplification of annual beneficiary election periods. 

Sec. 1165. Extension of reasonable cost contracts. 

Sec. 1166. Limitation of waiver authority for employer group plans. 

Sec. 1167. Improving risk adjustment for payments. 

Sec. 1168. Elimination of MA Regional Plan Stabilization Fund. 

PART 2—BENEFICIARY PROTECTIONS AND ANTI-FRAUD

Sec. 1171. Limitation on cost-sharing for individual health services. 


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Sec. 1172. Continuous open enrollment for enrollees in plans with enrollment 

suspension. 

Sec. 1173. Information for beneficiaries on MA plan administrative costs. 

Sec. 1174. Strengthening audit authority. 

Sec. 1175. Authority to deny plan bids. 

PART 3—TREATMENT OF SPECIAL NEEDS PLANS

Sec. 1176. Limitation on enrollment outside open enrollment period of individuals into chronic care specialized MA plans for special needs 

individuals. 

Sec. 1177. Extension of authority of special needs plans to restrict enrollment. 

Subtitle E—Improvements to Medicare Part D 

Sec. 1181. Elimination of coverage gap. 

Sec. 1182. Discounts for certain part D drugs in original coverage gap. 

Sec. 1183. Repeal of provision relating to submission of claims by pharmacies 

located in or contracting with long-term care facilities. 

Sec. 1184. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the 

annual out-of-pocket threshold under part D. 

Sec. 1185. Permitting mid-year changes in enrollment for formulary changes 

that adversely impact an enrollee. 

Subtitle F—Medicare Rural Access Protections 

Sec. 1191. Telehealth expansion and enhancements. 

Sec. 1192. Extension of outpatient hold harmless provision. 

Sec. 1193. Extension of section 508 hospital reclassifications. 

Sec. 1194. Extension of geographic floor for work. 

Sec. 1195. Extension of payment for technical component of certain physician 

pathology services. 

Sec. 1196. Extension of ambulance add-ons. 

TITLE II—MEDICARE BENEFICIARY IMPROVEMENTS 

Subtitle A—Improving and Simplifying Financial Assistance for Low Income 

Medicare Beneficiaries 

Sec. 1201. Improving assets tests for Medicare Savings Program and low-income subsidy program. 

Sec. 1202. Elimination of part D cost-sharing for certain non-institutionalized 

full-benefit dual eligible individuals. 

Sec. 1203. Eliminating barriers to enrollment. 

Sec. 1204. Enhanced oversight relating to reimbursements for retroactive low 

income subsidy enrollment. 

Sec. 1205. Intelligent assignment in enrollment. 

Sec. 1206. Special enrollment period and automatic enrollment process for certain subsidy eligible individuals. 

Sec. 1207. Application of MA premiums prior to rebate in calculation of low 

income subsidy benchmark. 

Subtitle B—Reducing Health Disparities 

Sec. 1221. Ensuring effective communication in Medicare. 


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Sec. 1222. Demonstration to promote access for Medicare beneficiaries with 

limited English proficiency by providing reimbursement for culturally and linguistically appropriate services. 

Sec. 1223. IOM report on impact of language access services. 

Sec. 1224. Definitions. 

Subtitle C—Miscellaneous Improvements 

Sec. 1231. Extension of therapy caps exceptions process. 

Sec. 1232. Extended months of coverage of immunosuppressive drugs for kidney transplant patients and other renal dialysis provisions. 

Sec. 1233. Advance care planning consultation. 

Sec. 1234. Part B special enrollment period and waiver of limited enrollment 

penalty for TRICARE beneficiaries. 

Sec. 1235. Exception for use of more recent tax year in case of gains from sale 

of primary residence in computing part B income-related premium. 

Sec. 1236. Demonstration program on use of patient decisions aids. 

TITLE III—PROMOTING PRIMARY CARE, MENTAL HEALTH 

SERVICES, AND COORDINATED CARE 

Sec. 1301. Accountable Care Organization pilot program. 

Sec. 1302. Medical home pilot program. 

Sec. 1303. Payment incentive for selected primary care services. 

Sec. 1304. Increased reimbursement rate for certified nurse-midwives. 

Sec. 1305. Coverage and waiver of cost-sharing for preventive services. 

Sec. 1306. Waiver of deductible for colorectal cancer screening tests regardless 

of coding, subsequent diagnosis, or ancillary tissue removal. 

Sec. 1307. Excluding clinical social worker services from coverage under the 

medicare skilled nursing facility prospective payment system 

and consolidated payment. 

Sec. 1308. Coverage of marriage and family therapist services and mental 

health counselor services. 

Sec. 1309. Extension of physician fee schedule mental health add-on. 

Sec. 1310. Expanding access to vaccines. 

Sec. 1311. Expansion of Medicare-Covered Preventive Services at Federally 

Qualified Health Centers. 

TITLE IV—QUALITY 

Subtitle A—Comparative Effectiveness Research 

Sec. 1401. Comparative effectiveness research. 

Subtitle B—Nursing Home Transparency 

PART 1—IMPROVING TRANSPARENCY OF INFORMATION ON SKILLED

NURSING FACILITIES AND NURSING FACILITIES

Sec. 1411. Required disclosure of ownership and additional disclosable parties 

information. 

Sec. 1412. Accountability requirements. 

Sec. 1413. Nursing home compare Medicare website. 

Sec. 1414. Reporting of expenditures. 

Sec. 1415. Standardized complaint form. 

Sec. 1416. Ensuring staffing accountability. 


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PART 2—TARGETING ENFORCEMENT

Sec. 1421. Civil money penalties. 

Sec. 1422. National independent monitor pilot program. 

Sec. 1423. Notification of facility closure. 

PART 3—IMPROVING STAFF TRAINING

Sec. 1431. Dementia and abuse prevention training. 

Sec. 1432. Study and report on training required for certified nurse aides and 

supervisory staff. 

Subtitle C—Quality Measurements 

Sec. 1441. Establishment of national priorities for quality improvement. 

Sec. 1442. Development of new quality measures; GAO evaluation of data collection process for quality measurement. 

Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of quality 

measures. 

Sec. 1444. Application of quality measures. 

Sec. 1445. Consensus-based entity funding. 

Subtitle D—Physician Payments Sunshine Provision 

Sec. 1451. Reports on financial relationships between manufacturers and distributors of covered drugs, devices, biologicals, or medical supplies under Medicare, Medicaid, or CHIP and physicians and 

other health care entities and between physicians and other 

health care entities. 

Subtitle E—Public Reporting on Health Care-Associated Infections 

Sec. 1461. Requirement for public reporting by hospitals and ambulatory surgical centers on health care-associated infections. 

TITLE V—MEDICARE GRADUATE MEDICAL EDUCATION 

Sec. 1501. Distribution of unused residency positions. 

Sec. 1502. Increasing training in nonprovider settings. 

Sec. 1503. Rules for counting resident time for didactic and scholarly activities 

and other activities. 

Sec. 1504. Preservation of resident cap positions from closed hospitals. 

Sec. 1505. Improving accountability for approved medical residency training. 

TITLE VI—PROGRAM INTEGRITY 

Subtitle A—Increased Funding to Fight Waste, Fraud, and Abuse 

Sec. 1601. Increased funding and flexibility to fight fraud and abuse. 

Subtitle B—Enhanced Penalties for Fraud and Abuse 

Sec. 1611. Enhanced penalties for false statements on provider or supplier enrollment applications. 

Sec. 1612. Enhanced penalties for submission of false statements material to 

a false claim. 

Sec. 1613. Enhanced penalties for delaying inspections. 

Sec. 1614. Enhanced hospice program safeguards. 


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Sec. 1615. Enhanced penalties for individuals excluded from program participation. 

Sec. 1616. Enhanced penalties for provision of false information by Medicare 

Advantage and part D plans. 

Sec. 1617. Enhanced penalties for Medicare Advantage and part D marketing 

violations. 

Sec. 1618. Enhanced penalties for obstruction of program audits. 

Sec. 1619. Exclusion of certain individuals and entities from participation in 

Medicare and State health care programs. 

Subtitle C—Enhanced Program and Provider Protections 

Sec. 1631. Enhanced CMS program protection authority. 

Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure requirements relating to previous affiliations. 

Sec. 1633. Required inclusion of payment modifier for certain evaluation and 

management services. 

Sec. 1634. Evaluations and reports required under Medicare Integrity Program. 

Sec. 1635. Require providers and suppliers to adopt programs to reduce waste, 

fraud, and abuse. 

Sec. 1636. Maximum period for submission of Medicare claims reduced to not 

more than 12 months. 

Sec. 1637. Physicians who order durable medical equipment or home health 

services required to be Medicare enrolled physicians or eligible 

professionals. 

Sec. 1638. Requirement for physicians to provide documentation on referrals to 

programs at high risk of waste and abuse. 

Sec. 1639. Face to face encounter with patient required before physicians may 

certify eligibility for home health services or durable medical 

equipment under Medicare. 

Sec. 1640. Extension of testimonial subpoena authority to program exclusion 

investigations. 

Sec. 1641. Required repayments of Medicare and Medicaid overpayments. 

Sec. 1642. Expanded application of hardship waivers for OIG exclusions to 

beneficiaries of any Federal health care program. 

Sec. 1643. Access to certain information on renal dialysis facilities. 

Sec. 1644. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicare. 

Sec. 1645. Conforming civil monetary penalties to False Claims Act amendments. 

Subtitle D—Access to Information Needed to Prevent Fraud, Waste, and 

Abuse 

Sec. 1651. Access to Information Necessary to Identify Fraud, Waste, and 

Abuse. 

Sec. 1652. Elimination of duplication between the Healthcare Integrity and 

Protection Data Bank and the National Practitioner Data 

Bank. 

Sec. 1653. Compliance with HIPAA privacy and security standards. 

TITLE VII—MEDICAID AND CHIP 

Subtitle A—Medicaid and Health Reform 


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Sec. 1701. Eligibility for individuals with income below 1331⁄3 percent of the 

Federal poverty level. 

Sec. 1702. Requirements and special rules for certain Medicaid eligible individuals. 

Sec. 1703. CHIP and Medicaid maintenance of effort. 

Sec. 1704. Reduction in Medicaid DSH. 

Sec. 1705. Expanded outstationing. 

Subtitle B—Prevention 

Sec. 1711. Required coverage of preventive services. 

Sec. 1712. Tobacco cessation. 

Sec. 1713. Optional coverage of nurse home visitation services. 

Sec. 1714. State eligibility option for family planning services. 

Subtitle C—Access 

Sec. 1721. Payments to primary care practitioners. 

Sec. 1722. Medical home pilot program. 

Sec. 1723. Translation or interpretation services. 

Sec. 1724. Optional coverage for freestanding birth center services. 

Sec. 1725. Inclusion of public health clinics under the vaccines for children program. 

Subtitle D—Coverage 

Sec. 1731. Optional medicaid coverage of low-income HIV-infected individuals. 

Sec. 1732. Extending transitional Medicaid Assistance (TMA). 

Sec. 1733. Requirement of 12-month continuous coverage under certain CHIP 

programs. 

Subtitle E—Financing 

Sec. 1741. Payments to pharmacists. 

Sec. 1742. Prescription drug rebates. 

Sec. 1743. Extension of prescription drug discounts to enrollees of medicaid 

managed care organizations. 

Sec. 1744. Payments for graduate medical education. 

Subtitle F—Waste, Fraud, and Abuse 

Sec. 1751. Health-care acquired conditions. 

Sec. 1752. Evaluations and reports required under Medicaid Integrity Program. 

Sec. 1753. Require providers and suppliers to adopt programs to reduce waste, 

fraud, and abuse. 

Sec. 1754. Overpayments. 

Sec. 1755. Managed Care Organizations. 

Sec. 1756. Termination of provider participation under Medicaid and CHIP if 

terminated under Medicare or other State plan or child health 

plan. 

Sec. 1757. Medicaid and CHIP exclusion from participation relating to certain 

ownership, control, and management affiliations. 

Sec. 1758. Requirement to report expanded set of data elements under MMIS 

to detect fraud and abuse. 

Sec. 1759. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicaid. 

Sec. 1760. Denial of payments for litigation-related misconduct. 


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Subtitle G—Puerto Rico and the Territories 

Sec. 1771. Puerto Rico and territories. 

Subtitle H—Miscellaneous 

Sec. 1781. Technical corrections. 

Sec. 1782. Extension of QI program. 

TITLE VIII—REVENUE-RELATED PROVISIONS 

Sec. 1801. Disclosures to facilitate identification of individuals likely to be ineligible for the low-income assistance under the Medicare prescription drug program to assist Social Security Administration’s outreach to eligible individuals. 

Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for 

Trust Fund. 

TITLE IX—MISCELLANEOUS PROVISIONS 

Sec. 1901. Repeal of trigger provision. 

Sec. 1902. Repeal of comparative cost adjustment (CCA) program. 

Sec. 1903. Extension of gainsharing demonstration. 

Sec. 1904. Grants to States for quality home visitation programs for families 

with young children and families expecting children. 

Sec. 1905. Improved coordination and protection for dual eligibles. 

Sec. 1906. Assessment of Medicare cost-intensive diseases and conditions. 

1 TITLE I—IMPROVING HEALTH 

2 CARE VALUE 

3 Subtitle A—Provisions Related to 

4 Medicare Part A 

5 PART 1—MARKET BASKET UPDATES 

6 SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE. 

7 (a) IN GENERAL.—Section 1888(e)(4)(E)(ii) of the 

8 Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is 

9 amended— 

10 (1) in subclause (III), by striking ‘‘and’’ at the 

11 end; 

12 (2) by redesignating subclause (IV) as sub13 clause (VI); and 


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1 (3) by inserting after subclause (III) the fol2 lowing new subclauses: 

3 ‘‘(IV) for each of fiscal years 

4 2004 through 2009, the rate com5 puted for the previous fiscal year in6 creased by the skilled nursing facility 

7 market basket percentage change for 

8 the fiscal year involved; 

9 ‘‘(V) for fiscal year 2010, the 

10 rate computed for the previous fiscal 

11 year; and’’. 

12 (b) DELAYED EFFECTIVE DATE.—Section 

13 1888(e)(4)(E)(ii)(V) of the Social Security Act, as in14 serted by subsection (a)(3), shall not apply to payment 

15 for days before January 1, 2010. 

16 SEC. 1102. INPATIENT REHABILITATION FACILITY PAY17 MENT UPDATE. 

18 (a) IN GENERAL.—Section 1886(j)(3)(C) of the So19 cial Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended 

20 by striking ‘‘and 2009’’ and inserting ‘‘through 2010’’. 

21 (b) DELAYED EFFECTIVE DATE.—The amendment 

22 made by subsection (a) shall not apply to payment units 

23 occurring before January 1, 2010. 


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1 SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVE2 MENTS INTO MARKET BASKET UPDATES 

3 THAT DO NOT ALREADY INCORPORATE SUCH 

4 IMPROVEMENTS. 

5 (a) INPATIENT ACUTE HOSPITALS.—Section 

6 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

7 1395ww(b)(3)(B)) is amended— 

8 (1) in clause (iii)— 

9 (A) by striking ‘‘(iii) For purposes of this 

10 subparagraph,’’ and inserting ‘‘(iii)(I) For pur11 poses of this subparagraph, subject to the pro12 ductivity adjustment described in subclause 

13 (II),’’; and 

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

15 subclause: 

16 ‘‘(II) The productivity adjustment described in this 

17 subclause, with respect to an increase or change for a fis18 cal year or year or cost reporting period, or other annual 

19 period, is a productivity offset equal to the percentage 

20 change in the 10-year moving average of annual economy21 wide private nonfarm business multi-factor productivity 

22 (as recently published before the promulgation of such in23 crease for the year or period involved). Except as other24 wise provided, any reference to the increase described in 

25 this clause shall be a reference to the percentage increase 


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1 described in subclause (I) minus the percentage change 

2 under this subclause.’’; 

3 (2) in the first sentence of clause (viii)(I), by 

4 inserting ‘‘(but not below zero)’’ after ‘‘shall be re5 duced’’; and 

6 (3) in the first sentence of clause (ix)(I)— 

7 (A) by inserting ‘‘(determined without re8 gard to clause (iii)(II)’’ after ‘‘clause (i)’’ the 

9 second time it appears; and 

10 (B) by inserting ‘‘(but not below zero)’’ 

11 after ‘‘reduced’’. 

12 (b) SKILLED NURSING FACILITIES.—Section 

13 1888(e)(5)(B) of such Act (42 U.S.C. 1395yy(e)(5))(B) 

14 is amended by inserting ‘‘subject to the productivity ad15 justment described in section 1886(b)(3)(B)(iii)(II)’’ after 

16 ‘‘as calculated by the Secretary’’. 

17 (c) LONG TERM CARE HOSPITALS.—Section 

18 1886(m) of the Social Security Act (42 U.S.C. 

19 1395ww(m)) is amended by adding at the end the fol20 lowing new paragraph: 

21 ‘‘(3) PRODUCTIVITY ADJUSTMENT.—In imple22 menting the system described in paragraph (1) for 

23 discharges occurring during the rate year ending in 

24 2010 or any subsequent rate year for a hospital, to 

25 the extent that an annual percentage increase factor 


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1 applies to a base rate for such discharges for the 

2 hospital, such factor shall be subject to the produc3 tivity adjustment described in subsection 

4 (b)(3)(B)(iii)(II).’’. 

5 (d) INPATIENT REHABILITATION FACILITIES.—The 

6 second sentence of section 1886(j)(3)(C) of the Social Se7 curity Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by in8 serting ‘‘(subject to the productivity adjustment described 

9 in subsection (b)(3)(B)(iii)(II))’’ after ‘‘appropriate per10 centage increase’’. 

11 (e) PSYCHIATRIC HOSPITALS.—Section 1886 of the 

12 Social Security Act (42 U.S.C. 1395ww) is amended by 

13 adding at the end the following new subsection: 

14 ‘‘(o) PROSPECTIVE PAYMENT FOR PSYCHIATRIC

15 HOSPITALS.— 

16 ‘‘(1) REFERENCE TO ESTABLISHMENT AND IM17 PLEMENTATION OF SYSTEM.—For provisions related 

18 to the establishment and implementation of a pro19 spective payment system for payments under this 

20 title for inpatient hospital services furnished by psy21 chiatric hospitals (as described in clause (i) of sub22 section (d)(1)(B) and psychiatric units (as described 

23 in the matter following clause (v) of such sub24 section), see section 124 of the Medicare, Medicaid, 


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1 and SCHIP Balanced Budget Refinement Act of 

2 1999. 

3 ‘‘(2) PRODUCTIVITY ADJUSTMENT.—In imple4 menting the system described in paragraph (1) for 

5 discharges occurring during the rate year ending in 

6 2011 or any subsequent rate year for a psychiatric 

7 hospital or unit described in such paragraph, to the 

8 extent that an annual percentage increase factor ap9 plies to a base rate for such discharges for the hos10 pital or unit, respectively, such factor shall be sub11 ject to the productivity adjustment described in sub12 section (b)(3)(B)(iii)(II).’’. 

13 (f) HOSPICE CARE.—Subclause (VII) of section 

14 1814(i)(1)(C)(ii) of the Social Security Act (42 U.S.C. 

15 1395f(i)(1)(C)(ii)) is amended by inserting after ‘‘the 

16 market basket percentage increase’’ the following: ‘‘(which 

17 is subject to the productivity adjustment described in sec18 tion 1886(b)(3)(B)(iii)(II))’’. 

19 (g) EFFECTIVE DATE.—The amendments made by 

20 subsections (a), (b), (d), and (f) shall apply to annual in21 creases effected for fiscal years beginning with fiscal year 

22 2010. 

23 PART 2—OTHER MEDICARE PART A PROVISIONS 

24 SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES. 

25 (a) CHANGE IN RECALIBRATION FACTOR.— 


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1 (1) ANALYSIS.—The Secretary of Health and 

2 Human Services shall conduct, using calendar year 

3 2006 claims data, an initial analysis comparing total 

4 payments under title XVIII of the Social Security 

5 Act for skilled nursing facility services under the 

6 RUG–53 and under the RUG–44 classification sys7 tems. 

8 (2) ADJUSTMENT IN RECALIBRATION FAC9 TOR.—Based on the initial analysis under paragraph 

10 (1), the Secretary shall adjust the case mix indexes 

11 under section 1888(e)(4)(G)(i) of the Social Security 

12 Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for fiscal year 

13 2010 by the appropriate recalibration factor as pro14 posed in the proposed rule for Medicare skilled nurs15 ing facilities issued by such Secretary on May 12, 

16 2009 (74 Federal Register 22214 et seq.). 

17 (b) CHANGE IN PAYMENT FOR NONTHERAPY ANCIL18 LARY (NTA) SERVICES AND THERAPY SERVICES.— 

19 (1) CHANGES UNDER CURRENT SNF CLASSI20 FICATION SYSTEM.— 

21 (A) IN GENERAL.—Subject to subpara22 graph (B), the Secretary of Health and Human 

23 Services shall, under the system for payment of 

24 skilled nursing facility services under section 

25 1888(e) of the Social Security Act (42 U.S.C. 


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1 1395yy(e)), increase payment by 10 percent for 

2 non-therapy ancillary services (as specified by 

3 the Secretary in the notice issued on November 

4 27, 1998 (63 Federal Register 65561 et seq.)) 

5 and shall decrease payment for the therapy case 

6 mix component of such rates by 5.5 percent. 

7 (B) EFFECTIVE DATE.—The changes in 

8 payment described in subparagraph (A) shall 

9 apply for days on or after January 1, 2010, 

10 and until the Secretary implements an alter11 native case mix classification system for pay12 ment of skilled nursing facility services under 

13 section 1888(e) of the Social Security Act (42 

14 U.S.C. 1395yy(e)). 

15 (C) IMPLEMENTATION.—Notwithstanding 

16 any other provision of law, the Secretary may 

17 implement by program instruction or otherwise 

18 the provisions of this paragraph. 

19 (2) CHANGES UNDER A FUTURE SNF CASE MIX

20 CLASSIFICATION SYSTEM.— 

21 (A) ANALYSIS.— 

22 (i) IN GENERAL.—The Secretary of 

23 Health and Human Services shall analyze 

24 payments for non-therapy ancillary services 

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1 sification system to ensure the accuracy of 

2 payment for non-therapy ancillary services. 

3 Such analysis shall consider use of appro4 priate predictors which may include age, 

5 physical and mental status, ability to per6 form activities of daily living, prior nursing 

7 home stay, diagnoses, broad RUG cat8 egory, and a proxy for length of stay. 

9 (ii) APPLICATION.—Such analysis 

10 shall be conducted in a manner such that 

11 the future skilled nursing facility classifica12 tion system is implemented to apply to 

13 services furnished during a fiscal year be14 ginning with fiscal year 2011. 

15 (B) CONSULTATION.—In conducting the 

16 analysis under subparagraph (A), the Secretary 

17 shall consult with interested parties, including 

18 the Medicare Payment Advisory Commission 

19 and other interested stakeholders, to identify 

20 appropriate predictors of nontherapy ancillary 

21 costs. 

22 (C) RULEMAKING.—The Secretary shall 

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1 making cycle for purposes of implementation 

2 beginning for such fiscal year. 

3 (D) IMPLEMENTATION.—Subject to sub4 paragraph (E) and consistent with subpara5 graph (A)(ii), the Secretary shall implement 

6 changes to payments for non-therapy ancillary 

7 services (which shall include a separate rate 

8 component for non-therapy ancillary services 

9 and may include use of a model that predicts 

10 payment amounts applicable for non-therapy 

11 ancillary services) under such future skilled 

12 nursing facility services classification system as 

13 the Secretary determines appropriate based on 

14 the analysis conducted pursuant to subpara15 graph (A). 

16 (E) BUDGET NEUTRALITY.—The Secretary 

17 shall implement changes described in subpara18 graph (D) in a manner such that the estimated 

19 expenditures under such future skilled nursing 

20 facility services classification system for a fiscal 

21 year beginning with fiscal year 2011 with such 

22 changes would be equal to the estimated ex23 penditures that would otherwise occur under 

24 title XVIII of the Social Security Act under 

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1 sification system for such year without such 

2 changes. 

3 (c) OUTLIER POLICY FOR NTA AND THERAPY.—Sec4 tion 1888(e) of the Social Security Act (42 U.S.C. 

5 1395yy(e)) is amended by adding at the end the following 

6 new paragraph: 

7 ‘‘(13) OUTLIERS FOR NTA AND THERAPY.— 

8 ‘‘(A) IN GENERAL.—With respect to 

9 outliers because of unusual variations in the 

10 type or amount of medically necessary care, be11 ginning with October 1, 2010, the Secretary— 

12 ‘‘(i) shall provide for an addition or 

13 adjustment to the payment amount other14 wise made under this section with respect 

15 to non-therapy ancillary services in the 

16 case of such outliers; and 

17 ‘‘(ii) may provide for such an addition 

18 or adjustment to the payment amount oth19 erwise made under this section with re20 spect to therapy services in the case of 

21 such outliers. 

22 ‘‘(B) OUTLIERS BASED ON AGGREGATE

23 COSTS.—Outlier adjustments or additional pay24 ments described in subparagraph (A) shall be 

25 based on aggregate costs during a stay in a 


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1 skilled nursing facility and not on the number 

2 of days in such stay. 

3 ‘‘(C) BUDGET NEUTRALITY.—The Sec4 retary shall reduce estimated payments that 

5 would otherwise be made under the prospective 

6 payment system under this subsection with re7 spect to a fiscal year by 2 percent. The total 

8 amount of the additional payments or payment 

9 adjustments for outliers made under this para10 graph with respect to a fiscal year may not ex11 ceed 2 percent of the total payments projected 

12 or estimated to be made based on the prospec13 tive payment system under this subsection for 

14 the fiscal year.’’. 

15 (d) CONFORMING AMENDMENTS.—Section 

16 1888(e)(8) of such Act (42 U.S.C. 1395yy(e)(8)) is 

17 amended— 

18 (1) in subparagraph (A)— 

19 (A) by striking ‘‘and’’ before ‘‘adjust20 ments’’; and 

21 (B) by inserting ‘‘, and adjustment under 

22 section 1111(b) of the America’s Affordable 

23 Health Choices Act of 2009’’ before the semi24 colon at the end; 

25 (2) in subparagraph (B), by striking ‘‘and’’; 


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1 (3) in subparagraph (C), by striking the period 

2 and inserting ‘‘; and’’; and 

3 (4) by adding at the end the following new sub4 paragraph: 

5 ‘‘(D) the establishment of outliers under 

6 paragraph (13).’’. 

7 SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUST8 MENTS IN RESPONSE TO COVERAGE EXPAN9 SION. 

10 (a) DSH REPORT.— 

11 (1) IN GENERAL.—Not later than January 1, 

12 2016, the Secretary of Health and Human Services 

13 shall submit to Congress a report on Medicare DSH 

14 taking into account the impact of the health care re15 forms carried out under subdivision A in reducing 

16 the number of uninsured individuals. The report 

17 shall include recommendations relating to the fol18 lowing: 

19 (A) The appropriate amount, targeting, 

20 and distribution of Medicare DSH to com21 pensate for higher Medicare costs associated 

22 with serving low-income beneficiaries (taking 

23 into account variations in the empirical jus24 tification for Medicare DSH attributable to hos25 pital characteristics, including bed size), conVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00243 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sistent with the original intent of Medicare 

2 DSH. 

3 (B) The appropriate amount, targeting, 

4 and distribution of Medicare DSH to hospitals 

5 given their continued uncompensated care costs, 

6 to the extent such costs remain. 

7 (2) COORDINATION WITH MEDICAID DSH RE8 PORT.—The Secretary shall coordinate the report 

9 under this subsection with the report on Medicaid 

10 DSH under section 1704(a). 

11 (b) PAYMENT ADJUSTMENTS IN RESPONSE TO COV12 ERAGE EXPANSION.— 

13 (1) IN GENERAL.—If there is a significant de14 crease in the national rate of uninsurance as a result 

15 of this division (as determined under paragraph 

16 (2)(A)), then the Secretary of Health and Human 

17 Services shall, beginning in fiscal year 2017, imple18 ment the following adjustments to Medicare DSH: 

19 (A) In lieu of the amount of Medicare 

20 DSH payment that would otherwise be made 

21 under section 1886(d)(5)(F) of the Social Secu22 rity Act, the amount of Medicare DSH payment 

23 shall be an amount based on the recommenda24 tions of the report under subsection (a)(1)(A) 

25 and shall take into account variations in the 


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1 empirical justification for Medicare DSH attrib2 utable to hospital characteristics, including bed 

3 size. 

4 (B) Subject to paragraph (3), make an ad5 ditional payment to a hospital by an amount 

6 that is estimated based on the amount of un7 compensated care provided by the hospital 

8 based on criteria for uncompensated care as de9 termined by the Secretary, which shall exclude 

10 bad debt. 

11 (2) SIGNIFICANT DECREASE IN NATIONAL RATE

12 OF UNINSURANCE AS A RESULT OF THIS DIVISION.— 

13 For purposes of this subsection— 

14 (A) IN GENERAL.—There is a ‘‘significant 

15 decrease in the national rate of uninsurance as 

16 a result of this division’’ if there is a decrease 

17 in the national rate of uninsurance (as defined 

18 in subparagraph (B)) from 2012 to 2014 that 

19 exceeds 8 percentage points. 

20 (B) NATIONAL RATE OF UNINSURANCE

21 DEFINED.—The term ‘‘national rate of 

22 uninsurance’’ means, for a year, such rate for 

23 the under-65 population for the year as deter24 mined and published by the Bureau of the CenVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00245 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sus in its Current Population Survey in or 

2 about September of the succeeding year. 

3 (3) UNCOMPENSATED CARE INCREASE.— 

4 (A) COMPUTATION OF DSH SAVINGS.—For 

5 each fiscal year (beginning with fiscal year 

6 2017), the Secretary shall estimate the aggre7 gate reduction in the amount of Medicare DSH 

8 payment that would be expected to result from 

9 the adjustment under paragraph (1)(A). 

10 (B) STRUCTURE OF PAYMENT IN11 CREASE.—The Secretary shall compute the ad12 ditional payment to a hospital as described in 

13 paragraph (1)(B) for a fiscal year in accordance 

14 with a formula established by the Secretary 

15 that provides that— 

16 (i) the estimated aggregate amount of 

17 such increase for the fiscal year does not 

18 exceed 50 percent of the aggregate reduc19 tion in Medicare DSH estimated by the 

20 Secretary for such fiscal year; and 

21 (ii) hospitals with higher levels of un22 compensated care receive a greater in23 crease. 

24 (c) MEDICARE DSH.—In this section, the term 

25 ‘‘Medicare DSH’’ means adjustments in payments under 


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1 section 1886(d)(5)(F) of the Social Security Act (42 

2 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital services 

3 furnished by disproportionate share hospitals. 

4 SEC. 1113. EXTENSION OF HOSPICE REGULATION MORATO5 RIUM. 

6 Section 4301(a) of division B of the American Recov7 ery and Reinvestment Act of 2009 (Public Law 111–5) 

8 is amended— 

9 (1) by striking ‘‘October 1, 2009’’ and inserting 

10 ‘‘October 1, 2010’’; and 

11 (2) by striking ‘‘for fiscal year 2009’’ and in12 serting ‘‘for fiscal years 2009 and 2010’’. 

13 Subtitle B—Provisions Related to 

14 Part B 

15 PART 1—PHYSICIANS’ SERVICES 

16 SEC. 1121. SUSTAINABLE GROWTH RATE REFORM. 

17 (a) TRANSITIONAL UPDATE FOR 2010.—Section 

18 1848(d) of the Social Security Act (42 U.S.C. 1395w– 

19 4(d)) is amended by adding at the end the following new 

20 paragraph: 

21 ‘‘(10) UPDATE FOR 2010.—The update to the 

22 single conversion factor established in paragraph 

23 (1)(C) for 2010 shall be the percentage increase in 

24 the MEI (as defined in section 1842(i)(3)) for that 

25 year.’’. 


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1 (b) REBASING SGR USING 2009; LIMITATION ON

2 CUMULATIVE ADJUSTMENT PERIOD.—Section 1848(d)(4) 

3 of such Act (42 U.S.C. 1395w–4(d)(4)) is amended— 

4 (1) in subparagraph (B), by striking ‘‘subpara5 graph (D)’’ and inserting ‘‘subparagraphs (D) and 

6 (G)’’; and 

7 (2) by adding at the end the following new sub8 paragraph: 

9 ‘‘(G) REBASING USING 2009 FOR FUTURE

10 UPDATE ADJUSTMENTS.—In determining the 

11 update adjustment factor under subparagraph 

12 (B) for 2011 and subsequent years— 

13 ‘‘(i) the allowed expenditures for 2009 

14 shall be equal to the amount of the actual 

15 expenditures for physicians’ services during 

16 2009; and 

17 ‘‘(ii) the reference in subparagraph 

18 (B)(ii)(I) to ‘April 1, 1996’ shall be treat19 ed as a reference to ‘January 1, 2009 (or, 

20 if later, the first day of the fifth year be21 fore the year involved)’.’’. 

22 (c) LIMITATION ON PHYSICIANS’ SERVICES IN23 CLUDED IN TARGET GROWTH RATE COMPUTATION TO

24 SERVICES COVERED UNDER PHYSICIAN FEE SCHED25 ULE.—Effective for services furnished on or after January 


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1 1, 2009, section 1848(f)(4)(A) of such Act is amended by 

2 striking ‘‘(such as clinical’’ and all that follows through 

3 ‘‘in a physician’s office’’ and inserting ‘‘for which payment 

4 under this part is made under the fee schedule under this 

5 section, for services for practitioners described in section 

6 1842(b)(18)(C) on a basis related to such fee schedule, 

7 or for services described in section 1861(p) (other than 

8 such services when furnished in the facility of a provider 

9 of services)’’. 

10 (d) ESTABLISHMENT OF SEPARATE TARGET

11 GROWTH RATES FOR CATEGORIES OF SERVICES.— 

12 (1) ESTABLISHMENT OF SERVICE CAT13 EGORIES.—Subsection (j) of section 1848 of the So14 cial Security Act (42 U.S.C. 1395w–4) is amended 

15 by adding at the end the following new paragraph: 

16 ‘‘(5) SERVICE CATEGORIES.—For services fur17 nished on or after January 1, 2009, each of the fol18 lowing categories of physicians’ services (as defined 

19 in paragraph (3)) shall be treated as a separate 

20 ‘service category’: 

21 ‘‘(A) Evaluation and management services 

22 that are procedure codes (for services covered 

23 under this title) for— 

24 ‘‘(i) services in the category des25 ignated Evaluation and Management in the 


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1 Health Care Common Procedure Coding 

2 System (established by the Secretary under 

3 subsection (c)(5) as of December 31, 2009, 

4 and as subsequently modified by the Sec5 retary); and 

6 ‘‘(ii) preventive services (as defined in 

7 section 1861(iii)) for which payment is 

8 made under this section. 

9 ‘‘(B) All other services not described in 

10 subparagraph (A). 

11 Service categories established under this paragraph 

12 shall apply without regard to the specialty of the 

13 physician furnishing the service.’’. 

14 (2) ESTABLISHMENT OF SEPARATE CONVER15 SION FACTORS FOR EACH SERVICE CATEGORY.— 

16 Subsection (d)(1) of section 1848 of the Social Secu17 rity Act (42 U.S.C. 1395w–4) is amended— 

18 (A) in subparagraph (A)— 

19 (i) by designating the sentence begin20 ning ‘‘The conversion factor’’ as clause (i) 

21 with the heading ‘‘APPLICATION OF SIN22 GLE CONVERSION FACTOR.—’’ and with 

23 appropriate indentation; 


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1 (ii) by striking ‘‘The conversion fac2 tor’’ and inserting ‘‘Subject to clause (ii), 

3 the conversion factor’’; and 

4 (iii) by adding at the end the fol5 lowing new clause: 

6 ‘‘(ii) APPLICATION OF MULTIPLE CON7 VERSION FACTORS BEGINNING WITH

8 2011.— 

9 ‘‘(I) IN GENERAL.—In applying 

10 clause (i) for years beginning with 

11 2011, separate conversion factors 

12 shall be established for each service 

13 category of physicians’ services (as de14 fined in subsection (j)(5)) and any 

15 reference in this section to a conver16 sion factor for such years shall be 

17 deemed to be a reference to the con18 version factor for each of such cat19 egories. 

20 ‘‘(II) INITIAL CONVERSION FAC21 TORS.—Such factors for 2011 shall be 

22 based upon the single conversion fac23 tor for the previous year multiplied by 

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1 graph (11) for such category for 

2 2011. 

3 ‘‘(III) UPDATING OF CONVER4 SION FACTORS.—Such factor for a 

5 service category for a subsequent year 

6 shall be based upon the conversion 

7 factor for such category for the pre8 vious year and adjusted by the update 

9 established for such category under 

10 paragraph (11) for the year in11 volved.’’; and 

12 (B) in subparagraph (D), by striking 

13 ‘‘other physicians’ services’’ and inserting ‘‘for 

14 physicians’ services described in the service cat15 egory described in subsection (j)(5)(B)’’. 

16 (3) ESTABLISHING UPDATES FOR CONVERSION

17 FACTORS FOR SERVICE CATEGORIES.—Section 

18 1848(d) of the Social Security Act (42 U.S.C. 

19 1395w–4(d)), as amended by subsection (a), is 

20 amended— 

21 (A) in paragraph (4)(C)(iii), by striking 

22 ‘‘The allowed’’ and inserting ‘‘Subject to para23 graph (11)(B), the allowed’’; and 

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

25 paragraph: 


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1 ‘‘(11) UPDATES FOR SERVICE CATEGORIES BE2 GINNING WITH 2011.— 

3 ‘‘(A) IN GENERAL.—In applying paragraph 

4 (4) for a year beginning with 2011, the fol5 lowing rules apply: 

6 ‘‘(i) APPLICATION OF SEPARATE UP7 DATE ADJUSTMENTS FOR EACH SERVICE

8 CATEGORY.—Pursuant to paragraph 

9 (1)(A)(ii)(I), the update shall be made to 

10 the conversion factor for each service cat11 egory (as defined in subsection (j)(5)) 

12 based upon an update adjustment factor 

13 for the respective category and year and 

14 the update adjustment factor shall be com15 puted, for a year, separately for each serv16 ice category. 

17 ‘‘(ii) COMPUTATION OF ALLOWED AND

18 ACTUAL EXPENDITURES BASED ON SERV19 ICE CATEGORIES.—In computing the prior 

20 year adjustment component and the cumu21 lative adjustment component under clauses 

22 (i) and (ii) of paragraph (4)(B), the fol23 lowing rules apply: 

24 ‘‘(I) APPLICATION BASED ON

25 SERVICE CATEGORIES.—The allowed 


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1 expenditures and actual expenditures 

2 shall be the allowed and actual ex3 penditures for the service category, as 

4 determined under subparagraph (B). 

5 ‘‘(II) APPLICATION OF CATEGORY

6 SPECIFIC TARGET GROWTH RATE.— 

7 The growth rate applied under clause 

8 (ii)(II) of such paragraph shall be the 

9 target growth rate for the service cat10 egory involved under subsection (f)(5). 

11 ‘‘(B) DETERMINATION OF ALLOWED EX12 PENDITURES.—In applying paragraph (4) for a 

13 year beginning with 2010, notwithstanding sub14 paragraph (C)(iii) of such paragraph, the al15 lowed expenditures for a service category for a 

16 year is an amount computed by the Secretary 

17 as follows: 

18 ‘‘(i) FOR 2010.—For 2010: 

19 ‘‘(I) TOTAL 2009 ACTUAL EX20 PENDITURES FOR ALL SERVICES IN21 CLUDED IN SGR COMPUTATION FOR

22 EACH SERVICE CATEGORY.—Compute 

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1 section (f)(4)(A)) for 2009 for each 

2 service category. 

3 ‘‘(II) INCREASE BY GROWTH

4 RATE TO OBTAIN 2010 ALLOWED EX5 PENDITURES FOR SERVICE CAT6 EGORY.—Compute allowed expendi7 tures for the service category for 2010 

8 by increasing the allowed expenditures 

9 for the service category for 2009 com10 puted under subclause (I) by the tar11 get growth rate for such service cat12 egory under subsection (f) for 2010. 

13 ‘‘(ii) FOR SUBSEQUENT YEARS.—For 

14 a subsequent year, take the amount of al15 lowed expenditures for such category for 

16 the preceding year (under clause (i) or this 

17 clause) and increase it by the target 

18 growth rate determined under subsection 

19 (f) for such category and year.’’. 

20 (4) APPLICATION OF SEPARATE TARGET

21 GROWTH RATES FOR EACH CATEGORY.— 

22 (A) IN GENERAL.—Section 1848(f) of the 

23 Social Security Act (42 U.S.C. 1395w–4(f)) is 

24 amended by adding at the end the following 

25 new paragraph: 


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1 ‘‘(5) APPLICATION OF SEPARATE TARGET

2 GROWTH RATES FOR EACH SERVICE CATEGORY BE3 GINNING WITH 2010.—The target growth rate for a 

4 year beginning with 2010 shall be computed and ap5 plied separately under this subsection for each serv6 ice category (as defined in subsection (j)(5)) and 

7 shall be computed using the same method for com8 puting the target growth rate except that the factor 

9 described in paragraph (2)(C) for— 

10 ‘‘(A) the service category described in sub11 section (j)(5)(A) shall be increased by 0.02; and 

12 ‘‘(B) the service category described in sub13 section (j)(5)(B) shall be increased by 0.01.’’. 

14 (B) USE OF TARGET GROWTH RATES.— 

15 Section 1848 of such Act is further amended— 

16 (i) in subsection (d)— 

17 (I) in paragraph (1)(E)(ii), by in18 serting ‘‘or target’’ after ‘‘sustain19 able’’; and 

20 (II) in paragraph (4)(B)(ii)(II), 

21 by inserting ‘‘or target’’ after ‘‘sus22 tainable’’; and 

23 (ii) in the heading of subsection (f), 

24 by inserting ‘‘AND TARGET GROWTH


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1 RATE’’ after ‘‘SUSTAINABLE GROWTH

2 RATE’’; 

3 (iii) in subsection (f)(1)— 

4 (I) by striking ‘‘and’’ at the end 

5 of subparagraph (A); 

6 (II) in subparagraph (B), by in7 serting ‘‘before 2010’’ after ‘‘each 

8 succeeding year’’ and by striking the 

9 period at the end and inserting ‘‘; 

10 and’’; and 

11 (III) by adding at the end the 

12 following new subparagraph: 

13 ‘‘(C) November 1 of each succeeding year 

14 the target growth rate for such succeeding year 

15 and each of the 2 preceding years.’’; and 

16 (iv) in subsection (f)(2), in the matter 

17 before subparagraph (A), by inserting after 

18 ‘‘beginning with 2000’’ the following: ‘‘and 

19 ending with 2009’’. 

20 (e) APPLICATION TO ACCOUNTABLE CARE ORGANI21 ZATION PILOT PROGRAM.—In applying the target growth 

22 rate under subsections (d) and (f) of section 1848 of the 

23 Social Security Act to services furnished by a practitioner 

24 to beneficiaries who are attributable to an accountable 

25 care organization under the pilot program provided under 


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1 section 1866D of such Act, the Secretary of Health and 

2 Human Services shall develop, not later than January 1, 

3 2012, for application beginning with 2012, a method 

4 that— 

5 (1) allows each such organization to have its 

6 own expenditure targets and updates for such practi7 tioners, with respect to beneficiaries who are attrib8 utable to that organization, that are consistent with 

9 the methodologies described in such subsection (f); 

10 and 

11 (2) provides that the target growth rate appli12 cable to other physicians shall not apply to such 

13 physicians to the extent that the physicians’ services 

14 are furnished through the accountable care organiza15 tion. 

16 In applying paragraph (1), the Secretary of Health and 

17 Human Services may apply the difference in the update 

18 under such paragraph on a claim-by-claim or lump sum 

19 basis and such a payment shall be taken into account 

20 under the pilot program. 

21 SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE 

22 SCHEDULE. 

23 (a) IN GENERAL.—Section 1848(c)(2) of the Social 

24 Security Act (42 U.S.C. 1395w-4(c)(2)) is amended by 

25 adding at the end the following new subparagraphs: 


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1 ‘‘(K) POTENTIALLY MISVALUED CODES.— 

2 ‘‘(i) IN GENERAL.—The Secretary 

3 shall— 

4 ‘‘(I) periodically identify services 

5 as being potentially misvalued using 

6 criteria specified in clause (ii); and 

7 ‘‘(II) review and make appro8 priate adjustments to the relative val9 ues established under this paragraph 

10 for services identified as being poten11 tially misvalued under subclause (I). 

12 ‘‘(ii) IDENTIFICATION OF POTEN13 TIALLY MISVALUED CODES.—For purposes 

14 of identifying potentially misvalued services 

15 pursuant to clause (i)(I), the Secretary 

16 shall examine (as the Secretary determines 

17 to be appropriate) codes (and families of 

18 codes as appropriate) for which there has 

19 been the fastest growth; codes (and fami20 lies of codes as appropriate) that have ex21 perienced substantial changes in practice 

22 expenses; codes for new technologies or 

23 services within an appropriate period (such 

24 as three years) after the relative values are 

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1 tiple codes that are frequently billed in 

2 conjunction with furnishing a single serv3 ice; codes with low relative values, particu4 larly those that are often billed multiple 

5 times for a single treatment; codes which 

6 have not been subject to review since the 

7 implementation of the RBRVS (the so8 called ‘Harvard-valued codes’); and such 

9 other codes determined to be appropriate 

10 by the Secretary. 

11 ‘‘(iii) REVIEW AND ADJUSTMENTS.— 

12 ‘‘(I) The Secretary may use ex13 isting processes to receive rec14 ommendations on the review and ap15 propriate adjustment of potentially 

16 misvalued services described clause 

17 (i)(II). 

18 ‘‘(II) The Secretary may conduct 

19 surveys, other data collection activi20 ties, studies, or other analyses as the 

21 Secretary determines to be appro22 priate to facilitate the review and ap23 propriate adjustment described in 

24 clause (i)(II). 


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1 ‘‘(III) The Secretary may use 

2 analytic contractors to identify and 

3 analyze services identified under 

4 clause (i)(I), conduct surveys or col5 lect data, and make recommendations 

6 on the review and appropriate adjust7 ment of services described in clause 

8 (i)(II). 

9 ‘‘(IV) The Secretary may coordi10 nate the review and appropriate ad11 justment described in clause (i)(II) 

12 with the periodic review described in 

13 subparagraph (B). 

14 ‘‘(V) As part of the review and 

15 adjustment described in clause (i)(II), 

16 including with respect to codes with 

17 low relative values described in clause 

18 (ii), the Secretary may make appro19 priate coding revisions (including 

20 using existing processes for consider21 ation of coding changes) which may 

22 include consolidation of individual 

23 services into bundled codes for pay24 ment under the fee schedule under 

25 subsection (b). 


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1 ‘‘(VI) The provisions of subpara2 graph (B)(ii)(II) shall apply to adjust3 ments to relative value units made 

4 pursuant to this subparagraph in the 

5 same manner as such provisions apply 

6 to adjustments under subparagraph 

7 (B)(ii)(II). 

8 ‘‘(L) VALIDATING RELATIVE VALUE

9 UNITS.— 

10 ‘‘(i) IN GENERAL.—The Secretary 

11 shall establish a process to validate relative 

12 value units under the fee schedule under 

13 subsection (b). 

14 ‘‘(ii) COMPONENTS AND ELEMENTS

15 OF WORK.—The process described in 

16 clause (i) may include validation of work 

17 elements (such as time, mental effort and 

18 professional judgment, technical skill and 

19 physical effort, and stress due to risk) in20 volved with furnishing a service and may 

21 include validation of the pre, post, and 

22 intra-service components of work. 

23 ‘‘(iii) SCOPE OF CODES.—The valida24 tion of work relative value units shall in25 clude a sampling of codes for services that 


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1 is the same as the codes listed under sub2 paragraph (K)(ii) 

3 ‘‘(iv) METHODS.—The Secretary may 

4 conduct the validation under this subpara5 graph using methods described in sub6 clauses (I) through (V) of subparagraph 

7 (K)(iii) as the Secretary determines to be 

8 appropriate. 

9 ‘‘(v) ADJUSTMENTS.—The Secretary 

10 shall make appropriate adjustments to the 

11 work relative value units under the fee 

12 schedule under subsection (b). The provi13 sions of subparagraph (B)(ii)(II) shall 

14 apply to adjustments to relative value units 

15 made pursuant to this subparagraph in the 

16 same manner as such provisions apply to 

17 adjustments under subparagraph 

18 (B)(ii)(II).’’. 

19 (b) IMPLEMENTATION.— 

20 (1) FUNDING.—For purposes of carrying out 

21 the provisions of subparagraphs (K) and (L) of 

22 1848(c)(2) of the Social Security Act, as added by 

23 subsection (a), in addition to funds otherwise avail24 able, out of any funds in the Treasury not otherwise 

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1 retary of Health and Human Services for the Center 

2 for Medicare & Medicaid Services Program Manage3 ment Account $20,000,000 for fiscal year 2010 and 

4 each subsequent fiscal year. Amounts appropriated 

5 under this paragraph for a fiscal year shall be avail6 able until expended. 

7 (2) ADMINISTRATION.— 

8 (A) Chapter 35 of title 44, United States 

9 Code and the provisions of the Federal Advisory 

10 Committee Act (5 U.S.C. App.) shall not apply 

11 to this section or the amendment made by this 

12 section. 

13 (B) Notwithstanding any other provision of 

14 law, the Secretary may implement subpara15 graphs (K) and (L) of 1848(c)(2) of the Social 

16 Security Act, as added by subsection (a), by 

17 program instruction or otherwise. 

18 (C) Section 4505(d) of the Balanced 

19 Budget Act of 1997 is repealed. 

20 (D) Except for provisions related to con21 fidentiality of information, the provisions of the 

22 Federal Acquisition Regulation shall not apply 

23 to this section or the amendment made by this 

24 section. 


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1 (3) FOCUSING CMS RESOURCES ON POTEN2 TIALLY OVERVALUED CODES.—Section 1868(a) of 

3 the Social Security Act (42 1395ee(a)) is repealed. 

4 SEC. 1123. PAYMENTS FOR EFFICIENT AREAS. 

5 Section 1833 of the Social Security Act (42 U.S.C. 

6 1395l) is amended by adding at the end the following new 

7 subsection: 

8 ‘‘(x) INCENTIVE PAYMENTS FOR EFFICIENT

9 AREAS.— 

10 ‘‘(1) IN GENERAL.—In the case of services fur11 nished under the physician fee schedule under sec12 tion 1848 on or after January 1, 2011, and before 

13 January 1, 2013, by a supplier that is paid under 

14 such fee schedule in an efficient area (as identified 

15 under paragraph (2)), in addition to the amount of 

16 payment that would otherwise be made for such 

17 services under this part, there also shall be paid (on 

18 a monthly or quarterly basis) an amount equal to 5 

19 percent of the payment amount for the services 

20 under this part. 

21 ‘‘(2) IDENTIFICATION OF EFFICIENT AREAS.— 

22 ‘‘(A) IN GENERAL.—Based upon available 

23 data, the Secretary shall identify those counties 

24 or equivalent areas in the United States in the 

25 lowest fifth percentile of utilization based on 


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1 per capita spending under this part and part A 

2 for services provided in the most recent year for 

3 which data are available as of the date of the 

4 enactment of this subsection, as standardized to 

5 eliminate the effect of geographic adjustments 

6 in payment rates. 

7 ‘‘(B) IDENTIFICATION OF COUNTIES

8 WHERE SERVICE IS FURNISHED..—For pur9 poses of paying the additional amount specified 

10 in paragraph (1), if the Secretary uses the 5- 

11 digit postal ZIP Code where the service is fur12 nished, the dominant county of the postal ZIP 

13 Code (as determined by the United States Post14 al Service, or otherwise) shall be used to deter15 mine whether the postal ZIP Code is in a coun16 ty described in subparagraph (A). 

17 ‘‘(C) LIMITATION ON REVIEW.—There 

18 shall be no administrative or judicial review 

19 under section 1869, 1878, or otherwise, respect20 ing— 

21 ‘‘(i) the identification of a county or 

22 other area under subparagraph (A); or 

23 ‘‘(ii) the assignment of a postal ZIP 

24 Code to a county or other area under sub25 paragraph (B). 


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1 ‘‘(D) PUBLICATION OF LIST OF COUNTIES; 

2 POSTING ON WEBSITE.—With respect to a year 

3 for which a county or area is identified under 

4 this paragraph, the Secretary shall identify 

5 such counties or areas as part of the proposed 

6 and final rule to implement the physician fee 

7 schedule under section 1848 for the applicable 

8 year. The Secretary shall post the list of coun9 ties identified under this paragraph on the 

10 Internet website of the Centers for Medicare & 

11 Medicaid Services.’’. 

12 SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY 

13 REPORTING INITIATIVE (PQRI). 

14 (a) FEEDBACK.—Section 1848(m)(5) of the Social 

15 Security Act (42 U.S.C. 1395w–4(m)(5)) is amended by 

16 adding at the end the following new subparagraph: 

17 ‘‘(H) FEEDBACK.—The Secretary shall 

18 provide timely feedback to eligible professionals 

19 on the performance of the eligible professional 

20 with respect to satisfactorily submitting data on 

21 quality measures under this subsection.’’. 

22 (b) APPEALS.—Such section is further amended— 

23 (1) in subparagraph (E), by striking ‘‘There 

24 shall be’’ and inserting ‘‘Subject to subparagraph 

25 (I), there shall be’’; and 


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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(I) INFORMAL APPEALS PROCESS.—Not4 withstanding subparagraph (E), by not later 

5 than January 1, 2011, the Secretary shall es6 tablish and have in place an informal process 

7 for eligible professionals to appeal the deter8 mination that an eligible professional did not 

9 satisfactorily submit data on quality measures 

10 under this subsection.’’. 

11 (c) INTEGRATION OF PHYSICIAN QUALITY REPORT12 ING AND EHR REPORTING.—Section 1848(m) of such 

13 Act is amended by adding at the end the following new 

14 paragraph: 

15 ‘‘(7) INTEGRATION OF PHYSICIAN QUALITY RE16 PORTING AND EHR REPORTING.—Not later than 

17 January 1, 2012, the Secretary shall develop a plan 

18 to integrate clinical reporting on quality measures 

19 under this subsection with reporting requirements 

20 under subsection (o) relating to the meaningful use 

21 of electronic health records. Such integration shall 

22 consist of the following: 

23 ‘‘(A) The development of measures, the re24 porting of which would both demonstrate— 


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1 ‘‘(i) meaningful use of an electronic 

2 health record for purposes of subsection 

3 (o); and 

4 ‘‘(ii) clinical quality of care furnished 

5 to an individual. 

6 ‘‘(B) The collection of health data to iden7 tify deficiencies in the quality and coordination 

8 of care for individuals eligible for benefits under 

9 this part. 

10 ‘‘(C) Such other activities as specified by 

11 the Secretary.’’. 

12 (d) EXTENSION OF INCENTIVE PAYMENTS.—Section 

13 1848(m)(1) of such Act (42 U.S.C. 1395w–4(m)(1)) is 

14 amended— 

15 (1) in subparagraph (A), by striking ‘‘2010’’ 

16 and inserting ‘‘2012’’; and 

17 (2) in subparagraph (B)(ii), by striking ‘‘2009 

18 and 2010’’ and inserting ‘‘for each of the years 2009 

19 through 2012’’. 

20 SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCAL21 ITIES. 

22 (a) IN GENERAL.—Section 1848(e) of the Social Se23 curity Act (42 U.S.C.1395w–4(e)) is amended by adding 

24 at the end the following new paragraph: 


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1 ‘‘(6) TRANSITION TO USE OF MSAS AS FEE

2 SCHEDULE AREAS IN CALIFORNIA.— 

3 ‘‘(A) IN GENERAL.— 

4 ‘‘(i) REVISION.—Subject to clause (ii) 

5 and notwithstanding the previous provi6 sions of this subsection, for services fur7 nished on or after January 1, 2011, the 

8 Secretary shall revise the fee schedule 

9 areas used for payment under this section 

10 applicable to the State of California using 

11 the Metropolitan Statistical Area (MSA) 

12 iterative Geographic Adjustment Factor 

13 methodology as follows: 

14 ‘‘(I) The Secretary shall con15 figure the physician fee schedule areas 

16 using the Core-Based Statistical 

17 Areas-Metropolitan Statistical Areas 

18 (each in this paragraph referred to as 

19 an ‘MSA’), as defined by the Director 

20 of the Office of Management and 

21 Budget, as the basis for the fee sched22 ule areas. The Secretary shall employ 

23 an iterative process to transition fee 

24 schedule areas. First, the Secretary 

25 shall list all MSAs within the State by 


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1 Geographic Adjustment Factor de2 scribed in paragraph (2) (in this para3 graph referred to as a ‘GAF’) in de4 scending order. In the first iteration, 

5 the Secretary shall compare the GAF 

6 of the highest cost MSA in the State 

7 to the weighted-average GAF of the 

8 group of remaining MSAs in the 

9 State. If the ratio of the GAF of the 

10 highest cost MSA to the weighted-av11 erage GAF of the rest of State is 1.05 

12 or greater then the highest cost MSA 

13 becomes a separate fee schedule area. 

14 ‘‘(II) In the next iteration, the 

15 Secretary shall compare the MSA of 

16 the second-highest GAF to the weight17 ed-average GAF of the group of re18 maining MSAs. If the ratio of the sec19 ond-highest MSA’s GAF to the 

20 weighted-average of the remaining 

21 lower cost MSAs is 1.05 or greater, 

22 the second-highest MSA becomes a 

23 separate fee schedule area. The 

24 iterative process continues until the 

25 ratio of the GAF of the highest-cost 


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1 remaining MSA to the weighted-aver2 age of the remaining lower-cost MSAs 

3 is less than 1.05, and the remaining 

4 group of lower cost MSAs form a sin5 gle fee schedule area, If two MSAs 

6 have identical GAFs, they shall be 

7 combined in the iterative comparison. 

8 ‘‘(ii) TRANSITION.—For services fur9 nished on or after January 1, 2011, and 

10 before January 1, 2016, in the State of 

11 California, after calculating the work, prac12 tice expense, and malpractice geographic 

13 indices described in clauses (i), (ii), and 

14 (iii) of paragraph (1)(A) that would other15 wise apply through application of this 

16 paragraph, the Secretary shall increase any 

17 such index to the county-based fee sched18 ule area value on December 31, 2009, if 

19 such index would otherwise be less than 

20 the value on January 1, 2010. 

21 ‘‘(B) SUBSEQUENT REVISIONS.— 

22 ‘‘(i) PERIODIC REVIEW AND ADJUST23 MENTS IN FEE SCHEDULE AREAS.—Subse24 quent to the process outlined in paragraph 

25 (1)(C), not less often than every three 


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1 years, the Secretary shall review and up2 date the California Rest-of-State fee sched3 ule area using MSAs as defined by the Di4 rector of the Office of Management and 

5 Budget and the iterative methodology de6 scribed in subparagraph (A)(i). 

7 ‘‘(ii) LINK WITH GEOGRAPHIC INDEX

8 DATA REVISION.—The revision described in 

9 clause (i) shall be made effective concur10 rently with the application of the periodic 

11 review of the adjustment factors required 

12 under paragraph (1)(C) for California for 

13 2012 and subsequent periods. Upon re14 quest, the Secretary shall make available 

15 to the public any county-level or MSA de16 rived data used to calculate the geographic 

17 practice cost index. 

18 ‘‘(C) REFERENCES TO FEE SCHEDULE

19 AREAS.—Effective for services furnished on or 

20 after January 1, 2010, for the State of Cali21 fornia, any reference in this section to a fee 

22 schedule area shall be deemed a reference to an 

23 MSA in the State.’’. 

24 (b) CONFORMING AMENDMENT TO DEFINITION OF

25 FEE SCHEDULE AREA.—Section 1848(j)(2) of the Social 


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1 Security Act (42 U.S.C. 1395w(j)(2)) is amended by strik2 ing ‘‘The term’’ and inserting ‘‘Except as provided in sub3 section (e)(6)(C), the term’’. 

4 PART 2—MARKET BASKET UPDATES 

5 SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVE6 MENTS INTO MARKET BASKET UPDATES 

7 THAT DO NOT ALREADY INCORPORATE SUCH 

8 IMPROVEMENTS. 

9 (a) OUTPATIENT HOSPITALS.— 

10 (1) IN GENERAL.—The first sentence of section 

11 1833(t)(3)(C)(iv) of the Social Security Act (42 

12 U.S.C. 1395l(t)(3)(C)(iv)) is amended— 

13 (A) by inserting ‘‘(which is subject to the 

14 productivity adjustment described in subclause 

15 (II) of such section)’’ after 

16 ‘‘1886(b)(3)(B)(iii)’’; and 

17 (B) by inserting ‘‘(but not below 0)’’ after 

18 ‘‘reduced’’. 

19 (2) EFFECTIVE DATE.—The amendments made 

20 by paragraph (1) shall apply to increase factors for 

21 services furnished in years beginning with 2010. 

22 (b) AMBULANCE SERVICES.—Section 1834(l)(3)(B) 

23 of such Act (42 U.S.C. 1395m(l)(3)(B))) is amended by 

24 inserting before the period at the end the following: ‘‘and, 

25 in the case of years beginning with 2010, subject to the 


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1 productivity adjustment described in section 

2 1886(b)(3)(B)(iii)(II)’’. 

3 (c) AMBULATORY SURGICAL CENTER SERVICES.— 

4 Section 1833(i)(2)(D) of such Act (42 U.S.C. 

5 1395l(i)(2)(D)) is amended— 

6 (1) by redesignating clause (v) as clause (vi); 

7 and 

8 (2) by inserting after clause (iv) the following 

9 new clause: 

10 ‘‘(v) In implementing the system described in clause 

11 (i), for services furnished during 2010 or any subsequent 

12 year, to the extent that an annual percentage change fac13 tor applies, such factor shall be subject to the productivity 

14 adjustment described in section 1886(b)(3)(B)(iii)(II).’’. 

15 (d) LABORATORY SERVICES.—Section 1833(h)(2)(A) 

16 of such Act (42 U.S.C. 1395l(h)(2)(A)) is amended— 

17 (1) in clause (i), by striking ‘‘for each of the 

18 years 2009 through 2013’’ and inserting ‘‘for 

19 2009’’; and 

20 (2) clause (ii)— 

21 (A) by striking ‘‘and’’ at the end of sub22 clause (III); 

23 (B) by striking the period at the end of 

24 subclause (IV) and inserting ‘‘; and’’; and 


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1 (C) by adding at the end the following new 

2 subclause: 

3 ‘‘(V) the annual adjustment in the fee schedules 

4 determined under clause (i) for years beginning with 

5 2010 shall be subject to the productivity adjustment 

6 described in section 1886(b)(3)(B)(iii)(II).’’. 

7 (e) CERTAIN DURABLE MEDICAL EQUIPMENT.—Sec8 tion 1834(a)(14) of such Act (42 U.S.C. 1395m(a)(14)) 

9 is amended— 

10 (1) in subparagraph (K), by inserting before 

11 the semicolon at the end the following: ‘‘, subject to 

12 the productivity adjustment described in section 

13 1886(b)(3)(B)(iii)(II)’’; 

14 (2) in subparagraph (L)(i), by inserting after 

15 ‘‘June 2013,’’ the following: ‘‘subject to the produc16 tivity adjustment described in section 

17 1886(b)(3)(B)(iii)(II),’’; 

18 (3) in subparagraph (L)(ii), by inserting after 

19 ‘‘June 2013’’ the following: ‘‘, subject to the produc20 tivity adjustment described in section 

21 1886(b)(3)(B)(iii)(II)’’; and 

22 (4) in subparagraph (M), by inserting before 

23 the period at the end the following: ‘‘, subject to the 

24 productivity adjustment described in section 

25 1886(b)(3)(B)(iii)(II)’’. 


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1 PART 3—OTHER PROVISIONS 

2 SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN 

3 WHEELCHAIRS. 

4 (a) IN GENERAL.—Section 1834(a)(7)(A)(iii) of the 

5 Social Security Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is 

6 amended— 

7 (1) in the heading, by inserting ‘‘CERTAIN COM8 PLEX REHABILITATIVE’’ after ‘‘OPTION FOR’’; and 

9 (2) by striking ‘‘power-driven wheelchair’’ and 

10 inserting ‘‘complex rehabilitative power-driven wheel11 chair recognized by the Secretary as classified within 

12 group 3 or higher’’. 

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

14 subsection (a) shall take effect on January 1, 2011, and 

15 shall apply to power-driven wheelchairs furnished on or 

16 after such date. Such amendments shall not apply to con17 tracts entered into under section 1847 of the Social Secu18 rity Act (42 U.S.C. 1395w–3) pursuant to a bid submitted 

19 under such section before October 1, 2010, under sub20 section (a)(1)(B)(i)(I) of such section. 

21 SEC. 1142. EXTENSION OF PAYMENT RULE FOR 

22 BRACHYTHERAPY. 

23 Section 1833(t)(16)(C) of the Social Security Act (42 

24 U.S.C. 1395l(t)(16)(C)), as amended by section 142 of the 

25 Medicare Improvements for Patients and Providers Act of 

26 2008 (Public Law 110–275), is amended by striking, the 


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1 first place it appears, ‘‘January 1, 2010’’ and inserting 

2 ‘‘January 1, 2012’’. 

3 SEC. 1143. HOME INFUSION THERAPY REPORT TO CON4 GRESS. 

5 Not later than 12 months after the date of enactment 

6 of this Act, the Medicare Payment Advisory Commission 

7 shall submit to Congress a report on the following: 

8 (1) The scope of coverage for home infusion 

9 therapy in the fee-for-service Medicare program 

10 under title XVIII of the Social Security Act, Medi11 care Advantage under part C of such title, the vet12 eran’s health care program under chapter 17 of title 

13 38, United States Code, and among private payers, 

14 including an analysis of the scope of services pro15 vided by home infusion therapy providers to their 

16 patients in such programs. 

17 (2) The benefits and costs of providing such 

18 coverage under the Medicare program, including a 

19 calculation of the potential savings achieved through 

20 avoided or shortened hospital and nursing home 

21 stays as a result of Medicare coverage of home infu22 sion therapy. 

23 (3) An assessment of sources of data on the 

24 costs of home infusion therapy that might be used 


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1 to construct payment mechanisms in the Medicare 

2 program. 

3 (4) Recommendations, if any, on the structure 

4 of a payment system under the Medicare program 

5 for home infusion therapy, including an analysis of 

6 the payment methodologies used under Medicare Ad7 vantage plans and private health plans for the provi8 sion of home infusion therapy and their applicability 

9 to the Medicare program. 

10 SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS 

11 (ASCS) TO SUBMIT COST DATA AND OTHER 

12 DATA. 

13 (a) COST REPORTING.— 

14 (1) IN GENERAL.—Section 1833(i) of the Social 

15 Security Act (42 U.S.C. 1395l(i)) is amended by 

16 adding at the end the following new paragraph: 

17 ‘‘(8) The Secretary shall require, as a condition of 

18 the agreement described in section 1832(a)(2)(F)(i), the 

19 submission of such cost report as the Secretary may speci20 fy, taking into account the requirements for such reports 

21 under section 1815 in the case of a hospital.’’. 

22 (2) DEVELOPMENT OF COST REPORT.—Not 

23 later than 3 years after the date of the enactment 

24 of this Act, the Secretary of Health and Human 

25 Services shall develop a cost report form for use 


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1 under section 1833(i)(8) of the Social Security Act, 

2 as added by paragraph (1). 

3 (3) AUDIT REQUIREMENT.—The Secretary shall 

4 provide for periodic auditing of cost reports sub5 mitted under section 1833(i)(8) of the Social Secu6 rity Act, as added by paragraph (1). 

7 (4) EFFECTIVE DATE.—The amendment made 

8 by paragraph (1) shall apply to agreements applica9 ble to cost reporting periods beginning 18 months 

10 after the date the Secretary develops the cost report 

11 form under paragraph (2). 

12 (b) ADDITIONAL DATA ON QUALITY.— 

13 (1) IN GENERAL.—Section 1833(i)(7) of such 

14 Act (42 U.S.C. 1395l(i)(7)) is amended— 

15 (A) in subparagraph (B), by inserting 

16 ‘‘subject to subparagraph (C),’’ after ‘‘may oth17 erwise provide,’’; and 

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

19 subparagraph: 

20 ‘‘(C) Under subparagraph (B) the Secretary shall re21 quire the reporting of such additional data relating to 

22 quality of services furnished in an ambulatory surgical fa23 cility, including data on health care associated infections, 

24 as the Secretary may specify.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall to reporting for years begin3 ning with 2012. 

4 SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS. 

5 Section 1833(t) of the Social Security Act (42 U.S.C. 

6 1395l(t)) is amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(18) AUTHORIZATION OF ADJUSTMENT FOR

9 CANCER HOSPITALS.— 

10 ‘‘(A) STUDY.—The Secretary shall conduct 

11 a study to determine if, under the system under 

12 this subsection, costs incurred by hospitals de13 scribed in section 1886(d)(1)(B)(v) with respect 

14 to ambulatory payment classification groups ex15 ceed those costs incurred by other hospitals fur16 nishing services under this subsection (as deter17 mined appropriate by the Secretary). 

18 ‘‘(B) AUTHORIZATION OF ADJUSTMENT.— 

19 Insofar as the Secretary determines under sub20 paragraph (A) that costs incurred by hospitals 

21 described in section 1886(d)(1)(B)(v) exceed 

22 those costs incurred by other hospitals fur23 nishing services under this subsection, the Sec24 retary shall provide for an appropriate adjust25 ment under paragraph (2)(E) to reflect those 


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1 higher costs effective for services furnished on 

2 or after January 1, 2011.’’. 

3 SEC. 1146. MEDICARE IMPROVEMENT FUND. 

4 Section 1898(b)(1)(A) of the Social Security Act (42 

5 U.S.C. 1395iii(b)(1)(A)) is amended to read as follows: 

6 ‘‘(A) the period beginning with fiscal year 

7 2011 and ending with fiscal year 2019, 

8 $8,000,000,000; and’’. 

9 SEC. 1147. PAYMENT FOR IMAGING SERVICES. 

10 (a) ADJUSTMENT IN PRACTICE EXPENSE TO RE11 FLECT HIGHER PRESUMED UTILIZATION.—Section 1848 

12 of the Social Security Act (42 U.S.C. 1395w) is amend13 ed— 

14 (1) in subsection (b)(4)— 

15 (A) in subparagraph (B), by striking ‘‘sub16 paragraph (A)’’ and inserting ‘‘this paragraph’’; 

17 and 

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

19 subparagraph: 

20 ‘‘(C) ADJUSTMENT IN PRACTICE EXPENSE

21 TO REFLECT HIGHER PRESUMED UTILIZA22 TION.—In computing the number of practice 

23 expense relative value units under subsection 

24 (c)(2)(C)(ii) with respect to advanced diagnostic 

25 imaging services (as defined in section 


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1 1834(e)(1)(B)) , the Secretary shall adjust such 

2 number of units so it reflects a 75 percent 

3 (rather than 50 percent) presumed rate of utili4 zation of imaging equipment.’’; and 

5 (2) in subsection (c)(2)(B)(v)(II), by inserting 

6 ‘‘AND OTHER PROVISIONS’’ after ‘‘OPD PAYMENT

7 CAP’’. 

8 (b) ADJUSTMENT IN TECHNICAL COMPONENT ‘‘DIS9 COUNT’’ ON SINGLE-SESSION IMAGING TO CONSECUTIVE

10 BODY PARTS.—Section 1848(b)(4) of such Act is further 

11 amended by adding at the end the following new subpara12 graph: 

13 ‘‘(D) ADJUSTMENT IN TECHNICAL COMPO14 NENT DISCOUNT ON SINGLE-SESSION IMAGING

15 INVOLVING CONSECUTIVE BODY PARTS.—The 

16 Secretary shall increase the reduction in ex17 penditures attributable to the multiple proce18 dure payment reduction applicable to the tech19 nical component for imaging under the final 

20 rule published by the Secretary in the Federal 

21 Register on November 21, 2005 (part 405 of 

22 title 42, Code of Federal Regulations) from 25 

23 percent to 50 percent.’’. 

24 (c) EFFECTIVE DATE.—Except as otherwise pro25 vided, this section, and the amendments made by this secVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00283 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion, shall apply to services furnished on or after January 

2 1, 2011. 

3 SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IM4 PROVEMENTS. 

5 (a) WAIVER OF SURETY BOND REQUIREMENT.—Sec6 tion 1834(a)(16) of the Social Security Act (42 U.S.C. 

7 1395m(a)(16)) is amended by adding at the end the fol8 lowing: ‘‘The requirement for a surety bond described in 

9 subparagraph (B) shall not apply in the case of a phar10 macy (i) that has been enrolled under section 1866(j) as 

11 a supplier of durable medical equipment, prosthetics, 

12 orthotics, and supplies and has been issued (which may 

13 include renewal of) a provider number (as described in the 

14 first sentence of this paragraph) for at least 5 years, and 

15 (ii) for which a final adverse action (as defined in section 

16 424.57(a) of title 42, Code of Federal Regulations) has 

17 never been imposed.’’. 

18 (b) ENSURING SUPPLY OF OXYGEN EQUIPMENT .— 

19 (1) IN GENERAL.—Section 1834(a)(5)(F) of the 

20 Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is 

21 amended— 

22 (A) in clause (ii), by striking ‘‘After the’’ 

23 and inserting ‘‘Except as provided in clause 

24 (iii), after the’’; and 


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

2 clause: 

3 ‘‘(iii) CONTINUATION OF SUPPLY.—In 

4 the case of a supplier furnishing such 

5 equipment to an individual under this sub6 section as of the 27th month of the 36 

7 months described in clause (i), the supplier 

8 furnishing such equipment as of such 

9 month shall continue to furnish such 

10 equipment to such individual (either di11 rectly or though arrangements with other 

12 suppliers of such equipment) during any 

13 subsequent period of medical need for the 

14 remainder of the reasonable useful lifetime 

15 of the equipment, as determined by the 

16 Secretary, regardless of the location of the 

17 individual, unless another supplier has ac18 cepted responsibility for continuing to fur19 nish such equipment during the remainder 

20 of such period.’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by paragraph (1) shall take effect as of the date of 

23 the enactment of this Act and shall apply to the fur24 nishing of equipment to individuals for whom the 

25 27th month of a continuous period of use of oxygen 


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1 equipment described in section 1834(a)(5)(F) of the 

2 Social Security Act occurs on or after July 1, 2010. 

3 (c) TREATMENT OF CURRENT ACCREDITATION AP4 PLICATIONS.—Section 1834(a)(20)(F) of such Act (42 

5 U.S.C. 1395m(a)(20)(F)) is amended— 

6 (1) in clause (i)— 

7 (A) by striking ‘‘clause (ii)’’ and inserting 

8 ‘‘clauses (ii) and (iii)’’; and 

9 (B) by striking ‘‘and’’ at the end; 

10 (2) by striking the period at the end of clause 

11 (ii)(II) and by inserting ‘‘; and’’; 

12 (3) by inserting after clause (ii) the following 

13 new clause: 

14 ‘‘(iii) the requirement for accredita15 tion described in clause (i) shall not apply 

16 for purposes of supplying diabetic testing 

17 supplies, canes, and crutches in the case of 

18 a pharmacy that is enrolled under section 

19 1866(j) as a supplier of durable medical 

20 equipment, prosthetics, orthotics, and sup21 plies.’’; and 

22 (4) by adding after and below clause (iii) the 

23 following: 

24 ‘‘Any supplier that has submitted an applica25 tion for accreditation before August 1, 2009, 


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1 shall be deemed as meeting applicable stand2 ards and accreditation requirement under this 

3 subparagraph until such time as the inde4 pendent accreditation organization takes action 

5 on the supplier’s application.’’. 

6 (d) RESTORING 36-MONTH OXYGEN RENTAL PERIOD

7 IN CASE OF SUPPLIER BANKRUPTCY FOR CERTAIN INDI8 VIDUALS.—Section 1834(a)(5)(F) of such Act (42 U.S.C. 

9 1395m(a)(5)(F)), as amended by subsection (b), is further 

10 amended by adding at the end the following new clause: 

11 ‘‘(iv) EXCEPTION FOR BANK12 RUPTCY.—If a supplier who furnishes oxy13 gen and oxygen equipment to an individual 

14 is declared bankrupt and its assets are liq15 uidated and at the time of such declaration 

16 and liquidation more than 24 months of 

17 rental payments have been made, such in18 dividual may begin a new 36-month rental 

19 period under this subparagraph with an20 other supplier of oxygen.’’. 

21 SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS 

22 MEASUREMENT. 

23 (a) IN GENERAL.—The Medicare Payment Advisory 

24 Commission shall conduct a study regarding bone mass 

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1 ergy x-ray absorptriometry, and vertebral fracture assess2 ment. The study shall focus on the following: 

3 (1) An assessment of the adequacy of Medicare 

4 payment rates for such services, taking into account 

5 costs of acquiring the necessary equipment, profes6 sional work time, and practice expense costs. 

7 (2) The impact of Medicare payment changes 

8 since 2006 on beneficiary access to bone mass meas9 urement benefits in general and in rural and minor10 ity communities specifically. 

11 (3) A review of the clinically appropriate and 

12 recommended use among Medicare beneficiaries and 

13 how usage rates among such beneficiaries compares 

14 to such recommendations. 

15 (4) In conjunction with the findings under (3), 

16 recommendations, if necessary, regarding methods 

17 for reaching appropriate use of bone mass measure18 ment studies among Medicare beneficiaries. 

19 (b) REPORT.—The Commission shall submit a report 

20 to the Congress, not later than 9 months after the date 

21 of the enactment of this Act, containing a description of 

22 the results of the study conducted under subsection (a) 

23 and the conclusions and recommendations, if any, regard24 ing each of the issues described in paragraphs (1), (2) (3) 

25 and (4) of such subsection. 


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1 Subtitle C—Provisions Related to 

2 Medicare Parts A and B 

3 SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOS4 PITAL READMISSIONS. 

5 (a) HOSPITALS.— 

6 (1) IN GENERAL.—Section 1886 of the Social 

7 Security Act (42 U.S.C. 1395ww), as amended by 

8 section 1103(a), is amended by adding at the end 

9 the following new subsection: 

10 ‘‘(p) ADJUSTMENT TO HOSPITAL PAYMENTS FOR

11 EXCESS READMISSIONS.— 

12 ‘‘(1) IN GENERAL.—With respect to payment 

13 for discharges from an applicable hospital (as de14 fined in paragraph (5)(C)) occurring during a fiscal 

15 year beginning on or after October 1, 2011, in order 

16 to account for excess readmissions in the hospital, 

17 the Secretary shall reduce the payments that would 

18 otherwise be made to such hospital under subsection 

19 (d) (or section 1814(b)(3), as the case may be) for 

20 such a discharge by an amount equal to the product 

21 of— 

22 ‘‘(A) the base operating DRG payment 

23 amount (as defined in paragraph (2)) for the 

24 discharge; and 


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1 ‘‘(B) the adjustment factor (described in 

2 paragraph (3)(A)) for the hospital for the fiscal 

3 year. 

4 ‘‘(2) BASE OPERATING DRG PAYMENT

5 AMOUNT.— 

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

7 subparagraph (B), for purposes of this sub8 section, the term ‘base operating DRG payment 

9 amount’ means, with respect to a hospital for a 

10 fiscal year, the payment amount that would 

11 otherwise be made under subsection (d) for a 

12 discharge if this subsection did not apply, re13 duced by any portion of such amount that is at14 tributable to payments under subparagraphs 

15 (B) and (F) of paragraph (5). 

16 ‘‘(B) ADJUSTMENTS.—For purposes of 

17 subparagraph (A), in the case of a hospital that 

18 is paid under section 1814(b)(3), the term ‘base 

19 operating DRG payment amount’ means the 

20 payment amount under such section. 

21 ‘‘(3) ADJUSTMENT FACTOR.— 

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (1), the adjustment factor under this 

24 paragraph for an applicable hospital for a fiscal 

25 year is equal to the greater of— 


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1 ‘‘(i) the ratio described in subpara2 graph (B) for the hospital for the applica3 ble period (as defined in paragraph (5)(D)) 

4 for such fiscal year; or 

5 ‘‘(ii) the floor adjustment factor speci6 fied in subparagraph (C). 

7 ‘‘(B) RATIO.—The ratio described in this 

8 subparagraph for a hospital for an applicable 

9 period is equal to 1 minus the ratio of— 

10 ‘‘(i) the aggregate payments for ex11 cess readmissions (as defined in paragraph 

12 (4)(A)) with respect to an applicable hos13 pital for the applicable period; and 

14 ‘‘(ii) the aggregate payments for all 

15 discharges (as defined in paragraph 

16 (4)(B)) with respect to such applicable 

17 hospital for such applicable period. 

18 ‘‘(C) FLOOR ADJUSTMENT FACTOR.—For 

19 purposes of subparagraph (A), the floor adjust20 ment factor specified in this subparagraph 

21 for— 

22 ‘‘(i) fiscal year 2012 is 0.99; 

23 ‘‘(ii) fiscal year 2013 is 0.98; 

24 ‘‘(iii) fiscal year 2014 is 0.97; or 

25 ‘‘(iv) a subsequent fiscal year is 0.95. 


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1 ‘‘(4) AGGREGATE PAYMENTS, EXCESS READMIS2 SION RATIO DEFINED.—For purposes of this sub3 section: 

4 ‘‘(A) AGGREGATE PAYMENTS FOR EXCESS

5 READMISSIONS.—The term ‘aggregate payments 

6 for excess readmissions’ means, for a hospital 

7 for a fiscal year, the sum, for applicable condi8 tions (as defined in paragraph (5)(A)), of the 

9 product, for each applicable condition, of— 

10 ‘‘(i) the base operating DRG payment 

11 amount for such hospital for such fiscal 

12 year for such condition; 

13 ‘‘(ii) the number of admissions for 

14 such condition for such hospital for such 

15 fiscal year; and 

16 ‘‘(iii) the excess readmissions ratio (as 

17 defined in subparagraph (C)) for such hos18 pital for the applicable period for such fis19 cal year minus 1. 

20 ‘‘(B) AGGREGATE PAYMENTS FOR ALL DIS21 CHARGES.—The term ‘aggregate payments for 

22 all discharges’ means, for a hospital for a fiscal 

23 year, the sum of the base operating DRG pay24 ment amounts for all discharges for all condi25 tions from such hospital for such fiscal year. 


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1 ‘‘(C) EXCESS READMISSION RATIO.— 

2 ‘‘(i) IN GENERAL.—Subject to clauses 

3 (ii) and (iii), the term ‘excess readmissions 

4 ratio’ means, with respect to an applicable 

5 condition for a hospital for an applicable 

6 period, the ratio (but not less than 1.0) 

7 of— 

8 ‘‘(I) the risk adjusted readmis9 sions based on actual readmissions, as 

10 determined consistent with a readmis11 sion measure methodology that has 

12 been endorsed under paragraph 

13 (5)(A)(ii)(I), for an applicable hospital 

14 for such condition with respect to the 

15 applicable period; to 

16 ‘‘(II) the risk adjusted expected 

17 readmissions (as determined con18 sistent with such a methodology) for 

19 such hospital for such condition with 

20 respect to such applicable period. 

21 ‘‘(ii) EXCLUSION OF CERTAIN RE22 ADMISSIONS.—For purposes of clause (i), 

23 with respect to a hospital, excess readmis24 sions shall not include readmissions for an 

25 applicable condition for which there are 


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1 fewer than a minimum number (as deter2 mined by the Secretary) of discharges for 

3 such applicable condition for the applicable 

4 period and such hospital. 

5 ‘‘(iii) ADJUSTMENT.—In order to pro6 mote a reduction over time in the overall 

7 rate of readmissions for applicable condi8 tions, the Secretary may provide, beginning 

9 with discharges for fiscal year 2014, for 

10 the determination of the excess readmis11 sions ratio under subparagraph (C) to be 

12 based on a ranking of hospitals by read13 mission ratios (from lower to higher read14 mission ratios) normalized to a benchmark 

15 that is lower than the 50th percentile. 

16 ‘‘(5) DEFINITIONS.—For purposes of this sub17 section: 

18 ‘‘(A) APPLICABLE CONDITION.—The term 

19 ‘applicable condition’ means, subject to sub20 paragraph (B), a condition or procedure se21 lected by the Secretary among conditions and 

22 procedures for which— 

23 ‘‘(i) readmissions (as defined in sub24 paragraph (E)) that represent conditions 

25 or procedures that are high volume or high 


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1 expenditures under this title (or other cri2 teria specified by the Secretary); and 

3 ‘‘(ii) measures of such readmissions— 

4 ‘‘(I) have been endorsed by the 

5 entity with a contract under section 

6 1890(a); and 

7 ‘‘(II) such endorsed measures 

8 have appropriate exclusions for re9 admissions that are unrelated to the 

10 prior discharge (such as a planned re11 admission or transfer to another ap12 plicable hospital). 

13 ‘‘(B) EXPANSION OF APPLICABLE CONDI14 TIONS.—Beginning with fiscal year 2013, the 

15 Secretary shall expand the applicable conditions 

16 beyond the 3 conditions for which measures 

17 have been endorsed as described in subpara18 graph (A)(ii)(I) as of the date of the enactment 

19 of this subsection to the additional 4 conditions 

20 that have been so identified by the Medicare 

21 Payment Advisory Commission in its report to 

22 Congress in June 2007 and to other conditions 

23 and procedures which may include an all-condi24 tion measure of readmissions, as determined 

25 appropriate by the Secretary. In expanding 


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1 such applicable conditions, the Secretary shall 

2 seek the endorsement described in subpara3 graph (A)(ii)(I) but may apply such measures 

4 without such an endorsement. 

5 ‘‘(C) APPLICABLE HOSPITAL.—The term 

6 ‘applicable hospital’ means a subsection (d) hos7 pital or a hospital that is paid under section 

8 1814(b)(3). 

9 ‘‘(D) APPLICABLE PERIOD.—The term ‘ap10 plicable period’ means, with respect to a fiscal 

11 year, such period as the Secretary shall specify 

12 for purposes of determining excess readmis13 sions. 

14 ‘‘(E) READMISSION.—The term ‘readmis15 sion’ means, in the case of an individual who is 

16 discharged from an applicable hospital, the ad17 mission of the individual to the same or another 

18 applicable hospital within a time period speci19 fied by the Secretary from the date of such dis20 charge. Insofar as the discharge relates to an 

21 applicable condition for which there is an en22 dorsed measure described in subparagraph 

23 (A)(ii)(I), such time period (such as 30 days) 

24 shall be consistent with the time period speci25 fied for such measure. 


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1 ‘‘(6) LIMITATIONS ON REVIEW.—There shall be 

2 no administrative or judicial review under section 

3 1869, section 1878, or otherwise of— 

4 ‘‘(A) the determination of base operating 

5 DRG payment amounts; 

6 ‘‘(B) the methodology for determining the 

7 adjustment factor under paragraph (3), includ8 ing excess readmissions ratio under paragraph 

9 (4)(C), aggregate payments for excess readmis10 sions under paragraph (4)(A), and aggregate 

11 payments for all discharges under paragraph 

12 (4)(B), and applicable periods and applicable 

13 conditions under paragraph (5); 

14 ‘‘(C) the measures of readmissions as de15 scribed in paragraph (5)(A)(ii); and 

16 ‘‘(D) the determination of a targeted hos17 pital under paragraph (8)(B)(i), the increase in 

18 payment under paragraph (8)(B)(ii), the aggre19 gate cap under paragraph (8)(C)(i), the hos20 pital-specific limit under paragraph (8)(C)(ii), 

21 and the form of payment made by the Secretary 

22 under paragraph (8)(D). 

23 ‘‘(7) MONITORING INAPPROPRIATE CHANGES IN

24 ADMISSIONS PRACTICES.—The Secretary shall mon25 itor the activities of applicable hospitals to determine 


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1 if such hospitals have taken steps to avoid patients 

2 at risk in order to reduce the likelihood of increasing 

3 readmissions for applicable conditions. If the Sec4 retary determines that such a hospital has taken 

5 such a step, after notice to the hospital and oppor6 tunity for the hospital to undertake action to allevi7 ate such steps, the Secretary may impose an appro8 priate sanction. 

9 ‘‘(8) ASSISTANCE TO CERTAIN HOSPITALS.— 

10 ‘‘(A) IN GENERAL.—For purposes of pro11 viding funds to applicable hospitals to take 

12 steps described in subparagraph (E) to address 

13 factors that may impact readmissions of indi14 viduals who are discharged from such a hos15 pital, for fiscal years beginning on or after Oc16 tober 1, 2011, the Secretary shall make a pay17 ment adjustment for a hospital described in 

18 subparagraph (B), with respect to each such 

19 fiscal year, by a percent estimated by the Sec20 retary to be consistent with subparagraph (C). 

21 ‘‘(B) TARGETED HOSPITALS.—Subpara22 graph (A) shall apply to an applicable hospital 

23 that— 

24 ‘‘(i) received (or, in the case of an 

25 1814(b)(3) hospital, otherwise would have 


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1 been eligible to receive) $10,000,000 or 

2 more in disproportionate share payments 

3 using the latest available data as estimated 

4 by the Secretary; and 

5 ‘‘(ii) provides assurances satisfactory 

6 to the Secretary that the increase in pay7 ment under this paragraph shall be used 

8 for purposes described in subparagraph 

9 (E). 

10 ‘‘(C) CAPS.— 

11 ‘‘(i) AGGREGATE CAP.—The aggregate 

12 amount of the payment adjustment under 

13 this paragraph for a fiscal year shall not 

14 exceed 5 percent of the estimated dif15 ference in the spending that would occur 

16 for such fiscal year with and without appli17 cation of the adjustment factor described 

18 in paragraph (3) and applied pursuant to 

19 paragraph (1). 

20 ‘‘(ii) HOSPITAL-SPECIFIC LIMIT.—The 

21 aggregate amount of the payment adjust22 ment for a hospital under this paragraph 

23 shall not exceed the estimated difference in 

24 spending that would occur for such fiscal 

25 year for such hospital with and without apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00299 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plication of the adjustment factor de2 scribed in paragraph (3) and applied pur3 suant to paragraph (1). 

4 ‘‘(D) FORM OF PAYMENT.—The Secretary 

5 may make the additional payments under this 

6 paragraph on a lump sum basis, a periodic 

7 basis, a claim by claim basis, or otherwise. 

8 ‘‘(E) USE OF ADDITIONAL PAYMENT.— 

9 Funding under this paragraph shall be used by 

10 targeted hospitals for transitional care activities 

11 designed to address the patient noncompliance 

12 issues that result in higher than normal read13 mission rates, such as one or more of the fol14 lowing: 

15 ‘‘(i) Providing care coordination serv16 ices to assist in transitions from the tar17 geted hospital to other settings. 

18 ‘‘(ii) Hiring translators and inter19 preters. 

20 ‘‘(iii) Increasing services offered by 

21 discharge planners. 

22 ‘‘(iv) Ensuring that individuals receive 

23 a summary of care and medication orders 

24 upon discharge. 


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1 ‘‘(v) Developing a quality improve2 ment plan to assess and remedy prevent3 able readmission rates. 

4 ‘‘(vi) Assigning discharged individuals 

5 to a medical home. 

6 ‘‘(vii) Doing other activities as deter7 mined appropriate by the Secretary. 

8 ‘‘(F) GAO REPORT ON USE OF FUNDS.— 

9 Not later than 3 years after the date on which 

10 funds are first made available under this para11 graph, the Comptroller General of the United 

12 States shall submit to Congress a report on the 

13 use of such funds. 

14 ‘‘(G) DISPROPORTIONATE SHARE HOS15 PITAL PAYMENT.—In this paragraph, the term 

16 ‘disproportionate share hospital payment’ 

17 means an additional payment amount under 

18 subsection (d)(5)(F).’’. 

19 (b) APPLICATION TO CRITICAL ACCESS HOS20 PITALS.—Section 1814(l) of the Social Security Act (42 

21 U.S.C. 1395f(l)) is amended— 

22 (1) in paragraph (5)— 

23 (A) by striking ‘‘and’’ at the end of sub24 paragraph (C); 


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1 (B) by striking the period at the end of 

2 subparagraph (D) and inserting ‘‘; and’’; 

3 (C) by inserting at the end the following 

4 new subparagraph: 

5 ‘‘(E) the methodology for determining the ad6 justment factor under paragraph (5), including the 

7 determination of aggregate payments for actual and 

8 expected readmissions, applicable periods, applicable 

9 conditions and measures of readmissions.’’; and 

10 (D) by redesignating such paragraph as 

11 paragraph (6); and 

12 (2) by inserting after paragraph (4) the fol13 lowing new paragraph: 

14 ‘‘(5) The adjustment factor described in section 

15 1886(p)(3) shall apply to payments with respect to a crit16 ical access hospital with respect to a cost reporting period 

17 beginning in fiscal year 2012 and each subsequent fiscal 

18 year (after application of paragraph (4) of this subsection) 

19 in a manner similar to the manner in which such section 

20 applies with respect to a fiscal year to an applicable hos21 pital as described in section 1886(p)(2).’’. 

22 (c) POST ACUTE CARE PROVIDERS.— 

23 (1) INTERIM POLICY.— 

24 (A) IN GENERAL.—With respect to a read25 mission to an applicable hospital or a critical 


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1 access hospital (as described in section 1814(l) 

2 of the Social Security Act) from a post acute 

3 care provider (as defined in paragraph (3)) and 

4 such a readmission is not governed by section 

5 412.531 of title 42, Code of Federal Regula6 tions, if the claim submitted by such a post7 acute care provider under title XVIII of the So8 cial Security Act indicates that the individual 

9 was readmitted to a hospital from such a post10 acute care provider or admitted from home and 

11 under the care of a home health agency within 

12 30 days of an initial discharge from an applica13 ble hospital or critical access hospital, the pay14 ment under such title on such claim shall be the 

15 applicable percent specified in subparagraph 

16 (B) of the payment that would otherwise be 

17 made under the respective payment system 

18 under such title for such post-acute care pro19 vider if this subsection did not apply. 

20 (B) APPLICABLE PERCENT DEFINED.—For 

21 purposes of subparagraph (A), the applicable 

22 percent is— 

23 (i) for fiscal or rate year 2012 is 

24 0.996; 


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1 (ii) for fiscal or rate year 2013 is 

2 0.993; and 

3 (iii) for fiscal or rate year 2014 is 

4 0.99. 

5 (C) EFFECTIVE DATE.—Subparagraph (1) 

6 shall apply to discharges or services furnished 

7 (as the case may be with respect to the applica8 ble post acute care provider) on or after the 

9 first day of the fiscal year or rate year, begin10 ning on or after October 1, 2011, with respect 

11 to the applicable post acute care provider. 

12 (2) DEVELOPMENT AND APPLICATION OF PER13 FORMANCE MEASURES.— 

14 (A) IN GENERAL.—The Secretary of 

15 Health and Human Services shall develop ap16 propriate measures of readmission rates for 

17 post acute care providers. The Secretary shall 

18 seek endorsement of such measures by the enti19 ty with a contract under section 1890(a) of the 

20 Social Security Act but may adopt and apply 

21 such measures under this paragraph without 

22 such an endorsement. The Secretary shall ex23 pand such measures in a manner similar to the 

24 manner in which applicable conditions are ex25 panded under paragraph (5)(B) of section 


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1 1886(p) of the Social Security Act, as added by 

2 subsection (a). 

3 (B) IMPLEMENTATION.—The Secretary 

4 shall apply, on or after October 1, 2014, with 

5 respect to post acute care providers, policies 

6 similar to the policies applied with respect to 

7 applicable hospitals and critical access hospitals 

8 under the amendments made by subsection (a). 

9 The provisions of paragraph (1) shall apply 

10 with respect to any period on or after October 

11 1, 2014, and before such application date de12 scribed in the previous sentence in the same 

13 manner as such provisions apply with respect to 

14 fiscal or rate year 2014. 

15 (C) MONITORING AND PENALTIES.—The 

16 provisions of paragraph (7) of such section 

17 1886(p) shall apply to providers under this 

18 paragraph in the same manner as they apply to 

19 hospitals under such section. 

20 (3) DEFINITIONS.—For purposes of this sub21 section: 

22 (A) POST ACUTE CARE PROVIDER.—The 

23 term ‘‘post acute care provider’’ means— 


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1 (i) a skilled nursing facility (as de2 fined in section 1819(a) of the Social Secu3 rity Act); 

4 (ii) an inpatient rehabilitation facility 

5 (described in section 1886(h)(1)(A) of such 

6 Act); 

7 (iii) a home health agency (as defined 

8 in section 1861(o) of such Act); and 

9 (iv) a long term care hospital (as de10 fined in section 1861(ccc) of such Act). 

11 (B) OTHER TERMS .—The terms ‘‘applica12 ble condition’’, ‘‘applicable hospital’’, and ‘‘re13 admission’’ have the meanings given such terms 

14 in section 1886(p)(5) of the Social Security 

15 Act, as added by subsection (a)(1). 

16 (d) PHYSICIANS.— 

17 (1) STUDY.—The Secretary of Health and 

18 Human Services shall conduct a study to determine 

19 how the readmissions policy described in the pre20 vious subsections could be applied to physicians. 

21 (2) CONSIDERATIONS.—In conducting the 

22 study, the Secretary shall consider approaches such 

23 as— 

24 (A) creating a new code (or codes) and 

25 payment amount (or amounts) under the fee 


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1 schedule in section 1848 of the Social Security 

2 Act (in a budget neutral manner) for services 

3 furnished by an appropriate physician who sees 

4 an individual within the first week after dis5 charge from a hospital or critical access hos6 pital; 

7 (B) developing measures of rates of read8 mission for individuals treated by physicians; 

9 (C) applying a payment reduction for phy10 sicians who treat the patient during the initial 

11 admission that results in a readmission; and 

12 (D) methods for attributing payments or 

13 payment reductions to the appropriate physi14 cian or physicians. 

15 (3) REPORT.—The Secretary shall issue a pub16 lic report on such study not later than the date that 

17 is one year after the date of the enactment of this 

18 Act. 

19 (e) FUNDING.—For purposes of carrying out the pro20 visions of this section, in addition to funds otherwise avail21 able, out of any funds in the Treasury not otherwise ap22 propriated, there are appropriated to the Secretary of 

23 Health and Human Services for the Center for Medicare 

24 & Medicaid Services Program Management Account 

25 $25,000,000 for each fiscal year beginning with 2010. 


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1 Amounts appropriated under this subsection for a fiscal 

2 year shall be available until expended. 

3 SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM 

4 PLAN AND BUNDLING PILOT PROGRAM. 

5 (a) PLAN.— 

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

7 Human Services (in this section referred to as the 

8 ‘‘Secretary’’) shall develop a detailed plan to reform 

9 payment for post acute care (PAC) services under 

10 the Medicare program under title XVIII of the So11 cial Security Act (in this section referred to as the 

12 ‘‘Medicare program)’’. The goals of such payment 

13 reform are to— 

14 (A) improve the coordination, quality, and 

15 efficiency of such services; and 

16 (B) improve outcomes for individuals such 

17 as reducing the need for readmission to hos18 pitals from providers of such services. 

19 (2) BUNDLING POST ACUTE SERVICES.—The 

20 plan described in paragraph (1) shall include de21 tailed specifications for a bundled payment for post 

22 acute services (in this section referred to as the 

23 ‘‘post acute care bundle’’), and may include other 

24 approaches determined appropriate by the Secretary. 


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1 (3) POST ACUTE SERVICES.—For purposes of 

2 this section, the term ‘‘post acute services’’ means 

3 services for which payment may be made under the 

4 Medicare program that are furnished by skilled 

5 nursing facilities, inpatient rehabilitation facilities, 

6 long term care hospitals, hospital based outpatient 

7 rehabilitation facilities and home health agencies to 

8 an individual after discharge of such individual from 

9 a hospital, and such other services determined ap10 propriate by the Secretary. 

11 (b) DETAILS.—The plan described in subsection 

12 (a)(1) shall include consideration of the following issues: 

13 (1) The nature of payments under a post acute 

14 care bundle, including the type of provider or entity 

15 to whom payment should be made, the scope of ac16 tivities and services included in the bundle, whether 

17 payment for physicians’ services should be included 

18 in the bundle, and the period covered by the bundle. 

19 (2) Whether the payment should be consoli20 dated with the payment under the inpatient prospec21 tive system under section 1886 of the Social Secu22 rity Act (in this section referred to as MS–DRGs) 

23 or a separate payment should be established for such 

24 bundle, and if a separate payment is established, 


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1 whether it should be made only upon use of post 

2 acute care services or for every discharge. 

3 (3) Whether the bundle should be applied 

4 across all categories of providers of inpatient serv5 ices (including critical access hospitals) and post 

6 acute care services or whether it should be limited 

7 to certain categories of providers, services, or dis8 charges, such as high volume or high cost MS– 

9 DRGs. 

10 (4) The extent to which payment rates could be 

11 established to achieve offsets for efficiencies that 

12 could be expected to be achieved with a bundle pay13 ment, whether such rates should be established on a 

14 national basis or for different geographic areas, 

15 should vary according to discharge, case mix, 

16 outliers, and geographic differences in wages or 

17 other appropriate adjustments, and how to update 

18 such rates. 

19 (5) The nature of protections needed for indi20 viduals under a system of bundled payments to en21 sure that individuals receive quality care, are fur22 nished the level and amount of services needed as 

23 determined by an appropriate assessment instru24 ment, are offered choice of provider, and the extent 

25 to which transitional care services would improve 


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1 quality of care for individuals and the functioning of 

2 a bundled post-acute system. 

3 (6) The nature of relationships that may be re4 quired between hospitals and providers of post acute 

5 care services to facilitate bundled payments, includ6 ing the application of gainsharing, anti-referral, 

7 anti-kickback, and anti-trust laws. 

8 (7) Quality measures that would be appropriate 

9 for reporting by hospitals and post acute providers 

10 (such as measures that assess changes in functional 

11 status and quality measures appropriate for each 

12 type of post acute services provider including how 

13 the reporting of such quality measures could be co14 ordinated with other reporting of such quality meas15 ures by such providers otherwise required). 

16 (8) How cost-sharing for a post acute care bun17 dle should be treated relative to current rules for 

18 cost-sharing for inpatient hospital, home health, 

19 skilled nursing facility, and other services. 

20 (9) How other programmatic issues should be 

21 treated in a post acute care bundle, including rules 

22 specific to various types of post-acute providers such 

23 as the post-acute transfer policy, three-day hospital 

24 stay to qualify for services furnished by skilled nurs25 ing facilities, and the coordination of payments and 


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1 care under the Medicare program and the Medicaid 

2 program. 

3 (10) Such other issues as the Secretary deems 

4 appropriate. 

5 (c) CONSULTATIONS AND ANALYSIS.— 

6 (1) CONSULTATION WITH STAKEHOLDERS.—In 

7 developing the plan under subsection (a)(1), the Sec8 retary shall consult with relevant stakeholders and 

9 shall consider experience with such research studies 

10 and demonstrations that the Secretary determines 

11 appropriate. 

12 (2) ANALYSIS AND DATA COLLECTION.—In de13 veloping such plan, the Secretary shall— 

14 (A) analyze the issues described in sub15 section (b) and other issues that the Secretary 

16 determines appropriate; 

17 (B) analyze the impacts (including geo18 graphic impacts) of post acute service reform 

19 approaches, including bundling of such services 

20 on individuals, hospitals, post acute care pro21 viders, and physicians; 

22 (C) use existing data (such as data sub23 mitted on claims) and collect such data as the 

24 Secretary determines are appropriate to develop 

25 such plan required in this section; and 


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1 (D) if patient functional status measures 

2 are appropriate for the analysis, to the extent 

3 practical, build upon the CARE tool being de4 veloped pursuant to section 5008 of the Deficit 

5 Reduction Act of 2005. 

6 (d) ADMINISTRATION.— 

7 (1) FUNDING.—For purposes of carrying out 

8 the provisions of this section, in addition to funds 

9 otherwise available, out of any funds in the Treasury 

10 not otherwise appropriated, there are appropriated 

11 to the Secretary for the Center for Medicare & Med12 icaid Services Program Management Account 

13 $15,000,000 for each of the fiscal years 2010 

14 through 2012. Amounts appropriated under this 

15 paragraph for a fiscal year shall be available until 

16 expended. 

17 (2) EXPEDITED DATA COLLECTION.—Chapter 

18 35 of title 44, United States Code shall not apply to 

19 this section. 

20 (e) PUBLIC REPORTS.— 

21 (1) INTERIM REPORTS.—The Secretary shall 

22 issue interim public reports on a periodic basis on 

23 the plan described in subsection (a)(1), the issues 

24 described in subsection (b), and impact analyses as 

25 the Secretary determines appropriate. 


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1 (2) FINAL REPORT.—Not later than the date 

2 that is 3 years after the date of the enactment of 

3 this Act, the Secretary shall issue a final public re4 port on such plan, including analysis of issues de5 scribed in subsection (b) and impact analyses. 

6 (f) CONVERSION OF ACUTE CARE EPISODE DEM7 ONSTRATION TO PILOT PROGRAM AND EXPANSION TO IN8 CLUDE POST ACUTE SERVICES.— 

9 (1) IN GENERAL.—Part E of title XVIII of the 

10 Social Security Act is amended by inserting after 

11 section 1866C the following new section: 

12 ‘‘CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION

13 TO PILOT PROGRAM AND EXPANSION TO INCLUDE

14 POST ACUTE SERVICES

15 ‘‘SEC. 1866D. (a) CONVERSION AND EXPANSION.— 

16 ‘‘(1) IN GENERAL.—By not later than January 

17 1, 2011, the Secretary shall, for the purpose of pro18 moting the use of bundled payments to promote effi19 cient and high quality delivery of care— 

20 ‘‘(A) convert the acute care episode dem21 onstration program conducted under section 

22 1866C to a pilot program; and 

23 ‘‘(B) subject to subsection (c), expand such 

24 program as so converted to include post acute 

25 services and such other services the Secretary 


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1 determines to be appropriate, which may in2 clude transitional services. 

3 ‘‘(2) BUNDLED PAYMENT STRUCTURES.— 

4 ‘‘(A) IN GENERAL.—In carrying out para5 graph (1), the Secretary may apply bundled 

6 payments with respect to— 

7 ‘‘(i) hospitals and physicians; 

8 ‘‘(ii) hospitals and post-acute care 

9 providers; 

10 ‘‘(iii) hospitals, physicians, and post11 acute care providers; or 

12 ‘‘(iv) combinations of post-acute pro13 viders. 

14 ‘‘(B) FURTHER APPLICATION.— 

15 ‘‘(i) IN GENERAL.—In carrying out 

16 paragraph (1), the Secretary shall apply 

17 bundled payments in a manner so as to in18 clude collaborative care networks and con19 tinuing care hospitals. 

20 ‘‘(ii) COLLABORATIVE CARE NETWORK

21 DEFINED.—For purposes of this subpara22 graph, the term ‘collaborative care net23 work’ means a consortium of health care 

24 providers that provides a comprehensive 

25 range of coordinated and integrated health 


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1 care services to low-income patient popu2 lations (including the uninsured) which 

3 may include coordinated and comprehen4 sive care by safety net providers to reduce 

5 any unnecessary use of items and services 

6 furnished in emergency departments, man7 age chronic conditions, improve quality and 

8 efficiency of care, increase preventive serv9 ices, and promote adherence to post-acute 

10 and follow-up care plans. 

11 ‘‘(iii) CONTINUING CARE HOSPITAL

12 DEFINED.—For purposes of this subpara13 graph, the term ‘continuing care hospital’ 

14 means an entity that has demonstrated the 

15 ability to meet patient care and patient 

16 safety standards and that provides under 

17 common management the medical and re18 habilitation services provided in inpatient 

19 rehabilitation hospitals and units (as de20 fined in section 1886(d)(1)(B)(ii)), long21 term care hospitals (as defined in section 

22 1886(d)(1)(B)(iv)(I)), and skilled nursing 

23 facilities (as defined in section 1819(a)) 

24 that are located in a hospital described in 

25 section 1886(d). 


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1 ‘‘(b) SCOPE.—The pilot program under subsection 

2 (a) may include additional geographic areas and additional 

3 conditions which account for significant program spend4 ing, as defined by the Secretary. Nothing in this sub5 section shall be construed as limiting the number of hos6 pital and physician groups or the number of hospital and 

7 post-acute provider groups that may participate in the 

8 pilot program. 

9 ‘‘(c) LIMITATION.—The Secretary shall only expand 

10 the pilot program under subsection (a) if the Secretary 

11 finds that— 

12 ‘‘(1) the demonstration program under section 

13 1866C and pilot program under this section main14 tain or increase the quality of care received by indi15 viduals enrolled under this title; and 

16 ‘‘(2) such demonstration program and pilot pro17 gram reduce program expenditures and, based on 

18 the certification under subsection (d), that the ex19 pansion of such pilot program would result in esti20 mated spending that would be less than what spend21 ing would otherwise be in the absence of this section. 

22 ‘‘(d) CERTIFICATION.—For purposes of subsection 

23 (c), the Chief Actuary of the Centers for Medicare & Med24 icaid Services shall certify whether expansion of the pilot 

25 program under this section would result in estimated 


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1 spending that would be less than what spending would 

2 otherwise be in the absence of this section. 

3 ‘‘(e) VOLUNTARY PARTICIPATION.—Nothing in this 

4 paragraph shall be construed as requiring the participa5 tion of an entity in the pilot program under this section. 

6 ‘‘(f) EVALUATION ON COST AND QUALITY OF

7 CARE.—The Secretary shall conduct an evaluation of the 

8 pilot program under subsection (a) to study the effect of 

9 such program on costs and quality of care. The findings 

10 of such evaluation shall be included in the final report re11 quired under section 1152(e)(2) of America’s Affordable 

12 Health Choices Act of 2009. 

13 ‘‘(g) STUDY OF ADDITIONAL BUNDLING AND EPI14 SODE-BASED PAYMENT FOR PHYSICIANS’ SERVICES.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall provide 

16 for a study of and development of a plan for testing 

17 additional ways to increase bundling of payments for 

18 physicians in connection with an episode of care, 

19 such as in connection with outpatient hospital serv20 ices or services rendered in physicians’ offices, other 

21 than those provided under the pilot program. 

22 ‘‘(2) APPLICATION.—The Secretary may imple23 ment such a plan through a demonstration pro24 gram.’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 1866C(b) of the Social Security Act (42 U.S.C. 

3 1395cc–3(b)) is amended by striking ‘‘The Sec4 retary’’ and inserting ‘‘Subject to section 1866D, the 

5 Secretary’’. 

6 SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010. 

7 Section 1895(b)(3)(B)(ii) of the Social Security Act 

8 (42 U.S.C. 1395fff(b)(3)(B)(ii)) is amended— 

9 (1) in subclause (IV), by striking ‘‘and’’; 

10 (2) by redesignating subclause (V) as subclause 

11 (VII); and 

12 (3) by inserting after subclause (IV) the fol13 lowing new subclauses: 

14 ‘‘(V) 2007, 2008, and 2009, sub15 ject to clause (v), the home health 

16 market basket percentage increase; 

17 ‘‘(VI) 2010, subject to clause (v), 

18 0 percent; and’’. 

19 SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH 

20 CARE. 

21 (a) ACCELERATION OF ADJUSTMENT FOR CASE MIX

22 CHANGES.—Section 1895(b)(3)(B) of the Social Security 

23 Act (42 U.S.C. 1395fff(b)(3)(B)) is amended— 

24 (1) in clause (iv), by striking ‘‘Insofar as’’ and 

25 inserting ‘‘Subject to clause (vi), insofar as’’; and 


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

2 clause: 

3 ‘‘(vi) SPECIAL RULE FOR CASE MIX

4 CHANGES FOR 2011.— 

5 ‘‘(I) IN GENERAL.—With respect 

6 to the case mix adjustments estab7 lished in section 484.220(a) of title 

8 42, Code of Federal Regulations, the 

9 Secretary shall apply, in 2010, the ad10 justment established in paragraph (3) 

11 of such section for 2011, in addition 

12 to applying the adjustment established 

13 in paragraph (2) for 2010. 

14 ‘‘(II) CONSTRUCTION.—Nothing 

15 in this clause shall be construed as 

16 limiting the amount of adjustment for 

17 case mix for 2010 or 2011 if more re18 cent data indicate an appropriate ad19 justment that is greater than the 

20 amount established in the section de21 scribed in subclause (I).’’. 

22 (b) REBASING HOME HEALTH PROSPECTIVE PAY23 MENT AMOUNT.—Section 1895(b)(3)(A) of the Social Se24 curity Act (42 U.S.C. 1395fff(b)(3)(A)) is amended— 

25 (1) in clause (i)— 


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1 (A) in subclause (III), by inserting ‘‘and 

2 before 2011’’ after ‘‘after the period described 

3 in subclause (II)’’; and 

4 (B) by inserting after subclause (III) the 

5 following new subclauses: 

6 ‘‘(IV) Subject to clause (iii)(I), 

7 for 2011, such amount (or amounts) 

8 shall be adjusted by a uniform per9 centage determined to be appropriate 

10 by the Secretary based on analysis of 

11 factors such as changes in the average 

12 number and types of visits in an epi13 sode, the change in intensity of visits 

14 in an episode, growth in cost per epi15 sode, and other factors that the Sec16 retary considers to be relevant. 

17 ‘‘(V) Subject to clause (iii)(II), 

18 for a year after 2011, such a amount 

19 (or amounts) shall be equal to the 

20 amount (or amounts) determined 

21 under this clause for the previous 

22 year, updated under subparagraph 

23 (B).’’; and 

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

25 clause: 


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1 ‘‘(iii) SPECIAL RULE IN CASE OF IN2 ABILITY TO EFFECT TIMELY REBASING.— 

3 ‘‘(I) APPLICATION OF PROXY

4 AMOUNT FOR 2011.—If the Secretary 

5 is not able to compute the amount (or 

6 amounts) under clause (i)(IV) so as to 

7 permit, on a timely basis, the applica8 tion of such clause for 2011, the Sec9 retary shall substitute for such 

10 amount (or amounts) 95 percent of 

11 the amount (or amounts) that would 

12 otherwise be specified under clause 

13 (i)(III) if it applied for 2011. 

14 ‘‘(II) ADJUSTMENT FOR SUBSE15 QUENT YEARS BASED ON DATA.—If 

16 the Secretary applies subclause (I), 

17 the Secretary before July 1, 2011, 

18 shall compare the amount (or 

19 amounts) applied under such sub20 clause with the amount (or amounts) 

21 that should have been applied under 

22 clause (i)(IV). The Secretary shall de23 crease or increase the prospective pay24 ment amount (or amounts) under 

25 clause (i)(V) for 2012 (or, at the SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00322 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary’s discretion, over a period of 

2 several years beginning with 2012) by 

3 the amount (if any) by which the 

4 amount (or amounts) applied under 

5 subclause (I) is greater or less, re6 spectively, than the amount (or 

7 amounts) that should have been ap8 plied under clause (i)(IV).’’. 

9 SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVE10 MENTS INTO MARKET BASKET UPDATE FOR 

11 HOME HEALTH SERVICES. 

12 (a) IN GENERAL.—Section 1895(b)(3)(B) of the So13 cial Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amend14 ed— 

15 (1) in clause (iii), by inserting ‘‘(including being 

16 subject to the productivity adjustment described in 

17 section 1886(b)(3)(B)(iii)(II))’’ after ‘‘in the same 

18 manner’’; and 

19 (2) in clause (v)(I), by inserting ‘‘(but not 

20 below 0)’’ after ‘‘reduced’’. 

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

22 subsection (a) shall apply to home health market basket 

23 percentage increases for years beginning with 2010. 


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1 SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE 

2 PROHIBITION ON CERTAIN PHYSICIAN RE3 FERRALS MADE TO HOSPITALS. 

4 (a) IN GENERAL.—Section 1877 of the Social Secu5 rity Act (42 U.S.C. 1395nn) is amended— 

6 (1) in subsection (d)(2)— 

7 (A) in subparagraph (A), by striking 

8 ‘‘and’’ at the end; 

9 (B) in subparagraph (B), by striking the 

10 period at the end and inserting ‘‘; and’’; and 

11 (C) by adding at the end the following new 

12 subparagraph: 

13 ‘‘(C) in the case where the entity is a hos14 pital, the hospital meets the requirements of 

15 paragraph (3)(D).’’; 

16 (2) in subsection (d)(3)— 

17 (A) in subparagraph (B), by striking 

18 ‘‘and’’ at the end; 

19 (B) in subparagraph (C), by striking the 

20 period at the end and inserting ‘‘; and’’; and 

21 (C) by adding at the end the following new 

22 subparagraph: 

23 ‘‘(D) the hospital meets the requirements 

24 described in subsection (i)(1).’’; 

25 (3) by amending subsection (f) to read as fol26 lows: 


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1 ‘‘(f) REPORTING AND DISCLOSURE REQUIRE2 MENTS.— 

3 ‘‘(1) IN GENERAL.—Each entity providing cov4 ered items or services for which payment may be 

5 made under this title shall provide the Secretary 

6 with the information concerning the entity’s owner7 ship, investment, and compensation arrangements, 

8 including— 

9 ‘‘(A) the covered items and services pro10 vided by the entity, and 

11 ‘‘(B) the names and unique physician iden12 tification numbers of all physicians with an 

13 ownership or investment interest (as described 

14 in subsection (a)(2)(A)), or with a compensa15 tion arrangement (as described in subsection 

16 (a)(2)(B)), in the entity, or whose immediate 

17 relatives have such an ownership or investment 

18 interest or who have such a compensation rela19 tionship with the entity. 

20 Such information shall be provided in such form, 

21 manner, and at such times as the Secretary shall 

22 specify. The requirement of this subsection shall not 

23 apply to designated health services provided outside 

24 the United States or to entities which the Secretary 


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1 determines provide services for which payment may 

2 be made under this title very infrequently. 

3 ‘‘(2) REQUIREMENTS FOR HOSPITALS WITH

4 PHYSICIAN OWNERSHIP OR INVESTMENT.—In the 

5 case of a hospital that meets the requirements de6 scribed in subsection (i)(1), the hospital shall— 

7 ‘‘(A) submit to the Secretary an initial re8 port, and periodic updates at a frequency deter9 mined by the Secretary, containing a detailed 

10 description of the identity of each physician 

11 owner and physician investor and any other 

12 owners or investors of the hospital; 

13 ‘‘(B) require that any referring physician 

14 owner or investor discloses to the individual 

15 being referred, by a time that permits the indi16 vidual to make a meaningful decision regarding 

17 the receipt of services, as determined by the 

18 Secretary, the ownership or investment interest, 

19 as applicable, of such referring physician in the 

20 hospital; and 

21 ‘‘(C) disclose the fact that the hospital is 

22 partially or wholly owned by one or more physi23 cians or has one or more physician investors— 

24 ‘‘(i) on any public website for the hos25 pital; and 


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1 ‘‘(ii) in any public advertising for the 

2 hospital. 

3 The information to be reported or disclosed under 

4 this paragraph shall be provided in such form, man5 ner, and at such times as the Secretary shall specify. 

6 The requirements of this paragraph shall not apply 

7 to designated health services furnished outside the 

8 United States or to entities which the Secretary de9 termines provide services for which payment may be 

10 made under this title very infrequently. 

11 ‘‘(3) PUBLICATION OF INFORMATION.—The 

12 Secretary shall publish, and periodically update, the 

13 information submitted by hospitals under paragraph 

14 (2)(A) on the public Internet website of the Centers 

15 for Medicare & Medicaid Services.’’; 

16 (4) by amending subsection (g)(5) to read as 

17 follows: 

18 ‘‘(5) FAILURE TO REPORT OR DISCLOSE INFOR19 MATION.— 

20 ‘‘(A) REPORTING.—Any person who is re21 quired, but fails, to meet a reporting require22 ment of paragraphs (1) and (2)(A) of sub23 section (f) is subject to a civil money penalty of 

24 not more than $10,000 for each day for which 

25 reporting is required to have been made. 


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1 ‘‘(B) DISCLOSURE.—Any physician who is 

2 required, but fails, to meet a disclosure require3 ment of subsection (f)(2)(B) or a hospital that 

4 is required, but fails, to meet a disclosure re5 quirement of subsection (f)(2)(C) is subject to 

6 a civil money penalty of not more than $10,000 

7 for each case in which disclosure is required to 

8 have been made. 

9 ‘‘(C) APPLICATION.—The provisions of 

10 section 1128A (other than the first sentence of 

11 subsection (a) and other than subsection (b)) 

12 shall apply to a civil money penalty under sub13 paragraphs (A) and (B) in the same manner as 

14 such provisions apply to a penalty or proceeding 

15 under section 1128A(a).’’; and 

16 (5) by adding at the end the following new sub17 section: 

18 ‘‘(i) REQUIREMENTS TO QUALIFY FOR RURAL PRO19 VIDER AND HOSPITAL OWNERSHIP EXCEPTIONS TO

20 SELF-REFERRAL PROHIBITION.— 

21 ‘‘(1) REQUIREMENTS DESCRIBED.—For pur22 poses of subsection (d)(3)(D), the requirements de23 scribed in this paragraph are as follows: 

24 ‘‘(A) PROVIDER AGREEMENT.—The hos25 pital had— 


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1 ‘‘(i) physician ownership or invest2 ment on January 1, 2009; and 

3 ‘‘(ii) a provider agreement under sec4 tion 1866 in effect on such date. 

5 ‘‘(B) PROHIBITION ON PHYSICIAN OWNER6 SHIP OR INVESTMENT.—The percentage of the 

7 total value of the ownership or investment in8 terests held in the hospital, or in an entity 

9 whose assets include the hospital, by physician 

10 owners or investors in the aggregate does not 

11 exceed such percentage as of the date of enact12 ment of this subsection. 

13 ‘‘(C) PROHIBITION ON EXPANSION OF FA14 CILITY CAPACITY.—Except as provided in para15 graph (2), the number of operating rooms, pro16 cedure rooms, or beds of the hospital at any 

17 time on or after the date of the enactment of 

18 this subsection are no greater than the number 

19 of operating rooms, procedure rooms, or beds, 

20 respectively, as of such date. 

21 ‘‘(D) ENSURING BONA FIDE OWNERSHIP

22 AND INVESTMENT.— 

23 ‘‘(i) Any ownership or investment in24 terests that the hospital offers to a physi25 cian are not offered on more favorable 


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1 terms than the terms offered to a person 

2 who is not in a position to refer patients 

3 or otherwise generate business for the hos4 pital. 

5 ‘‘(ii) The hospital (or any investors in 

6 the hospital) does not directly or indirectly 

7 provide loans or financing for any physi8 cian owner or investor in the hospital. 

9 ‘‘(iii) The hospital (or any investors in 

10 the hospital) does not directly or indirectly 

11 guarantee a loan, make a payment toward 

12 a loan, or otherwise subsidize a loan, for 

13 any physician owner or investor or group 

14 of physician owners or investors that is re15 lated to acquiring any ownership or invest16 ment interest in the hospital. 

17 ‘‘(iv) Ownership or investment returns 

18 are distributed to each owner or investor in 

19 the hospital in an amount that is directly 

20 proportional to the ownership or invest21 ment interest of such owner or investor in 

22 the hospital. 

23 ‘‘(v) The investment interest of the 

24 owner or investor is directly proportional 

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1 tributions made at the time the ownership 

2 or investment interest is obtained. 

3 ‘‘(vi) Physician owners and investors 

4 do not receive, directly or indirectly, any 

5 guaranteed receipt of or right to purchase 

6 other business interests related to the hos7 pital, including the purchase or lease of 

8 any property under the control of other 

9 owners or investors in the hospital or lo10 cated near the premises of the hospital. 

11 ‘‘(vii) The hospital does not offer a 

12 physician owner or investor the oppor13 tunity to purchase or lease any property 

14 under the control of the hospital or any 

15 other owner or investor in the hospital on 

16 more favorable terms than the terms of17 fered to a person that is not a physician 

18 owner or investor. 

19 ‘‘(viii) The hospital does not condition 

20 any physician ownership or investment in21 terests either directly or indirectly on the 

22 physician owner or investor making or in23 fluencing referrals to the hospital or other24 wise generating business for the hospital. 


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1 ‘‘(E) PATIENT SAFETY.—In the case of a 

2 hospital that does not offer emergency services, 

3 the hospital has the capacity to— 

4 ‘‘(i) provide assessment and initial 

5 treatment for medical emergencies; and 

6 ‘‘(ii) if the hospital lacks additional 

7 capabilities required to treat the emergency 

8 involved, refer and transfer the patient 

9 with the medical emergency to a hospital 

10 with the required capability. 

11 ‘‘(F) LIMITATION ON APPLICATION TO

12 CERTAIN CONVERTED FACILITIES.—The hos13 pital was not converted from an ambulatory 

14 surgical center to a hospital on or after the date 

15 of enactment of this subsection. 

16 ‘‘(2) EXCEPTION TO PROHIBITION ON EXPAN17 SION OF FACILITY CAPACITY.— 

18 ‘‘(A) PROCESS.— 

19 ‘‘(i) ESTABLISHMENT.—The Secretary 

20 shall establish and implement a process 

21 under which a hospital may apply for an 

22 exception from the requirement under 

23 paragraph (1)(C). 

24 ‘‘(ii) OPPORTUNITY FOR COMMUNITY

25 INPUT.—The process under clause (i) shall 


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1 provide persons and entities in the commu2 nity in which the hospital applying for an 

3 exception is located with the opportunity to 

4 provide input with respect to the applica5 tion. 

6 ‘‘(iii) TIMING FOR IMPLEMENTA7 TION.—The Secretary shall implement the 

8 process under clause (i) on the date that is 

9 one month after the promulgation of regu10 lations described in clause (iv). 

11 ‘‘(iv) REGULATIONS.—Not later than 

12 the first day of the month beginning 18 

13 months after the date of the enactment of 

14 this subsection, the Secretary shall promul15 gate regulations to carry out the process 

16 under clause (i). The Secretary may issue 

17 such regulations as interim final regula18 tions. 

19 ‘‘(B) FREQUENCY.—The process described 

20 in subparagraph (A) shall permit a hospital to 

21 apply for an exception up to once every 2 years. 

22 ‘‘(C) PERMITTED INCREASE.— 

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

24 (ii) and subparagraph (D), a hospital 

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1 scribed in subparagraph (A) may increase 

2 the number of operating rooms, procedure 

3 rooms, or beds of the hospital above the 

4 baseline number of operating rooms, proce5 dure rooms, or beds, respectively, of the 

6 hospital (or, if the hospital has been grant7 ed a previous exception under this para8 graph, above the number of operating 

9 rooms, procedure rooms, or beds, respec10 tively, of the hospital after the application 

11 of the most recent increase under such an 

12 exception). 

13 ‘‘(ii) 100 PERCENT INCREASE LIMITA14 TION.—The Secretary shall not permit an 

15 increase in the number of operating rooms, 

16 procedure rooms, or beds of a hospital 

17 under clause (i) to the extent such increase 

18 would result in the number of operating 

19 rooms, procedure rooms, or beds of the 

20 hospital exceeding 200 percent of the base21 line number of operating rooms, procedure 

22 rooms, or beds of the hospital. 

23 ‘‘(iii) BASELINE NUMBER OF OPER24 ATING ROOMS, PROCEDURE ROOMS, OR

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1 line number of operating rooms, procedure 

2 rooms, or beds’ means the number of oper3 ating rooms, procedure rooms, or beds of a 

4 hospital as of the date of enactment of this 

5 subsection. 

6 ‘‘(D) INCREASE LIMITED TO FACILITIES

7 ON THE MAIN CAMPUS OF THE HOSPITAL.— 

8 Any increase in the number of operating rooms, 

9 procedure rooms, or beds of a hospital pursuant 

10 to this paragraph may only occur in facilities on 

11 the main campus of the hospital. 

12 ‘‘(E) CONDITIONS FOR APPROVAL OF AN

13 INCREASE IN FACILITY CAPACITY.—The Sec14 retary may grant an exception under the proc15 ess described in subparagraph (A) only to a 

16 hospital— 

17 ‘‘(i) that is located in a county in 

18 which the percentage increase in the popu19 lation during the most recent 5-year period 

20 for which data are available is estimated to 

21 be at least 150 percent of the percentage 

22 increase in the population growth of the 

23 State in which the hospital is located dur24 ing that period, as estimated by Bureau of 

25 the Census and available to the Secretary; 


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1 ‘‘(ii) whose annual percent of total in2 patient admissions that represent inpatient 

3 admissions under the program under title 

4 XIX is estimated to be equal to or greater 

5 than the average percent with respect to 

6 such admissions for all hospitals located in 

7 the county in which the hospital is located; 

8 ‘‘(iii) that does not discriminate 

9 against beneficiaries of Federal health care 

10 programs and does not permit physicians 

11 practicing at the hospital to discriminate 

12 against such beneficiaries; 

13 ‘‘(iv) that is located in a State in 

14 which the average bed capacity in the 

15 State is estimated to be less than the na16 tional average bed capacity; 

17 ‘‘(v) that has an average bed occu18 pancy rate that is estimated to be greater 

19 than the average bed occupancy rate in the 

20 State in which the hospital is located; and 

21 ‘‘(vi) that meets other conditions as 

22 determined by the Secretary. 

23 ‘‘(F) PROCEDURE ROOMS.—In this sub24 section, the term ‘procedure rooms’ includes 

25 rooms in which catheterizations, angiographies, 


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1 angiograms, and endoscopies are furnished, but 

2 such term shall not include emergency rooms or 

3 departments (except for rooms in which cath4 eterizations, angiographies, angiograms, and 

5 endoscopies are furnished). 

6 ‘‘(G) PUBLICATION OF FINAL DECI7 SIONS.—Not later than 120 days after receiving 

8 a complete application under this paragraph, 

9 the Secretary shall publish on the public Inter10 net website of the Centers for Medicare & Med11 icaid Services the final decision with respect to 

12 such application. 

13 ‘‘(H) LIMITATION ON REVIEW.—There 

14 shall be no administrative or judicial review 

15 under section 1869, section 1878, or otherwise 

16 of the exception process under this paragraph, 

17 including the establishment of such process, 

18 and any determination made under such proc19 ess. 

20 ‘‘(3) PHYSICIAN OWNER OR INVESTOR DE21 FINED.—For purposes of this subsection and sub22 section (f)(2), the term ‘physician owner or investor’ 

23 means a physician (or an immediate family member 

24 of such physician) with a direct or an indirect own25 ership or investment interest in the hospital. 


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1 ‘‘(4) PATIENT SAFETY REQUIREMENT.—In the 

2 case of a hospital to which the requirements of para3 graph (1) apply, insofar as the hospital admits a pa4 tient and does not have any physician available on 

5 the premises 24 hours per day, 7 days per week, be6 fore admitting the patient— 

7 ‘‘(A) the hospital shall disclose such fact to 

8 the patient; and 

9 ‘‘(B) following such disclosure, the hospital 

10 shall receive from the patient a signed acknowl11 edgment that the patient understands such fact. 

12 ‘‘(5) CLARIFICATION.—Nothing in this sub13 section shall be construed as preventing the Sec14 retary from terminating a hospital’s provider agree15 ment if the hospital is not in compliance with regu16 lations pursuant to section 1866.’’. 

17 (b) VERIFYING COMPLIANCE.—The Secretary of 

18 Health and Human Services shall establish policies and 

19 procedures to verify compliance with the requirements de20 scribed in subsections (i)(1) and (i)(4) of section 1877 of 

21 the Social Security Act, as added by subsection (a)(5). 

22 The Secretary may use unannounced site reviews of hos23 pitals and audits to verify compliance with such require24 ments. 

25 (c) IMPLEMENTATION.— 


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1 (1) FUNDING.—For purposes of carrying out 

2 the amendments made by subsection (a) and the 

3 provisions of subsection (b), in addition to funds 

4 otherwise available, out of any funds in the Treasury 

5 not otherwise appropriated there are appropriated to 

6 the Secretary of Health and Human Services for the 

7 Centers for Medicare & Medicaid Services Program 

8 Management Account $5,000,000 for each fiscal 

9 year beginning with fiscal year 2010. Amounts ap10 propriated under this paragraph for a fiscal year 

11 shall be available until expended. 

12 (2) ADMINISTRATION.—Chapter 35 of title 44, 

13 United States Code, shall not apply to the amend14 ments made by subsection (a) and the provisions of 

15 subsection (b). 

16 SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEO17 GRAPHIC ADJUSTMENT FACTORS UNDER 

18 MEDICARE. 

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

20 Human Services shall enter into a contract with the Insti21 tute of Medicine of the National Academy of Science to 

22 conduct a comprehensive empirical study, and provide rec23 ommendations as appropriate, on the accuracy of the geo24 graphic adjustment factors established under sections 


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1 1848(e) and 1886(d)(3)(E) of the Social Security Act (42 

2 U.S.C. 1395w–4(e), 11395ww(d)(3)). 

3 (b) MATTERS INCLUDED.—Such study shall include 

4 an evaluation and assessment of the following with respect 

5 to such adjustment factors: 

6 (1) Empirical validity of the adjustment factors. 

7 (2) Methodology used to determine the adjust8 ment factors. 

9 (3) Measures used for the adjustment factors, 

10 taking into account— 

11 (A) timeliness of data and frequency of re12 visions to such data; 

13 (B) sources of data and the degree to 

14 which such data are representative of costs; and 

15 (C) operational costs of providers who par16 ticipate in Medicare. 

17 (c) EVALUATION.—Such study shall, within the con18 text of the United States health care marketplace, evalu19 ate and consider the following: 

20 (1) The effect of the adjustment factors on the 

21 level and distribution of the health care workforce 

22 and resources, including— 

23 (A) recruitment and retention that takes 

24 into account workforce mobility between urban 

25 and rural areas; 


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1 (B) ability of hospitals and other facilities 

2 to maintain an adequate and skilled workforce; 

3 and 

4 (C) patient access to providers and needed 

5 medical technologies. 

6 (2) The effect of the adjustment factors on pop7 ulation health and quality of care. 

8 (3) The effect of the adjustment factors on the 

9 ability of providers to furnish efficient, high value 

10 care. 

11 (d) REPORT.—The contract under subsection (a) 

12 shall provide for the Institute of Medicine to submit, not 

13 later than one year after the date of the enactment of this 

14 Act, to the Secretary and the Congress a report containing 

15 results and recommendations of the study conducted 

16 under this section. 

17 (e) FUNDING.—There are authorized to be appro18 priated to carry out this section such sums as may be nec19 essary. 

20 SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO 

21 ADDRESS GEOGRAPHIC INEQUITIES. 

22 (a) REVISION OF MEDICARE PAYMENT SYSTEMS.— 

23 Taking into account the recommendations described in the 

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1 tion 1848(e) and section 1886(d)(3)(E) of the Social Se2 curity Act ((42 U.S.C. 1395w-4, 1395ww(d)), the Sec3 retary of Health and Human Services shall include in pro4 posed rules applicable to the rulemaking cycle for payment 

5 systems for physicians’ services and inpatient hospital 

6 services under sections 1848 and section 1886(d) of such 

7 Act, respectively, proposals (as the Secretary determines 

8 to be appropriate) to revise the geographic adjustment fac9 tors used in such systems. Such proposals’ rules shall be 

10 contained in the next rulemaking cycle following the sub11 mission to the Secretary of the report described in section 

12 1157. 

13 (b) PAYMENT ADJUSTMENTS.— 

14 (1) FUNDING FOR IMPROVEMENTS.—The Sec15 retary shall use funds as provided under subsection 

16 (c) in making changes to the geographic adjustment 

17 factors pursuant to subsection (a). In making such 

18 changes to such geographic adjustment factors, the 

19 Secretary shall ensure that the estimated increased 

20 expenditures resulting from such changes does not 

21 exceed the amounts provided under subsection (c). 

22 (2) ENSURING FAIRNESS.—In carrying out this 

23 subsection, the Secretary shall not reduce the geo24 graphic adjustment below the factor that applied for 


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1 such payment system in the payment year before 

2 such changes. 

3 (c) FUNDING.—Amounts in the Medicare Improve4 ment Fund under section 1898, as amended by section 

5 1146, shall be available to the Secretary to make changes 

6 to the geographic adjustments factors as described in sub7 sections (a) and (b) with respect to services furnished be8 fore January 1, 2014. No more than one-half of such 

9 amounts shall be available with respect to services fur10 nished in any one payment year. 

11 SEC. 1159. INSTITUTE OF MEDICINE STUDY OF GEO12 GRAPHIC VARIATION IN HEALTH CARE 

13 SPENDING AND PROMOTING HIGH-VALUE 

14 HEALTH CARE. 

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

16 Human Services shall enter into an agreement with the 

17 Institutes of Medicine of the National Academies (referred 

18 to in this section as the ‘‘Institute’’) to conduct a study 

19 on geographic variation in per capita health care spending 

20 among both the Medicare and privately insured popu21 lations. Such study shall include each of the following: 

22 (1) An evaluation of the extent and range of 

23 such variation using various units of geographic 

24 measurement. 


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1 (2) The extent to which geographic variation 

2 can be attributed to differences in input prices, prac3 tice patterns, access to medical services, supply of 

4 medical services, socio-economic factors, and pro5 vider organizational models. 

6 (3) The extent to which variations in spending 

7 are correlated with patient access to care, distribu8 tion of health care resources, and consensus-based 

9 measures of health care quality. 

10 (4) The extent to which variation can be attrib11 uted to physician and practitioner discretion in mak12 ing treatment decisions, and the degree to which dis13 cretionary treatment decisions are made that could 

14 be characterized as different from the best available 

15 medical evidence. 

16 (5) An assessment of the degree to which vari17 ation cannot be explained by empirical evidence. 

18 (6) Other factors the Institute deems appro19 priate. 

20 (b) RECOMMENDATIONS.—Taking into account the 

21 findings under subsection (a), the Institute shall rec22 ommend strategies for addressing variation in per capita 

23 spending by promoting high-value care (as defined in sub24 section (e)). In making such recommendations, the Insti25 tute shall consider each of the following: 


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1 (1) Measurement and reporting on quality and 

2 population health. 

3 (2) Reducing fragmented and duplicative care. 

4 (3) Promoting the practice of evidence-based 

5 medicine. 

6 (4) Empowering patients to make value-based 

7 care decisions. 

8 (5) Leveraging the use of health information 

9 technology. 

10 (6) The role of financial and other incentives. 

11 (7) Other topics the Institute deems appro12 priate. 

13 (c) SPECIFIC CONSIDERATIONS.—In making the rec14 ommendations under subsection (b), the Institute shall 

15 specifically address whether payment systems under title 

16 XVIII of the Social Security Act for physicians and hos17 pitals should be further modified to incentivize high-value 

18 care. In so doing, the Institute shall consider the adoption 

19 of a value index based on a composite of appropriate meas20 ures of quality and cost that would adjust provider pay21 ments on a regional or provider-level basis. If the Institute 

22 finds that application of such a value index would signifi23 cantly incentivize providers to furnish high-value care, it 

24 shall make specific recommendations on how such an 

25 index would be designed and implemented. In so doing, 


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1 it should identify specific measures of quality and cost ap2 propriate for use in such an index, and include a thorough 

3 analysis (including on a geographic basis) of how pay4 ments and spending under such title would be affected by 

5 such an index. 

6 (d) REPORT.— Not later than three years after the 

7 date of the enactment of this Act, the Institute shall sub8 mit to Congress a report containing findings and rec9 ommendations of the study conducted under this section. 

10 (e) HIGH-VALUE CARE DEFINED.—For purposes of 

11 this section, the term ‘‘high-value care’’ means the effi12 cient delivery of high quality, evidence-based, patient-cen13 tered care. 

14 (f) AUTHORIZATION OF APPROPRIATIONS.—There is 

15 authorized to be appropriated such sums as are necessary 

16 to carry out this section. Such sums are authorized to re17 main available until expended. 

18 Subtitle D—Medicare Advantage 

19 Reforms 

20 PART 1—PAYMENT AND ADMINISTRATION 

21 SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR22 SERVICE COSTS. 

23 Section 1853 of the Social Security Act (42 U.S.C. 

24 1395w–23) is amended— 

25 (1) in subsection (j)(1)(A)— 


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1 (A) by striking ‘‘beginning with 2007’’ and 

2 inserting ‘‘for 2007, 2008, 2009, and 2010’’; 

3 and 

4 (B) by inserting after ‘‘(k)(1)’’ the following: ‘‘, or, beginning with 2011, 1 5 ⁄12 of the 

6 blended benchmark amount determined under 

7 subsection (n)(1)’’; and 

8 (2) by adding at the end the following new sub9 section: 

10 ‘‘(n) DETERMINATION OF BLENDED BENCHMARK

11 AMOUNT.— 

12 ‘‘(1) IN GENERAL.—For purposes of subsection 

13 (j), subject to paragraphs (3) and (4), the term 

14 ‘blended benchmark amount’ means for an area— 

15 ‘‘(A) for 2011 the sum of— 

‘‘(i) 2 16 ⁄3 of the applicable amount (as 

17 defined in subsection (k)) for the area and 

18 year; and 

‘‘(ii) 1 19 ⁄3 of the amount specified in 

20 paragraph (2) for the area and year; 

21 ‘‘(B) for 2012 the sum of— 

‘‘(i) 1 22 ⁄3 of the applicable amount for 

23 the area and year; and 

‘‘(ii) 2 24 ⁄3 of the amount specified in 

25 paragraph (2) for the area and year; and 


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1 ‘‘(C) for a subsequent year the amount 

2 specified in paragraph (2) for the area and 

3 year. 

4 ‘‘(2) SPECIFIED AMOUNT.—The amount speci5 fied in this paragraph for an area and year is the 

6 amount specified in subsection (c)(1)(D)(i) for the 

7 area and year adjusted (in a manner specified by the 

8 Secretary) to take into account the phase-out in the 

9 indirect costs of medical education from capitation 

10 rates described in subsection (k)(4). 

11 ‘‘(3) FEE-FOR-SERVICE PAYMENT FLOOR.—In 

12 no case shall the blended benchmark amount for an 

13 area and year be less than the amount specified in 

14 paragraph (2). 

15 ‘‘(4) EXCEPTION FOR PACE PLANS.—This sub16 section shall not apply to payments to a PACE pro17 gram under section 1894.’’. 

18 SEC. 1162. QUALITY BONUS PAYMENTS. 

19 (a) IN GENERAL.—Section 1853 of the Social Secu20 rity Act (42 U.S.C. 1395w-23), as amended by section 

21 1161, is amended— 

22 (1) in subsection (j), by inserting ‘‘subject to 

23 subsection (o),’’ after ‘‘For purposes of this part,’’; 

24 and 


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1 (2) by adding at the end the following new sub2 section: 

3 ‘‘(o) QUALITY BASED PAYMENT ADJUSTMENT.— 

4 ‘‘(1) IN GENERAL.—In the case of a qualifying 

5 plan in a qualifying county with respect to a year 

6 beginning with 2011, the blended benchmark 

7 amount under subsection (n)(1) shall be increased— 

8 ‘‘(A) for 2011, by 2.6 percent; 

9 ‘‘(B) for 2012, by 5.3 percent; and 

10 ‘‘(C) for a subsequent year, by 8.0 percent. 

11 ‘‘(2) QUALIFYING PLAN AND QUALIFYING

12 COUNTY DEFINED.—For purposes of this subsection: 

13 ‘‘(A) QUALIFYING PLAN.—The term ‘quali14 fying plan’ means, for a year and subject to 

15 paragraph (4), a plan that, in a preceding year 

16 specified by the Secretary, had a quality rank17 ing (based on the quality ranking system estab18 lished by the Centers for Medicare & Medicaid 

19 Services for Medicare Advantage plans) of 4 

20 stars or higher. 

21 ‘‘(B) QUALIFYING COUNTY.—The term 

22 ‘qualifying county’ means, for a year, a coun23 ty— 

24 ‘‘(i) that ranked within the lowest 

25 quartile of counties in the amount specified 


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1 in subsection (n)(2) for the year specified 

2 by the Secretary under subparagraph (A); 

3 and 

4 ‘‘(ii) for which, as of June of such 

5 specified year, of the Medicare Advantage 

6 eligible individuals residing in the county— 

7 ‘‘(I) at least 50 percent of such 

8 individuals were enrolled in Medicare 

9 Advantage plans; and 

10 ‘‘(II) of the residents so enrolled 

11 at least 50 percent of such individuals 

12 were enrolled in such plans with a 

13 quality ranking (based on the quality 

14 ranking system established by the 

15 Centers for Medicare & Medicaid 

16 Services for Medicare Advantage 

17 plans) of 4 stars or higher. 

18 ‘‘(3) NOTIFICATION.—The Secretary, in the an19 nual announcement required under subsection 

20 (b)(1)(B) in 2010 and each succeeding year, shall 

21 notify the Medicare Advantage organization that is 

22 offering a qualifying plan in a qualifying county of 

23 such identification for the year. The Secretary shall 

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1 care program of the information described in the 

2 previous sentence. 

3 ‘‘(4) AUTHORITY TO DISQUALIFY DEFICIENT

4 PLANS.—The Secretary may determine that a Medi5 care Advantage plan is not a qualifying plan if the 

6 Secretary has identified deficiencies in the plan’s 

7 compliance with rules for Medicare Advantage plans 

8 under this part.’’. 

9 SEC. 1163. EXTENSION OF SECRETARIAL CODING INTEN10 SITY ADJUSTMENT AUTHORITY. 

11 Section 1853(a)(1)(C)(ii) of the Social Security Act 

12 (42 U.S.C. 1395w–23(a)(1)(C)(ii) is amended— 

13 (1) in the matter before subclause (I), by strik14 ing ‘‘through 2010’’ and inserting ‘‘and each subse15 quent year’’; and 

16 (2) in subclause (II)— 

17 (A) by inserting ‘‘periodically’’ before ‘‘con18 duct an analysis’’; 

19 (B) by inserting ‘‘on a timely basis’’ after 

20 ‘‘are incorporated’’; and 

21 (C) by striking ‘‘only for 2008, 2009, and 

22 2010’’ and inserting ‘‘for 2008 and subsequent 

23 years’’. 


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1 SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY 

2 ELECTION PERIODS. 

3 (a) 2 WEEK PROCESSING PERIOD FOR ANNUAL EN4 ROLLMENT PERIOD (AEP).—Paragraph (3)(B) of section 

5 1851(e) of the Social Security Act (42 U.S.C. 1395w– 

6 21(e)) is amended— 

7 (1) by striking ‘‘and’’ at the end of clause (iii); 

8 (2) in clause (iv)— 

9 (A) by striking ‘‘and succeeding years’’ 

10 and inserting ‘‘, 2008, 2009, and 2010’’; and 

11 (B) by striking the period at the end and 

12 inserting ‘‘; and’’; and 

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

14 clause: 

15 ‘‘(v) with respect to 2011 and suc16 ceeding years, the period beginning on No17 vember 1 and ending on December 15 of 

18 the year before such year.’’. 

19 (b) ELIMINATION OF 3-MONTH ADDITIONAL OPEN

20 ENROLLMENT PERIOD (OEP).—Effective for plan years 

21 beginning with 2011, paragraph (2) of such section is 

22 amended by striking subparagraph (C). 

23 SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS. 

24 Section 1876(h)(5)(C) of the Social Security Act (42 

25 U.S.C. 1395mm(h)(5)(C)) is amended— 


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1 (1) in clause (ii), by striking ‘‘January 1, 

2 2010’’ and inserting ‘‘January 1, 2012’’; and 

3 (2) in clause (iii), by striking ‘‘the service area 

4 for the year’’ and inserting ‘‘the portion of the 

5 plan’s service area for the year that is within the 

6 service area of a reasonable cost reimbursement con7 tract’’. 

8 SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EM9 PLOYER GROUP PLANS. 

10 (a) IN GENERAL.—The first sentence of paragraph 

11 (2) of section 1857(i) of the Social Security Act (42 

12 U.S.C. 1395w–27(i)) is amended by inserting before the 

13 period at the end the following: ‘‘, but only if 90 percent 

14 of the Medicare Advantage eligible individuals enrolled 

15 under such plan reside in a county in which the MA orga16 nization offers an MA local plan’’. 

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

18 subsection (a) shall apply for plan years beginning on or 

19 after January 1, 2011, and shall not apply to plans which 

20 were in effect as of December 31, 2010. 

21 SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS. 

22 (a) REPORT TO CONGRESS.—Not later than 1 year 

23 after the date of the enactment of this Act, the Secretary 

24 of Health and Human Services shall submit to Congress 

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1 ment system under section 1853(a)(1)(C) of the Social Se2 curity Act (42 U.S.C. 1395–23(a)(1)(C)) in predicting 

3 costs for beneficiaries with chronic or co-morbid condi4 tions, beneficiaries dually-eligible for Medicare and Med5 icaid, and non-Medicaid eligible low-income beneficiaries; 

6 and the need and feasibility of including further grada7 tions of diseases or conditions and multiple years of bene8 ficiary data. 

9 (b) IMPROVEMENTS TO RISK ADJUSTMENT.—Not 

10 later than January 1, 2012, the Secretary shall implement 

11 necessary improvements to the risk adjustment system 

12 under section 1853(a)(1)(C) of the Social Security Act (42 

13 U.S.C. 1395–23(a)(1)(C)), taking into account the evalua14 tion under subsection (a). 

15 SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STA16 BILIZATION FUND. 

17 (a) IN GENERAL.—Section 1858 of the Social Secu18 rity Act (42 U.S.C. 1395w–27a) is amended by striking 

19 subsection (e). 

20 (b) TRANSITION.—Any amount contained in the MA 

21 Regional Plan Stabilization Fund as of the date of the 

22 enactment of this Act shall be transferred to the Federal 

23 Supplementary Medical Insurance Trust Fund. 


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1 PART 2—BENEFICIARY PROTECTIONS AND ANTI2 FRAUD 

3 SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL 

4 HEALTH SERVICES. 

5 (a) IN GENERAL.—Section 1852(a)(1) of the Social 

6 Security Act (42 U.S.C. 1395w–22(a)(1)) is amended— 

7 (1) in subparagraph (A), by inserting before the 

8 period at the end the following: ‘‘with cost-sharing 

9 that is no greater (and may be less) than the cost10 sharing that would otherwise be imposed under such 

11 program option’’; 

12 (2) in subparagraph (B)(i), by striking ‘‘or an 

13 actuarially equivalent level of cost-sharing as deter14 mined in this part’’; and 

15 (3) by amending clause (ii) of subparagraph 

16 (B) to read as follows: 

17 ‘‘(ii) PERMITTING USE OF FLAT CO18 PAYMENT OR PER DIEM RATE.—Nothing in 

19 clause (i) shall be construed as prohibiting 

20 a Medicare Advantage plan from using a 

21 flat copayment or per diem rate, in lieu of 

22 the cost-sharing that would be imposed 

23 under part A or B, so long as the amount 

24 of the cost-sharing imposed does not ex25 ceed the amount of the cost-sharing that 

26 would be imposed under the respective part 


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1 if the individual were not enrolled in a plan 

2 under this part.’’. 

3 (b) LIMITATION FOR DUAL ELIGIBLES AND QUALI4 FIED MEDICARE BENEFICIARIES.—Section 1852(a)(7) of 

5 such Act is amended to read as follows: 

6 ‘‘(7) LIMITATION ON COST-SHARING FOR DUAL

7 ELIGIBLES AND QUALIFIED MEDICARE BENE8 FICIARIES.—In the case of a individual who is a full9 benefit dual eligible individual (as defined in section 

10 1935(c)(6)) or a qualified medicare beneficiary (as 

11 defined in section 1905(p)(1)) who is enrolled in a 

12 Medicare Advantage plan, the plan may not impose 

13 cost-sharing that exceeds the amount of cost-sharing 

14 that would be permitted with respect to the indi15 vidual under this title and title XIX if the individual 

16 were not enrolled with such plan.’’. 

17 (c) EFFECTIVE DATES.— 

18 (1) The amendments made by subsection (a) 

19 shall apply to plan years beginning on or after Janu20 ary 1, 2011. 

21 (2) The amendments made by subsection (b) 

22 shall apply to plan years beginning on or after Janu23 ary 1, 2011. 


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1 SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLL2 EES IN PLANS WITH ENROLLMENT SUSPEN3 SION. 

4 Section 1851(e)(4) of the Social Security Act (42 

5 U.S.C. 1395w(e)(4)) is amended— 

6 (1) in subparagraph (C), by striking at the end 

7 ‘‘or’’; 

8 (2) in subparagraph (D)— 

9 (A) by inserting ‘‘, taking into account the 

10 health or well-being of the individual’’ before 

11 the period; and 

12 (B) by redesignating such subparagraph as 

13 subparagraph (E); and 

14 (3) by inserting after subparagraph (C) the fol15 lowing new subparagraph: 

16 ‘‘(D) the individual is enrolled in an MA 

17 plan and enrollment in the plan is suspended 

18 under paragraph (2)(B) or (3)(C) of section 

19 1857(g) because of a failure of the plan to meet 

20 applicable requirements; or’’. 

21 SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN 

22 ADMINISTRATIVE COSTS. 

23 (a) DISCLOSURE OF MEDICAL LOSS RATIOS AND

24 OTHER EXPENSE DATA.—Section 1851 of the Social Se25 curity Act (42 U.S.C. 1395w–21), as previously amended 


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1 by this subtitle, is amended by adding at the end the fol2 lowing new subsection: 

3 ‘‘(p) PUBLICATION OF MEDICAL LOSS RATIOS AND

4 OTHER COST-RELATED INFORMATION.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall pub6 lish, not later than November 1 of each year (begin7 ning with 2011), for each MA plan contract, the 

8 medical loss ratio of the plan in the previous year. 

9 ‘‘(2) SUBMISSION OF DATA.— 

10 ‘‘(A) IN GENERAL.—Each MA organization 

11 shall submit to the Secretary, in a form and 

12 manner specified by the Secretary, data nec13 essary for the Secretary to publish the medical 

14 loss ratio on a timely basis. 

15 ‘‘(B) DATA FOR 2010 AND 2011.—The data 

16 submitted under subparagraph (A) for 2010 

17 and for 2011 shall be consistent in content with 

18 the data reported as part of the MA plan bid 

19 in June 2009 for 2010. 

20 ‘‘(C) USE OF STANDARDIZED ELEMENTS

21 AND DEFINITIONS.—The data to be submitted 

22 under subparagraph (A) relating to medical loss 

23 ratio for a year, beginning with 2012, shall be 

24 submitted based on the standardized elements 

25 and definitions developed under paragraph (3). 


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1 ‘‘(3) DEVELOPMENT OF DATA REPORTING

2 STANDARDS.— 

3 ‘‘(A) IN GENERAL.—The Secretary shall 

4 develop and implement standardized data ele5 ments and definitions for reporting under this 

6 subsection, for contract years beginning with 

7 2012, of data necessary for the calculation of 

8 the medical loss ratio for MA plans. Not later 

9 than December 31, 2010, the Secretary shall 

10 publish a report describing the elements and 

11 definitions so developed. 

12 ‘‘(B) CONSULTATION.—The Secretary 

13 shall consult with the Health Choices Commis14 sioner, representatives of MA organizations, ex15 perts on health plan accounting systems, and 

16 representatives of the National Association of 

17 Insurance Commissioners, in the development 

18 of such data elements and definitions. 

19 ‘‘(4) MEDICAL LOSS RATIO TO BE DEFINED.— 

20 For purposes of this part, the term ‘medical loss 

21 ratio’ has the meaning given such term by the Sec22 retary, taking into account the meaning given such 

23 term by the Health Choices Commissioner under 

24 section 116 of the America’s Affordable Health 

25 Choices Act of 2009.’’. 


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1 (b) MINIMUM MEDICAL LOSS RATIO.—Section 

2 1857(e) of the Social Security Act (42 U.S.C. 1395w– 

3 27(e)) is amended by adding at the end the following new 

4 paragraph: 

5 ‘‘(4) REQUIREMENT FOR MINIMUM MEDICAL

6 LOSS RATIO.—If the Secretary determines for a con7 tract year (beginning with 2014) that an MA plan 

8 has failed to have a medical loss ratio (as defined in 

9 section 1851(p)(4)) of at least .85— 

10 ‘‘(A) the Secretary shall require the Medi11 care Advantage organization offering the plan 

12 to give enrollees a rebate (in the second suc13 ceeding contract year) of premiums under this 

14 part (or part B or part D, if applicable) by 

15 such amount as would provide for a benefits 

16 ratio of at least .85; 

17 ‘‘(B) for 3 consecutive contract years, the 

18 Secretary shall not permit the enrollment of 

19 new enrollees under the plan for coverage dur20 ing the second succeeding contract year; and 

21 ‘‘(C) the Secretary shall terminate the plan 

22 contract if the plan fails to have such a medical 

23 loss ratio for 5 consecutive contract years.’’. 


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1 SEC. 1174. STRENGTHENING AUDIT AUTHORITY. 

2 (a) FOR PART C PAYMENTS RISK ADJUSTMENT.— 

3 Section 1857(d)(1) of the Social Security Act (42 U.S.C. 

4 1395w–27(d)(1)) is amended by inserting after ‘‘section 

5 1858(c))’’ the following: ‘‘, and data submitted with re6 spect to risk adjustment under section 1853(a)(3)’’. 

7 (b) ENFORCEMENT OF AUDITS AND DEFI8 CIENCIES.— 

9 (1) IN GENERAL.—Section 1857(e) of such Act, 

10 as amended by section 1173, is amended by adding 

11 at the end the following new paragraph: 

12 ‘‘(5) ENFORCEMENT OF AUDITS AND DEFI13 CIENCIES.— 

14 ‘‘(A) INFORMATION IN CONTRACT.—The 

15 Secretary shall require that each contract with 

16 an MA organization under this section shall in17 clude terms that inform the organization of the 

18 provisions in subsection (d). 

19 ‘‘(B) ENFORCEMENT AUTHORITY.—The 

20 Secretary is authorized, in connection with con21 ducting audits and other activities under sub22 section (d), to take such actions, including pur23 suit of financial recoveries, necessary to address 

24 deficiencies identified in such audits or other 

25 activities.’’. 


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1 (2) APPLICATION UNDER PART D.—For provi2 sion applying the amendment made by paragraph 

3 (1) to prescription drug plans under part D, see sec4 tion 1860D–12(b)(3)(D) of the Social Security Act. 

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

6 this section shall take effect on the date of the enactment 

7 of this Act and shall apply to audits and activities con8 ducted for contract years beginning on or after January 

9 1, 2011. 

10 SEC. 1175. AUTHORITY TO DENY PLAN BIDS. 

11 (a) IN GENERAL.—Section 1854(a)(5) of the Social 

12 Security Act (42 U.S.C. 1395w–24(a)(5)) is amended by 

13 adding at the end the following new subparagraph: 

14 ‘‘(C) REJECTION OF BIDS.—Nothing in 

15 this section shall be construed as requiring the 

16 Secretary to accept any or every bid by an MA 

17 organization under this subsection.’’. 

18 (b) APPLICATION UNDER PART D.—Section 1860D– 

19 11(d) of such Act (42 U.S.C. 1395w–111(d)) is amended 

20 by adding at the end the following new paragraph: 

21 ‘‘(3) REJECTION OF BIDS.—Paragraph (5)(C) 

22 of section 1854(a) shall apply with respect to bids 

23 under this section in the same manner as it applies 

24 to bids by an MA organization under such section.’’. 


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

2 this section shall apply to bids for contract years begin3 ning on or after January 1, 2011. 

4 PART 3—TREATMENT OF SPECIAL NEEDS PLANS 

5 SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN 

6 ENROLLMENT PERIOD OF INDIVIDUALS INTO 

7 CHRONIC CARE SPECIALIZED MA PLANS FOR 

8 SPECIAL NEEDS INDIVIDUALS. 

9 Section 1859(f)(4) of the Social Security Act (42 

10 U.S.C. 1395w–28(f)(4)) is amended by adding at the end 

11 the following new subparagraph: 

12 ‘‘(C) The plan does not enroll an individual 

13 on or after January 1, 2011, other than during 

14 an annual, coordinated open enrollment period 

15 or when at the time of the diagnosis of the dis16 ease or condition that qualifies the individual as 

17 an individual described in subsection 

18 (b)(6)(B)(iii).’’. 

19 SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS 

20 PLANS TO RESTRICT ENROLLMENT. 

21 (a) IN GENERAL.—Section 1859(f)(1) of the Social 

22 Security Act (42 U.S.C. 1395w–28(f)(1)) is amended by 

23 striking ‘‘January 1, 2011’’ and inserting ‘‘January 1, 

24 2013 (or January 1, 2016, in the case of a plan described 


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1 in section 1177(b)(1) of the America’s Affordable Health 

2 Choices Act of 2009)’’. 

3 (b) GRANDFATHERING OF CERTAIN PLANS.— 

4 (1) PLANS DESCRIBED.—For purposes of sec5 tion 1859(f)(1) of the Social Security Act (42 

6 U.S.C. 1395w–28(f)(1)), a plan described in this 

7 paragraph is a plan that had a contract with a State 

8 that had a State program to operate an integrated 

9 Medicaid-Medicare program that had been approved 

10 by the Centers for Medicare & Medicaid Services as 

11 of January 1, 2004. 

12 (2) ANALYSIS; REPORT.—The Secretary of 

13 Health and Human Services shall provide, through 

14 a contract with an independent health services eval15 uation organization, for an analysis of the plans de16 scribed in paragraph (1) with regard to the impact 

17 of such plans on cost, quality of care, patient satis18 faction, and other subjects as specified by the Sec19 retary. Not later than December 31, 2011, the Sec20 retary shall submit to Congress a report on such 

21 analysis and shall include in such report such rec22 ommendations with regard to the treatment of such 

23 plans as the Secretary deems appropriate. 


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1 Subtitle E—Improvements to 

2 Medicare Part D 

3 SEC. 1181. ELIMINATION OF COVERAGE GAP. 

4 (a) IN GENERAL.—Section 1860D–2(b) of such Act 

5 (42 U.S.C. 1395w–102(b)) is amended— 

6 (1) in paragraph (3)(A), by striking ‘‘paragraph 

7 (4)’’ and inserting ‘‘paragraphs (4) and (7)’’; 

8 (2) in paragraph (4)(B)(i), by inserting ‘‘sub9 ject to paragraph (7)’’ after ‘‘purposes of this part’’; 

10 and 

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

12 paragraph: 

13 ‘‘(7) PHASED-IN ELIMINATION OF COVERAGE

14 GAP.— 

15 ‘‘(A) IN GENERAL.—For each year begin16 ning with 2011, the Secretary shall consistent 

17 with this paragraph progressively increase the 

18 initial coverage limit (described in subsection 

19 (b)(3)) and decrease the annual out-of-pocket 

20 threshold from the amounts otherwise computed 

21 until there is a continuation of coverage from 

22 the initial coverage limit for expenditures in23 curred through the total amount of expendi24 tures at which benefits are available under 

25 paragraph (4). 


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1 ‘‘(B) INCREASE IN INITIAL COVERAGE

2 LIMIT.—For a year beginning with 2011, the 

3 initial coverage limit otherwise computed with4 out regard to this paragraph shall be increased 

by 1 5 ⁄2 of the cumulative phase-in percentage (as 

6 defined in subparagraph (D)(ii) for the year) 

7 times the out-of-pocket gap amount (as defined 

8 in subparagraph (E)) for the year. 

9 ‘‘(C) DECREASE IN ANNUAL OUT-OF-POCK10 ET THRESHOLD.—For a year beginning with 

11 2011, the annual out-of-pocket threshold other12 wise computed without regard to this paragraph 

shall be decreased by 1 13 ⁄2 of the cumulative 

14 phase-in percentage of the out-of-pocket gap 

15 amount for the year multiplied by 1.75. 

16 ‘‘(D) PHASE–IN.—For purposes of this 

17 paragraph: 

18 ‘‘(i) ANNUAL PHASE-IN PERCENT19 AGE.—The term ‘annual phase-in percent20 age’ means— 

21 ‘‘(I) for 2011, 13 percent; 

22 ‘‘(II) for 2012, 2013, 2014, and 

23 2015, 5 percent; 

24 ‘‘(III) for 2016 through 2018, 

25 7.5 percent; and 


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1 ‘‘(IV) for 2019 and each subse2 quent year, 10 percent. 

3 ‘‘(ii) CUMULATIVE PHASE-IN PER4 CENTAGE.—The term ‘cumulative phase-in 

5 percentage’ means for a year the sum of 

6 the annual phase-in percentage for the 

7 year and the annual phase-in percentages 

8 for each previous year beginning with 

9 2011, but in no case more than 100 per10 cent. 

11 ‘‘(E) OUT-OF-POCKET GAP AMOUNT.—For 

12 purposes of this paragraph, the term ‘out-of13 pocket gap amount’ means for a year the 

14 amount by which— 

15 ‘‘(i) the annual out-of-pocket thresh16 old specified in paragraph (4)(B) for the 

17 year (as determined as if this paragraph 

18 did not apply), exceeds 

19 ‘‘(ii) the sum of— 

20 ‘‘(I) the annual deductible under 

21 paragraph (1) for the year; and 

‘‘(II) 1 22 ⁄4 of the amount by which 

23 the initial coverage limit under para24 graph (3) for the year (as determined 


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1 as if this paragraph did not apply) ex2 ceeds such annual deductible.’’. 

3 (b) REQUIRING DRUG MANUFACTURERS TO PROVIDE

4 DRUG REBATES FOR FULL-BENEFIT DUAL ELIGIBLES.— 

5 (1) IN GENERAL.—Section 1860D–2 of the So6 cial Security Act (42 U.S.C. 1396r–8) is amended— 

7 (A) in subsection (e)(1), in the matter be8 fore subparagraph (A), by inserting ‘‘and sub9 section (f)’’ after ‘‘this subsection’’; and 

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

11 subsection: 

12 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

13 FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 

14 ‘‘(1) IN GENERAL.—In this part, the term ‘cov15 ered part D drug’ does not include any drug or bio16 logic that is manufactured by a manufacturer that 

17 has not entered into and have in effect a rebate 

18 agreement described in paragraph (2). 

19 ‘‘(2) REBATE AGREEMENT.—A rebate agree20 ment under this subsection shall require the manu21 facturer to provide to the Secretary a rebate for 

22 each rebate period (as defined in paragraph (6)(B)) 

23 ending after December 31, 2010, in the amount 

24 specified in paragraph (3) for any covered part D 

25 drug of the manufacturer dispensed after December 


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1 31, 2010, to any full-benefit dual eligible individual 

2 (as defined in paragraph (6)(A)) for which payment 

3 was made by a PDP sponsor under part D or a MA 

4 organization under part C for such period. Such re5 bate shall be paid by the manufacturer to the Sec6 retary not later than 30 days after the date of re7 ceipt of the information described in section 1860D– 

8 12(b)(7), including as such section is applied under 

9 section 1857(f)(3). 

10 ‘‘(3) REBATE FOR FULL-BENEFIT DUAL ELIGI11 BLE MEDICARE DRUG PLAN ENROLLEES.— 

12 ‘‘(A) IN GENERAL.—The amount of the re13 bate specified under this paragraph for a manu14 facturer for a rebate period, with respect to 

15 each dosage form and strength of any covered 

16 part D drug provided by such manufacturer 

17 and dispensed to a full-benefit dual eligible indi18 vidual, shall be equal to the product of— 

19 ‘‘(i) the total number of units of such 

20 dosage form and strength of the drug so 

21 provided and dispensed for which payment 

22 was made by a PDP sponsor under part D 

23 or a MA organization under part C for the 

24 rebate period (as reported under section 


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1 1860D–12(b)(7), including as such section 

2 is applied under section 1857(f)(3)); and 

3 ‘‘(ii) the amount (if any) by which— 

4 ‘‘(I) the Medicaid rebate amount 

5 (as defined in subparagraph (B)) for 

6 such form, strength, and period, ex7 ceeds 

8 ‘‘(II) the average Medicare drug 

9 program full-benefit dual eligible re10 bate amount (as defined in subpara11 graph (C)) for such form, strength, 

12 and period. 

13 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

14 purposes of this paragraph, the term ‘Medicaid 

15 rebate amount’ means, with respect to each 

16 dosage form and strength of a covered part D 

17 drug provided by the manufacturer for a rebate 

18 period— 

19 ‘‘(i) in the case of a single source 

20 drug or an innovator multiple source drug, 

21 the amount specified in paragraph 

22 (1)(A)(ii) of section 1927(b) plus the 

23 amount, if any, specified in paragraph 

24 (2)(A)(ii) of such section, for such form, 

25 strength, and period; or 


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1 ‘‘(ii) in the case of any other covered 

2 outpatient drug, the amount specified in 

3 paragraph (3)(A)(i) of such section for 

4 such form, strength, and period. 

5 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

6 FULL-BENEFIT DUAL ELIGIBLE REBATE

7 AMOUNT.—For purposes of this subsection, the 

8 term ‘average Medicare drug program full-ben9 efit dual eligible rebate amount’ means, with re10 spect to each dosage form and strength of a 

11 covered part D drug provided by a manufac12 turer for a rebate period, the sum, for all PDP 

13 sponsors under part D and MA organizations 

14 administering a MA–PD plan under part C, 

15 of— 

16 ‘‘(i) the product, for each such spon17 sor or organization, of— 

18 ‘‘(I) the sum of all rebates, dis19 counts, or other price concessions (not 

20 taking into account any rebate pro21 vided under paragraph (2) for such 

22 dosage form and strength of the drug 

23 dispensed, calculated on a per-unit 

24 basis, but only to the extent that any 

25 such rebate, discount, or other price 


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1 concession applies equally to drugs 

2 dispensed to full-benefit dual eligible 

3 Medicare drug plan enrollees and 

4 drugs dispensed to PDP and MA–PD 

5 enrollees who are not full-benefit dual 

6 eligible individuals; and 

7 ‘‘(II) the number of the units of 

8 such dosage and strength of the drug 

9 dispensed during the rebate period to 

10 full-benefit dual eligible individuals 

11 enrolled in the prescription drug plans 

12 administered by the PDP sponsor or 

13 the MA–PD plans administered by the 

14 MA–PD organization; divided by 

15 ‘‘(ii) the total number of units of such 

16 dosage and strength of the drug dispensed 

17 during the rebate period to full-benefit 

18 dual eligible individuals enrolled in all pre19 scription drug plans administered by PDP 

20 sponsors and all MA–PD plans adminis21 tered by MA–PD organizations. 

22 ‘‘(4) LENGTH OF AGREEMENT.—The provisions 

23 of paragraph (4) of section 1927(b) (other than 

24 clauses (iv) and (v) of subparagraph (B)) shall apply 

25 to rebate agreements under this subsection in the 


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1 same manner as such paragraph applies to a rebate 

2 agreement under such section. 

3 ‘‘(5) OTHER TERMS AND CONDITIONS.—The 

4 Secretary shall establish other terms and conditions 

5 of the rebate agreement under this subsection, in6 cluding terms and conditions related to compliance, 

7 that are consistent with this subsection. 

8 ‘‘(6) DEFINITIONS.—In this subsection and sec9 tion 1860D–12(b)(7): 

10 ‘‘(A) FULL-BENEFIT DUAL ELIGIBLE INDI11 VIDUAL.—The term ‘full-benefit dual eligible in12 dividual’ has the meaning given such term in 

13 section 1935(c)(6). 

14 ‘‘(B) REBATE PERIOD.—The term ‘rebate 

15 period’ has the meaning given such term in sec16 tion 1927(k)(8).’’. 

17 (2) REPORTING REQUIREMENT FOR THE DE18 TERMINATION AND PAYMENT OF REBATES BY MANU19 FACTURES RELATED TO REBATE FOR FULL-BENEFIT

20 DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLL21 EES.— 

22 (A) REQUIREMENTS FOR PDP SPON23 SORS.—Section 1860D–12(b) of the Social Se24 curity Act (42 U.S.C. 1395w–112(b)) is amendVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00373 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ed by adding at the end the following new para2 graph: 

3 ‘‘(7) REPORTING REQUIREMENT FOR THE DE4 TERMINATION AND PAYMENT OF REBATES BY MANU5 FACTURERS RELATED TO REBATE FOR FULL-BEN6 EFIT DUAL ELIGIBLE MEDICARE DRUG PLAN EN7 ROLLEES.— 

8 ‘‘(A) IN GENERAL.—For purposes of the 

9 rebate under section 1860D–2(f) for contract 

10 years beginning on or after January 1, 2011, 

11 each contract entered into with a PDP sponsor 

12 under this part with respect to a prescription 

13 drug plan shall require that the sponsor comply 

14 with subparagraphs (B) and (C). 

15 ‘‘(B) REPORT FORM AND CONTENTS.—Not 

16 later than 60 days after the end of each rebate 

17 period (as defined in section 1860D–2(f)(6)(B)) 

18 within such a contract year to which such sec19 tion applies, a PDP sponsor of a prescription 

20 drug plan under this part shall report to each 

21 manufacturer— 

22 ‘‘(i) information (by National Drug 

23 Code number) on the total number of units 

24 of each dosage, form, and strength of each 

25 drug of such manufacturer dispensed to 


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1 full-benefit dual eligible Medicare drug 

2 plan enrollees under any prescription drug 

3 plan operated by the PDP sponsor during 

4 the rebate period; 

5 ‘‘(ii) information on the price dis6 counts, price concessions, and rebates for 

7 such drugs for such form, strength, and 

8 period; 

9 ‘‘(iii) information on the extent to 

10 which such price discounts, price conces11 sions, and rebates apply equally to full12 benefit dual eligible Medicare drug plan 

13 enrollees and PDP enrollees who are not 

14 full-benefit dual eligible Medicare drug 

15 plan enrollees; and 

16 ‘‘(iv) any additional information that 

17 the Secretary determines is necessary to 

18 enable the Secretary to calculate the aver19 age Medicare drug program full-benefit 

20 dual eligible rebate amount (as defined in 

21 paragraph (3)(C) of such section), and to 

22 determine the amount of the rebate re23 quired under this section, for such form, 

24 strength, and period. 


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1 Such report shall be in a form consistent with 

2 a standard reporting format established by the 

3 Secretary. 

4 ‘‘(C) SUBMISSION TO SECRETARY.—Each 

5 PDP sponsor shall promptly transmit a copy of 

6 the information reported under subparagraph 

7 (B) to the Secretary for the purpose of audit 

8 oversight and evaluation. 

9 ‘‘(D) CONFIDENTIALITY OF INFORMA10 TION.—The provisions of subparagraph (D) of 

11 section 1927(b)(3), relating to confidentiality of 

12 information, shall apply to information reported 

13 by PDP sponsors under this paragraph in the 

14 same manner that such provisions apply to in15 formation disclosed by manufacturers or whole16 salers under such section, except— 

17 ‘‘(i) that any reference to ‘this sec18 tion’ in clause (i) of such subparagraph 

19 shall be treated as being a reference to this 

20 section; 

21 ‘‘(ii) the reference to the Director of 

22 the Congressional Budget Office in clause 

23 (iii) of such subparagraph shall be treated 

24 as including a reference to the Medicare 

25 Payment Advisory Commission; and 


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1 ‘‘(iii) clause (iv) of such subparagraph 

2 shall not apply. 

3 ‘‘(E) OVERSIGHT.—Information reported 

4 under this paragraph may be used by the In5 spector General of the Department of Health 

6 and Human Services for the statutorily author7 ized purposes of audit, investigation, and eval8 uations. 

9 ‘‘(F) PENALTIES FOR FAILURE TO PRO10 VIDE TIMELY INFORMATION AND PROVISION OF

11 FALSE INFORMATION.—In the case of a PDP 

12 sponsor— 

13 ‘‘(i) that fails to provide information 

14 required under subparagraph (B) on a 

15 timely basis, the sponsor is subject to a 

16 civil money penalty in the amount of 

17 $10,000 for each day in which such infor18 mation has not been provided; or 

19 ‘‘(ii) that knowingly (as defined in 

20 section 1128A(i)) provides false informa21 tion under such subparagraph, the sponsor 

22 is subject to a civil money penalty in an 

23 amount not to exceed $100,000 for each 

24 item of false information. 


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1 Such civil money penalties are in addition to 

2 other penalties as may be prescribed by law. 

3 The provisions of section 1128A (other than 

4 subsections (a) and (b)) shall apply to a civil 

5 money penalty under this subparagraph in the 

6 same manner as such provisions apply to a pen7 alty or proceeding under section 1128A(a).’’. 

8 (B) APPLICATION TO MA ORGANIZA9 TIONS.—Section 1857(f)(3) of the Social Secu10 rity Act (42 U.S.C. 1395w–27(f)(3)) is amend11 ed by adding at the end the following: 

12 ‘‘(D) REPORTING REQUIREMENT RELATED

13 TO REBATE FOR FULL-BENEFIT DUAL ELIGIBLE

14 MEDICARE DRUG PLAN ENROLLEES.—Section 

15 1860D–12(b)(7).’’. 

16 (3) DEPOSIT OF REBATES INTO MEDICARE PRE17 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) 

18 of such Act (42 U.S.C. 1395w–116(c)) is amended 

19 by adding at the end the following new paragraph: 

20 ‘‘(6) REBATE FOR FULL-BENEFIT DUAL ELIGI21 BLE MEDICARE DRUG PLAN ENROLLEES.—Amounts 

22 paid under a rebate agreement under section 

23 1860D–2(f) shall be deposited into the Account and 

24 shall be used to pay for all or part of the gradual 


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1 elimination of the coverage gap under section 

2 1860D–2(b)(7).’’. 

3 SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN 

4 ORIGINAL COVERAGE GAP. 

5 Section 1860D–2 of the Social Security Act (42 

6 U.S.C. 1395w–102), as amended by section 1181, is 

7 amended— 

8 (1) in subsection (b)(4)(C)(ii), by inserting 

9 ‘‘subject to subsection (g)(2)(C),’’ after ‘‘(ii)’’; 

10 (2) in subsection (e)(1), in the matter before 

11 subparagraph (A), by striking ‘‘subsection (f)’’ and 

12 inserting ‘‘subsections (f) and (g)’’ after ‘‘this sub13 section’’; and 

14 (3) by adding at the end the following new sub15 section: 

16 ‘‘(g) REQUIREMENT FOR MANUFACTURER DISCOUNT

17 AGREEMENT FOR CERTAIN QUALIFYING DRUGS.— 

18 ‘‘(1) IN GENERAL.—In this part, the term ‘cov19 ered part D drug’ does not include any drug or bio20 logic that is manufactured by a manufacturer that 

21 has not entered into and have in effect for all quali22 fying drugs (as defined in paragraph (5)(A)) a dis23 count agreement described in paragraph (2). 

24 ‘‘(2) DISCOUNT AGREEMENT.— 


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1 ‘‘(A) PERIODIC DISCOUNTS.—A discount 

2 agreement under this paragraph shall require 

3 the manufacturer involved to provide, to each 

4 PDP sponsor with respect to a prescription 

5 drug plan or each MA organization with respect 

6 to each MA–PD plan, a discount in an amount 

7 specified in paragraph (3) for qualifying drugs 

8 (as defined in paragraph (5)(A)) of the manu9 facturer dispensed to a qualifying enrollee after 

10 December 31, 2010, insofar as the individual is 

11 in the original gap in coverage (as defined in 

12 paragraph (5)(E)). 

13 ‘‘(B) DISCOUNT AGREEMENT.—Insofar as 

14 not inconsistent with this subsection, the Sec15 retary shall establish terms and conditions of 

16 such agreement, including terms and conditions 

17 relating to compliance, similar to the terms and 

18 conditions for rebate agreements under para19 graphs (2), (3), and (4) of section 1927(b), ex20 cept that— 

21 ‘‘(i) discounts shall be applied under 

22 this subsection to prescription drug plans 

23 and MA–PD plans instead of State plans 

24 under title XIX; 


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1 ‘‘(ii) PDP sponsors and MA organiza2 tions shall be responsible, instead of 

3 States, for provision of necessary utiliza4 tion information to drug manufacturers; 

5 and 

6 ‘‘(iii) sponsors and MA organizations 

7 shall be responsible for reporting informa8 tion on drug-component negotiated price, 

9 instead of other manufacturer prices. 

10 ‘‘(C) COUNTING DISCOUNT TOWARD TRUE

11 OUT-OF-POCKET COSTS.—Under the discount 

12 agreement, in applying subsection (b)(4), with 

13 regard to subparagraph (C)(i) of such sub14 section, if a qualified enrollee purchases the 

15 qualified drug insofar as the enrollee is in an 

16 actual gap of coverage (as defined in paragraph 

17 (5)(D)), the amount of the discount under the 

18 agreement shall be treated and counted as costs 

19 incurred by the plan enrollee. 

20 ‘‘(3) DISCOUNT AMOUNT.—The amount of the 

21 discount specified in this paragraph for a discount 

22 period for a plan is equal to 50 percent of the 

23 amount of the drug-component negotiated price (as 

24 defined in paragraph (5)(C)) for qualifying drugs for 

25 the period involved. 


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1 ‘‘(4) ADDITIONAL TERMS.—In the case of a dis2 count provided under this subsection with respect to 

3 a prescription drug plan offered by a PDP sponsor 

4 or an MA–PD plan offered by an MA organization, 

5 if a qualified enrollee purchases the qualified drug— 

6 ‘‘(A) insofar as the enrollee is in an actual 

7 gap of coverage (as defined in paragraph 

8 (5)(D)), the sponsor or plan shall provide the 

9 discount to the enrollee at the time the enrollee 

10 pays for the drug; and 

11 ‘‘(B) insofar as the enrollee is in the por12 tion of the original gap in coverage (as defined 

13 in paragraph (5)(E)) that is not in the actual 

14 gap in coverage, the discount shall not be ap15 plied against the negotiated price (as defined in 

16 subsection (d)(1)(B)) for the purpose of calcu17 lating the beneficiary payment. 

18 ‘‘(5) DEFINITIONS.—In this subsection: 

19 ‘‘(A) QUALIFYING DRUG.—The term 

20 ‘qualifying drug’ means, with respect to a pre21 scription drug plan or MA–PD plan, a drug or 

22 biological product that— 

23 ‘‘(i)(I) is a drug produced or distrib24 uted under an original new drug applica25 tion approved by the Food and Drug AdVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00382 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ministration, including a drug product 

2 marketed by any cross-licensed producers 

3 or distributors operating under the new 

4 drug application; 

5 ‘‘(II) is a drug that was originally 

6 marketed under an original new drug ap7 plication approved by the Food and Drug 

8 Administration; or 

9 ‘‘(III) is a biological product as ap10 proved under Section 351(a) of the Public 

11 Health Services Act; 

12 ‘‘(ii) is covered under the formulary of 

13 the plan; and 

14 ‘‘(iii) is dispensed to an individual 

15 who is in the original gap in coverage. 

16 ‘‘(B) QUALIFYING ENROLLEE.—The term 

17 ‘qualifying enrollee’ means an individual en18 rolled in a prescription drug plan or MA–PD 

19 plan other than such an individual who is a 

20 subsidy-eligible individual (as defined in section 

21 1860D–14(a)(3)). 

22 ‘‘(C) DRUG-COMPONENT NEGOTIATED

23 PRICE.—The term ‘drug-component negotiated 

24 price’ means, with respect to a qualifying drug, 

25 the negotiated price (as defined in subsection 


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1 (d)(1)(B)), as determined without regard to any 

2 dispensing fee, of the drug under the prescrip3 tion drug plan or MA–PD plan involved. 

4 ‘‘(D) ACTUAL GAP IN COVERAGE.—The 

5 term ‘actual gap in coverage’ means the gap in 

6 prescription drug coverage that occurs between 

7 the initial coverage limit (as modified under 

8 subparagraph (B) of subsection (b)(7)) and the 

9 annual out-of-pocket threshold (as modified 

10 under subparagraph (C) of such subsection). 

11 ‘‘(E) ORIGINAL GAP IN COVERAGE.—The 

12 term ‘original in gap coverage’ means the gap 

13 in prescription drug coverage that would occur 

14 between the initial coverage limit (described in 

15 subsection (b)(3)) and the out-of-pocket thresh16 old (as defined in subsection (b)(4))(B) if sub17 section (b)(7) did not apply.’’. 

18 SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS19 SION OF CLAIMS BY PHARMACIES LOCATED 

20 IN OR CONTRACTING WITH LONG-TERM CARE 

21 FACILITIES. 

22 (a) PART D SUBMISSION.—Section 1860D–12(b) of 

23 the Social Security Act (42 U.S.C. 1395w–112(b)), as 

24 amended by section 172(a)(1) of Public Law 110–275, is 

25 amended by striking paragraph (5) and redesignating 


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1 paragraph (6) and paragraph (7), as added by section 

2 1181(b)(2), as paragraph (5) and paragraph (6), respec3 tively. 

4 (b) SUBMISSION TO MA–PD PLANS.—Section 

5 1857(f)(3) of the Social Security Act (42 U.S.C. 1395w6 27(f)(3)), as added by section 171(b) of Public Law 110– 

7 275 and amended by section 172(a)(2) of such Public Law 

8 and section 1181 of this division, is amended by striking 

9 subparagraph (B) and redesignating subparagraphs (C) 

10 and (D) as subparagraphs (B) and (C) respectively. 

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

12 this section shall apply for contract years beginning with 

13 2010. 

14 SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS15 SISTANCE PROGRAMS AND INDIAN HEALTH 

16 SERVICE IN PROVIDING PRESCRIPTION 

17 DRUGS TOWARD THE ANNUAL OUT-OF-POCK18 ET THRESHOLD UNDER PART D. 

19 (a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the 

20 Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is 

21 amended— 

22 (1) in clause (i), by striking ‘‘and’’ at the end; 

23 (2) in clause (ii)— 

24 (A) by striking ‘‘such costs shall be treated 

25 as incurred only if’’ and inserting ‘‘subject to 


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1 clause (iii), such costs shall be treated as in2 curred only if’’; 

3 (B) by striking ‘‘, under section 1860D– 

4 14, or under a State Pharmaceutical Assistance 

5 Program’’; and 

6 (C) by striking the period at the end and 

7 inserting ‘‘; and’’; and 

8 (3) by inserting after clause (ii) the following 

9 new clause: 

10 ‘‘(iii) such costs shall be treated as in11 curred and shall not be considered to be 

12 reimbursed under clause (ii) if such costs 

13 are borne or paid— 

14 ‘‘(I) under section 1860D–14; 

15 ‘‘(II) under a State Pharma16 ceutical Assistance Program; 

17 ‘‘(III) by the Indian Health Serv18 ice, an Indian tribe or tribal organiza19 tion, or an urban Indian organization 

20 (as defined in section 4 of the Indian 

21 Health Care Improvement Act); or 

22 ‘‘(IV) under an AIDS Drug As23 sistance Program under part B of 

24 title XXVI of the Public Health Serv25 ice Act.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply to costs incurred on or after 

3 January 1, 2011. 

4 SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLL5 MENT FOR FORMULARY CHANGES THAT AD6 VERSELY IMPACT AN ENROLLEE. 

7 (a) IN GENERAL.—Section 1860D–1(b)(3) of the So8 cial Security Act (42 U.S.C. 1395w–101(b)(3)) is amend9 ed by adding at the end the following new subparagraph: 

10 ‘‘(F) CHANGE IN FORMULARY RESULTING

11 IN INCREASE IN COST-SHARING.— 

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), in the case of an indi14 vidual enrolled in a prescription drug plan 

15 (or MA–PD plan) who has been prescribed 

16 and is using a covered part D drug while 

17 so enrolled, if the formulary of the plan is 

18 materially changed (other than at the end 

19 of a contract year) so to reduce the cov20 erage (or increase the cost-sharing) of the 

21 drug under the plan. 

22 ‘‘(ii) EXCEPTION.—Clause (i) shall 

23 not apply in the case that a drug is re24 moved from the formulary of a plan be25 cause of a recall or withdrawal of the drug 


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1 issued by the Food and Drug Administra2 tion, because the drug is replaced with a 

3 generic drug that is a therapeutic equiva4 lent, or because of utilization management 

5 applied to— 

6 ‘‘(I) a drug whose labeling in7 cludes a boxed warning required by 

8 the Food and Drug Administration 

9 under section 210.57(c)(1) of title 21, 

10 Code of Federal Regulations (or a 

11 successor regulation); or 

12 ‘‘(II) a drug required under sub13 section (c)(2) of section 505–1 of the 

14 Federal Food, Drug, and Cosmetic 

15 Act to have a Risk Evaluation and 

16 Management Strategy that includes 

17 elements under subsection (f) of such 

18 section.’’. 

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

20 subsection (a) shall apply to contract years beginning on 

21 or after January 1, 2011. 


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1 Subtitle F—Medicare Rural Access 

2 Protections 

3 SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. 

4 . 

5 (a) ADDITIONAL TELEHEALTH SITE.— 

6 (1) IN GENERAL.—Paragraph (4)(C)(ii) of sec7 tion 1834(m) of the Social Security Act (42 U.S.C. 

8 1395m(m)) is amended by adding at the end the fol9 lowing new subclause: 

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

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall apply to services furnished on 

13 or after January 1, 2011. 

14 (b) TELEHEALTH ADVISORY COMMITTEE.— 

15 (1) ESTABLISHMENT.—Section 1868 of the So16 cial Security Act (42 U.S.C. 1395ee) is amended— 

17 (A) in the heading, by adding at the end 

18 the following: ‘‘TELEHEALTH ADVISORY COM19 MITTEE’’; and 

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

21 subsection: 

22 ‘‘(c) TELEHEALTH ADVISORY COMMITTEE.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall appoint 

24 a Telehealth Advisory Committee (in this subsection 

25 referred to as the ‘Advisory Committee’) to make 


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1 recommendations to the Secretary on policies of the 

2 Centers for Medicare & Medicaid Services regarding 

3 telehealth services as established under section 

4 1834(m), including the appropriate addition or dele5 tion of services (and HCPCS codes) to those speci6 fied in paragraphs (4)(F)(i) and (4)(F)(ii) of such 

7 section and for authorized payment under paragraph 

8 (1) of such section. 

9 ‘‘(2) MEMBERSHIP; TERMS.— 

10 ‘‘(A) MEMBERSHIP.— 

11 ‘‘(i) IN GENERAL.—The Advisory 

12 Committee shall be composed of 9 mem13 bers, to be appointed by the Secretary, of 

14 whom— 

15 ‘‘(I) 5 shall be practicing physi16 cians; 

17 ‘‘(II) 2 shall be practicing non18 physician health care practitioners; 

19 and 

20 ‘‘(III) 2 shall be administrators 

21 of telehealth programs. 

22 ‘‘(ii) REQUIREMENTS FOR APPOINT23 ING MEMBERS.—In appointing members of 

24 the Advisory Committee, the Secretary 

25 shall— 


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1 ‘‘(I) ensure that each member 

2 has prior experience with the practice 

3 of telemedicine or telehealth; 

4 ‘‘(II) give preference to individ5 uals who are currently providing tele6 medicine or telehealth services or who 

7 are involved in telemedicine or tele8 health programs; 

9 ‘‘(III) ensure that the member10 ship of the Advisory Committee rep11 resents a balance of specialties and 

12 geographic regions; and 

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

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

17 Secretary may specify. 

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

20 with respect to a particular matter considered 

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

23 member) has a financial interest that could be 

24 affected by the advice given to the Secretary 

25 with respect to such matter. 


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1 ‘‘(3) MEETINGS.—The Advisory Committee 

2 shall meet twice each calendar year and at such 

3 other times as the Secretary may provide. 

4 ‘‘(4) PERMANENT COMMITTEE.—Section 14 of 

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

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

7 (2) FOLLOWING RECOMMENDATIONS.—Section 

8 1834(m)(4)(F) of such Act (42 U.S.C. 

9 1395m(m)(4)(F)) is amended by adding at the end 

10 the following new clause: 

11 ‘‘(iii) RECOMMENDATIONS OF THE

12 TELEHEALTH ADVISORY COMMITTEE.—In 

13 making determinations under clauses (i) 

14 and (ii), the Secretary shall take into ac15 count the recommendations of the Tele16 health Advisory Committee (established 

17 under section 1868(c)) when adding or de18 leting services (and HCPCS codes) and in 

19 establishing policies of the Centers for 

20 Medicare & Medicaid Services regarding 

21 the delivery of telehealth services. If the 

22 Secretary does not implement such a rec23 ommendation, the Secretary shall publish 

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1 garding the reason such recommendation 

2 was not implemented.’’ 

3 (3) WAIVER OF ADMINISTRATIVE LIMITA4 TION.—The Secretary of Health and Human Serv5 ices shall establish the Telehealth Advisory Com6 mittee under the amendment made by paragraph (1) 

7 notwithstanding any limitation that may apply to 

8 the number of advisory committees that may be es9 tablished (within the Department of Health and 

10 Human Services or otherwise). 

11 (c) CREDENTIALING TELEMEDICINE PRACTI12 TIONERS.—Section 1834(m) of such Act (42 U.S.C. 

13 1395m(m)) is amended by adding at the end the following 

14 new paragraph: 

15 ‘‘(5) HOSPITAL CREDENTIALING OF TELEMEDI16 CINE PRACTITIONERS.—A telemedicine practitioner 

17 that is credentialed by a hospital in compliance with 

18 the Joint Commission Standards for Telemedicine 

19 shall be considered in compliance with conditions of 

20 participation and reimbursement credentialing re21 quirements under this title for telemedicine serv22 ices.’’. 


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1 SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS 

2 PROVISION. 

3 Section 1833(t)(7)(D)(i) of the Social Security Act 

4 (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 

5 (1) in subclause (II)— 

6 (A) in the first sentence, by striking 

7 ‘‘‘2010’’ and inserting ‘‘2012’’; and 

8 (B) in the second sentence, by striking ‘‘or 

9 2009’’ and inserting ‘‘, 2009, 2010, or 2011’’; 

10 and 

11 (2) in subclause (III), by striking ‘‘January 1, 

12 2010’’ and inserting ‘‘January 1, 2012’’. 

13 SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLAS14 SIFICATIONS. 

15 Subsection (a) of section 106 of division B of the Tax 

16 Relief and Health Care Act of 2006 (42 U.S.C. 1395 

17 note), as amended by section 117 of the Medicare, Med18 icaid, and SCHIP Extension Act of 2007 (Public Law 

19 110–173) and section 124 of the Medicare Improvements 

20 for Patients and Providers Act of 2008 (Public Law 110– 

21 275), is amended by striking ‘‘September 30, 2009’’ and 

22 inserting ‘‘September 30, 2011’’. 

23 SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK. 

24 Section 1848(e)(1)(E) of the Social Security Act (42 

25 U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘before 


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1 January 1, 2010’’ and inserting ‘‘before January 1, 

2 2012’’. 

3 SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COM4 PONENT OF CERTAIN PHYSICIAN PATHOL5 OGY SERVICES. 

6 Section 542(c) of the Medicare, Medicaid, and 

7 SCHIP Benefits Improvement and Protection Act of 2000 

8 (as enacted into law by section 1(a)(6) of Public Law 106– 

9 554), as amended by section 732 of the Medicare Prescrip10 tion Drug, Improvement, and Modernization Act of 2003 

11 (42 U.S.C. 1395w–4 note), section 104 of division B of 

12 the Tax Relief and Health Care Act of 2006 (42 U.S.C. 

13 1395w–4 note), section 104 of the Medicare, Medicaid, 

14 and SCHIP Extension Act of 2007 (Public Law 110– 

15 173), and section 136 of the Medicare Improvements for 

16 Patients and Providers Act of 1008 (Public Law 110– 

17 275), is amended by striking ‘‘and 2009’’ and inserting 

18 ‘‘2009, 2010, and 2011’’. 

19 SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS. 

20 (a) IN GENERAL.—Section 1834(l)(13) of the Social 

21 Security Act (42 U.S.C. 1395m(l)(13)) is amended— 

22 (1) in subparagraph (A)— 

23 (A) in the matter preceding clause (i), by 

24 striking ‘‘before January 1, 2010’’ and insert25 ing ‘‘before January 1, 2012’’; and 


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1 (B) in each of clauses (i) and (ii), by strik2 ing ‘‘before January 1, 2010’’ and inserting 

3 ‘‘before January 1, 2012’’. 

4 (b) AIR AMBULANCE IMPROVEMENTS.—Section 

5 146(b)(1) of the Medicare Improvements for Patients and 

6 Providers Act of 2008 (Public Law 110–275) is amended 

7 by striking ‘‘ending on December 31, 2009’’ and inserting 

8 ‘‘ending on December 31, 2011’’. 

9 TITLE II—MEDICARE 

10 BENEFICIARY IMPROVEMENTS 

11 Subtitle A—Improving and Simpli12 fying Financial Assistance for 

13 Low Income Medicare Bene14 ficiaries 

15 SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAV16 INGS PROGRAM AND LOW-INCOME SUBSIDY 

17 PROGRAM. 

18 (a) APPLICATION OF HIGHEST LEVEL PERMITTED

19 UNDER LIS TO ALL SUBSIDY ELIGIBLE INDIVIDUALS.— 

20 (1) IN GENERAL.—Section 1860D–14(a)(1) of 

21 the Social Security Act (42 U.S.C. 1395w– 

22 114(a)(1)) is amended in the matter before subpara23 graph (A), by inserting ‘‘(or, beginning with 2012, 

24 paragraph (3)(E))’’ after ‘‘paragraph (3)(D)’’. 


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1 (2) ANNUAL INCREASE IN LIS RESOURCE

2 TEST.—Section 1860D–14(a)(3)(E)(i) of such Act 

3 (42 U.S.C. 1395w–114(a)(3)(E)(i)) is amended— 

4 (A) by striking ‘‘and’’ at the end of sub5 clause (I); 

6 (B) in subclause (II), by inserting ‘‘(before 

7 2012)’’ after ‘‘subsequent year’’; 

8 (C) by striking the period at the end of 

9 subclause (II) and inserting a semicolon; 

10 (D) by inserting after subclause (II) the 

11 following new subclauses: 

12 ‘‘(III) for 2012, $17,000 (or 

13 $34,000 in the case of the combined 

14 value of the individual’s assets or re15 sources and the assets or resources of 

16 the individual’s spouse); and 

17 ‘‘(IV) for a subsequent year, the 

18 dollar amounts specified in this sub19 clause (or subclause (III)) for the pre20 vious year increased by the annual 

21 percentage increase in the consumer 

22 price index (all items; U.S. city aver23 age) as of September of such previous 

24 year.’’; and 


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1 (E) in the last sentence, by inserting ‘‘or 

2 (IV)’’ after ‘‘subclause (II)’’. 

3 (3) APPLICATION OF LIS TEST UNDER MEDI4 CARE SAVINGS PROGRAM.—Section 1905(p)(1)(C) of 

5 such Act (42 U.S.C. 1396d(p)(1)(C)) is amended— 

6 (A) by striking ‘‘effective beginning with 

7 January 1, 2010’’ and inserting ‘‘effective for 

8 the period beginning with January 1, 2010, and 

9 ending with December 31, 2011’’; and 

10 (B) by inserting before the period at the 

11 end the following: ‘‘or, effective beginning with 

12 January 1, 2012, whose resources (as so deter13 mined) do not exceed the maximum resource 

14 level applied for the year under subparagraph 

15 (E) of section 1860D–14(a)(3) (determined 

16 without regard to the life insurance policy ex17 clusion provided under subparagraph (G) of 

18 such section) applicable to an individual or to 

19 the individual and the individual’s spouse (as 

20 the case may be)’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 subsection (a) shall apply to eligibility determinations for 

23 income-related subsidies and medicare cost-sharing fur24 nished for periods beginning on or after January 1, 2012. 


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1 SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR 

2 CERTAIN NON-INSTITUTIONALIZED FULL3 BENEFIT DUAL ELIGIBLE INDIVIDUALS. 

4 (a) IN GENERAL.—Section 1860D–14(a)(1)(D)(i) of 

5 the Social Security Act (42 U.S.C. 1395w– 

6 114(a)(1)(D)(i)) is amended— 

7 (1) by striking ‘‘INSTITUTIONALIZED INDIVID8 UALS.—In’’ and inserting ‘‘ELIMINATION OF COST9 SHARING FOR CERTAIN FULL-BENEFIT DUAL ELIGI10 BLE INDIVIDUALS.— 

11 ‘‘(I) INSTITUTIONALIZED INDI12 VIDUALS.—In’’; and 

13 (2) by adding at the end the following new sub14 clause: 

15 ‘‘(II) CERTAIN OTHER INDIVID16 UALS.—In the case of an individual 

17 who is a full-benefit dual eligible indi18 vidual and with respect to whom there 

19 has been a determination that but for 

20 the provision of home and community 

21 based care (whether under section 

22 1915, 1932, or under a waiver under 

23 section 1115) the individual would re24 quire the level of care provided in a 

25 hospital or a nursing facility or inter26 mediate care facility for the mentally 


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1 retarded the cost of which could be re2 imbursed under the State plan under 

3 title XIX, the elimination of any bene4 ficiary coinsurance described in sec5 tion 1860D–2(b)(2) (for all amounts 

6 through the total amount of expendi7 tures at which benefits are available 

8 under section 1860D–2(b)(4)).’’. 

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

10 subsection (a) shall apply to drugs dispensed on or after 

11 January 1, 2011. 

12 SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT. 

13 (a) ADMINISTRATIVE VERIFICATION OF INCOME AND

14 RESOURCES UNDER THE LOW-INCOME SUBSIDY PRO15 GRAM.— 

16 (1) IN GENERAL.—Clause (iii) of section 

17 1860D–14(a)(3)(E) of the Social Security Act (42 

18 U.S.C. 1395w–114(a)(3)(E)) is amended to read as 

19 follows: 

20 ‘‘(iii) CERTIFICATION OF INCOME AND

21 RESOURCES.—For purposes of applying 

22 this section— 

23 ‘‘(I) an individual shall be per24 mitted to apply on the basis of selfVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00400 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 certification of income and resources; 

2 and 

3 ‘‘(II) matters attested to in the 

4 application shall be subject to appro5 priate methods of verification without 

6 the need of the individual to provide 

7 additional documentation, except in 

8 extraordinary situations as determined 

9 by the Commissioner.’’. 

10 (2) EFFECTIVE DATE.—The amendment made 

11 by paragraph (1) shall apply beginning January 1, 

12 2010. 

13 (b) DISCLOSURES TO FACILITATE IDENTIFICATION

14 OF INDIVIDUALS LIKELY TO BE INELIGIBLE FOR THE

15 LOW-INCOME ASSISTANCE UNDER THE MEDICARE PRE16 SCRIPTION DRUG PROGRAM TO ASSIST SOCIAL SECURITY

17 ADMINISTRATION’S OUTREACH TO ELIGIBLE INDIVID18 UALS.—For provision authorizing disclosure of return in19 formation to facilitate identification of individuals likely 

20 to be ineligible for low-income subsidies under Medicare 

21 prescription drug program, see section 1801. 


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1 SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIM2 BURSEMENTS FOR RETROACTIVE LOW IN3 COME SUBSIDY ENROLLMENT. 

4 (a) IN GENERAL.—In the case of a retroactive LIS 

5 enrollment beneficiary who is enrolled under a prescription 

6 drug plan under part D of title XVIII of the Social Secu7 rity Act (or an MA–PD plan under part C of such title), 

8 the beneficiary (or any eligible third party) is entitled to 

9 reimbursement by the plan for covered drug costs incurred 

10 by the beneficiary during the retroactive coverage period 

11 of the beneficiary in accordance with subsection (b) and 

12 in the case of such a beneficiary described in subsection 

13 (c)(4)(A)(i), such reimbursement shall be made automati14 cally by the plan upon receipt of appropriate notice the 

15 beneficiary is eligible for assistance described in such sub16 section (c)(4)(A)(i) without further information required 

17 to be filed with the plan by the beneficiary. 

18 (b) ADMINISTRATIVE REQUIREMENTS RELATING TO

19 REIMBURSEMENTS.— 

20 (1) LINE-ITEM DESCRIPTION.—Each reimburse21 ment made by a prescription drug plan or MA–PD 

22 plan under subsection (a) shall include a line-item 

23 description of the items for which the reimbursement 

24 is made. 

25 (2) TIMING OF REIMBURSEMENTS.—A prescrip26 tion drug plan or MA–PD plan must make a reimVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00402 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 bursement under subsection (a) to a retroactive LIS 

2 enrollment beneficiary, with respect to a claim, not 

3 later than 45 days after— 

4 (A) in the case of a beneficiary described 

5 in subsection (c)(4)(A)(i), the date on which the 

6 plan receives notice from the Secretary that the 

7 beneficiary is eligible for assistance described in 

8 such subsection; or 

9 (B) in the case of a beneficiary described 

10 in subsection (c)(4)(A)(ii), the date on which 

11 the beneficiary files the claim with the plan. 

12 (3) REPORTING REQUIREMENT.—For each 

13 month beginning with January 2011, each prescrip14 tion drug plan and each MA–PD plan shall report 

15 to the Secretary the following: 

16 (A) The number of claims the plan has re17 adjudicated during the month due to a bene18 ficiary becoming retroactively eligible for sub19 sidies available under section 1860D–14 of the 

20 Social Security Act. 

21 (B) The total value of the readjudicated 

22 claim amount for the month. 

23 (C) The Medicare Health Insurance Claims 

24 Number of beneficiaries for whom claims were 

25 readjudicated. 


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1 (D) For the claims described in subpara2 graphs (A) and (B), an attestation to the Ad3 ministrator of the Centers for Medicare & Med4 icaid Services of the total amount of reimburse5 ment the plan has provided to beneficiaries for 

6 premiums and cost-sharing that the beneficiary 

7 overpaid for which the plan received payment 

8 from the Centers for Medicare & Medicaid Serv9 ices. 

10 (c) DEFINITIONS.—For purposes of this section: 

11 (1) COVERED DRUG COSTS.—The term ‘‘cov12 ered drug costs’’ means, with respect to a retroactive 

13 LIS enrollment beneficiary enrolled under a pre14 scription drug plan under part D of title XVIII of 

15 the Social Security Act (or an MA–PD plan under 

16 part C of such title), the amount by which— 

17 (A) the costs incurred by such beneficiary 

18 during the retroactive coverage period of the 

19 beneficiary for covered part D drugs, premiums, 

20 and cost-sharing under such title; exceeds 

21 (B) such costs that would have been in22 curred by such beneficiary during such period if 

23 the beneficiary had been both enrolled in the 

24 plan and recognized by such plan as qualified 

25 during such period for the low income subsidy 


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1 under section 1860D–14 of the Social Security 

2 Act to which the individual is entitled. 

3 (2) ELIGIBLE THIRD PARTY.—The term ‘‘eligi4 ble third party’’ means, with respect to a retroactive 

5 LIS enrollment beneficiary, an organization or other 

6 third party that is owed payment on behalf of such 

7 beneficiary for covered drug costs incurred by such 

8 beneficiary during the retroactive coverage period of 

9 such beneficiary. 

10 (3) RETROACTIVE COVERAGE PERIOD.—The 

11 term ‘‘retroactive coverage period’’ means— 

12 (A) with respect to a retroactive LIS en13 rollment beneficiary described in paragraph 

14 (4)(A)(i), the period— 

15 (i) beginning on the effective date of 

16 the assistance described in such paragraph 

17 for which the individual is eligible; and 

18 (ii) ending on the date the plan effec19 tuates the status of such individual as so 

20 eligible; and 

21 (B) with respect to a retroactive LIS en22 rollment beneficiary described in paragraph 

23 (4)(A)(ii), the period— 

24 (i) beginning on the date the indi25 vidual is both entitled to benefits under 


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1 part A, or enrolled under part B, of title 

2 XVIII of the Social Security Act and eligi3 ble for medical assistance under a State 

4 plan under title XIX of such Act; and 

5 (ii) ending on the date the plan effec6 tuates the status of such individual as a 

7 full-benefit dual eligible individual (as de8 fined in section 1935(c)(6) of such Act). 

9 (4) RETROACTIVE LIS ENROLLMENT BENE10 FICIARY.— 

11 (A) IN GENERAL.—The term ‘‘retroactive 

12 LIS enrollment beneficiary’’ means an indi13 vidual who— 

14 (i) is enrolled in a prescription drug 

15 plan under part D of title XVIII of the So16 cial Security Act (or an MA–PD plan 

17 under part C of such title) and subse18 quently becomes eligible as a full-benefit 

19 dual eligible individual (as defined in sec20 tion 1935(c)(6) of such Act), an individual 

21 receiving a low-income subsidy under sec22 tion 1860D–14 of such Act, an individual 

23 receiving assistance under the Medicare 

24 Savings Program implemented under 

25 clauses (i), (iii), and (iv) of section 


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1 1902(a)(10)(E) of such Act, or an indi2 vidual receiving assistance under the sup3 plemental security income program under 

4 section 1611 of such Act; or 

5 (ii) subject to subparagraph (B)(i), is 

6 a full-benefit dual eligible individual (as 

7 defined in section 1935(c)(6) of such Act) 

8 who is automatically enrolled in such a 

9 plan under section 1860D–1(b)(1)(C) of 

10 such Act. 

11 (B) EXCEPTION FOR BENEFICIARIES EN12 ROLLED IN RFP PLAN.— 

13 (i) IN GENERAL.—In no case shall an 

14 individual described in subparagraph 

15 (A)(ii) include an individual who is en16 rolled, pursuant to a RFP contract de17 scribed in clause (ii), in a prescription 

18 drug plan offered by the sponsor of such 

19 plan awarded such contract. 

20 (ii) RFP CONTRACT DESCRIBED.— 

21 The RFP contract described in this section 

22 is a contract entered into between the Sec23 retary and a sponsor of a prescription drug 

24 plan pursuant to the Centers for Medicare 

25 & Medicaid Services’ request for proposals 


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1 issued on February 17, 2009, relating to 

2 Medicare part D retroactive coverage for 

3 certain low income beneficiaries, or a simi4 lar subsequent request for proposals. 

5 SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT. 

6 (a) IN GENERAL.—Section 1860D–1(b)(1)(C) of the 

7 Social Security Act (42 U.S.C. 1395w–101(b)(1)(C)) is 

8 amended by adding after ‘‘PDP region’’ the following: ‘‘or 

9 through use of an intelligent assignment process that is 

10 designed to maximize the access of such individual to nec11 essary prescription drugs while minimizing costs to such 

12 individual and to the program under this part to the great13 est extent possible. In the case the Secretary enrolls such 

14 individuals through use of an intelligent assignment proc15 ess, such process shall take into account the extent to 

16 which prescription drugs necessary for the individual are 

17 covered in the case of a PDP sponsor of a prescription 

18 drug plan that uses a formulary, the use of prior author19 ization or other restrictions on access to coverage of such 

20 prescription drugs by such a sponsor, and the overall qual21 ity of a prescription drug plan as measured by quality rat22 ings established by the Secretary’’ 

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

24 subsection (a) shall take effect for contract years begin25 ning with 2012. 


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1 SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC 

2 ENROLLMENT PROCESS FOR CERTAIN SUB3 SIDY ELIGIBLE INDIVIDUALS. 

4 (a) SPECIAL ENROLLMENT PERIOD.—Section 

5 1860D–1(b)(3)(D) of the Social Security Act (42 U.S.C. 

6 1395w–101(b)(3)(D)) is amended to read as follows: 

7 ‘‘(D) SUBSIDY ELIGIBLE INDIVIDUALS.— 

8 In the case of an individual (as determined by 

9 the Secretary) who is determined under sub10 paragraph (B) of section 1860D–14(a)(3) to be 

11 a subsidy eligible individual.’’. 

12 (b) AUTOMATIC ENROLLMENT.—Section 1860D– 

13 1(b)(1) of the Social Security Act (42 U.S.C. 1395w– 

14 101(b)(1)) is amended by adding at the end the following 

15 new subparagraph: 

16 ‘‘(D) SPECIAL RULE FOR SUBSIDY ELIGI17 BLE INDIVIDUALS.—The process established 

18 under subparagraph (A) shall include, in the 

19 case of an individual described in section 

20 1860D–1(b)(3)(D) who fails to enroll in a pre21 scription drug plan or an MA–PD plan during 

22 the special enrollment established under such 

23 section applicable to such individual, the appli24 cation of the assignment process described in 

25 subparagraph (C) to such individual in the 

26 same manner as such assignment process apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00409 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plies to a part D eligible individual described in 

2 such subparagraph (C). Nothing in the previous 

3 sentence shall prevent an individual described in 

4 such sentence from declining enrollment in a 

5 plan determined appropriate by the Secretary 

6 (or in the program under this part) or from 

7 changing such enrollment.’’. 

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

9 this section shall apply to subsidy determinations made 

10 for months beginning with January 2011. 

11 SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO RE12 BATE IN CALCULATION OF LOW INCOME SUB13 SIDY BENCHMARK. 

14 (a) IN GENERAL.—Section 1860D–14(b)(2)(B)(iii) 

15 of the Social Security Act (42 U.S.C. 1395w– 

16 114(b)(2)(B)(iii)) is amended by inserting before the pe17 riod the following: ‘‘before the application of the monthly 

18 rebate computed under section 1854(b)(1)(C)(i) for that 

19 plan and year involved’’. 

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

21 subsection (a) shall apply to subsidy determinations made 

22 for months beginning with January 2011. 


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1 Subtitle B—Reducing Health 

2 Disparities 

3 SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN 

4 MEDICARE. 

5 (a) ENSURING EFFECTIVE COMMUNICATION BY THE

6 CENTERS FOR MEDICARE & MEDICAID SERVICES.— 

7 (1) STUDY ON MEDICARE PAYMENTS FOR LAN8 GUAGE SERVICES.—The Secretary of Health and 

9 Human Services shall conduct a study that examines 

10 the extent to which Medicare service providers uti11 lize, offer, or make available language services for 

12 beneficiaries who are limited English proficient and 

13 ways that Medicare should develop payment systems 

14 for language services. 

15 (2) ANALYSES.—The study shall include an 

16 analysis of each of the following: 

17 (A) How to develop and structure appro18 priate payment systems for language services 

19 for all Medicare service providers. 

20 (B) The feasibility of adopting a payment 

21 methodology for on-site interpreters, including 

22 interpreters who work as independent contrac23 tors and interpreters who work for agencies 

24 that provide on-site interpretation, pursuant to 

25 which such interpreters could directly bill MediVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00411 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 care for services provided in support of physi2 cian office services for an LEP Medicare pa3 tient. 

4 (C) The feasibility of Medicare contracting 

5 directly with agencies that provide off-site inter6 pretation including telephonic and video inter7 pretation pursuant to which such contractors 

8 could directly bill Medicare for the services pro9 vided in support of physician office services for 

10 an LEP Medicare patient. 

11 (D) The feasibility of modifying the exist12 ing Medicare resource-based relative value scale 

13 (RBRVS) by using adjustments (such as multi14 pliers or add-ons) when a patient is LEP. 

15 (E) How each of options described in a 

16 previous paragraph would be funded and how 

17 such funding would affect physician payments, 

18 a physician’s practice, and beneficiary cost19 sharing. 

20 (F) The extent to which providers under 

21 parts A and B of title XVIII of the Social Secu22 rity Act, MA organizations offering Medicare 

23 Advantage plans under part C of such title and 

24 PDP sponsors of a prescription drug plan 

25 under part D of such title utilize, offer, or make 


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1 available language services for beneficiaries with 

2 limited English proficiency. 

3 (G) The nature and type of language serv4 ices provided by States under title XIX of the 

5 Social Security Act and the extent to which 

6 such services could be utilized by beneficiaries 

7 and providers under title XVIII of such Act. 

8 (3) VARIATION IN PAYMENT SYSTEM DE9 SCRIBED.—The payment systems described in para10 graph (2)(A) may allow variations based upon types 

11 of service providers, available delivery methods, and 

12 costs for providing language services including such 

13 factors as— 

14 (A) the type of language services provided 

15 (such as provision of health care or health care 

16 related services directly in a non-English lan17 guage by a bilingual provider or use of an inter18 preter); 

19 (B) type of interpretation services provided 

20 (such as in-person, telephonic, video interpreta21 tion); 

22 (C) the methods and costs of providing 

23 language services (including the costs of pro24 viding language services with internal staff or 


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1 through contract with external independent con2 tractors or agencies, or both); 

3 (D) providing services for languages not 

4 frequently encountered in the United States; 

5 and 

6 (E) providing services in rural areas. 

7 (4) REPORT.—The Secretary shall submit a re8 port on the study conducted under subsection (a) to 

9 appropriate committees of Congress not later than 

10 12 months after the date of the enactment of this 

11 Act. 

12 (5) EXEMPTION FROM PAPERWORK REDUCTION

13 ACT.—Chapter 35 of title 44, United States Code 

14 (commonly known as the ‘‘Paperwork Reduction 

15 Act’’ ), shall not apply for purposes of carrying out 

16 this subsection. 

17 (6) AUTHORIZATION OF APPROPRIATIONS.— 

18 There is authorized to be appropriated to carry out 

19 this subsection such sums as are necessary. 

20 (b) HEALTH PLANS.—Section 1857(g)(1) of the So21 cial Security Act (42 U.S.C. 1395w–27(g)(1)) is amend22 ed— 

23 (1) by striking ‘‘or’’ at the end of subparagraph 

24 (F); 


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1 (2) by adding ‘‘or’’ at the end of subparagraph 

2 (G); and 

3 (3) by inserting after subparagraph (G) the fol4 lowing new subparagraph: 

5 ‘‘(H) fails substantially to provide lan6 guage services to limited English proficient 

7 beneficiaries enrolled in the plan that are re8 quired under law;’’. 

9 SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR 

10 MEDICARE BENEFICIARIES WITH LIMITED 

11 ENGLISH PROFICIENCY BY PROVIDING REIM12 BURSEMENT FOR CULTURALLY AND LINGUIS13 TICALLY APPROPRIATE SERVICES. 

14 (a) IN GENERAL.—Not later than 6 months after the 

15 date of the completion of the study described in section 

16 1221(a), the Secretary, acting through the Centers for 

17 Medicare & Medicaid Services, shall carry out a dem18 onstration program under which the Secretary shall award 

19 not fewer than 24 3-year grants to eligible Medicare serv20 ice providers (as described in subsection (b)(1)) to improve 

21 effective communication between such providers and Medi22 care beneficiaries who are living in communities where ra23 cial and ethnic minorities, including populations that face 

24 language barriers, are underserved with respect to such 

25 services. In designing and carrying out the demonstration 


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1 the Secretary shall take into consideration the results of 

2 the study conducted under section 1221(a) and adjust, as 

3 appropriate, the distribution of grants so as to better tar4 get Medicare beneficiaries who are in the greatest need 

5 of language services. The Secretary shall not authorize a 

6 grant larger than $500,000 over three years for any grant7 ee. 

8 (b) ELIGIBILITY; PRIORITY.— 

9 (1) ELIGIBILITY.—To be eligible to receive a 

10 grant under subsection (a) an entity shall— 

11 (A) be— 

12 (i) a provider of services under part A 

13 of title XVIII of the Social Security Act; 

14 (ii) a service provider under part B of 

15 such title; 

16 (iii) a part C organization offering a 

17 Medicare part C plan under part C of such 

18 title; or 

19 (iv) a PDP sponsor of a prescription 

20 drug plan under part D of such title; and 

21 (B) prepare and submit to the Secretary 

22 an application, at such time, in such manner, 

23 and accompanied by such additional informa24 tion as the Secretary may require. 

25 (2) PRIORITY.— 


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1 (A) DISTRIBUTION.—To the extent fea2 sible, in awarding grants under this section, the 

3 Secretary shall award— 

4 (i) at least 6 grants to providers of 

5 services described in paragraph (1)(A)(i); 

6 (ii) at least 6 grants to service pro7 viders described in paragraph (1)(A)(ii); 

8 (iii) at least 6 grants to organizations 

9 described in paragraph (1)(A)(iii); and 

10 (iv) at least 6 grants to sponsors de11 scribed in paragraph (1)(A)(iv). 

12 (B) FOR COMMUNITY ORGANIZATIONS.— 

13 The Secretary shall give priority to applicants 

14 that have developed partnerships with commu15 nity organizations or with agencies with experi16 ence in language access. 

17 (C) VARIATION IN GRANTEES.—The Sec18 retary shall also ensure that the grantees under 

19 this section represent, among other factors, 

20 variations in— 

21 (i) different types of language services 

22 provided and of service providers and orga23 nizations under parts A through D of title 

24 XVIII of the Social Security Act; 


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1 (ii) languages needed and their fre2 quency of use; 

3 (iii) urban and rural settings; 

4 (iv) at least two geographic regions, 

5 as defined by the Secretary; and 

6 (v) at least two large metropolitan 

7 statistical areas with diverse populations. 

8 (c) USE OF FUNDS.— 

9 (1) IN GENERAL.—A grantee shall use grant 

10 funds received under this section to pay for the pro11 vision of competent language services to Medicare 

12 beneficiaries who are limited English proficient. 

13 Competent interpreter services may be provided 

14 through on-site interpretation, telephonic interpreta15 tion, or video interpretation or direct provision of 

16 health care or health care related services by a bilin17 gual health care provider. A grantee may use bilin18 gual providers, staff, or contract interpreters. A 

19 grantee may use grant funds to pay for competent 

20 translation services. A grantee may use up to 10 

21 percent of the grant funds to pay for administrative 

22 costs associated with the provision of competent lan23 guage services and for reporting required under sub24 section (e). 


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1 (2) ORGANIZATIONS.—Grantees that are part C 

2 organizations or PDP sponsors must ensure that 

3 their network providers receive at least 50 percent of 

4 the grant funds to pay for the provision of com5 petent language services to Medicare beneficiaries 

6 who are limited English proficient, including physi7 cians and pharmacies. 

8 (3) DETERMINATION OF PAYMENTS FOR LAN9 GUAGE SERVICES.—Payments to grantees shall be 

10 calculated based on the estimated numbers of lim11 ited English proficient Medicare beneficiaries in a 

12 grantee’s service area utilizing— 

13 (A) data on the numbers of limited 

14 English proficient individuals who speak 

15 English less than ‘‘very well’’ from the most re16 cently available data from the Bureau of the 

17 Census or other State-based study the Sec18 retary determines likely to yield accurate data 

19 regarding the number of such individuals served 

20 by the grantee; or 

21 (B) the grantee’s own data if the grantee 

22 routinely collects data on Medicare bene23 ficiaries’ primary language in a manner deter24 mined by the Secretary to yield accurate data 

25 and such data shows greater numbers of limited 


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1 English proficient individuals than the data list2 ed in subparagraph (A). 

3 (4) LIMITATIONS.— 

4 (A) REPORTING.—Payments shall only be 

5 provided under this section to grantees that re6 port their costs of providing language services 

7 as required under subsection (e) and may be 

8 modified annually at the discretion of the Sec9 retary. If a grantee fails to provide the reports 

10 under such section for the first year of a grant, 

11 the Secretary may terminate the grant and so12 licit applications from new grantees to partici13 pate in the subsequent two years of the dem14 onstration program. 

15 (B) TYPE OF SERVICES.— 

16 (i) IN GENERAL.—Subject to clause 

17 (ii), payments shall be provided under this 

18 section only to grantees that utilize com19 petent bilingual staff or competent inter20 preter or translation services which— 

21 (I) if the grantee operates in a 

22 State that has statewide health care 

23 interpreter standards, meet the State 

24 standards currently in effect; or 


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1 (II) if the grantee operates in a 

2 State that does not have statewide 

3 health care interpreter standards, uti4 lizes competent interpreters who fol5 low the National Council on Inter6 preting in Health Care’s Code of Eth7 ics and Standards of Practice. 

8 (ii) EXEMPTIONS.—The requirements 

9 of clause (i) shall not apply— 

10 (I) in the case of a Medicare ben11 eficiary who is limited English pro12 ficient (who has been informed in the 

13 beneficiary’s primary language of the 

14 availability of free interpreter and 

15 translation services) and who requests 

16 the use of family, friends, or other 

17 persons untrained in interpretation or 

18 translation and the grantee documents 

19 the request in the beneficiary’s record; 

20 and 

21 (II) in the case of a medical 

22 emergency where the delay directly as23 sociated with obtaining a competent 

24 interpreter or translation services 


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1 would jeopardize the health of the pa2 tient. 

3 Nothing in clause (ii)(II) shall be con4 strued to exempt emergency rooms or simi5 lar entities that regularly provide health 

6 care services in medical emergencies from 

7 having in place systems to provide com8 petent interpreter and translation services 

9 without undue delay. 

10 (d) ASSURANCES.—Grantees under this section 

11 shall— 

12 (1) ensure that appropriate clinical and support 

13 staff receive ongoing education and training in lin14 guistically appropriate service delivery; 

15 (2) ensure the linguistic competence of bilingual 

16 providers; 

17 (3) offer and provide appropriate language serv18 ices at no additional charge to each patient with lim19 ited English proficiency at all points of contact, in 

20 a timely manner during all hours of operation; 

21 (4) notify Medicare beneficiaries of their right 

22 to receive language services in their primary lan23 guage; 


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1 (5) post signage in the languages of the com2 monly encountered group or groups present in the 

3 service area of the organization; and 

4 (6) ensure that— 

5 (A) primary language data are collected 

6 for recipients of language services; and 

7 (B) consistent with the privacy protections 

8 provided under the regulations promulgated 

9 pursuant to section 264(c) of the Health Insur10 ance Portability and Accountability Act of 1996 

11 (42 U.S.C. 1320d–2 note), if the recipient of 

12 language services is a minor or is incapacitated, 

13 the primary language of the parent or legal 

14 guardian is collected and utilized. 

15 (e) REPORTING REQUIREMENTS.—Grantees under 

16 this section shall provide the Secretary with reports at the 

17 conclusion of the each year of a grant under this section. 

18 Each report shall include at least the following informa19 tion: 

20 (1) The number of Medicare beneficiaries to 

21 whom language services are provided. 

22 (2) The languages of those Medicare bene23 ficiaries. 

24 (3) The types of language services provided 

25 (such as provision of services directly in non-English 


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1 language by a bilingual health care provider or use 

2 of an interpreter). 

3 (4) Type of interpretation (such as in-person, 

4 telephonic, or video interpretation). 

5 (5) The methods of providing language services 

6 (such as staff or contract with external independent 

7 contractors or agencies). 

8 (6) The length of time for each interpretation 

9 encounter. 

10 (7) The costs of providing language services 

11 (which may be actual or estimated, as determined by 

12 the Secretary). 

13 (f) NO COST SHARING.—Limited English proficient 

14 Medicare beneficiaries shall not have to pay cost-sharing 

15 or co-pays for language services provided through this 

16 demonstration program. 

17 (g) EVALUATION AND REPORT.—The Secretary shall 

18 conduct an evaluation of the demonstration program 

19 under this section and shall submit to the appropriate 

20 committees of Congress a report not later than 1 year 

21 after the completion of the program. The report shall in22 clude the following: 

23 (1) An analysis of the patient outcomes and 

24 costs of furnishing care to the limited English pro25 ficient Medicare beneficiaries participating in the 


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1 project as compared to such outcomes and costs for 

2 limited English proficient Medicare beneficiaries not 

3 participating. 

4 (2) The effect of delivering culturally and lin5 guistically appropriate services on beneficiary access 

6 to care, utilization of services, efficiency and cost-ef7 fectiveness of health care delivery, patient satisfac8 tion, and select health outcomes. 

9 (3) Recommendations, if any, regarding the ex10 tension of such project to the entire Medicare pro11 gram. 

12 (h) GENERAL PROVISIONS.—Nothing in this section 

13 shall be construed to limit otherwise existing obligations 

14 of recipients of Federal financial assistance under title VI 

15 of the Civil Rights Act of 1964 (42 U.S.C. 2000(d) et 

16 seq.) or any other statute. 

17 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section 

19 $16,000,000 for each fiscal year of the demonstration pro20 gram. 

21 SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS 

22 SERVICES. 

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

24 Human Services shall enter into an arrangement with the 

25 Institute of Medicine under which the Institute will preVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00425 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 pare and publish, not later than 3 years after the date 

2 of the enactment of this Act, a report on the impact of 

3 language access services on the health and health care of 

4 limited English proficient populations. 

5 (b) CONTENTS.—Such report shall include— 

6 (1) recommendations on the development and 

7 implementation of policies and practices by health 

8 care organizations and providers for limited English 

9 proficient patient populations; 

10 (2) a description of the effect of providing lan11 guage access services on quality of health care and 

12 access to care and reduced medical error; and 

13 (3) a description of the costs associated with or 

14 savings related to provision of language access serv15 ices. 

16 SEC. 1224. DEFINITIONS. 

17 In this subtitle: 

18 (1) BILINGUAL.—The term ‘‘bilingual’’ with re19 spect to an individual means a person who has suffi20 cient degree of proficiency in two languages and can 

21 ensure effective communication can occur in both 

22 languages. 

23 (2) COMPETENT INTERPRETER SERVICES.—The 

24 term ‘‘competent interpreter services’’ means a 

25 trans-language rendition of a spoken message in 


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1 which the interpreter comprehends the source lan2 guage and can speak comprehensively in the target 

3 language to convey the meaning intended in the 

4 source language. The interpreter knows health and 

5 health-related terminology and provides accurate in6 terpretations by choosing equivalent expressions that 

7 convey the best matching and meaning to the source 

8 language and captures, to the greatest possible ex9 tent, all nuances intended in the source message. 

10 (3) COMPETENT TRANSLATION SERVICES.—The 

11 term ‘‘competent translation services’’ means a 

12 trans-language rendition of a written document in 

13 which the translator comprehends the source lan14 guage and can write comprehensively in the target 

15 language to convey the meaning intended in the 

16 source language. The translator knows health and 

17 health-related terminology and provides accurate 

18 translations by choosing equivalent expressions that 

19 convey the best matching and meaning to the source 

20 language and captures, to the greatest possible ex21 tent, all nuances intended in the source document. 

22 (4) EFFECTIVE COMMUNICATION.—The term 

23 ‘‘effective communication’’ means an exchange of in24 formation between the provider of health care or 

25 health care-related services and the limited English 


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1 proficient recipient of such services that enables lim2 ited English proficient individuals to access, under3 stand, and benefit from health care or health care4 related services. 

5 (5) INTERPRETING/INTERPRETATION.—The 

6 terms ‘‘interpreting’’ and ‘‘interpretation’’ mean the 

7 transmission of a spoken message from one language 

8 into another, faithfully, accurately, and objectively. 

9 (6) HEALTH CARE SERVICES.—The term 

10 ‘‘health care services’’ means services that address 

11 physical as well as mental health conditions in all 

12 care settings. 

13 (7) HEALTH CARE-RELATED SERVICES.—The 

14 term ‘‘health care-related services’’ means human or 

15 social services programs or activities that provide ac16 cess, referrals or links to health care. 

17 (8) LANGUAGE ACCESS.—The term ‘‘language 

18 access’’ means the provision of language services to 

19 an LEP individual designed to enhance that individ20 ual’s access to, understanding of or benefit from 

21 health care or health care-related services. 

22 (9) LANGUAGE SERVICES.—The term ‘‘lan23 guage services’’ means provision of health care serv24 ices directly in a non-English language, interpreta25 tion, translation, and non-English signage. 


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1 (10) LIMITED ENGLISH PROFICIENT.—The 

2 term ‘‘limited English proficient’’ or ‘‘LEP’’ with re3 spect to an individual means an individual who 

4 speaks a primary language other than English and 

5 who cannot speak, read, write or understand the 

6 English language at a level that permits the indi7 vidual to effectively communicate with clinical or 

8 nonclinical staff at an entity providing health care or 

9 health care related services. 

10 (11) MEDICARE BENEFICIARY.—The term 

11 ‘‘Medicare beneficiary’’ means an individual entitled 

12 to benefits under part A of title XVIII of the Social 

13 Security Act or enrolled under part B of such title. 

14 (12) MEDICARE PROGRAM.—The term ‘‘Medi15 care program’’ means the programs under parts A 

16 through D of title XVIII of the Social Security Act. 

17 (13) SERVICE PROVIDER.—The term ‘‘service 

18 provider’’ includes all suppliers, providers of services, 

19 or entities under contract to provide coverage, items 

20 or services under any part of title XVIII of the So21 cial Security Act. 


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1 Subtitle C—Miscellaneous 

2 Improvements 

3 SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS 

4 PROCESS. 

5 Section 1833(g)(5) of the Social Security Act (42 

6 U.S.C. 1395l(g)(5)), as amended by section 141 of the 

7 Medicare Improvements for Patients and Providers Act of 

8 2008 (Public Law 110–275), is amended by striking ‘‘De9 cember 31, 2009’’ and inserting ‘‘December 31, 2011’’. 

10 SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNO11 SUPPRESSIVE DRUGS FOR KIDNEY TRANS12 PLANT PATIENTS AND OTHER RENAL DIALY13 SIS PROVISIONS. 

14 (a) PROVISION OF APPROPRIATE COVERAGE OF IM15 MUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE PRO16 GRAM FOR KIDNEY TRANSPLANT RECIPIENTS.— 

17 (1) CONTINUED ENTITLEMENT TO IMMUNO18 SUPPRESSIVE DRUGS.— 

19 (A) KIDNEY TRANSPLANT RECIPIENTS.— 

20 Section 226A(b)(2) of the Social Security Act 

21 (42 U.S.C. 426–1(b)(2)) is amended by insert22 ing ‘‘(except for coverage of immunosuppressive 

23 drugs under section 1861(s)(2)(J))’’ before ‘‘, 

24 with the thirty-sixth month’’. 


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1 (B) APPLICATION.—Section 1836 of such 

2 Act (42 U.S.C. 1395o) is amended— 

3 (i) by striking ‘‘Every individual who’’ 

4 and inserting ‘‘(a) IN GENERAL.—Every 

5 individual who’’; and 

6 (ii) by adding at the end the following 

7 new subsection: 

8 ‘‘(b) SPECIAL RULES APPLICABLE TO INDIVIDUALS

9 ONLY ELIGIBLE FOR COVERAGE OF IMMUNOSUPPRESSIVE

10 DRUGS.— 

11 ‘‘(1) IN GENERAL.—In the case of an individual 

12 whose eligibility for benefits under this title has 

13 ended on or after January 1, 2012, except for the 

14 coverage of immunosuppressive drugs by reason of 

15 section 226A(b)(2), the following rules shall apply: 

16 ‘‘(A) The individual shall be deemed to be 

17 enrolled under this part for purposes of receiv18 ing coverage of such drugs. 

19 ‘‘(B) The individual shall be responsible 

20 for providing for payment of the portion of the 

21 premium under section 1839 which is not cov22 ered under the Medicare savings program (as 

23 defined in section 1144(c)(7)) in order to re24 ceive such coverage. 


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1 ‘‘(C) The provision of such drugs shall be 

2 subject to the application of— 

3 ‘‘(i) the deductible under section 

4 1833(b); and 

5 ‘‘(ii) the coinsurance amount applica6 ble for such drugs (as determined under 

7 this part). 

8 ‘‘(D) If the individual is an inpatient of a 

9 hospital or other entity, the individual is enti10 tled to receive coverage of such drugs under 

11 this part. 

12 ‘‘(2) ESTABLISHMENT OF PROCEDURES IN

13 ORDER TO IMPLEMENT COVERAGE.—The Secretary 

14 shall establish procedures for— 

15 ‘‘(A) identifying individuals that are enti16 tled to coverage of immunosuppressive drugs by 

17 reason of section 226A(b)(2); and 

18 ‘‘(B) distinguishing such individuals from 

19 individuals that are enrolled under this part for 

20 the complete package of benefits under this 

21 part.’’. 

22 (C) TECHNICAL AMENDMENT TO CORRECT

23 DUPLICATE SUBSECTION DESIGNATION.—Sub24 section (c) of section 226A of such Act (42 

25 U.S.C. 426–1), as added by section 


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1 201(a)(3)(D)(ii) of the Social Security Inde2 pendence and Program Improvements Act of 

3 1994 (Public Law 103–296; 108 Stat. 1497), is 

4 redesignated as subsection (d). 

5 (2) EXTENSION OF SECONDARY PAYER RE6 QUIREMENTS FOR ESRD BENEFICIARIES.—Section 

7 1862(b)(1)(C) of such Act (42 U.S.C. 

8 1395y(b)(1)(C)) is amended by adding at the end 

9 the following new sentence: ‘‘With regard to im10 munosuppressive drugs furnished on or after the 

11 date of the enactment of the America’s Affordable 

12 Health Choices Act of 2009, this subparagraph shall 

13 be applied without regard to any time limitation.’’. 

14 (b) MEDICARE COVERAGE FOR ESRD PATIENTS.— 

15 Section 1881 of such Act is further amended— 

16 (1) in subsection (b)(14)(B)(iii), by inserting ‘‘, 

17 including oral drugs that are not the oral equivalent 

18 of an intravenous drug (such as oral phosphate bind19 ers and calcimimetics),’’ after ‘‘other drugs and 

20 biologicals’’; 

21 (2) in subsection (b)(14)(E)(ii)— 

22 (A) in the first sentence— 

23 (i) by striking ‘‘a one-time election to 

24 be excluded from the phase-in’’ and insert25 ing ‘‘an election, with respect to 2011, 


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1 2012, or 2013, to be excluded from the 

2 phase-in (or the remainder of the phase3 in)’’; and 

4 (ii) by adding before the period at the 

5 end the following: ‘‘for such year and for 

6 each subsequent year during the phase-in 

7 described in clause (i)’’; and 

8 (B) in the second sentence— 

9 (i) by striking ‘‘January 1, 2011’’ and 

10 inserting ‘‘the first date of such year’’; and 

11 (ii) by inserting ‘‘and at a time’’ after 

12 ‘‘form and manner’’; and 

13 (3) in subsection (h)(4)(E), by striking ‘‘lesser’’ 

14 and inserting ‘‘greater’’. 

15 SEC. 1233. ADVANCE CARE PLANNING CONSULTATION. 

16 (a) MEDICARE.— 

17 (1) IN GENERAL.—Section 1861 of the Social 

18 Security Act (42 U.S.C. 1395x) is amended— 

19 (A) in subsection (s)(2)— 

20 (i) by striking ‘‘and’’ at the end of 

21 subparagraph (DD); 

22 (ii) by adding ‘‘and’’ at the end of 

23 subparagraph (EE); and 

24 (iii) by adding at the end the fol25 lowing new subparagraph: 


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1 ‘‘(FF) advance care planning consultation (as 

2 defined in subsection (hhh)(1));’’; and 

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

4 subsection: 

5 ‘‘Advance Care Planning Consultation 

6 ‘‘(hhh)(1) Subject to paragraphs (3) and (4), the 

7 term ‘advance care planning consultation’ means a con8 sultation between the individual and a practitioner de9 scribed in paragraph (2) regarding advance care planning, 

10 if, subject to paragraph (3), the individual involved has 

11 not had such a consultation within the last 5 years. Such 

12 consultation shall include the following: 

13 ‘‘(A) An explanation by the practitioner of ad14 vance care planning, including key questions and 

15 considerations, important steps, and suggested peo16 ple to talk to. 

17 ‘‘(B) An explanation by the practitioner of ad18 vance directives, including living wills and durable 

19 powers of attorney, and their uses. 

20 ‘‘(C) An explanation by the practitioner of the 

21 role and responsibilities of a health care proxy. 

22 ‘‘(D) The provision by the practitioner of a list 

23 of national and State-specific resources to assist con24 sumers and their families with advance care plan25 ning, including the national toll-free hotline, the adVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00435 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vance care planning clearinghouses, and State legal 

2 service organizations (including those funded 

3 through the Older Americans Act of 1965). 

4 ‘‘(E) An explanation by the practitioner of the 

5 continuum of end-of-life services and supports avail6 able, including palliative care and hospice, and bene7 fits for such services and supports that are available 

8 under this title. 

9 ‘‘(F)(i) Subject to clause (ii), an explanation of 

10 orders regarding life sustaining treatment or similar 

11 orders, which shall include— 

12 ‘‘(I) the reasons why the development of 

13 such an order is beneficial to the individual and 

14 the individual’s family and the reasons why 

15 such an order should be updated periodically as 

16 the health of the individual changes; 

17 ‘‘(II) the information needed for an indi18 vidual or legal surrogate to make informed deci19 sions regarding the completion of such an 

20 order; and 

21 ‘‘(III) the identification of resources that 

22 an individual may use to determine the require23 ments of the State in which such individual re24 sides so that the treatment wishes of that indi25 vidual will be carried out if the individual is unVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00436 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 able to communicate those wishes, including re2 quirements regarding the designation of a sur3 rogate decisionmaker (also known as a health 

4 care proxy). 

5 ‘‘(ii) The Secretary shall limit the requirement 

6 for explanations under clause (i) to consultations 

7 furnished in a State— 

8 ‘‘(I) in which all legal barriers have been 

9 addressed for enabling orders for life sustaining 

10 treatment to constitute a set of medical orders 

11 respected across all care settings; and 

12 ‘‘(II) that has in effect a program for or13 ders for life sustaining treatment described in 

14 clause (iii). 

15 ‘‘(iii) A program for orders for life sustaining 

16 treatment for a States described in this clause is a 

17 program that— 

18 ‘‘(I) ensures such orders are standardized 

19 and uniquely identifiable throughout the State; 

20 ‘‘(II) distributes or makes accessible such 

21 orders to physicians and other health profes22 sionals that (acting within the scope of the pro23 fessional’s authority under State law) may sign 

24 orders for life sustaining treatment; 


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1 ‘‘(III) provides training for health care 

2 professionals across the continuum of care 

3 about the goals and use of orders for life sus4 taining treatment; and 

5 ‘‘(IV) is guided by a coalition of stake6 holders includes representatives from emergency 

7 medical services, emergency department physi8 cians or nurses, state long-term care associa9 tion, state medical association, state surveyors, 

10 agency responsible for senior services, state de11 partment of health, state hospital association, 

12 home health association, state bar association, 

13 and state hospice association. 

14 ‘‘(2) A practitioner described in this paragraph is— 

15 ‘‘(A) a physician (as defined in subsection 

16 (r)(1)); and 

17 ‘‘(B) a nurse practitioner or physician assistant 

18 who has the authority under State law to sign orders 

19 for life sustaining treatments. 

20 ‘‘(3)(A) An initial preventive physical examination 

21 under subsection (WW), including any related discussion 

22 during such examination, shall not be considered an ad23 vance care planning consultation for purposes of applying 

24 the 5-year limitation under paragraph (1). 


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1 ‘‘(B) An advance care planning consultation with re2 spect to an individual may be conducted more frequently 

3 than provided under paragraph (1) if there is a significant 

4 change in the health condition of the individual, including 

5 diagnosis of a chronic, progressive, life-limiting disease, a 

6 life-threatening or terminal diagnosis or life-threatening 

7 injury, or upon admission to a skilled nursing facility, a 

8 long-term care facility (as defined by the Secretary), or 

9 a hospice program. 

10 ‘‘(4) A consultation under this subsection may in11 clude the formulation of an order regarding life sustaining 

12 treatment or a similar order. 

13 ‘‘(5)(A) For purposes of this section, the term ‘order 

14 regarding life sustaining treatment’ means, with respect 

15 to an individual, an actionable medical order relating to 

16 the treatment of that individual that— 

17 ‘‘(i) is signed and dated by a physician (as de18 fined in subsection (r)(1)) or another health care 

19 professional (as specified by the Secretary and who 

20 is acting within the scope of the professional’s au21 thority under State law in signing such an order, in22 cluding a nurse practitioner or physician assistant) 

23 and is in a form that permits it to stay with the in24 dividual and be followed by health care professionals 

25 and providers across the continuum of care; 


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1 ‘‘(ii) effectively communicates the individual’s 

2 preferences regarding life sustaining treatment, in3 cluding an indication of the treatment and care de4 sired by the individual; 

5 ‘‘(iii) is uniquely identifiable and standardized 

6 within a given locality, region, or State (as identified 

7 by the Secretary); and 

8 ‘‘(iv) may incorporate any advance directive (as 

9 defined in section 1866(f)(3)) if executed by the in10 dividual. 

11 ‘‘(B) The level of treatment indicated under subpara12 graph (A)(ii) may range from an indication for full treat13 ment to an indication to limit some or all or specified 

14 interventions. Such indicated levels of treatment may in15 clude indications respecting, among other items— 

16 ‘‘(i) the intensity of medical intervention if the 

17 patient is pulse less, apneic, or has serious cardiac 

18 or pulmonary problems; 

19 ‘‘(ii) the individual’s desire regarding transfer 

20 to a hospital or remaining at the current care set21 ting; 

22 ‘‘(iii) the use of antibiotics; and 

23 ‘‘(iv) the use of artificially administered nutri24 tion and hydration.’’. 


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1 (2) PAYMENT.—Section 1848(j)(3) of such Act 

2 (42 U.S.C. 1395w-4(j)(3)) is amended by inserting 

3 ‘‘(2)(FF),’’ after ‘‘(2)(EE),’’. 

4 (3) FREQUENCY LIMITATION.—Section 1862(a) 

5 of such Act (42 U.S.C. 1395y(a)) is amended— 

6 (A) in paragraph (1)— 

7 (i) in subparagraph (N), by striking 

8 ‘‘and’’ at the end; 

9 (ii) in subparagraph (O) by striking 

10 the semicolon at the end and inserting ‘‘, 

11 and’’; and 

12 (iii) by adding at the end the fol13 lowing new subparagraph: 

14 ‘‘(P) in the case of advance care planning 

15 consultations (as defined in section 

16 1861(hhh)(1)), which are performed more fre17 quently than is covered under such section;’’; 

18 and 

19 (B) in paragraph (7), by striking ‘‘or (K)’’ 

20 and inserting ‘‘(K), or (P)’’. 

21 (4) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall apply to consultations fur23 nished on or after January 1, 2011. 

24 (b) EXPANSION OF PHYSICIAN QUALITY REPORTING

25 INITIATIVE FOR END OF LIFE CARE.— 


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1 (1) PHYSICIAN’S QUALITY REPORTING INITIA2 TIVE.—Section 1848(k)(2) of the Social Security Act 

3 (42 U.S.C. 1395w–4(k)(2)) is amended by adding at 

4 the end the following new subparagraph: 

5 ‘‘(E) PHYSICIAN’S QUALITY REPORTING

6 INITIATIVE.— 

7 ‘‘(i) IN GENERAL.—For purposes of 

8 reporting data on quality measures for cov9 ered professional services furnished during 

10 2011 and any subsequent year, to the ex11 tent that measures are available, the Sec12 retary shall include quality measures on 

13 end of life care and advanced care plan14 ning that have been adopted or endorsed 

15 by a consensus-based organization, if ap16 propriate. Such measures shall measure 

17 both the creation of and adherence to or18 ders for life-sustaining treatment. 

19 ‘‘(ii) PROPOSED SET OF MEASURES.— 

20 The Secretary shall publish in the Federal 

21 Register proposed quality measures on end 

22 of life care and advanced care planning 

23 that the Secretary determines are de24 scribed in subparagraph (A) and would be 

25 appropriate for eligible professionals to use 


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1 to submit data to the Secretary. The Sec2 retary shall provide for a period of public 

3 comment on such set of measures before fi4 nalizing such proposed measures.’’. 

5 (c) INCLUSION OF INFORMATION IN MEDICARE & 

6 YOU HANDBOOK.— 

7 (1) MEDICARE & YOU HANDBOOK.— 

8 (A) IN GENERAL.—Not later than 1 year 

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

10 Secretary of Health and Human Services shall 

11 update the online version of the Medicare & 

12 You Handbook to include the following: 

13 (i) An explanation of advance care 

14 planning and advance directives, includ15 ing— 

16 (I) living wills; 

17 (II) durable power of attorney; 

18 (III) orders of life-sustaining 

19 treatment; and 

20 (IV) health care proxies. 

21 (ii) A description of Federal and State 

22 resources available to assist individuals 

23 and their families with advance care plan24 ning and advance directives, including— 


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1 (I) available State legal service 

2 organizations to assist individuals 

3 with advance care planning, including 

4 those organizations that receive fund5 ing pursuant to the Older Americans 

6 Act of 1965 (42 U.S.C. 93001 et 

7 seq.); 

8 (II) website links or addresses for 

9 State-specific advance directive forms; 

10 and 

11 (III) any additional information, 

12 as determined by the Secretary. 

13 (B) UPDATE OF PAPER AND SUBSEQUENT

14 VERSIONS.—The Secretary shall include the in15 formation described in subparagraph (A) in all 

16 paper and electronic versions of the Medicare & 

17 You Handbook that are published on or after 

18 the date that is 1 year after the date of the en19 actment of this Act. 

20 SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND 

21 WAIVER OF LIMITED ENROLLMENT PENALTY 

22 FOR TRICARE BENEFICIARIES. 

23 (a) PART B SPECIAL ENROLLMENT PERIOD.— 


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1 (1) IN GENERAL.—Section 1837 of the Social 

2 Security Act (42 U.S.C. 1395p) is amended by add3 ing at the end the following new subsection: 

4 ‘‘(l)(1) In the case of any individual who is a covered 

5 beneficiary (as defined in section 1072(5) of title 10, 

6 United States Code) at the time the individual is entitled 

7 to hospital insurance benefits under part A under section 

8 226(b) or section 226A and who is eligible to enroll but 

9 who has elected not to enroll (or to be deemed enrolled) 

10 during the individual’s initial enrollment period, there 

11 shall be a special enrollment period described in paragraph 

12 (2). 

13 ‘‘(2) The special enrollment period described in this 

14 paragraph, with respect to an individual, is the 12-month 

15 period beginning on the day after the last day of the initial 

16 enrollment period of the individual or, if later, the 12- 

17 month period beginning with the month the individual is 

18 notified of enrollment under this section. 

19 ‘‘(3) In the case of an individual who enrolls during 

20 the special enrollment period provided under paragraph 

21 (1), the coverage period under this part shall begin on the 

22 first day of the month in which the individual enrolls or, 

23 at the option of the individual, on the first day of the sec24 ond month following the last month of the individual’s ini25 tial enrollment period. 


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1 ‘‘(4) The Secretary of Defense shall establish a meth2 od for identifying individuals described in paragraph (1) 

3 and providing notice to them of their eligibility for enroll4 ment during the special enrollment period described in 

5 paragraph (2).’’. 

6 (2) EFFECTIVE DATE.—The amendment made 

7 by paragraph (1) shall apply to elections made on or 

8 after the date of the enactment of this Act. 

9 (b) WAIVER OF INCREASE OF PREMIUM.— 

10 (1) IN GENERAL.—Section 1839(b) of the So11 cial Security Act (42 U.S.C. 1395r(b)) is amended 

12 by striking ‘‘section 1837(i)(4)’’ and inserting ‘‘sub13 section (i)(4) or (l) of section 1837’’. 

14 (2) EFFECTIVE DATE.— 

15 (A) IN GENERAL.—The amendment made 

16 by paragraph (1) shall apply with respect to 

17 elections made on or after the date of the en18 actment of this Act. 

19 (B) REBATES FOR CERTAIN DISABLED

20 AND ESRD BENEFICIARIES.— 

21 (i) IN GENERAL.—With respect to 

22 premiums for months on or after January 

23 2005 and before the month of the enact24 ment of this Act, no increase in the pre25 mium shall be effected for a month in the 


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1 case of any individual who is a covered 

2 beneficiary (as defined in section 1072(5) 

3 of title 10, United States Code) at the time 

4 the individual is entitled to hospital insur5 ance benefits under part A of title XVIII 

6 of the Social Security Act under section 

7 226(b) or 226A of such Act, and who is el8 igible to enroll, but who has elected not to 

9 enroll (or to be deemed enrolled), during 

10 the individual’s initial enrollment period, 

11 and who enrolls under this part within the 

12 12-month period that begins on the first 

13 day of the month after the month of notifi14 cation of entitlement under this part. 

15 (ii) CONSULTATION WITH DEPART16 MENT OF DEFENSE.—The Secretary of 

17 Health and Human Services shall consult 

18 with the Secretary of Defense in identi19 fying individuals described in this para20 graph. 

21 (iii) REBATES.—The Secretary of 

22 Health and Human Services shall establish 

23 a method for providing rebates of premium 

24 increases paid for months on or after Jan25 uary 1, 2005, and before the month of the 


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1 enactment of this Act for which a penalty 

2 was applied and collected. 

3 SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX 

4 YEAR IN CASE OF GAINS FROM SALE OF PRI5 MARY RESIDENCE IN COMPUTING PART B IN6 COME-RELATED PREMIUM. 

7 (a) IN GENERAL.—Section 1839(i)(4)(C)(ii)(II) of 

8 the Social Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) 

9 is amended by inserting ‘‘sale of primary residence,’’ after 

10 ‘‘divorce of such individual,’’. 

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

12 subsection (a) shall apply to premiums and payments for 

13 years beginning with 2011. 

14 SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PA15 TIENT DECISIONS AIDS. 

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

17 Human Services shall establish a shared decision making 

18 demonstration program (in this subsection referred to as 

19 the ‘‘program’’) under the Medicare program using pa20 tient decision aids to meet the objective of improving the 

21 understanding by Medicare beneficiaries of their medical 

22 treatment options, as compared to comparable Medicare 

23 beneficiaries who do not participate in a shared decision 

24 making process using patient decision aids. 

25 (b) SITES.— 


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1 (1) ENROLLMENT.—The Secretary shall enroll 

2 in the program not more than 30 eligible providers 

3 who have experience in implementing, and have in4 vested in the necessary infrastructure to implement, 

5 shared decision making using patient decision aids. 

6 (2) APPLICATION.—An eligible provider seeking 

7 to participate in the program shall submit to the 

8 Secretary an application at such time and containing 

9 such information as the Secretary may require. 

10 (3) PREFERENCE.—In enrolling eligible pro11 viders in the program, the Secretary shall give pref12 erence to eligible providers that— 

13 (A) have documented experience in using 

14 patient decision aids for the conditions identi15 fied by the Secretary and in using shared deci16 sion making; 

17 (B) have the necessary information tech18 nology infrastructure to collect the information 

19 required by the Secretary for reporting pur20 poses; and 

21 (C) are trained in how to use patient deci22 sion aids and shared decision making. 

23 (c) FOLLOW-UP COUNSELING VISIT.— 

24 (1) IN GENERAL.—An eligible provider partici25 pating in the program shall routinely schedule MediVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00449 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 care beneficiaries for a counseling visit after the 

2 viewing of such a patient decision aid to answer any 

3 questions the beneficiary may have with respect to 

4 the medical care of the condition involved and to as5 sist the beneficiary in thinking through how their 

6 preferences and concerns relate to their medical 

7 care. 

8 (2) PAYMENT FOR FOLLOW-UP COUNSELING

9 VISIT.—The Secretary shall establish procedures for 

10 making payments for such counseling visits provided 

11 to Medicare beneficiaries under the program. Such 

12 procedures shall provide for the establishment— 

13 (A) of a code (or codes) to represent such 

14 services; and 

15 (B) of a single payment amount for such 

16 service that includes the professional time of 

17 the health care provider and a portion of the 

18 reasonable costs of the infrastructure of the eli19 gible provider such as would be made under the 

20 applicable payment systems to that provider for 

21 similar covered services. 

22 (d) COSTS OF AIDS.—An eligible provider partici23 pating in the program shall be responsible for the costs 

24 of selecting, purchasing, and incorporating such patient 


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1 decision aids into the provider’s practice, and reporting 

2 data on quality and outcome measures under the program. 

3 (e) FUNDING.—The Secretary shall provide for the 

4 transfer from the Federal Supplementary Medical Insur5 ance Trust Fund established under section 1841 of the 

6 Social Security Act (42 U.S.C. 1395t) of such funds as 

7 are necessary for the costs of carrying out the program. 

8 (f) WAIVER AUTHORITY.—The Secretary may waive 

9 such requirements of titles XI and XVIII of the Social 

10 Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.) 

11 as may be necessary for the purpose of carrying out the 

12 program. 

13 (g) REPORT.—Not later than 12 months after the 

14 date of completion of the program, the Secretary shall sub15 mit to Congress a report on such program, together with 

16 recommendations for such legislation and administrative 

17 action as the Secretary determines to be appropriate. The 

18 final report shall include an evaluation of the impact of 

19 the use of the program on health quality, utilization of 

20 health care services, and on improving the quality of life 

21 of such beneficiaries. 

22 (h) DEFINITIONS.—In this section: 

23 (1) ELIGIBLE PROVIDER.—The term ‘‘eligible 

24 provider’’ means the following: 

25 (A) A primary care practice. 


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1 (B) A specialty practice. 

2 (C) A multispecialty group practice. 

3 (D) A hospital. 

4 (E) A rural health clinic. 

5 (F) A Federally qualified health center (as 

6 defined in section 1861(aa)(4) of the Social Se7 curity Act (42 U.S.C. 1395x(aa)(4)). 

8 (G) An integrated delivery system. 

9 (H) A State cooperative entity that in10 cludes the State government and at least one 

11 other health care provider which is set up for 

12 the purpose of testing shared decision making 

13 and patient decision aids. 

14 (2) PATIENT DECISION AID.—The term ‘‘pa15 tient decision aid’’ means an educational tool (such 

16 as the Internet, a video, or a pamphlet) that helps 

17 patients (or, if appropriate, the family caregiver of 

18 the patient) understand and communicate their be19 liefs and preferences related to their treatment op20 tions, and to decide with their health care provider 

21 what treatments are best for them based on their 

22 treatment options, scientific evidence, circumstances, 

23 beliefs, and preferences. 

24 (3) SHARED DECISION MAKING.—The term 

25 ‘‘shared decision making’’ means a collaborative 


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1 process between patient and clinician that engages 

2 the patient in decision making, provides patients 

3 with information about trade-offs among treatment 

4 options, and facilitates the incorporation of patient 

5 preferences and values into the medical plan. 

6 TITLE III—PROMOTING PRI7 MARY CARE, MENTAL 

8 HEALTH SERVICES, AND CO9 ORDINATED CARE 

10 SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT 

11 PROGRAM. 

12 Title XVIII of the Social Security Act is amended by 

13 inserting after section 1866D, as added by section 1152(f) 

14 of this division, the following new section: 

15 ‘‘ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM

16 ‘‘SEC. 1866E. (a) IN GENERAL.—The Secretary shall 

17 conduct a pilot program (in this section referred to as the 

18 ‘pilot program’) to test different payment incentive mod19 els, including (to the extent practicable) the specific pay20 ment incentive models described in subsection (c), de21 signed to reduce the growth of expenditures and improve 

22 health outcomes in the provision of items and services 

23 under this title to applicable beneficiaries (as defined in 

24 subsection (d)) by qualifying accountable care organiza25 tions (as defined in subsection (b)(1)) in order to— 


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1 ‘‘(1) promote accountability for a patient popu2 lation and coordinate items and services under parts 

3 A and B; 

4 ‘‘(2) encourage investment in infrastructure and 

5 redesigned care processes for high quality and effi6 cient service delivery; and 

7 ‘‘(3) reward physician practices and other phy8 sician organizational models for the provision of high 

9 quality and efficient health care services. 

10 ‘‘(b) QUALIFYING ACCOUNTABLE CARE ORGANIZA11 TIONS (ACOS).— 

12 ‘‘(1) QUALIFYING ACO DEFINED.—In this sec13 tion: 

14 ‘‘(A) IN GENERAL.—The terms ‘qualifying 

15 accountable care organization’ and ‘qualifying 

16 ACO’ mean a group of physicians or other phy17 sician organizational model (as defined in sub18 paragraph (D)) that— 

19 ‘‘(i) is organized at least in part for 

20 the purpose of providing physicians’ serv21 ices; and 

22 ‘‘(ii) meets such criteria as the Sec23 retary determines to be appropriate to par24 ticipate in the pilot program, including the 

25 criteria specified in paragraph (2). 


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1 ‘‘(B) INCLUSION OF OTHER PROVIDERS.— 

2 Nothing in this subsection shall be construed as 

3 preventing a qualifying ACO from including a 

4 hospital or any other provider of services or 

5 supplier furnishing items or services for which 

6 payment may be made under this title that is 

7 affiliated with the ACO under an arrangement 

8 structured so that such provider or supplier 

9 participates in the pilot program and shares in 

10 any incentive payments under the pilot pro11 gram. 

12 ‘‘(C) PHYSICIAN.—The term ‘physician’ in13 cludes, except as the Secretary may otherwise 

14 provide, any individual who furnishes services 

15 for which payment may be made as physicians’ 

16 services. 

17 ‘‘(D) OTHER PHYSICIAN ORGANIZATIONAL

18 MODEL.—The term ‘other physician organiza19 tion model’ means, with respect to a qualifying 

20 ACO any model of organization under which 

21 physicians enter into agreements with other 

22 providers for the purposes of participation in 

23 the pilot program in order to provide high qual24 ity and efficient health care services and share 

25 in any incentive payments under such program 


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1 ‘‘(E) OTHER SERVICES.—Nothing in this 

2 paragraph shall be construed as preventing a 

3 qualifying ACO from furnishing items or serv4 ices, for which payment may not be made under 

5 this title, for purposes of achieving performance 

6 goals under the pilot program. 

7 ‘‘(2) QUALIFYING CRITERIA.—The following are 

8 criteria described in this paragraph for an organized 

9 group of physicians to be a qualifying ACO: 

10 ‘‘(A) The group has a legal structure that 

11 would allow the group to receive and distribute 

12 incentive payments under this section. 

13 ‘‘(B) The group includes a sufficient num14 ber of primary care physicians (regardless of 

15 specialty) for the applicable beneficiaries for 

16 whose care the group is accountable (as deter17 mined by the Secretary). 

18 ‘‘(C) The group reports on quality meas19 ures in such form, manner, and frequency as 

20 specified by the Secretary (which may be for 

21 the group, for providers of services and sup22 pliers, or both). 

23 ‘‘(D) The group reports to the Secretary 

24 (in a form, manner and frequency as specified 

25 by the Secretary) such data as the Secretary 


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1 determines appropriate to monitor and evaluate 

2 the pilot program. 

3 ‘‘(E) The group provides notice to applica4 ble beneficiaries regarding the pilot program (as 

5 determined appropriate by the Secretary). 

6 ‘‘(F) The group contributes to a best prac7 tices network or website, that shall be main8 tained by the Secretary for the purpose of shar9 ing strategies on quality improvement, care co10 ordination, and efficiency that the groups be11 lieve are effective. 

12 ‘‘(G) The group utilizes patient-centered 

13 processes of care, including those that empha14 size patient and caregiver involvement in plan15 ning and monitoring of ongoing care manage16 ment plan. 

17 ‘‘(H) The group meets other criteria deter18 mined to be appropriate by the Secretary. 

19 ‘‘(c) SPECIFIC PAYMENT INCENTIVE MODELS.—The 

20 specific payment incentive models described in this sub21 section are the following: 

22 ‘‘(1) PERFORMANCE TARGET MODEL.—Under 

23 the performance target model under this paragraph 

24 (in this paragraph referred to as the ‘performance 

25 target model’): 


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1 ‘‘(A) IN GENERAL.—A qualifying ACO 

2 qualifies to receive an incentive payment if ex3 penditures for applicable beneficiaries are less 

4 than a target spending level or a target rate of 

5 growth. The incentive payment shall be made 

6 only if savings are greater than would result 

7 from normal variation in expenditures for items 

8 and services covered under parts A and B. 

9 ‘‘(B) COMPUTATION OF PERFORMANCE

10 TARGET.— 

11 ‘‘(i) IN GENERAL.—The Secretary 

12 shall establish a performance target for 

13 each qualifying ACO comprised of a base 

14 amount (described in clause (ii)) increased 

15 to the current year by an adjustment fac16 tor (described in clause (iii)). Such a tar17 get may be established on a per capita 

18 basis, as the Secretary determines to be 

19 appropriate. 

20 ‘‘(ii) BASE AMOUNT.—For purposes of 

21 clause (i), the base amount in this sub22 paragraph is equal to the average total 

23 payments (or allowed charges) under parts 

24 A and B (and may include part D, if the 

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1 plicable beneficiaries for whom the quali2 fying ACO furnishes items and services in 

3 a base period determined by the Secretary. 

4 Such base amount may be determined on 

5 a per capita basis. 

6 ‘‘(iii) ADJUSTMENT FACTOR.—For 

7 purposes of clause (i), the adjustment fac8 tor in this clause may equal an annual per 

9 capita amount that reflects changes in ex10 penditures from the period of the base 

11 amount to the current year that would rep12 resent an appropriate performance target 

13 for applicable beneficiaries (as determined 

14 by the Secretary). Such adjustment factor 

15 may be determined as an amount or rate, 

16 may be determined on a national, regional, 

17 local, or organization-specific basis, and 

18 may be determined on a per capita basis. 

19 Such adjustment factor also may be ad20 justed for risk as determined appropriate 

21 by the Secretary. 

22 ‘‘(iv) REBASING.—Under this model 

23 the Secretary shall periodically rebase the 

24 base expenditure amount described in 

25 clause (ii). 


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1 ‘‘(C) MEETING TARGET.— 

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

3 (ii), a qualifying ACO that meet or exceeds 

4 annual quality and performance targets for 

5 a year shall receive an incentive payment 

6 for such year equal to a portion (as deter7 mined appropriate by the Secretary) of the 

8 amount by which payments under this title 

9 for such year relative are estimated to be 

10 below the performance target for such 

11 year, as determined by the Secretary. The 

12 Secretary may establish a cap on incentive 

13 payments for a year for a qualifying ACO. 

14 ‘‘(ii) LIMITATION.— The Secretary 

15 shall limit incentive payments to each 

16 qualifying ACO under this paragraph as 

17 necessary to ensure that the aggregate ex18 penditures with respect to applicable bene19 ficiaries for such ACOs under this title (in20 clusive of incentive payments described in 

21 this subparagraph) do not exceed the 

22 amount that the Secretary estimates would 

23 be expended for such ACO for such bene24 ficiaries if the pilot program under this 

25 section were not implemented. 


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1 ‘‘(D) REPORTING AND OTHER REQUIRE2 MENTS.—In carrying out such model, the Sec3 retary may (as the Secretary determines to be 

4 appropriate) incorporate reporting require5 ments, incentive payments, and penalties re6 lated to the physician quality reporting initia7 tive (PQRI), electronic prescribing, electronic 

8 health records, and other similar initiatives 

9 under section 1848, and may use alternative 

10 criteria than would otherwise apply under such 

11 section for determining whether to make such 

12 payments. The incentive payments described in 

13 this subparagraph shall not be included in the 

14 limit described in subparagraph (C)(ii) or in the 

15 performance target model described in this 

16 paragraph. 

17 ‘‘(2) PARTIAL CAPITATION MODEL.— 

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graph (B), a partial capitation model described 

20 in this paragraph (in this paragraph referred to 

21 as a ‘partial capitation model’) is a model in 

22 which a qualifying ACO would be at financial 

23 risk for some, but not all, of the items and serv24 ices covered under parts A and B, such as at 

25 risk for some or all physicians’ services or all 


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1 items and services under part B. The Secretary 

2 may limit a partial capitation model to ACOs 

3 that are highly integrated systems of care and 

4 to ACOs capable of bearing risk, as determined 

5 to be appropriate by the Secretary. 

6 ‘‘(B) NO ADDITIONAL PROGRAM EXPENDI7 TURES.—Payments to a qualifying ACO for ap8 plicable beneficiaries for a year under the par9 tial capitation model shall be established in a 

10 manner that does not result in spending more 

11 for such ACO for such beneficiaries than would 

12 otherwise be expended for such ACO for such 

13 beneficiaries for such year if the pilot program 

14 were not implemented, as estimated by the Sec15 retary. 

16 ‘‘(3) OTHER PAYMENT MODELS.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), the Secretary may develop other 

19 payment models that meet the goals of this 

20 pilot program to improve quality and efficiency. 

21 ‘‘(B) NO ADDITIONAL PROGRAM EXPENDI22 TURES.—Subparagraph (B) of paragraph (2) 

23 shall apply to a payment model under subpara24 graph (A) in a similar manner as such subparaVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00462 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 graph (B) applies to the payment model under 

2 paragraph (2). 

3 ‘‘(d) APPLICABLE BENEFICIARIES.— 

4 ‘‘(1) IN GENERAL.—In this section, the term 

5 ‘applicable beneficiary’ means, with respect to a 

6 qualifying ACO, an individual who— 

7 ‘‘(A) is enrolled under part B and entitled 

8 to benefits under part A; 

9 ‘‘(B) is not enrolled in a Medicare Advan10 tage plan under part C or a PACE program 

11 under section 1894; and 

12 ‘‘(C) meets such other criteria as the Sec13 retary determines appropriate, which may in14 clude criteria relating to frequency of contact 

15 with physicians in the ACO 

16 ‘‘(2) FOLLOWING APPLICABLE BENE17 FICIARIES.—The Secretary may monitor data on ex18 penditures and quality of services under this title 

19 after an applicable beneficiary discontinues receiving 

20 services under this title through a qualifying ACO. 

21 ‘‘(e) IMPLEMENTATION.— 

22 ‘‘(1) STARTING DATE.—The pilot program shall 

23 begin no later than January 1, 2012. An agreement 

24 with a qualifying ACO under the pilot program may 

25 cover a multi-year period of between 3 and 5 years. 


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1 ‘‘(2) WAIVER.—The Secretary may waive such 

2 provisions of this title (including section 1877) and 

3 title XI in the manner the Secretary determines nec4 essary in order implement the pilot program. 

5 ‘‘(3) PERFORMANCE RESULTS REPORTS.—The 

6 Secretary shall report performance results to quali7 fying ACOs under the pilot program at least annu8 ally. 

9 ‘‘(4) LIMITATIONS ON REVIEW.—There shall be 

10 no administrative or judicial review under section 

11 1869, section 1878, or otherwise of— 

12 ‘‘(A) the elements, parameters, scope, and 

13 duration of the pilot program; 

14 ‘‘(B) the selection of qualifying ACOs for 

15 the pilot program; 

16 ‘‘(C) the establishment of targets, meas17 urement of performance, determinations with 

18 respect to whether savings have been achieved 

19 and the amount of savings; 

20 ‘‘(D) determinations regarding whether, to 

21 whom, and in what amounts incentive payments 

22 are paid; and 

23 ‘‘(E) decisions about the extension of the 

24 program under subsection (g), expansion of the 


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1 program under subsection (h) or extensions 

2 under subsection (i). 

3 ‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 

4 United States Code shall not apply to this section. 

5 ‘‘(f) EVALUATION; MONITORING.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall evalu7 ate the payment incentive model for each qualifying 

8 ACO under the pilot program to assess impacts on 

9 beneficiaries, providers of services, suppliers and the 

10 program under this title. The Secretary shall make 

11 such evaluation publicly available within 60 days of 

12 the date of completion of such report. 

13 ‘‘(2) MONITORING.—The Inspector General of 

14 the Department of Health and Human Services shall 

15 provide for monitoring of the operation of ACOs 

16 under the pilot program with regard to violations of 

17 section 1877 (popularly known as the ‘Stark law’). 

18 ‘‘(g) EXTENSION OF PILOT AGREEMENT WITH SUC19 CESSFUL ORGANIZATIONS.— 

20 ‘‘(1) REPORTS TO CONGRESS.—Not later than 

21 2 years after the date the first agreement is entered 

22 into under this section, and biennially thereafter for 

23 six years, the Secretary shall submit to Congress 

24 and make publicly available a report on the use of 

25 authorities under the pilot program. Each report 


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1 shall address the impact of the use of those authori2 ties on expenditures, access, and quality under this 

3 title. 

4 ‘‘(2) EXTENSION.—Subject to the report pro5 vided under paragraph (1), with respect to a quali6 fying ACO, the Secretary may extend the duration 

7 of the agreement for such ACO under the pilot pro8 gram as the Secretary determines appropriate if— 

9 ‘‘(A) the ACO receives incentive payments 

10 with respect to any of the first 4 years of the 

11 pilot agreement and is consistently meeting 

12 quality standards or 

13 ‘‘(B) the ACO is consistently exceeding 

14 quality standards and is not increasing spend15 ing under the program. 

16 ‘‘(3) TERMINATION.—The Secretary may termi17 nate an agreement with a qualifying ACO under the 

18 pilot program if such ACO did not receive incentive 

19 payments or consistently failed to meet quality 

20 standards in any of the first 3 years under the pro21 gram. 

22 ‘‘(h) EXPANSION TO ADDITIONAL ACOS.— 

23 ‘‘(1) TESTING AND REFINEMENT OF PAYMENT

24 INCENTIVE MODELS.—Subject to the evaluation de25 scribed in subsection (f), the Secretary may enter 


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1 into agreements under the pilot program with addi2 tional qualifying ACOs to further test and refine 

3 payment incentive models with respect to qualifying 

4 ACOs. 

5 ‘‘(2) EXPANDING USE OF SUCCESSFUL MODELS

6 TO PROGRAM IMPLEMENTATION.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), the Secretary may issue regulations 

9 to implement, on a permanent basis, 1 or more 

10 models if, and to the extent that, such models 

11 are beneficial to the program under this title, as 

12 determined by the Secretary. 

13 ‘‘(B) CERTIFICATION.—The Chief Actuary 

14 of the Centers for Medicare & Medicaid Serv15 ices shall certify that 1 or more of such models 

16 described in subparagraph (A) would result in 

17 estimated spending that would be less than 

18 what spending would otherwise be estimated to 

19 be in the absence of such expansion. 

20 ‘‘(i) TREATMENT OF PHYSICIAN GROUP PRACTICE

21 DEMONSTRATION.— 

22 ‘‘(1) EXTENSION.—The Secretary may enter in 

23 to an agreement with a qualifying ACO under the 

24 demonstration under section 1866A, subject to re25 basing and other modifications deemed appropriate 


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1 by the Secretary, until the pilot program under this 

2 section is operational. 

3 ‘‘(2) TRANSITION.—For purposes of extension 

4 of an agreement with a qualifying ACO under sub5 section (g)(2), the Secretary shall treat receipt of an 

6 incentive payment for a year by an organization 

7 under the physician group practice demonstration 

8 pursuant to section 1866A as a year for which an 

9 incentive payment is made under such subsection, as 

10 long as such practice group practice organization 

11 meets the criteria under subsection (b)(2). 

12 ‘‘(j) ADDITIONAL PROVISIONS.— 

13 ‘‘(1) AUTHORITY FOR SEPARATE INCENTIVE

14 ARRANGEMENTS.—The Secretary may create sepa15 rate incentive arrangements (including using mul16 tiple years of data, varying thresholds, varying 

17 shared savings amounts, and varying shared savings 

18 limits) for different categories of qualifying ACOs to 

19 reflect natural variations in data availability, vari20 ation in average annual attributable expenditures, 

21 program integrity, and other matters the Secretary 

22 deems appropriate. 

23 ‘‘(2) ENCOURAGEMENT OF PARTICIPATION OF

24 SMALLER ORGANIZATIONS.—In order to encourage 

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1 zations under the pilot program, the Secretary may 

2 limit a qualifying ACO’s exposure to high cost pa3 tients under the program. 

4 ‘‘(3) INVOLVEMENT IN PRIVATE PAYER AR5 RANGEMENTS.—Nothing in this section shall be con6 strued as preventing qualifying ACOs participating 

7 in the pilot program from negotiating similar con8 tracts with private payers. 

9 ‘‘(4) ANTIDISCRIMINATION LIMITATION.—The 

10 Secretary shall not enter into an agreement with an 

11 entity to provide health care items or services under 

12 the pilot program, or with an entity to administer 

13 the program, unless such entity guarantees that it 

14 will not deny, limit, or condition the coverage or pro15 vision of benefits under the program, for individuals 

16 eligible to be enrolled under such program, based on 

17 any health status-related factor described in section 

18 2702(a)(1) of the Public Health Service Act. 

19 ‘‘(5) CONSTRUCTION.—Nothing in this section 

20 shall be construed to compel or require an organiza21 tion to use an organization-specific target growth 

22 rate for an accountable care organization under this 

23 section for purposes of section 1848. 

24 ‘‘(6) FUNDING.—For purposes of administering 

25 and carrying out the pilot program, other than for 


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1 payments for items and services furnished under this 

2 title and incentive payments under subsection (c)(1), 

3 in addition to funds otherwise appropriated, there 

4 are appropriated to the Secretary for the Center for 

5 Medicare & Medicaid Services Program Management 

6 Account $25,000,000 for each of fiscal years 2010 

7 through 2014 and $20,000,000 for fiscal year 2015. 

8 Amounts appropriated under this paragraph for a 

9 fiscal year shall be available until expended.’’. 

10 SEC. 1302. MEDICAL HOME PILOT PROGRAM. 

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

12 Act is amended by inserting after section 1866E, as in13 serted by section 1301, the following new section: 

14 ‘‘MEDICAL HOME PILOT PROGRAM

15 ‘‘SEC. 1866F. (a) ESTABLISHMENT AND MEDICAL

16 HOME MODELS.— 

17 ‘‘(1) ESTABLISHMENT OF PILOT PROGRAM.— 

18 The Secretary shall establish a medical home pilot 

19 program (in this section referred to as the ‘pilot pro20 gram’) for the purpose of evaluating the feasibility 

21 and advisability of reimbursing qualified patient-cen22 tered medical homes for furnishing medical home 

23 services (as defined under subsection (b)(1)) to high 

24 need beneficiaries (as defined in subsection 

25 (d)(1)(C)) and to targeted high need beneficiaries 

26 (as defined in subsection (c)(1)(C)). 


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1 ‘‘(2) SCOPE.—Subject to subsection (g), the 

2 pilot program shall include urban, rural, and under3 served areas. 

4 ‘‘(3) MODELS OF MEDICAL HOMES IN THE

5 PILOT PROGRAM.—The pilot program shall evaluate 

6 each of the following medical home models: 

7 ‘‘(A) INDEPENDENT PATIENT-CENTERED

8 MEDICAL HOME MODEL.—Independent patient9 centered medical home model under subsection 

10 (c). 

11 ‘‘(B) COMMUNITY-BASED MEDICAL HOME

12 MODEL.—Community-based medical home 

13 model under subsection (d). 

14 ‘‘(4) PARTICIPATION OF NURSE PRACTITIONERS

15 AND PHYSICIAN ASSISTANTS.— 

16 ‘‘(A) Nothing in this section shall be con17 strued as preventing a nurse practitioner from 

18 leading a patient centered medical home so long 

19 as— 

20 ‘‘(i) all the requirements of this sec21 tion are met; and 

22 ‘‘(ii) the nurse practitioner is acting 

23 consistently with State law. 

24 ‘‘(B) Nothing in this section shall be con25 strued as preventing a physician assistant from 


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1 participating in a patient centered medical 

2 home so long as— 

3 ‘‘(i) all the requirements of this sec4 tion are met; and 

5 ‘‘(ii) the physician assistant is acting 

6 consistently with State law. 

7 ‘‘(b) DEFINITIONS.—For purposes of this section: 

8 ‘‘(1) PATIENT-CENTERED MEDICAL HOME

9 SERVICES.—The term ‘patient-centered medical 

10 home services’ means services that— 

11 ‘‘(A) provide beneficiaries with direct and 

12 ongoing access to a primary care or principal 

13 care by a physician or nurse practitioner who 

14 accepts responsibility for providing first contact, 

15 continuous and comprehensive care to such ben16 eficiary; 

17 ‘‘(B) coordinate the care provided to a ben18 eficiary by a team of individuals at the practice 

19 level across office, institutional and home set20 tings led by a primary care or principal care 

21 physician or nurse practitioner, as needed and 

22 appropriate; 

23 ‘‘(C) provide for all the patient’s health 

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1 priately arranging care with other qualified pro2 viders for all stages of life; 

3 ‘‘(D) provide continuous access to care and 

4 communication with participating beneficiaries; 

5 ‘‘(E) provide support for patient self-man6 agement, proactive and regular patient moni7 toring, support for family caregivers, use pa8 tient-centered processes, and coordination with 

9 community resources; 

10 ‘‘(F) integrate readily accessible, clinically 

11 useful information on participating patients 

12 that enables the practice to treat such patients 

13 comprehensively and systematically; and 

14 ‘‘(G) implement evidence-based guidelines 

15 and apply such guidelines to the identified 

16 needs of beneficiaries over time and with the in17 tensity needed by such beneficiaries. 

18 ‘‘(2) PRIMARY CARE.—The term ‘primary care’ 

19 means health care that is provided by a physician, 

20 nurse practitioner, or physician assistant who prac21 tices in the field of family medicine, general internal 

22 medicine, geriatric medicine, or pediatric medicine. 

23 ‘‘(3) PRINCIPAL CARE.—The term ‘principal 

24 care’ means integrated, accessible health care that is 

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1 specialist that addresses the majority of the personal 

2 health care needs of patients with chronic conditions 

3 requiring the subspecialist’s expertise, and for whom 

4 the subspecialist assumes care management. 

5 ‘‘(c) INDEPENDENT PATIENT-CENTERED MEDICAL

6 HOME MODEL.— 

7 ‘‘(1) IN GENERAL.— 

8 ‘‘(A) PAYMENT AUTHORITY.—Under the 

9 independent patient-centered medical home 

10 model under this subsection, the Secretary shall 

11 make payments for medical home services fur12 nished by an independent patient-centered med13 ical home (as defined in subparagraph (B)) 

14 pursuant to paragraph (3)(B) for a targeted 

15 high need beneficiaries (as defined in subpara16 graph (C)). 

17 ‘‘(B) INDEPENDENT PATIENT-CENTERED

18 MEDICAL HOME DEFINED.—In this section, the 

19 term ‘independent patient-centered medical 

20 home’ means a physician-directed or nurse21 practitioner-directed practice that is qualified 

22 under paragraph (2) as— 

23 ‘‘(i) providing beneficiaries with pa24 tient-centered medical home services; and 


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1 ‘‘(ii) meets such other requirements as 

2 the Secretary may specify. 

3 ‘‘(C) TARGETED HIGH NEED BENEFICIARY

4 DEFINED.—For purposes of this subsection, the 

5 term ‘targeted high need beneficiary’ means a 

6 high need beneficiary who, based on a risk score 

7 as specified by the Secretary, is generally within 

8 the upper 50th percentile of Medicare bene9 ficiaries. 

10 ‘‘(D) BENEFICIARY ELECTION TO PARTICI11 PATE.—The Secretary shall determine an ap12 propriate method of ensuring that beneficiaries 

13 have agreed to participate in the pilot program. 

14 ‘‘(E) IMPLEMENTATION.—The pilot pro15 gram under this subsection shall begin no later 

16 than 6 months after the date of the enactment 

17 of this section. 

18 ‘‘(2) STANDARD SETTING AND QUALIFICATION

19 PROCESS FOR PATIENT-CENTERED MEDICAL

20 HOMES.—The Secretary shall review alternative 

21 models for standard setting and qualification, and 

22 shall establish a process— 

23 ‘‘(A) to establish standards to enable med24 ical practices to qualify as patient-centered 

25 medical homes; and 


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1 ‘‘(B) to initially provide for the review and 

2 certification of medical practices as meeting 

3 such standards. 

4 ‘‘(3) PAYMENT.— 

5 ‘‘(A) ESTABLISHMENT OF METHOD6 OLOGY.—The Secretary shall establish a meth7 odology for the payment for medical home serv8 ices furnished by independent patient-centered 

9 medical homes. Under such methodology, the 

10 Secretary shall adjust payments to medical 

11 homes based on beneficiary risk scores to en12 sure that higher payments are made for higher 

13 risk beneficiaries. 

14 ‘‘(B) PER BENEFICIARY PER MONTH PAY15 MENTS.—Under such payment methodology, the 

16 Secretary shall pay independent patient-cen17 tered medical homes a monthly fee for each tar18 geted high need beneficiary who consents to re19 ceive medical home services through such med20 ical home. 

21 ‘‘(C) PROSPECTIVE PAYMENT.—The fee 

22 under subparagraph (B) shall be paid on a pro23 spective basis. 


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1 ‘‘(D) AMOUNT OF PAYMENT.—In deter2 mining the amount of such fee, the Secretary 

3 shall consider the following: 

4 ‘‘(i) The clinical work and practice ex5 penses involved in providing the medical 

6 home services provided by the independent 

7 patient-centered medical home (such as 

8 providing increased access, care coordina9 tion, population disease management, and 

10 teaching self-care skills for managing 

11 chronic illnesses) for which payment is not 

12 made under this title as of the date of the 

13 enactment of this section. 

14 ‘‘(ii) Allow for differential payments 

15 based on capabilities of the independent 

16 patient-centered medical home. 

17 ‘‘(iii) Use appropriate risk-adjustment 

18 in determining the amount of the per bene19 ficiary per month payment under this 

20 paragraph in a manner that ensures that 

21 higher payments are made for higher risk 

22 beneficiaries. 

23 ‘‘(4) ENCOURAGING PARTICIPATION OF VARI24 ETY OF PRACTICES.—The pilot program under this 

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1 tion of physicians in practices with fewer than 10 

2 full-time equivalent physicians, as well as physicians 

3 in larger practices, particularly in underserved and 

4 rural areas, as well as federally qualified community 

5 health centers, and rural health centers. 

6 ‘‘(5) NO DUPLICATION IN PILOT PARTICIPA7 TION.—A physician in a group practice that partici8 pates in the accountable care organization pilot pro9 gram under section 1866D shall not be eligible to 

10 participate in the pilot program under this sub11 section, unless the pilot program under this section 

12 has been implemented on a permanent basis under 

13 subsection (e)(3). 

14 ‘‘(d) COMMUNITY-BASED MEDICAL HOME MODEL.— 

15 ‘‘(1) IN GENERAL.— 

16 ‘‘(A) AUTHORITY FOR PAYMENTS.—Under 

17 the community-based medical home model 

18 under this subsection (in this section referred to 

19 as the ‘CBMH model’), the Secretary shall 

20 make payments for the furnishing of medical 

21 home services by a community-based medical 

22 home (as defined in subparagraph (B)) pursu23 ant to paragraph (5)(B) for high need bene24 ficiaries. 


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1 ‘‘(B) COMMUNITY-BASED MEDICAL HOME

2 DEFINED.—In this section, the term ‘commu3 nity-based medical home’ means a nonprofit 

4 community-based or State-based organization 

5 that is certified under paragraph (2) as meeting 

6 the following requirements: 

7 ‘‘(i) The organization provides bene8 ficiaries with medical home services. 

9 ‘‘(ii) The organization provides med10 ical home services under the supervision of 

11 and in close collaboration with the primary 

12 care or principal care physician, nurse 

13 practitioner, or physician assistant des14 ignated by the beneficiary as his or her 

15 community-based medical home provider. 

16 ‘‘(iii) The organization employs com17 munity health workers, including nurses or 

18 other non-physician practitioners, lay 

19 health workers, or other persons as deter20 mined appropriate by the Secretary, that 

21 assist the primary or principal care physi22 cian, nurse practitioner, or physician as23 sistant in chronic care management activi24 ties such as teaching self-care skills for 

25 managing chronic illnesses, transitional 


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1 care services, care plan setting, medication 

2 therapy management services for patients 

3 with multiple chronic diseases, or help 

4 beneficiaries access the health care and 

5 community-based resources in their local 

6 geographic area. 

7 ‘‘(iv) The organization meets such 

8 other requirements as the Secretary may 

9 specify. 

10 ‘‘(C) HIGH NEED BENEFICIARY.—In this 

11 section, the term ‘high need beneficiary’ means 

12 an individual who requires regular medical 

13 monitoring, advising, or treatment. 

14 ‘‘(2) QUALIFICATION PROCESS FOR COMMU15 NITY-BASED MEDICAL HOMES.—The Secretary shall 

16 establish a process— 

17 ‘‘(A) for the initial qualification of commu18 nity-based or State-based organizations as com19 munity-based medical homes; and 

20 ‘‘(B) to provide for the review and quali21 fication of such community-based and State22 based organizations pursuant to criteria estab23 lished by the Secretary. 

24 ‘‘(3) DURATION.—The pilot program for com25 munity-based medical homes under this subsection 


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1 shall start no later than 2 years after the date of the 

2 enactment of this section. Each demonstration site 

3 under the pilot program shall operate for a period 

4 of up to 5 years after the initial implementation 

5 phase, without regard to the receipt of a initial im6 plementation funding under subsection (i). 

7 ‘‘(4) PREFERENCE.—In selecting sites for the 

8 CBMH model, the Secretary may give preference 

9 to— 

10 ‘‘(A) applications from geographic areas 

11 that propose to coordinate health care services 

12 for chronically ill beneficiaries across a variety 

13 of health care settings, such as primary care 

14 physician practices with fewer than 10 physi15 cians, specialty physicians, nurse practitioner 

16 practices, Federally qualified health centers, 

17 rural health clinics, and other settings; 

18 ‘‘(B) applications that include other payors 

19 that furnish medical home services for chron20 ically ill patients covered by such payors; and 

21 ‘‘(C) applications from States that propose 

22 to use the medical home model to coordinate 

23 health care services for individuals enrolled 

24 under this title, individuals enrolled under title 

25 XIX, and full-benefit dual eligible individuals 


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1 (as defined in section 1935(c)(6)) with chronic 

2 diseases across a variety of health care settings. 

3 ‘‘(5) PAYMENTS.— 

4 ‘‘(A) ESTABLISHMENT OF METHOD5 OLOGY.—The Secretary shall establish a meth6 odology for the payment for medical home serv7 ices furnished under the CBMH model. 

8 ‘‘(B) PER BENEFICIARY PER MONTH PAY9 MENTS.—Under such payment methodology, the 

10 Secretary shall make two separate monthly pay11 ments for each high need beneficiary who con12 sents to receive medical home services through 

13 such medical home, as follows: 

14 ‘‘(i) PAYMENT TO COMMUNITY-BASED

15 ORGANIZATION.—One monthly payment to 

16 a community-based or State-based organi17 zation. 

18 ‘‘(ii) PAYMENT TO PRIMARY OR PRIN19 CIPAL CARE PRACTICE.—One monthly pay20 ment to the primary or principal care prac21 tice for such beneficiary. 

22 ‘‘(C) PROSPECTIVE PAYMENT.—The pay23 ments under subparagraph (B) shall be paid on 

24 a prospective basis. 


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1 ‘‘(D) AMOUNT OF PAYMENT.—In deter2 mining the amount of such payment, the Sec3 retary shall consider the following: 

4 ‘‘(i) The clinical work and practice ex5 penses involved in providing the medical 

6 home services provided by the community7 based medical home (such as providing in8 creased access, care coordination, care plan 

9 setting, population disease management, 

10 and teaching self-care skills for managing 

11 chronic illnesses) for which payment is not 

12 made under this title as of the date of the 

13 enactment of this section. 

14 ‘‘(ii) Use appropriate risk-adjustment 

15 in determining the amount of the per bene16 ficiary per month payment under this 

17 paragraph. 

18 ‘‘(6) INITIAL IMPLEMENTATION FUNDING.— 

19 The Secretary may make available initial implemen20 tation funding to a community based or State-based 

21 organization or a State that is participating in the 

22 pilot program under this subsection. Such organiza23 tion shall provide the Secretary with a detailed im24 plementation plan that includes how such funds will 

25 be used. 


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1 ‘‘(e) EXPANSION OF PROGRAM.— 

2 ‘‘(1) EVALUATION OF COST AND QUALITY.— 

3 The Secretary shall evaluate the pilot program to 

4 determine— 

5 ‘‘(A) the extent to which medical homes re6 sult in— 

7 ‘‘(i) improvement in the quality and 

8 coordination of health care services, par9 ticularly with regard to the care of complex 

10 patients; 

11 ‘‘(ii) improvement in reducing health 

12 disparities; 

13 ‘‘(iii) reductions in preventable hos14 pitalizations; 

15 ‘‘(iv) prevention of readmissions; 

16 ‘‘(v) reductions in emergency room 

17 visits; 

18 ‘‘(vi) improvement in health outcomes, 

19 including patient functional status where 

20 applicable; 

21 ‘‘(vii) improvement in patient satisfac22 tion; 

23 ‘‘(viii) improved efficiency of care such 

24 as reducing duplicative diagnostic tests and 

25 laboratory tests; and 


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1 ‘‘(ix) reductions in health care ex2 penditures; and 

3 ‘‘(B) the feasability and advisability of re4 imbursing medical homes for medical home 

5 services under this title on a permanent basis. 

6 ‘‘(2) REPORT.—Not later than 60 days after 

7 the date of completion of the evaluation under para8 graph (1), the Secretary shall submit to Congress 

9 and make available to the public a report on the 

10 findings of the evaluation under paragraph (1). 

11 ‘‘(3) EXPANSION OF PROGRAM.— 

12 ‘‘(A) IN GENERAL.—Subject to the results 

13 of the evaluation under paragraph (1) and sub14 paragraph (B), the Secretary may issue regula15 tions to implement, on a permanent basis, one 

16 or more models, if, and to the extent that such 

17 model or models, are beneficial to the program 

18 under this title, including that such implemen19 tation will improve quality of care, as deter20 mined by the Secretary. 

21 ‘‘(B) CERTIFICATION REQUIREMENT.—The 

22 Secretary may not issue such regulations unless 

23 the Chief Actuary of the Centers for Medicare 

24 & Medicaid Services certifies that the expansion 

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1 scribed in subparagraph (A) would result in es2 timated spending under this title that would be 

3 no more than the level of spending that the 

4 Secretary estimates would otherwise be spent 

5 under this title in the absence of such expan6 sion. 

7 ‘‘(f) ADMINISTRATIVE PROVISIONS.— 

8 ‘‘(1) NO DUPLICATION IN PAYMENTS.—During 

9 any month, the Secretary may not make payments 

10 under this section under more than one model or 

11 through more than one medical home under any 

12 model for the furnishing of medical home services to 

13 an individual. 

14 ‘‘(2) NO EFFECT ON PAYMENT FOR EVALUA15 TION AND MANAGEMENT SERVICES.—Payments 

16 made under this section are in addition to, and have 

17 no effect on the amount of, payment for evaluation 

18 and management services made under this title 

19 ‘‘(3) ADMINISTRATION.—Chapter 35 of title 44, 

20 United States Code shall not apply to this section. 

21 ‘‘(g) FUNDING.— 

22 ‘‘(1) OPERATIONAL COSTS.—For purposes of 

23 administering and carrying out the pilot program 

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1 dition to funds otherwise available, there shall be 

2 transferred from the Federal Supplementary Medical 

3 Insurance Trust Fund under section 1841 to the 

4 Secretary for the Centers for Medicare & Medicaid 

5 Services Program Management Account $6,000,000 

6 for each of fiscal years 2010 through 2014. 

7 Amounts appropriated under this paragraph for a 

8 fiscal year shall be available until expended. 

9 ‘‘(2) PATIENT-CENTERED MEDICAL HOME

10 SERVICES.—In addition to funds otherwise available, 

11 there shall be available to the Secretary for the Cen12 ters for Medicare & Medicaid Services, from the 

13 Federal Supplementary Medical Insurance Trust 

14 Fund under section 1841— 

15 ‘‘(A) $200,000,000 for each of fiscal years 

16 2010 through 2014 for payments for medical 

17 home services under subsection (c)(3); and 

18 ‘‘(B) $125,000,000 for each of fiscal years 

19 2012 through 2016, for payments under sub20 section (d)(5). 

21 Amounts available under this paragraph for a fiscal 

22 year shall be available until expended. 

23 ‘‘(3) INITIAL IMPLEMENTATION.—In addition 

24 to funds otherwise available, there shall be available 

25 to the Secretary for the Centers for Medicare & 


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1 Medicaid Services, from the Federal Supplementary 

2 Medical Insurance Trust Fund under section 1841, 

3 $2,500,000 for each of fiscal years 2010 through 

4 2012, under subsection (d)(6). Amounts available 

5 under this paragraph for a fiscal year shall be avail6 able until expended. 

7 ‘‘(h) TREATMENT OF TRHCA MEDICARE MEDICAL

8 HOME DEMONSTRATION FUNDING.— 

9 ‘‘(1) In addition to funds otherwise available for 

10 payment of medical home services under subsection 

11 (c)(3), there shall also be available the amount pro12 vided in subsection (g) of section 204 of division B 

13 of the Tax Relief and Health Care Act of 2006 (42 

14 U.S.C. 1395b–1 note). 

15 ‘‘(2) Notwithstanding section 1302(c) of the 

16 America’s Affordable Health Choices Act of 2009, in 

17 addition to funds provided in paragraph (1) and 

18 subsection (g)(2)(A), the funding for medical home 

19 services that would otherwise have been available if 

20 such section 204 medical home demonstration had 

21 been implemented (without regard to subsection (g) 

22 of such section) shall be available to the independent 

23 patient-centered medical home model described in 

24 subsection (c).’’. 


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

2 this section shall apply to services furnished on or after 

3 the date of the enactment of this Act. 

4 (c) CONFORMING REPEAL.—Section 204 of division 

5 B of the Tax Relief and Health Care Act of 2006 (42 

6 U.S.C. 1395b–1 note), as amended by section 133(a)(2) 

7 of the Medicare Improvements for Patients and Providers 

8 Act of 2008 (Public Law 110–275), is repealed. 

9 SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY 

10 CARE SERVICES. 

11 (a) IN GENERAL.—Section 1833 of the Social Secu12 rity Act is amended by inserting after subsection (o) the 

13 following new subsection: 

14 ‘‘(p) PRIMARY CARE PAYMENT INCENTIVES.— 

15 ‘‘(1) IN GENERAL.—In the case of primary care 

16 services (as defined in paragraph (2)) furnished on 

17 or after January 1, 2011, by a primary care practi18 tioner (as defined in paragraph (3)) for which 

19 amounts are payable under section 1848, in addition 

20 to the amount otherwise paid under this part there 

21 shall also be paid to the practitioner (or to an em22 ployer or facility in the cases described in clause (A) 

23 of section 1842(b)(6)) (on a monthly or quarterly 

24 basis) from the Federal Supplementary Medical In25 surance Trust Fund an amount equal 5 percent (or 


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1 10 percent if the practitioner predominately fur2 nishes such services in an area that is designated 

3 (under section 332(a)(1)(A) of the Public Health 

4 Service Act) as a primary care health professional 

5 shortage area. 

6 ‘‘(2) PRIMARY CARE SERVICES DEFINED.—In 

7 this subsection, the term ‘primary care services’— 

8 ‘‘(A) means services which are evaluation 

9 and management services as defined in section 

10 1848(j)(5)(A); and 

11 ‘‘(B) includes services furnished by another 

12 health care professional that would be described 

13 in subparagraph (A) if furnished by a physi14 cian. 

15 ‘‘(3) PRIMARY CARE PRACTITIONER DE16 FINED.—In this subsection, the term ‘primary care 

17 practitioner’— 

18 ‘‘(A) means a physician or other health 

19 care practitioner (including a nurse practi20 tioner) who— 

21 ‘‘(i) specializes in family medicine, 

22 general internal medicine, general pediat23 rics, geriatrics, or obstetrics and gyne24 cology; and 


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1 ‘‘(ii) has allowed charges for primary 

2 care services that account for at least 50 

3 percent of the physician’s or practitioner’s 

4 total allowed charges under section 1848, 

5 as determined by the Secretary for the 

6 most recent period for which data are 

7 available; and 

8 ‘‘(B) includes a physician assistant who is 

9 under the supervision of a physician described 

10 in subparagraph (A). 

11 ‘‘(4) LIMITATION ON REVIEW.—There shall be 

12 no administrative or judicial review under section 

13 1869, section 1878, or otherwise, respecting— 

14 ‘‘(A) any determination or designation 

15 under this subsection; 

16 ‘‘(B) the identification of services as pri17 mary care services under this subsection; and 

18 ‘‘(C) the identification of a practitioner as 

19 a primary care practitioner under this sub20 section. 

21 ‘‘(5) COORDINATION WITH OTHER PAY22 MENTS.— 

23 ‘‘(A) WITH OTHER PRIMARY CARE INCEN24 TIVES.—The provisions of this subsection shall 

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1 sections (m) and (u) and any payment under 

2 such subsections shall not be taken into account 

3 in computing payments under this subsection. 

4 ‘‘(B) WITH QUALITY INCENTIVES.—Pay5 ments under this subsection shall not be taken 

6 into account in determining the amounts that 

7 would otherwise be paid under this part for 

8 purposes of section 1834(g)(2)(B).’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Section 1833(m) of such Act (42 U.S.C. 

11 1395l(m)) is amended by redesignating paragraph 

12 (4) as paragraph (5) and by inserting after para13 graph (3) the following new paragraph: 

14 ‘‘(4) The provisions of this subsection shall not be 

15 taken into account in applying subsections (m) or (u) and 

16 any payment under such subsections shall not be taken 

17 into account in computing payments under this sub18 section.’’. 

19 (2) Section 1848(m)(5)(B) of such Act (42 

20 U.S.C. 1395w–4(m)(5)(B)) is amended by inserting 

21 ‘‘, (p),’’ after ‘‘(m)’’. 

22 (3) Section 1848(o)(1)(B)(iv) of such Act (42 

23 U.S.C. 1395w–4(o)(1)(B)(iv)) is amended by insert24 ing ‘‘primary care’’ before ‘‘health professional 

25 shortage area’’. 


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1 SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CER2 TIFIED NURSE-MIDWIVES. 

3 (a) IN GENERAL.—Section 1833(a)(1)(K) of the So4 cial Security Act (42 U.S.C.1395l(a)(1)(K)) is amended 

5 by striking ‘‘(but in no event’’ and all that follows through 

6 ‘‘performed by a physician)’’. 

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

8 subsection (a) shall apply to services furnished on or after 

9 January 1, 2011. 

10 SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR 

11 PREVENTIVE SERVICES. 

12 (a) MEDICARE COVERED PREVENTIVE SERVICES DE13 FINED.—Section 1861 of the Social Security Act (42 

14 U.S.C. 1395x), as amended by section 1233(a)(1)(B), is 

15 amended by adding at the end the following new sub16 section: 

17 ‘‘Medicare Covered Preventive Services 

18 ‘‘(iii)(1) Subject to the succeeding provisions of this 

19 subsection, the term ‘Medicare covered preventive services’ 

20 means the following: 

21 ‘‘(A) Prostate cancer screening tests (as defined 

22 in subsection (oo)). 

23 ‘‘(B) Colorectal cancer screening tests (as de24 fined in subsection (pp). 

25 ‘‘(C) Diabetes outpatient self-management 

26 training services (as defined in subsection (qq)). 


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1 ‘‘(D) Screening for glaucoma for certain indi2 viduals (as described in subsection (s)(2)(U)). 

3 ‘‘(E) Medical nutrition therapy services for cer4 tain individuals (as described in subsection 

5 (s)(2)(V)). 

6 ‘‘(F) An initial preventive physical examination 

7 (as defined in subsection (ww)). 

8 ‘‘(G) Cardiovascular screening blood tests (as 

9 defined in subsection (xx)(1)). 

10 ‘‘(H) Diabetes screening tests (as defined in 

11 subsection (yy)). 

12 ‘‘(I) Ultrasound screening for abdominal aortic 

13 aneurysm for certain individuals (as described in 

14 subsection (s)(2)(AA)). 

15 ‘‘(J) Pneumococcal and influenza vaccines and 

16 their administration (as described in subsection 

17 (s)(10)(A)) and hepatitis B vaccine and its adminis18 tration for certain individuals (as described in sub19 section (s)(10)(B)). 

20 ‘‘(K) Screening mammography (as defined in 

21 subsection (jj)). 

22 ‘‘(L) Screening pap smear and screening pelvic 

23 exam (as defined in subsection (nn)). 

24 ‘‘(M) Bone mass measurement (as defined in 

25 subsection (rr)). 


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1 ‘‘(N) Kidney disease education services (as de2 fined in subsection (ggg)). 

3 ‘‘(O) Additional preventive services (as defined 

4 in subsection (ddd)). 

5 ‘‘(2) With respect to specific Medicare covered pre6 ventive services, the limitations and conditions described 

7 in the provisions referenced in paragraph (1) with respect 

8 to such services shall apply.’’. 

9 (b) PAYMENT AND ELIMINATION OF COST-SHAR10 ING.— 

11 (1) IN GENERAL.— 

12 (A) IN GENERAL.—Section 1833(a) of the 

13 Social Security Act (42 U.S.C. 1395l(a)) is 

14 amended by adding after and below paragraph 

15 (9) the following: 

16 ‘‘With respect to Medicare covered preventive services, in 

17 any case in which the payment rate otherwise provided 

18 under this part is computed as a percent of less than 100 

19 percent of an actual charge, fee schedule rate, or other 

20 rate, such percentage shall be increased to 100 percent.’’. 

21 (B) APPLICATION TO SIGMOIDOSCOPIES

22 AND COLONOSCOPIES.—Section 1834(d) of such 

23 Act (42 U.S.C. 1395m(d)) is amended— 

24 (i) in paragraph (2)(C), by amending 

25 clause (ii) to read as follows: 


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1 ‘‘(ii) NO COINSURANCE.—In the case 

2 of a beneficiary who receives services de3 scribed in clause (i), there shall be no coin4 surance applied.’’; and 

5 (ii) in paragraph (3)(C), by amending 

6 clause (ii) to read as follows: 

7 ‘‘(ii) NO COINSURANCE.—In the case 

8 of a beneficiary who receives services de9 scribed in clause (i), there shall be no coin10 surance applied.’’. 

11 (2) ELIMINATION OF COINSURANCE IN OUT12 PATIENT HOSPITAL SETTINGS.— 

13 (A) EXCLUSION FROM OPD FEE SCHED14 ULE.—Section 1833(t)(1)(B)(iv) of the Social 

15 Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is 

16 amended by striking ‘‘screening mammography 

17 (as defined in section 1861(jj)) and diagnostic 

18 mammography’’ and inserting ‘‘diagnostic 

19 mammograms and Medicare covered preventive 

20 services (as defined in section 1861(iii)(1))’’. 

21 (B) CONFORMING AMENDMENTS.—Section 

22 1833(a)(2) of the Social Security Act (42 

23 U.S.C. 1395l(a)(2)) is amended— 

24 (i) in subparagraph (F), by striking 

25 ‘‘and’’ after the semicolon at the end; 


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1 (ii) in subparagraph (G), by adding 

2 ‘‘and’’ at the end; and 

3 (iii) by adding at the end the fol4 lowing new subparagraph: 

5 ‘‘(H) with respect to additional preventive 

6 services (as defined in section 1861(ddd)) fur7 nished by an outpatient department of a hos8 pital, the amount determined under paragraph 

9 (1)(W);’’. 

10 (3) WAIVER OF APPLICATION OF DEDUCTIBLE

11 FOR ALL PREVENTIVE SERVICES.—The first sen12 tence of section 1833(b) of the Social Security Act 

13 (42 U.S.C. 1395l(b)) is amended— 

14 (A) in clause (1), by striking ‘‘items and 

15 services described in section 1861(s)(10)(A)’’ 

16 and inserting ‘‘Medicare covered preventive 

17 services (as defined in section 1861(iii))’’; 

18 (B) by inserting ‘‘and’’ before ‘‘(4)’’; and 

19 (C) by striking clauses (5) through (8). 

20 (4) APPLICATION TO PROVIDERS OF SERV21 ICES.—Section 1866(a)(2)(A)(ii) of such Act (42 

22 U.S.C. 1395cc(a)(2)(A)(ii)) is amended by inserting 

23 ‘‘other than for Medicare covered preventive services 

24 and’’ after ‘‘for such items and services (’’. 


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

2 this section shall apply to services furnished on or after 

3 January 1, 2011. 

4 SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL 

5 CANCER SCREENING TESTS REGARDLESS OF 

6 CODING, SUBSEQUENT DIAGNOSIS, OR ANCIL7 LARY TISSUE REMOVAL. 

8 (a) IN GENERAL.—Section 1833 of the Social Secu9 rity Act (42 U.S.C. 1395l(b)), as amended by section 

10 1305(b), is further amended— 

11 (1) in subsection (a), in the sentence added by 

12 section 1305(b)(1)(A), by inserting ‘‘(including serv13 ices described in the last sentence of section 

14 1833(b))’’ after ‘‘preventive services’’; and 

15 (2) in subsection (b), by adding at the end the 

16 following new sentence: ‘‘Clause (1) of the first sen17 tence of this subsection shall apply with respect to 

18 a colorectal cancer screening test regardless of the 

19 code that is billed for the establishment of a diag20 nosis as a result of the test, or for the removal of 

21 tissue or other matter or other procedure that is fur22 nished in connection with, as a result of, and in the 

23 same clinical encounter as, the screening test.’’. 


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

2 subsection (a) shall apply to items and services furnished 

3 on or after January 1, 2011. 

4 SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERV5 ICES FROM COVERAGE UNDER THE MEDI6 CARE SKILLED NURSING FACILITY PROSPEC7 TIVE PAYMENT SYSTEM AND CONSOLIDATED 

8 PAYMENT. 

9 (a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the 

10 Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 

11 amended by inserting ‘‘clinical social worker services,’’ 

12 after ‘‘qualified psychologist services,’’. 

13 (b) CONFORMING AMENDMENT.—Section 

14 1861(hh)(2) of the Social Security Act (42 U.S.C. 

15 1395x(hh)(2)) is amended by striking ‘‘and other than 

16 services furnished to an inpatient of a skilled nursing facil17 ity which the facility is required to provide as a require18 ment for participation’’. 

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

20 this section shall apply to items and services furnished on 

21 or after July 1, 2010. 


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1 SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERA2 PIST SERVICES AND MENTAL HEALTH COUN3 SELOR SERVICES. 

4 (a) COVERAGE OF MARRIAGE AND FAMILY THERA5 PIST SERVICES.— 

6 (1) COVERAGE OF SERVICES.—Section 

7 1861(s)(2) of the Social Security Act (42 U.S.C. 

8 1395x(s)(2)), as amended by section 1235, is 

9 amended— 

10 (A) in subparagraph (EE), by striking 

11 ‘‘and’’ at the end; 

12 (B) in subparagraph (FF), by adding 

13 ‘‘and’’ at the end; and 

14 (C) by adding at the end the following new 

15 subparagraph: 

16 ‘‘(GG) marriage and family therapist serv17 ices (as defined in subsection (jjj));’’. 

18 (2) DEFINITION.—Section 1861 of the Social 

19 Security Act (42 U.S.C. 1395x), as amended by sec20 tions 1233 and 1305, is amended by adding at the 

21 end the following new subsection: 

22 ‘‘Marriage and Family Therapist Services 

23 ‘‘(jjj)(1) The term ‘marriage and family therapist 

24 services’ means services performed by a marriage and 

25 family therapist (as defined in paragraph (2)) for the diag26 nosis and treatment of mental illnesses, which the marVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00500 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 riage and family therapist is legally authorized to perform 

2 under State law (or the State regulatory mechanism pro3 vided by State law) of the State in which such services 

4 are performed, as would otherwise be covered if furnished 

5 by a physician or as incident to a physician’s professional 

6 service, but only if no facility or other provider charges 

7 or is paid any amounts with respect to the furnishing of 

8 such services. 

9 ‘‘(2) The term ‘marriage and family therapist’ means 

10 an individual who— 

11 ‘‘(A) possesses a master’s or doctoral degree 

12 which qualifies for licensure or certification as a 

13 marriage and family therapist pursuant to State 

14 law; 

15 ‘‘(B) after obtaining such degree has performed 

16 at least 2 years of clinical supervised experience in 

17 marriage and family therapy; and 

18 ‘‘(C) is licensed or certified as a marriage and 

19 family therapist in the State in which marriage and 

20 family therapist services are performed.’’. 

21 (3) PROVISION FOR PAYMENT UNDER PART

22 B.—Section 1832(a)(2)(B) of the Social Security 

23 Act (42 U.S.C. 1395k(a)(2)(B)) is amended by add24 ing at the end the following new clause: 


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1 ‘‘(v) marriage and family therapist 

2 services;’’. 

3 (4) AMOUNT OF PAYMENT.— 

4 (A) IN GENERAL.—Section 1833(a)(1) of 

5 the Social Security Act (42 U.S.C. 1395l(a)(1)) 

6 is amended— 

7 (i) by striking ‘‘and’’ before ‘‘(W)’’; 

8 and 

9 (ii) by inserting before the semicolon 

10 at the end the following: ‘‘, and (X) with 

11 respect to marriage and family therapist 

12 services under section 1861(s)(2)(GG), the 

13 amounts paid shall be 80 percent of the 

14 lesser of the actual charge for the services 

15 or 75 percent of the amount determined 

16 for payment of a psychologist under clause 

17 (L)’’. 

18 (B) DEVELOPMENT OF CRITERIA WITH RE19 SPECT TO CONSULTATION WITH A HEALTH

20 CARE PROFESSIONAL.—The Secretary of Health 

21 and Human Services shall, taking into consider22 ation concerns for patient confidentiality, de23 velop criteria with respect to payment for mar24 riage and family therapist services for which 

25 payment may be made directly to the marriage 


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1 and family therapist under part B of title 

2 XVIII of the Social Security Act (42 U.S.C. 

3 1395j et seq.) under which such a therapist 

4 must agree to consult with a patient’s attending 

5 or primary care physician or nurse practitioner 

6 in accordance with such criteria. 

7 (5) EXCLUSION OF MARRIAGE AND FAMILY

8 THERAPIST SERVICES FROM SKILLED NURSING FA9 CILITY PROSPECTIVE PAYMENT SYSTEM.—Section 

10 1888(e)(2)(A)(ii) of the Social Security Act (42 

11 U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 

12 1307(a), is amended by inserting ‘‘marriage and 

13 family therapist services (as defined in subsection 

14 (jjj)(1)),’’ after ‘‘clinical social worker services,’’. 

15 (6) COVERAGE OF MARRIAGE AND FAMILY

16 THERAPIST SERVICES PROVIDED IN RURAL HEALTH

17 CLINICS AND FEDERALLY QUALIFIED HEALTH CEN18 TERS.—Section 1861(aa)(1)(B) of the Social Secu19 rity Act (42 U.S.C. 1395x(aa)(1)(B)) is amended by 

20 striking ‘‘or by a clinical social worker (as defined 

21 in subsection (hh)(1)),’’ and inserting ‘‘, by a clinical 

22 social worker (as defined in subsection (hh)(1)), or 

23 by a marriage and family therapist (as defined in 

24 subsection (jjj)(2)),’’. 


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1 (7) INCLUSION OF MARRIAGE AND FAMILY

2 THERAPISTS AS PRACTITIONERS FOR ASSIGNMENT

3 OF CLAIMS.—Section 1842(b)(18)(C) of the Social 

4 Security Act (42 U.S.C. 1395u(b)(18)(C)) is amend5 ed by adding at the end the following new clause: 

6 ‘‘(vii) A marriage and family therapist (as de7 fined in section 1861(jjj)(2)).’’. 

8 (b) COVERAGE OF MENTAL HEALTH COUNSELOR

9 SERVICES.— 

10 (1) COVERAGE OF SERVICES.—Section 

11 1861(s)(2) of the Social Security Act (42 U.S.C. 

12 1395x(s)(2)), as previously amended, is further 

13 amended— 

14 (A) in subparagraph (FF), by striking 

15 ‘‘and’’ at the end; 

16 (B) in subparagraph (GG), by inserting 

17 ‘‘and’’ at the end; and 

18 (C) by adding at the end the following new 

19 subparagraph: 

20 ‘‘(HH) mental health counselor services (as de21 fined in subsection (kkk)(1));’’. 

22 (2) DEFINITION.—Section 1861 of the Social 

23 Security Act (42 U.S.C. 1395x), as previously 

24 amended, is amended by adding at the end the fol25 lowing new subsection: 


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1 ‘‘Mental Health Counselor Services 

2 ‘‘(kkk)(1) The term ‘mental health counselor services’ 

3 means services performed by a mental health counselor (as 

4 defined in paragraph (2)) for the diagnosis and treatment 

5 of mental illnesses which the mental health counselor is 

6 legally authorized to perform under State law (or the 

7 State regulatory mechanism provided by the State law) of 

8 the State in which such services are performed, as would 

9 otherwise be covered if furnished by a physician or as inci10 dent to a physician’s professional service, but only if no 

11 facility or other provider charges or is paid any amounts 

12 with respect to the furnishing of such services. 

13 ‘‘(2) The term ‘mental health counselor’ means an 

14 individual who— 

15 ‘‘(A) possesses a master’s or doctor’s degree 

16 which qualifies the individual for licensure or certifi17 cation for the practice of mental health counseling in 

18 the State in which the services are performed; 

19 ‘‘(B) after obtaining such a degree has per20 formed at least 2 years of supervised mental health 

21 counselor practice; and 

22 ‘‘(C) is licensed or certified as a mental health 

23 counselor or professional counselor by the State in 

24 which the services are performed.’’. 


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1 (3) PROVISION FOR PAYMENT UNDER PART

2 B.—Section 1832(a)(2)(B) of the Social Security 

3 Act (42 U.S.C. 1395k(a)(2)(B)), as amended by 

4 subsection (a)(3), is further amended— 

5 (A) by striking ‘‘and’’ at the end of clause 

6 (iv); 

7 (B) by adding ‘‘and’’ at the end of clause 

8 (v); and 

9 (C) by adding at the end the following new 

10 clause: 

11 ‘‘(vi) mental health counselor serv12 ices;’’. 

13 (4) AMOUNT OF PAYMENT.— 

14 (A) IN GENERAL.—Section 1833(a)(1) of 

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

16 1395l(a)(1)), as amended by subsection (a), is 

17 further amended— 

18 (i) by striking ‘‘and’’ before ‘‘(X)’’; 

19 and 

20 (ii) by inserting before the semicolon 

21 at the end the following: ‘‘, and (Y), with 

22 respect to mental health counselor services 

23 under section 1861(s)(2)(HH), the 

24 amounts paid shall be 80 percent of the 

25 lesser of the actual charge for the services 


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1 or 75 percent of the amount determined 

2 for payment of a psychologist under clause 

3 (L)’’. 

4 (B) DEVELOPMENT OF CRITERIA WITH RE5 SPECT TO CONSULTATION WITH A PHYSICIAN.— 

6 The Secretary of Health and Human Services 

7 shall, taking into consideration concerns for pa8 tient confidentiality, develop criteria with re9 spect to payment for mental health counselor 

10 services for which payment may be made di11 rectly to the mental health counselor under part 

12 B of title XVIII of the Social Security Act (42 

13 U.S.C. 1395j et seq.) under which such a coun14 selor must agree to consult with a patient’s at15 tending or primary care physician in accordance 

16 with such criteria. 

17 (5) EXCLUSION OF MENTAL HEALTH COUN18 SELOR SERVICES FROM SKILLED NURSING FACILITY

19 PROSPECTIVE PAYMENT SYSTEM.—Section 

20 1888(e)(2)(A)(ii) of the Social Security Act (42 

21 U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 

22 1307(a) and subsection (a), is amended by inserting 

23 ‘‘mental health counselor services (as defined in sec24 tion 1861(kkk)(1)),’’ after ‘‘marriage and family 


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1 therapist services (as defined in subsection 

2 (jjj)(1)),’’. 

3 (6) COVERAGE OF MENTAL HEALTH COUN4 SELOR SERVICES PROVIDED IN RURAL HEALTH

5 CLINICS AND FEDERALLY QUALIFIED HEALTH CEN6 TERS.—Section 1861(aa)(1)(B) of the Social Secu7 rity Act (42 U.S.C. 1395x(aa)(1)(B)), as amended 

8 by subsection (a), is amended by striking ‘‘or by a 

9 marriage and family therapist (as defined in sub10 section (jjj)(2)),’’ and inserting ‘‘by a marriage and 

11 family therapist (as defined in subsection (jjj)(2)), 

12 or a mental health counselor (as defined in sub13 section (kkk)(2)),’’. 

14 (7) INCLUSION OF MENTAL HEALTH COUN15 SELORS AS PRACTITIONERS FOR ASSIGNMENT OF

16 CLAIMS.—Section 1842(b)(18)(C) of the Social Se17 curity Act (42 U.S.C. 1395u(b)(18)(C)), as amended 

18 by subsection (a)(7), is amended by adding at the 

19 end the following new clause: 

20 ‘‘(viii) A mental health counselor (as defined in 

21 section 1861(kkk)(2)).’’. 

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

23 this section shall apply to items and services furnished on 

24 or after January 1, 2011. 


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1 SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN2 TAL HEALTH ADD-ON. 

3 Section 138(a)(1) of the Medicare Improvements for 

4 Patients and Providers Act of 2008 (Public Law 110–275) 

5 is amended by striking ‘‘December 31, 2009’’ and insert6 ing ‘‘December 31, 2011’’. 

7 SEC. 1310. EXPANDING ACCESS TO VACCINES. 

8 (a) IN GENERAL.—Paragraph (10) of section 

9 1861(s) of the Social Security Act (42 U.S.C. 1395w(s)) 

10 is amended to read as follows: 

11 ‘‘(10) federally recommended vaccines (as de12 fined in subsection (lll)) and their respective admin13 istration;’’. 

14 (b) FEDERALLY RECOMMENDED VACCINES DE15 FINED.—Section 1861 of such Act is further amended by 

16 adding at the end the following new subsection: 

17 ‘‘Federally Recommended Vaccines 

18 ‘‘(lll) The term ‘federally recommended vaccine’ 

19 means an approved vaccine recommended by the Advisory 

20 Committee on Immunization Practices (an advisory com21 mittee established by the Secretary, acting through the Di22 rector of the Centers for Disease Control and Preven23 tion).’’. 

24 (c) CONFORMING AMENDMENTS.— 

25 (1) Section 1833 of such Act (42 U.S.C. 1395l) 

26 is amended, in each of subsections (a)(1)(B), 


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1 (a)(2)(G), and (a)(3)(A), by striking 

2 ‘‘1861(s)(10)(A)’’ and inserting ‘‘1861(s)(10)’’ each 

3 place it appears. 

4 (2) Section 1842(o)(1)(A)(iv) of such Act (42 

5 U.S.C. 1395u(o)(1)(A)(iv)) is amended— 

6 (A) by striking ‘‘subparagraph (A) or (B) 

7 of’’; and 

8 (B) by inserting before the period the fol9 lowing: ‘‘and before January 1, 2011, and influ10 enza vaccines furnished on or after January 1, 

11 2011’’. 

12 (3) Section 1847A(c)(6) of such Act (42 U.S.C. 

13 1395w–3a(c)(6)) is amended by striking subpara14 graph (G) and inserting the following: 

15 ‘‘(G) IMPLEMENTATION.—Chapter 35 of 

16 title 44, United States Code shall not apply to 

17 manufacturer provision of information pursuant 

18 to section 1927(b)(3)(A)(iii) for purposes of im19 plementation of this section.’’. 

20 (4) Section 1860D–2(e)(1) of such Act (42 

21 U.S.C. 1395w–102(e)(1)) is amended by striking 

22 ‘‘such term includes a vaccine’’ and all that follows 

23 through ‘‘its administration) and’’. 

24 (5) Section 1861(ww)(2)(A) of such Act (42 

25 U.S.C. 1395x(ww)(2)(A))) is amended by striking 


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1 ‘‘Pneumococcal, influenza, and hepatitis B vaccine 

2 and administration’’ and inserting ‘‘Federally rec3 ommended vaccines (as defined in subsection (lll)) 

4 and their respective administration’’. 

5 (6) Section 1861(iii)(1) of such Act, as added 

6 by section 1305(a), is amended by amending sub7 paragraph (J) to read as follows: 

8 ‘‘(J) Federally recommended vaccines (as de9 fined in subsection (lll)) and their respective admin10 istration.’’. 

11 (7) Section 1927(b)(3)(A)(iii) of such Act (42 

12 U.S.C. 1396r–8(b)(3)(A)(iii)) is amended, in the 

13 matter following subclause (III), by inserting 

14 ‘‘(A)(iv) (including influenza vaccines furnished on 

15 or after January 1, 2011),’’ after ‘‘described in sub16 paragraph’’ 

17 (d) EFFECTIVE DATES.—The amendments made 

18 by— 

19 (1) this section (other than by subsection 

20 (c)(7)) shall apply to vaccines administered on or 

21 after January 1, 2011; and 

22 (2) by subsection (c)(7) shall apply to calendar 

23 quarters beginning on or after January 1, 2010. 


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1 SEC. 1311. EXPANSION OF MEDICARE-COVERED PREVEN2 TIVE SERVICES AT FEDERALLY QUALIFIED 

3 HEALTH CENTERS. 

4 Section 1861(aa)(3)(A) of the Social Security Act (42 

5 U.S.C. 1395w (aa)(3)(A)) is amended to read as follows:

6 ‘‘(A) services of the type described sub7 paragraphs (A) through (C) of paragraph (1) 

8 and services described in section 1861(iii); 

9 and’’. 

10 TITLE IV—QUALITY 

11 Subtitle A—Comparative 

12 Effectiveness Research 

13 SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH. 

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

15 is amended by adding at the end the following new part: 

16 ‘‘PART D—COMPARATIVE EFFECTIVENESS RESEARCH

17 ‘‘COMPARATIVE EFFECTIVENESS RESEARCH

18 ‘‘SEC. 1181. (a) CENTER FOR COMPARATIVE EFFEC19 TIVENESS RESEARCH ESTABLISHED.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall estab21 lish within the Agency for Healthcare Research and 

22 Quality a Center for Comparative Effectiveness Re23 search (in this section referred to as the ‘Center’) to 

24 conduct, support, and synthesize research (including 

25 research conducted or supported under section 1013 

26 of the Medicare Prescription Drug, Improvement, 


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1 and Modernization Act of 2003) with respect to the 

2 outcomes, effectiveness, and appropriateness of 

3 health care services and procedures in order to iden4 tify the manner in which diseases, disorders, and 

5 other health conditions can most effectively and ap6 propriately be prevented, diagnosed, treated, and 

7 managed clinically. 

8 ‘‘(2) DUTIES.—The Center shall— 

9 ‘‘(A) conduct, support, and synthesize re10 search relevant to the comparative effectiveness 

11 of the full spectrum of health care items, serv12 ices and systems, including pharmaceuticals, 

13 medical devices, medical and surgical proce14 dures, and other medical interventions; 

15 ‘‘(B) conduct and support systematic re16 views of clinical research, including original re17 search conducted subsequent to the date of the 

18 enactment of this section; 

19 ‘‘(C) continuously develop rigorous sci20 entific methodologies for conducting compara21 tive effectiveness studies, and use such meth22 odologies appropriately; 

23 ‘‘(D) submit to the Comparative Effective24 ness Research Commission, the Secretary, and 


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1 Congress appropriate relevant reports described 

2 in subsection (d)(2); and 

3 ‘‘(E) encourage, as appropriate, the devel4 opment and use of clinical registries and the de5 velopment of clinical effectiveness research data 

6 networks from electronic health records, post 

7 marketing drug and medical device surveillance 

8 efforts, and other forms of electronic health 

9 data. 

10 ‘‘(3) POWERS.— 

11 ‘‘(A) OBTAINING OFFICIAL DATA.—The 

12 Center may secure directly from any depart13 ment or agency of the United States informa14 tion necessary to enable it to carry out this sec15 tion. Upon request of the Center, the head of 

16 that department or agency shall furnish that in17 formation to the Center on an agreed upon 

18 schedule. 

19 ‘‘(B) DATA COLLECTION.—In order to 

20 carry out its functions, the Center shall— 

21 ‘‘(i) utilize existing information, both 

22 published and unpublished, where possible, 

23 collected and assessed either by its own 

24 staff or under other arrangements made in 

25 accordance with this section, 


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1 ‘‘(ii) carry out, or award grants or 

2 contracts for, original research and experi3 mentation, where existing information is 

4 inadequate, and 

5 ‘‘(iii) adopt procedures allowing any 

6 interested party to submit information for 

7 the use by the Center and Commission 

8 under subsection (b) in making reports 

9 and recommendations. 

10 ‘‘(C) ACCESS OF GAO TO INFORMATION.— 

11 The Comptroller General shall have unrestricted 

12 access to all deliberations, records, and non13 proprietary data of the Center and Commission 

14 under subsection (b), immediately upon request. 

15 ‘‘(D) PERIODIC AUDIT.—The Center and 

16 Commission under subsection (b) shall be sub17 ject to periodic audit by the Comptroller Gen18 eral. 

19 ‘‘(b) OVERSIGHT BY COMPARATIVE EFFECTIVENESS

20 RESEARCH COMMISSION.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall estab22 lish an independent Comparative Effectiveness Re23 search Commission (in this section referred to as the 

24 ‘Commission’) to oversee and evaluate the activities 

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1 ject to the authority of the Secretary, to ensure such 

2 activities result in highly credible research and infor3 mation resulting from such research. 

4 ‘‘(2) DUTIES.—The Commission shall— 

5 ‘‘(A) determine national priorities for re6 search described in subsection (a) and in mak7 ing such determinations consult with a broad 

8 array of public and private stakeholders, includ9 ing patients and health care providers and pay10 ers; 

11 ‘‘(B) monitor the appropriateness of use of 

12 the CERTF described in subsection (g) with re13 spect to the timely production of comparative 

14 effectiveness research determined to be a na15 tional priority under subparagraph (A); 

16 ‘‘(C) identify highly credible research 

17 methods and standards of evidence for such re18 search to be considered by the Center; 

19 ‘‘(D) review the methodologies developed 

20 by the center under subsection (a)(2)(C); 

21 ‘‘(E) not later than one year after the date 

22 of the enactment of this section, enter into an 

23 arrangement under which the Institute of Medi24 cine of the National Academy of Sciences shall 


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1 conduct an evaluation and report on standards 

2 of evidence for such research; 

3 ‘‘(F) support forums to increase stake4 holder awareness and permit stakeholder feed5 back on the efforts of the Center to advance 

6 methods and standards that promote highly 

7 credible research; 

8 ‘‘(G) make recommendations for policies 

9 that would allow for public access of data pro10 duced under this section, in accordance with ap11 propriate privacy and proprietary practices, 

12 while ensuring that the information produced 

13 through such data is timely and credible; 

14 ‘‘(H) appoint a clinical perspective advisory 

15 panel for each research priority determined 

16 under subparagraph (A), which shall consult 

17 with patients and advise the Center on research 

18 questions, methods, and evidence gaps in terms 

19 of clinical outcomes for the specific research in20 quiry to be examined with respect to such pri21 ority to ensure that the information produced 

22 from such research is clinically relevant to deci23 sions made by clinicians and patients at the 

24 point of care; 


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1 ‘‘(I) make recommendations for the pri2 ority for periodic reviews of previous compara3 tive effectiveness research and studies con4 ducted by the Center under subsection (a); 

5 ‘‘(J) routinely review processes of the Cen6 ter with respect to such research to confirm 

7 that the information produced by such research 

8 is objective, credible, consistent with standards 

9 of evidence established under this section, and 

10 developed through a transparent process that 

11 includes consultations with appropriate stake12 holders; and 

13 ‘‘(K) make recommendations to the center 

14 for the broad dissemination of the findings of 

15 research conducted and supported under this 

16 section that enables clinicians, patients, con17 sumers, and payers to make more informed 

18 health care decisions that improve quality and 

19 value. 

20 ‘‘(3) COMPOSITION OF COMMISSION.— 

21 ‘‘(A) IN GENERAL.—The members of the 

22 Commission shall consist of— 

23 ‘‘(i) the Director of the Agency for 

24 Healthcare Research and Quality; 


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1 ‘‘(ii) the Chief Medical Officer of the 

2 Centers for Medicare & Medicaid Services; 

3 and 

4 ‘‘(iii) 15 additional members who shall 

5 represent broad constituencies of stake6 holders including clinicians, patients, re7 searchers, third-party payers, consumers of 

8 Federal and State beneficiary programs. 

9 Of such members, at least 9 shall be practicing 

10 physicians, health care practitioners, con11 sumers, or patients. 

12 ‘‘(B) QUALIFICATIONS.— 

13 ‘‘(i) DIVERSE REPRESENTATION OF

14 PERSPECTIVES.—The members of the 

15 Commission shall represent a broad range 

16 of perspectives and shall collectively have 

17 experience in the following areas: 

18 ‘‘(I) Epidemiology. 

19 ‘‘(II) Health services research. 

20 ‘‘(III) Bioethics. 

21 ‘‘(IV) Decision sciences. 

22 ‘‘(V) Health disparities. 

23 ‘‘(VI) Economics. 

24 ‘‘(ii) DIVERSE REPRESENTATION OF

25 HEALTH CARE COMMUNITY.—At least one 


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1 member shall represent each of the fol2 lowing health care communities: 

3 ‘‘(I) Patients. 

4 ‘‘(II) Health care consumers. 

5 ‘‘(III) Practicing Physicians, in6 cluding surgeons. 

7 ‘‘(IV) Other health care practi8 tioners engaged in clinical care. 

9 ‘‘(V) Employers. 

10 ‘‘(VI) Public payers. 

11 ‘‘(VII) Insurance plans. 

12 ‘‘(VIII) Clinical researchers who 

13 conduct research on behalf of pharma14 ceutical or device manufacturers. 

15 ‘‘(C) LIMITATION.—No more than 3 of the 

16 Members of the Commission may be representa17 tives of pharmaceutical or device manufacturers 

18 and such representatives shall be clinical re19 searchers described under subparagraph 

20 (B)(ii)(VIII). 

21 ‘‘(4) APPOINTMENT.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 appoint the members of the Commission. 

24 ‘‘(B) CONSULTATION.—In considering can25 didates for appointment to the Commission, the 


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1 Secretary may consult with the Government Ac2 countability Office and the Institute of Medicine 

3 of the National Academy of Sciences. 

4 ‘‘(5) CHAIRMAN; VICE CHAIRMAN.—The Sec5 retary shall designate a member of the Commission, 

6 at the time of appointment of the member, as Chair7 man and a member as Vice Chairman for that term 

8 of appointment, except that in the case of vacancy 

9 of the Chairmanship or Vice Chairmanship, the Sec10 retary may designate another member for the re11 mainder of that member’s term. The Chairman shall 

12 serve as an ex officio member of the National Advi13 sory Council of the Agency for Health Care Re14 search and Quality under section 931(c)(3)(B) of 

15 the Public Health Service Act. 

16 ‘‘(6) TERMS.— 

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

18 subparagraph (B), each member of the Com19 mission shall be appointed for a term of 4 

20 years. 

21 ‘‘(B) TERMS OF INITIAL APPOINTEES.—Of 

22 the members first appointed— 

23 ‘‘(i) 8 shall be appointed for a term of 

24 4 years; and 


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1 ‘‘(ii) 7 shall be appointed for a term 

2 of 3 years. 

3 ‘‘(7) COORDINATION.—To enhance effectiveness 

4 and coordination, the Secretary is encouraged, to the 

5 greatest extent possible, to seek coordination be6 tween the Commission and the National Advisory 

7 Council of the Agency for Healthcare Research and 

8 Quality. 

9 ‘‘(8) CONFLICTS OF INTEREST.— 

10 ‘‘(A) IN GENERAL.—In appointing the 

11 members of the Commission or a clinical per12 spective advisory panel described in paragraph 

13 (2)(H), the Secretary or the Commission, re14 spectively, shall take into consideration any fi15 nancial interest (as defined in subparagraph 

16 (D)), consistent with this paragraph, and de17 velop a plan for managing any identified con18 flicts. 

19 ‘‘(B) EVALUATION AND CRITERIA.—When 

20 considering an appointment to the Commission 

21 or a clinical perspective advisory panel de22 scribed paragraph (2)(H) the Secretary or the 

23 Commission shall review the expertise of the in24 dividual and the financial disclosure report filed 

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1 ernment Act of 1978 for each individual under 

2 consideration for the appointment, so as to re3 duce the likelihood that an appointed individual 

4 will later require a written determination as re5 ferred to in section 208(b)(1) of title 18, United 

6 States Code, a written certification as referred 

7 to in section 208(b)(3) of title 18, United 

8 States Code, or a waiver as referred to in sub9 paragraph (D)(iii) for service on the Commis10 sion at a meeting of the Commission. 

11 ‘‘(C) DISCLOSURES; PROHIBITIONS ON

12 PARTICIPATION; WAIVERS.— 

13 ‘‘(i) DISCLOSURE OF FINANCIAL IN14 TEREST.—Prior to a meeting of the Com15 mission or a clinical perspective advisory 

16 panel described in paragraph (2)(H) re17 garding a ‘particular matter’ (as that term 

18 is used in section 208 of title 18, United 

19 States Code), each member of the Commis20 sion or the clinical perspective advisory 

21 panel who is a full-time Government em22 ployee or special Government employee 

23 shall disclose to the Secretary financial in24 terests in accordance with subsection (b) of 

25 such section 208. 


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1 ‘‘(ii) PROHIBITIONS ON PARTICIPA2 TION.—Except as provided under clause 

3 (iii), a member of the Commission or a 

4 clinical perspective advisory panel de5 scribed in paragraph (2)(H) may not par6 ticipate with respect to a particular matter 

7 considered in meeting of the Commission 

8 or the clinical perspective advisory panel if 

9 such member (or an immediate family 

10 member of such member) has a financial 

11 interest that could be affected by the ad12 vice given to the Secretary with respect to 

13 such matter, excluding interests exempted 

14 in regulations issued by the Director of the 

15 Office of Government Ethics as too remote 

16 or inconsequential to affect the integrity of 

17 the services of the Government officers or 

18 employees to which such regulations apply. 

19 ‘‘(iii) WAIVER.—If the Secretary de20 termines it necessary to afford the Com21 mission or a clinical perspective advisory 

22 panel described in paragraph 2(H) essen23 tial expertise, the Secretary may grant a 

24 waiver of the prohibition in clause (ii) to 


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1 permit a member described in such sub2 paragraph to— 

3 ‘‘(I) participate as a non-voting 

4 member with respect to a particular 

5 matter considered in a Commission or 

6 a clinical perspective advisory panel 

7 meeting; or 

8 ‘‘(II) participate as a voting 

9 member with respect to a particular 

10 matter considered in a Commission or 

11 a clinical perspective advisory panel 

12 meeting. 

13 ‘‘(iv) LIMITATION ON WAIVERS AND

14 OTHER EXCEPTIONS.— 

15 ‘‘(I) DETERMINATION OF ALLOW16 ABLE EXCEPTIONS FOR THE COMMIS17 SION.—The number of waivers grant18 ed to members of the Commission 

19 cannot exceed one-half of the total 

20 number of members for the Commis21 sion. 

22 ‘‘(II) PROHIBITION ON VOTING

23 STATUS ON CLINICAL PERSPECTIVE

24 ADVISORY PANELS.—No voting mem25 ber of any clinical perspective advisory 


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1 panel shall be in receipt of a waiver. 

2 No more than two nonvoting members 

3 of any clinical perspective advisory 

4 panel shall receive a waiver. 

5 ‘‘(D) FINANCIAL INTEREST DEFINED.— 

6 For purposes of this paragraph, the term ‘fi7 nancial interest’ means a financial interest 

8 under section 208(a) of title 18, United States 

9 Code. 

10 ‘‘(9) COMPENSATION.—While serving on the 

11 business of the Commission (including travel time), 

12 a member of the Commission shall be entitled to 

13 compensation at the per diem equivalent of the rate 

14 provided for level IV of the Executive Schedule 

15 under section 5315 of title 5, United States Code; 

16 and while so serving away from home and the mem17 ber’s regular place of business, a member may be al18 lowed travel expenses, as authorized by the Director 

19 of the Commission. 

20 ‘‘(10) AVAILABILITY OF REPORTS.—The Com21 mission shall transmit to the Secretary a copy of 

22 each report submitted under this subsection and 

23 shall make such reports available to the public. 

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

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1 retary deems necessary to assure the efficient ad2 ministration of the Commission, the Commission 

3 may— 

4 ‘‘(A) appoint an Executive Director (sub5 ject to the approval of the Secretary) and such 

6 other personnel as Federal employees under 

7 section 2105 of title 5, United States Code, as 

8 may be necessary to carry out its duties (with9 out regard to the provisions of title 5, United 

10 States Code, governing appointments in the 

11 competitive service); 

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

13 may be required in the performance of its du14 ties from appropriate Federal departments and 

15 agencies; 

16 ‘‘(C) enter into contracts or make other ar17 rangements, as may be necessary for the con18 duct of the work of the Commission (without 

19 regard to section 3709 of the Revised Statutes 

20 (41 U.S.C. 5)); 

21 ‘‘(D) make advance, progress, and other 

22 payments which relate to the work of the Com23 mission; 


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1 ‘‘(E) provide transportation and subsist2 ence for persons serving without compensation; 

3 and 

4 ‘‘(F) prescribe such rules and regulations 

5 as it deems necessary with respect to the inter6 nal organization and operation of the Commis7 sion. 

8 ‘‘(c) RESEARCH REQUIREMENTS.—Any research con9 ducted, supported, or synthesized under this section shall 

10 meet the following requirements: 

11 ‘‘(1) ENSURING TRANSPARENCY, CREDIBILITY, 

12 AND ACCESS.— 

13 ‘‘(A) The establishment of the agenda and 

14 conduct of the research shall be insulated from 

15 inappropriate political or stakeholder influence. 

16 ‘‘(B) Methods of conducting such research 

17 shall be scientifically based. 

18 ‘‘(C) All aspects of the prioritization of re19 search, conduct of the research, and develop20 ment of conclusions based on the research shall 

21 be transparent to all stakeholders. 

22 ‘‘(D) The process and methods for con23 ducting such research shall be publicly docu24 mented and available to all stakeholders. 


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1 ‘‘(E) Throughout the process of such re2 search, the Center shall provide opportunities 

3 for all stakeholders involved to review and pro4 vide public comment on the methods and find5 ings of such research. 

6 ‘‘(2) USE OF CLINICAL PERSPECTIVE ADVISORY

7 PANELS.—The research shall meet a national re8 search priority determined under subsection 

9 (b)(2)(A) and shall consider advice given to the Cen10 ter by the clinical perspective advisory panel for the 

11 national research priority. 

12 ‘‘(3) STAKEHOLDER INPUT.— 

13 ‘‘(A) IN GENERAL.—The Commission shall 

14 consult with patients, health care providers, 

15 health care consumer representatives, and other 

16 appropriate stakeholders with an interest in the 

17 research through a transparent process rec18 ommended by the Commission. 

19 ‘‘(B) SPECIFIC AREAS OF CONSULTA20 TION.—Consultation shall include where 

21 deemed appropriate by the Commission— 

22 ‘‘(i) recommending research priorities 

23 and questions; 

24 ‘‘(ii) recommending research meth25 odologies; and 


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1 ‘‘(iii) advising on and assisting with 

2 efforts to disseminate research findings. 

3 ‘‘(C) OMBUDSMAN.—The Secretary shall 

4 designate a patient ombudsman. The ombuds5 man shall— 

6 ‘‘(i) serve as an available point of con7 tact for any patients with an interest in 

8 proposed comparative effectiveness studies 

9 by the Center; and 

10 ‘‘(ii) ensure that any comments from 

11 patients regarding proposed comparative 

12 effectiveness studies are reviewed by the 

13 Commission. 

14 ‘‘(4) TAKING INTO ACCOUNT POTENTIAL DIF15 FERENCES.—Research shall— 

16 ‘‘(A) be designed, as appropriate, to take 

17 into account the potential for differences in the 

18 effectiveness of health care items and services 

19 used with various subpopulations such as racial 

20 and ethnic minorities, women, different age 

21 groups (including children, adolescents, adults, 

22 and seniors), and individuals with different 

23 comorbidities; and— 


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1 ‘‘(B) seek, as feasible and appropriate, to 

2 include members of such subpopulations as sub3 jects in the research. 

4 ‘‘(d) PUBLIC ACCESS TO COMPARATIVE EFFECTIVE5 NESS INFORMATION.— 

6 ‘‘(1) IN GENERAL.—Not later than 90 days 

7 after receipt by the Center or Commission, as appli8 cable, of a relevant report described in paragraph 

9 (2) made by the Center, Commission, or clinical per10 spective advisory panel under this section, appro11 priate information contained in such report shall be 

12 posted on the official public Internet site of the Cen13 ter and of the Commission, as applicable. 

14 ‘‘(2) RELEVANT REPORTS DESCRIBED.—For 

15 purposes of this section, a relevant report is each of 

16 the following submitted by the Center or a grantee 

17 or contractor of the Center: 

18 ‘‘(A) Any interim or progress reports as 

19 deemed appropriate by the Secretary. 

20 ‘‘(B) Stakeholder comments. 

21 ‘‘(C) A final report. 

22 ‘‘(e) DISSEMINATION AND INCORPORATION OF COM23 PARATIVE EFFECTIVENESS INFORMATION.— 

24 ‘‘(1) DISSEMINATION.—The Center shall pro25 vide for the dissemination of appropriate findings 


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1 produced by research supported, conducted, or syn2 thesized under this section to health care providers, 

3 patients, vendors of health information technology 

4 focused on clinical decision support, appropriate pro5 fessional associations, and Federal and private 

6 health plans, and other relevant stakeholders. In dis7 seminating such findings the Center shall— 

8 ‘‘(A) convey findings of research so that 

9 they are comprehensible and useful to patients 

10 and providers in making health care decisions; 

11 ‘‘(B) discuss findings and other consider12 ations specific to certain sub-populations, risk 

13 factors, and comorbidities as appropriate; 

14 ‘‘(C) include considerations such as limita15 tions of research and what further research 

16 may be needed, as appropriate; 

17 ‘‘(D) not include any data that the dis18 semination of which would violate the privacy of 

19 research participants or violate any confiden20 tiality agreements made with respect to the use 

21 of data under this section; and 

22 ‘‘(E) assist the users of health information 

23 technology focused on clinical decision support 

24 to promote the timely incorporation of such 


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1 findings into clinical practices and promote the 

2 ease of use of such incorporation. 

3 ‘‘(2) DISSEMINATION PROTOCOLS AND STRATE4 GIES.—The Center shall develop protocols and strat5 egies for the appropriate dissemination of research 

6 findings in order to ensure effective communication 

7 of findings and the use and incorporation of such 

8 findings into relevant activities for the purpose of in9 forming higher quality and more effective and effi10 cient decisions regarding medical items and services. 

11 In developing and adopting such protocols and strat12 egies, the Center shall consult with stakeholders con13 cerning the types of dissemination that will be most 

14 useful to the end users of information and may pro15 vide for the utilization of multiple formats for con16 veying findings to different audiences, including dis17 semination to individuals with limited English pro18 ficiency. 

19 ‘‘(f) REPORTS TO CONGRESS.— 

20 ‘‘(1) ANNUAL REPORTS.—Beginning not later 

21 than one year after the date of the enactment of this 

22 section, the Director of the Agency of Healthcare 

23 Research and Quality and the Commission shall sub24 mit to Congress an annual report on the activities 

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1 search, conducted under this section. Each such re2 port shall include a discussion of the Center’s com3 pliance with subsection (c)(4)(B), including any rea4 sons for lack of compliance with such subsection. 

5 ‘‘(2) RECOMMENDATION FOR FAIR SHARE PER

6 CAPITA AMOUNT FOR ALL-PAYER FINANCING.—Be7 ginning not later than December 31, 2011, the Sec8 retary shall submit to Congress an annual rec9 ommendation for a fair share per capita amount de10 scribed in subsection (c)(1) of section 9511 of the 

11 Internal Revenue Code of 1986 for purposes of 

12 funding the CERTF under such section. 

13 ‘‘(3) ANALYSIS AND REVIEW.—Not later than 

14 December 31, 2013, the Secretary, in consultation 

15 with the Commission, shall submit to Congress a re16 port on all activities conducted or supported under 

17 this section as of such date. Such report shall in18 clude an evaluation of the overall costs of such ac19 tivities and an analysis of the backlog of any re20 search proposals approved by the Commission but 

21 not funded. 

22 ‘‘(g) FUNDING OF COMPARATIVE EFFECTIVENESS

23 RESEARCH.—For fiscal year 2010 and each subsequent 

24 fiscal year, amounts in the Comparative Effectiveness Re25 search Trust Fund (referred to in this section as the 


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1 ‘CERTF’) under section 9511 of the Internal Revenue 

2 Code of 1986 shall be available, without the need for fur3 ther appropriations and without fiscal year limitation, to 

4 the Secretary to carry out this section. 

5 ‘‘(h) CONSTRUCTION.—Nothing in this section shall 

6 be construed to permit the Commission or the Center to 

7 mandate coverage, reimbursement, or other policies for 

8 any public or private payer.’’. 

9 (b) COMPARATIVE EFFECTIVENESS RESEARCH

10 TRUST FUND; FINANCING FOR THE TRUST FUND.—For 

11 provision establishing a Comparative Effectiveness Re12 search Trust Fund and financing such Trust Fund, see 

13 section 1802. 

14 Subtitle B—Nursing Home 

15 Transparency 

16 PART 1—IMPROVING TRANSPARENCY OF INFOR17 MATION ON SKILLED NURSING FACILITIES 

18 AND NURSING FACILITIES 

19 SEC. 1411. REQUIRED DISCLOSURE OF OWNERSHIP AND 

20 ADDITIONAL DISCLOSABLE PARTIES INFOR21 MATION. 

22 (a) IN GENERAL.—Section 1124 of the Social Secu23 rity Act (42 U.S.C. 1320a–3) is amended by adding at 

24 the end the following new subsection: 


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1 ‘‘(c) REQUIRED DISCLOSURE OF OWNERSHIP AND

2 ADDITIONAL DISCLOSABLE PARTIES INFORMATION.— 

3 ‘‘(1) DISCLOSURE.—A facility (as defined in 

4 paragraph (7)(B)) shall have the information de5 scribed in paragraph (3) available— 

6 ‘‘(A) during the period beginning on the 

7 date of the enactment of this subsection and 

8 ending on the date such information is made 

9 available to the public under section 1411(b) of 

10 the America’s Affordable Health Choices Act of 

11 2009, for submission to the Secretary, the In12 spector General of the Department of Health 

13 and Human Services, the State in which the fa14 cility is located, and the State long-term care 

15 ombudsman in the case where the Secretary, 

16 the Inspector General, the State, or the State 

17 long-term care ombudsman requests such infor18 mation; and 

19 ‘‘(B) beginning on the effective date of the 

20 final regulations promulgated under paragraph 

21 (4)(A), for reporting such information in ac22 cordance with such final regulations. 

23 Nothing in subparagraph (A) shall be construed as 

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1 tive date of the final regulations promulgated under 

2 paragraph (4)(A). 

3 ‘‘(2) PUBLIC AVAILABILITY OF INFORMATION.— 

4 During the period described in paragraph (1)(A), a 

5 facility shall— 

6 ‘‘(A) make the information described in 

7 paragraph (3) available to the public upon re8 quest and update such information as may be 

9 necessary to reflect changes in such informa10 tion; and 

11 ‘‘(B) post a notice of the availability of 

12 such information in the lobby of the facility in 

13 a prominent manner. 

14 ‘‘(3) INFORMATION DESCRIBED.— 

15 ‘‘(A) IN GENERAL.—The following infor16 mation is described in this paragraph: 

17 ‘‘(i) The information described in sub18 sections (a) and (b), subject to subpara19 graph (C). 

20 ‘‘(ii) The identity of and information 

21 on— 

22 ‘‘(I) each member of the gov23 erning body of the facility, including 

24 the name, title, and period of service 

25 of each such member; 


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1 ‘‘(II) each person or entity who is 

2 an officer, director, member, partner, 

3 trustee, or managing employee of the 

4 facility, including the name, title, and 

5 date of start of service of each such 

6 person or entity; and 

7 ‘‘(III) each person or entity who 

8 is an additional disclosable party of 

9 the facility. 

10 ‘‘(iii) The organizational structure of 

11 each person and entity described in sub12 clauses (II) and (III) of clause (ii) and a 

13 description of the relationship of each such 

14 person or entity to the facility and to one 

15 another. 

16 ‘‘(B) SPECIAL RULE WHERE INFORMATION

17 IS ALREADY REPORTED OR SUBMITTED.—To 

18 the extent that information reported by a facil19 ity to the Internal Revenue Service on Form 

20 990, information submitted by a facility to the 

21 Securities and Exchange Commission, or infor22 mation otherwise submitted to the Secretary or 

23 any other Federal agency contains the informa24 tion described in clauses (i), (ii), or (iii) of sub25 paragraph (A), the Secretary may allow, to the 


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1 extent practicable, such Form or such informa2 tion to meet the requirements of paragraph (1) 

3 and to be submitted in a manner specified by 

4 the Secretary. 

5 ‘‘(C) SPECIAL RULE.—In applying sub6 paragraph (A)(i)— 

7 ‘‘(i) with respect to subsections (a) 

8 and (b), ‘ownership or control interest’ 

9 shall include direct or indirect interests, in10 cluding such interests in intermediate enti11 ties; and 

12 ‘‘(ii) subsection (a)(3)(A)(ii) shall in13 clude the owner of a whole or part interest 

14 in any mortgage, deed of trust, note, or 

15 other obligation secured, in whole or in 

16 part, by the entity or any of the property 

17 or assets thereof, if the interest is equal to 

18 or exceeds 5 percent of the total property 

19 or assets of the entirety. 

20 ‘‘(4) REPORTING.— 

21 ‘‘(A) IN GENERAL.—Not later than the 

22 date that is 2 years after the date of the enact23 ment of this subsection, the Secretary shall pro24 mulgate regulations requiring, effective on the 

25 date that is 90 days after the date on which 


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1 such final regulations are published in the Fed2 eral Register, a facility to report the informa3 tion described in paragraph (3) to the Secretary 

4 in a standardized format, and such other regu5 lations as are necessary to carry out this sub6 section. Such final regulations shall ensure that 

7 the facility certifies, as a condition of participa8 tion and payment under the program under 

9 title XVIII or XIX, that the information re10 ported by the facility in accordance with such 

11 final regulations is accurate and current. 

12 ‘‘(B) GUIDANCE.—The Secretary shall pro13 vide guidance and technical assistance to States 

14 on how to adopt the standardized format under 

15 subparagraph (A). 

16 ‘‘(5) NO EFFECT ON EXISTING REPORTING RE17 QUIREMENTS.—Nothing in this subsection shall re18 duce, diminish, or alter any reporting requirement 

19 for a facility that is in effect as of the date of the 

20 enactment of this subsection. 

21 ‘‘(6) DEFINITIONS.—In this subsection: 

22 ‘‘(A) ADDITIONAL DISCLOSABLE PARTY.— 

23 The term ‘additional disclosable party’ means, 

24 with respect to a facility, any person or entity 

25 who— 


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1 ‘‘(i) exercises operational, financial, or 

2 managerial control over the facility or a 

3 part thereof, or provides policies or proce4 dures for any of the operations of the facil5 ity, or provides financial or cash manage6 ment services to the facility; 

7 ‘‘(ii) leases or subleases real property 

8 to the facility, or owns a whole or part in9 terest equal to or exceeding 5 percent of 

10 the total value of such real property; 

11 ‘‘(iii) lends funds or provides a finan12 cial guarantee to the facility in an amount 

13 which is equal to or exceeds $50,000; or 

14 ‘‘(iv) provides management or admin15 istrative services, clinical consulting serv16 ices, or accounting or financial services to 

17 the facility. 

18 ‘‘(B) FACILITY.—The term ‘facility’ means 

19 a disclosing entity which is— 

20 ‘‘(i) a skilled nursing facility (as de21 fined in section 1819(a)); or 

22 ‘‘(ii) a nursing facility (as defined in 

23 section 1919(a)). 

24 ‘‘(C) MANAGING EMPLOYEE.—The term 

25 ‘managing employee’ means, with respect to a 


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1 facility, an individual (including a general man2 ager, business manager, administrator, director, 

3 or consultant) who directly or indirectly man4 ages, advises, or supervises any element of the 

5 practices, finances, or operations of the facility. 

6 ‘‘(D) ORGANIZATIONAL STRUCTURE.—The 

7 term ‘organizational structure’ means, in the 

8 case of— 

9 ‘‘(i) a corporation, the officers, direc10 tors, and shareholders of the corporation 

11 who have an ownership interest in the cor12 poration which is equal to or exceeds 5 

13 percent; 

14 ‘‘(ii) a limited liability company, the 

15 members and managers of the limited li16 ability company (including, as applicable, 

17 what percentage each member and man18 ager has of the ownership interest in the 

19 limited liability company); 

20 ‘‘(iii) a general partnership, the part21 ners of the general partnership; 

22 ‘‘(iv) a limited partnership, the gen23 eral partners and any limited partners of 

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1 ership interest in the limited partnership 

2 which is equal to or exceeds 10 percent; 

3 ‘‘(v) a trust, the trustees of the trust; 

4 ‘‘(vi) an individual, contact informa5 tion for the individual; and 

6 ‘‘(vii) any other person or entity, such 

7 information as the Secretary determines 

8 appropriate.’’. 

9 (b) PUBLIC AVAILABILITY OF INFORMATION.— 

10 (1) IN GENERAL.—Not later than the date that 

11 is 1 year after the date on which the final regula12 tions promulgated under section 1124(c)(4)(A) of 

13 the Social Security Act, as added by subsection (a), 

14 are published in the Federal Register, the informa15 tion reported in accordance with such final regula16 tions shall be made available to the public in accord17 ance with procedures established by the Secretary. 

18 (2) DEFINITIONS.—In this subsection: 

19 (A) NURSING FACILITY.—The term ‘‘nurs20 ing facility’’ has the meaning given such term 

21 in section 1919(a) of the Social Security Act 

22 (42 U.S.C. 1396r(a)). 

23 (B) SECRETARY.—The term ‘‘Secretary’’ 

24 means the Secretary of Health and Human 

25 Services. 


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1 (C) SKILLED NURSING FACILITY.—The 

2 term ‘‘skilled nursing facility’’ has the meaning 

3 given such term in section 1819(a) of the Social 

4 Security Act (42 U.S.C. 1395i–3(a)). 

5 (c) CONFORMING AMENDMENTS.— 

6 (1) SKILLED NURSING FACILITIES.—Section 

7 1819(d)(1) of the Social Security Act (42 U.S.C. 

8 1395i–3(d)(1)) is amended by striking subparagraph 

9 (B) and redesignating subparagraph (C) as subpara10 graph (B). 

11 (2) NURSING FACILITIES.—Section 1919(d)(1) 

12 of the Social Security Act (42 U.S.C. 1396r(d)(1)) 

13 is amended by striking subparagraph (B) and redes14 ignating subparagraph (C) as subparagraph (B). 

15 SEC. 1412. ACCOUNTABILITY REQUIREMENTS. 

16 (a) EFFECTIVE COMPLIANCE AND ETHICS PRO17 GRAMS.— 

18 (1) SKILLED NURSING FACILITIES.—Section 

19 1819(d)(1) of the Social Security Act (42 U.S.C. 

20 1395i–3(d)(1)), as amended by section 1411(c)(1), 

21 is amended by adding at the end the following new 

22 subparagraph: 

23 ‘‘(C) COMPLIANCE AND ETHICS PRO24 GRAMS.— 


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1 ‘‘(i) REQUIREMENT.—On or after the 

2 date that is 36 months after the date of 

3 the enactment of this subparagraph, a 

4 skilled nursing facility shall, with respect 

5 to the entity that operates the facility (in 

6 this subparagraph referred to as the ‘oper7 ating organization’ or ‘organization’), have 

8 in operation a compliance and ethics pro9 gram that is effective in preventing and de10 tecting criminal, civil, and administrative 

11 violations under this Act and in promoting 

12 quality of care consistent with regulations 

13 developed under clause (ii). 

14 ‘‘(ii) DEVELOPMENT OF REGULA15 TIONS.— 

16 ‘‘(I) IN GENERAL.—Not later 

17 than the date that is 2 years after 

18 such date of the enactment, the Sec19 retary, in consultation with the In20 spector General of the Department of 

21 Health and Human Services, shall 

22 promulgate regulations for an effec23 tive compliance and ethics program 

24 for operating organizations, which 


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1 may include a model compliance pro2 gram. 

3 ‘‘(II) DESIGN OF REGULA4 TIONS.—Such regulations with respect 

5 to specific elements or formality of a 

6 program may vary with the size of the 

7 organization, such that larger organi8 zations should have a more formal 

9 and rigorous program and include es10 tablished written policies defining the 

11 standards and procedures to be fol12 lowed by its employees. Such require13 ments shall specifically apply to the 

14 corporate level management of multi15 unit nursing home chains. 

16 ‘‘(III) EVALUATION.—Not later 

17 than 3 years after the date of promul18 gation of regulations under this 

19 clause, the Secretary shall complete 

20 an evaluation of the compliance and 

21 ethics programs required to be estab22 lished under this subparagraph. Such 

23 evaluation shall determine if such pro24 grams led to changes in deficiency ci25 tations, changes in quality performVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00546 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ance, or changes in other metrics of 

2 resident quality of care. The Secretary 

3 shall submit to Congress a report on 

4 such evaluation and shall include in 

5 such report such recommendations re6 garding changes in the requirements 

7 for such programs as the Secretary 

8 determines appropriate. 

9 ‘‘(iii) REQUIREMENTS FOR COMPLI10 ANCE AND ETHICS PROGRAMS.—In this 

11 subparagraph, the term ‘compliance and 

12 ethics program’ means, with respect to a 

13 skilled nursing facility, a program of the 

14 operating organization that— 

15 ‘‘(I) has been reasonably de16 signed, implemented, and enforced so 

17 that it generally will be effective in 

18 preventing and detecting criminal, 

19 civil, and administrative violations 

20 under this Act and in promoting qual21 ity of care; and 

22 ‘‘(II) includes at least the re23 quired components specified in clause 

24 (iv). 


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1 ‘‘(iv) REQUIRED COMPONENTS OF

2 PROGRAM.—The required components of a 

3 compliance and ethics program of an orga4 nization are the following: 

5 ‘‘(I) The organization must have 

6 established compliance standards and 

7 procedures to be followed by its em8 ployees, contractors, and other agents 

9 that are reasonably capable of reduc10 ing the prospect of criminal, civil, and 

11 administrative violations under this 

12 Act. 

13 ‘‘(II) Specific individuals within 

14 high-level personnel of the organiza15 tion must have been assigned overall 

16 responsibility to oversee compliance 

17 with such standards and procedures 

18 and have sufficient resources and au19 thority to assure such compliance. 

20 ‘‘(III) The organization must 

21 have used due care not to delegate 

22 substantial discretionary authority to 

23 individuals whom the organization 

24 knew, or should have known through 

25 the exercise of due diligence, had a 


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1 propensity to engage in criminal, civil, 

2 and administrative violations under 

3 this Act. 

4 ‘‘(IV) The organization must 

5 have taken steps to communicate ef6 fectively its standards and procedures 

7 to all employees and other agents, 

8 such as by requiring participation in 

9 training programs or by disseminating 

10 publications that explain in a practical 

11 manner what is required. 

12 ‘‘(V) The organization must have 

13 taken reasonable steps to achieve com14 pliance with its standards, such as by 

15 utilizing monitoring and auditing sys16 tems reasonably designed to detect 

17 criminal, civil, and administrative vio18 lations under this Act by its employ19 ees and other agents and by having in 

20 place and publicizing a reporting sys21 tem whereby employees and other 

22 agents could report violations by oth23 ers within the organization without 

24 fear of retribution. 


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1 ‘‘(VI) The standards must have 

2 been consistently enforced through ap3 propriate disciplinary mechanisms, in4 cluding, as appropriate, discipline of 

5 individuals responsible for the failure 

6 to detect an offense. 

7 ‘‘(VII) After an offense has been 

8 detected, the organization must have 

9 taken all reasonable steps to respond 

10 appropriately to the offense and to 

11 prevent further similar offenses, in12 cluding repayment of any funds to 

13 which it was not entitled and any nec14 essary modification to its program to 

15 prevent and detect criminal, civil, and 

16 administrative violations under this 

17 Act. 

18 ‘‘(VIII) The organization must 

19 periodically undertake reassessment of 

20 its compliance program to identify 

21 changes necessary to reflect changes 

22 within the organization and its facili23 ties. 

24 ‘‘(v) COORDINATION.—The provisions 

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1 spect to a skilled nursing facility in lieu of 

2 section 1874(d).’’. 

3 (2) NURSING FACILITIES.—Section 1919(d)(1) 

4 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

5 as amended by section 1411(c)(2), is amended by 

6 adding at the end the following new subparagraph: 

7 ‘‘(C) COMPLIANCE AND ETHICS PRO8 GRAM.— 

9 ‘‘(i) REQUIREMENT.—On or after the 

10 date that is 36 months after the date of 

11 the enactment of this subparagraph, a 

12 nursing facility shall, with respect to the 

13 entity that operates the facility (in this 

14 subparagraph referred to as the ‘operating 

15 organization’ or ‘organization’), have in op16 eration a compliance and ethics program 

17 that is effective in preventing and detect18 ing criminal, civil, and administrative viola19 tions under this Act and in promoting 

20 quality of care consistent with regulations 

21 developed under clause (ii). 

22 ‘‘(ii) DEVELOPMENT OF REGULA23 TIONS.— 

24 ‘‘(I) IN GENERAL.—Not later 

25 than the date that is 2 years after 


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1 such date of the enactment, the Sec2 retary, in consultation with the In3 spector General of the Department of 

4 Health and Human Services, shall de5 velop regulations for an effective com6 pliance and ethics program for oper7 ating organizations, which may in8 clude a model compliance program. 

9 ‘‘(II) DESIGN OF REGULA10 TIONS.—Such regulations with respect 

11 to specific elements or formality of a 

12 program may vary with the size of the 

13 organization, such that larger organi14 zations should have a more formal 

15 and rigorous program and include es16 tablished written policies defining the 

17 standards and procedures to be fol18 lowed by its employees. Such require19 ments may specifically apply to the 

20 corporate level management of multi21 unit nursing home chains. 

22 ‘‘(III) EVALUATION.—Not later 

23 than 3 years after the date of promul24 gation of regulations under this clause 

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1 uation of the compliance and ethics 

2 programs required to be established 

3 under this subparagraph. Such eval4 uation shall determine if such pro5 grams led to changes in deficiency ci6 tations, changes in quality perform7 ance, or changes in other metrics of 

8 resident quality of care. The Secretary 

9 shall submit to Congress a report on 

10 such evaluation and shall include in 

11 such report such recommendations re12 garding changes in the requirements 

13 for such programs as the Secretary 

14 determines appropriate. 

15 ‘‘(iii) REQUIREMENTS FOR COMPLI16 ANCE AND ETHICS PROGRAMS.—In this 

17 subparagraph, the term ‘compliance and 

18 ethics program’ means, with respect to a 

19 nursing facility, a program of the oper20 ating organization that— 

21 ‘‘(I) has been reasonably de22 signed, implemented, and enforced so 

23 that it generally will be effective in 

24 preventing and detecting criminal, 

25 civil, and administrative violations 


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1 under this Act and in promoting qual2 ity of care; and 

3 ‘‘(II) includes at least the re4 quired components specified in clause 

5 (iv). 

6 ‘‘(iv) REQUIRED COMPONENTS OF

7 PROGRAM.—The required components of a 

8 compliance and ethics program of an orga9 nization are the following: 

10 ‘‘(I) The organization must have 

11 established compliance standards and 

12 procedures to be followed by its em13 ployees and other agents that are rea14 sonably capable of reducing the pros15 pect of criminal, civil, and administra16 tive violations under this Act. 

17 ‘‘(II) Specific individuals within 

18 high-level personnel of the organiza19 tion must have been assigned overall 

20 responsibility to oversee compliance 

21 with such standards and procedures 

22 and has sufficient resources and au23 thority to assure such compliance. 

24 ‘‘(III) The organization must 

25 have used due care not to delegate 


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1 substantial discretionary authority to 

2 individuals whom the organization 

3 knew, or should have known through 

4 the exercise of due diligence, had a 

5 propensity to engage in criminal, civil, 

6 and administrative violations under 

7 this Act. 

8 ‘‘(IV) The organization must 

9 have taken steps to communicate ef10 fectively its standards and procedures 

11 to all employees and other agents, 

12 such as by requiring participation in 

13 training programs or by disseminating 

14 publications that explain in a practical 

15 manner what is required. 

16 ‘‘(V) The organization must have 

17 taken reasonable steps to achieve com18 pliance with its standards, such as by 

19 utilizing monitoring and auditing sys20 tems reasonably designed to detect 

21 criminal, civil, and administrative vio22 lations under this Act by its employ23 ees and other agents and by having in 

24 place and publicizing a reporting sys25 tem whereby employees and other 


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1 agents could report violations by oth2 ers within the organization without 

3 fear of retribution. 

4 ‘‘(VI) The standards must have 

5 been consistently enforced through ap6 propriate disciplinary mechanisms, in7 cluding, as appropriate, discipline of 

8 individuals responsible for the failure 

9 to detect an offense. 

10 ‘‘(VII) After an offense has been 

11 detected, the organization must have 

12 taken all reasonable steps to respond 

13 appropriately to the offense and to 

14 prevent further similar offenses, in15 cluding repayment of any funds to 

16 which it was not entitled and any nec17 essary modification to its program to 

18 prevent and detect criminal, civil, and 

19 administrative violations under this 

20 Act. 

21 ‘‘(VIII) The organization must 

22 periodically undertake reassessment of 

23 its compliance program to identify 

24 changes necessary to reflect changes 


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1 within the organization and its facili2 ties. 

3 ‘‘(v) COORDINATION.—The provisions 

4 of this subparagraph shall apply with re5 spect to a nursing facility in lieu of section 

6 1902(a)(77).’’. 

7 (b) QUALITY ASSURANCE AND PERFORMANCE IM8 PROVEMENT PROGRAM.— 

9 (1) SKILLED NURSING FACILITIES.—Section 

10 1819(b)(1)(B) of the Social Security Act (42 U.S.C. 

11 1396r(b)(1)(B)) is amended— 

12 (A) by striking ‘‘ASSURANCE’’ and insert13 ing ‘‘ASSURANCE AND QUALITY ASSURANCE

14 AND PERFORMANCE IMPROVEMENT PROGRAM’’; 

15 (B) by designating the matter beginning 

16 with ‘‘A skilled nursing facility’’ as a clause (i) 

17 with the heading ‘‘IN GENERAL.—’’ and the ap18 propriate indentation; 

19 (C) in clause (i) (as so designated by sub20 paragraph (B)), by redesignating clauses (i) 

21 and (ii) as subclauses (I) and (II), respectively; 

22 and 

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

24 clause: 


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1 ‘‘(ii) QUALITY ASSURANCE AND PER2 FORMANCE IMPROVEMENT PROGRAM.— 

3 ‘‘(I) IN GENERAL.—Not later 

4 than December 31, 2011, the Sec5 retary shall establish and implement a 

6 quality assurance and performance 

7 improvement program (in this clause 

8 referred to as the ‘QAPI program’) 

9 for skilled nursing facilities, including 

10 multi-unit chains of such facilities. 

11 Under the QAPI program, the Sec12 retary shall establish standards relat13 ing to such facilities and provide tech14 nical assistance to such facilities on 

15 the development of best practices in 

16 order to meet such standards. Not 

17 later than 1 year after the date on 

18 which the regulations are promulgated 

19 under subclause (II), a skilled nursing 

20 facility must submit to the Secretary 

21 a plan for the facility to meet such 

22 standards and implement such best 

23 practices, including how to coordinate 

24 the implementation of such plan with 


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1 quality assessment and assurance ac2 tivities conducted under clause (i). 

3 ‘‘(II) REGULATIONS.—The Sec4 retary shall promulgate regulations to 

5 carry out this clause.’’. 

6 (2) NURSING FACILITIES.—Section 

7 1919(b)(1)(B) of the Social Security Act (42 U.S.C. 

8 1396r(b)(1)(B)) is amended— 

9 (A) by striking ‘‘ASSURANCE’’ and insert10 ing ‘‘ASSURANCE AND QUALITY ASSURANCE

11 AND PERFORMANCE IMPROVEMENT PROGRAM’’; 

12 (B) by designating the matter beginning 

13 with ‘‘A nursing facility’’ as a clause (i) with 

14 the heading ‘‘IN GENERAL.—’’ and the appro15 priate indentation; and 

16 (C) by adding at the end the following new 

17 clause: 

18 ‘‘(ii) QUALITY ASSURANCE AND PER19 FORMANCE IMPROVEMENT PROGRAM.— 

20 ‘‘(I) IN GENERAL.—Not later 

21 than December 31, 2011, the Sec22 retary shall establish and implement a 

23 quality assurance and performance 

24 improvement program (in this clause 

25 referred to as the ‘QAPI program’) 


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1 for nursing facilities, including multi2 unit chains of such facilities. Under 

3 the QAPI program, the Secretary 

4 shall establish standards relating to 

5 such facilities and provide technical 

6 assistance to such facilities on the de7 velopment of best practices in order to 

8 meet such standards. Not later than 1 

9 year after the date on which the regu10 lations are promulgated under sub11 clause (II), a nursing facility must 

12 submit to the Secretary a plan for the 

13 facility to meet such standards and 

14 implement such best practices, includ15 ing how to coordinate the implementa16 tion of such plan with quality assess17 ment and assurance activities con18 ducted under clause (i). 

19 ‘‘(II) REGULATIONS.—The Sec20 retary shall promulgate regulations to 

21 carry out this clause.’’. 

22 (3) PROPOSAL TO REVISE QUALITY ASSURANCE

23 AND PERFORMANCE IMPROVEMENT PROGRAMS.— 

24 The Secretary shall include in the proposed rule 

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1 rity Act (42 U.S.C. 1395yy(e)(5)(A)) for the subse2 quent fiscal year to the extent otherwise authorized 

3 under section 1819(b)(1)(B) or 1819(d)(1)(C) of the 

4 Social Security Act or other statutory or regulatory 

5 authority, one or more proposals for skilled nursing 

6 facilities to modify and strengthen quality assurance 

7 and performance improvement programs in such fa8 cilities. At the time of publication of such proposed 

9 rule and to the extent otherwise authorized under 

10 section 1919(b)(1)(B) or 1919(d)(1)(C) of such Act 

11 or other regulatory authority. 

12 (4) FACILITY PLAN.—Not later than 1 year 

13 after the date on which the regulations are promul14 gated under subclause (II) of clause (ii) of sections 

15 1819(b)(1)(B) and 1919(b)(1)(B) of the Social Se16 curity Act, as added by paragraphs (1) and (2), a 

17 skilled nursing facility and a nursing facility must 

18 submit to the Secretary a plan for the facility to 

19 meet the standards under such regulations and im20 plement such best practices, including how to coordi21 nate the implementation of such plan with quality 

22 assessment and assurance activities conducted under 

23 clause (i) of such sections. 

24 (c) GAO STUDY ON NURSING FACILITY UNDER25 CAPITALIZATION.— 


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1 (1) IN GENERAL.—The Comptroller General of 

2 the United States shall conduct a study that exam3 ines the following: 

4 (A) The extent to which corporations that 

5 own or operate large numbers of nursing facili6 ties, taking into account ownership type (includ7 ing private equity and control interests), are 

8 undercapitalizing such facilities. 

9 (B) The effects of such undercapitalization 

10 on quality of care, including staffing and food 

11 costs, at such facilities. 

12 (C) Options to address such undercapital13 ization, such as requirements relating to surety 

14 bonds, liability insurance, or minimum capital15 ization. 

16 (2) REPORT.—Not later than 18 months after 

17 the date of the enactment of this Act, the Comp18 troller General shall submit to Congress a report on 

19 the study conducted under paragraph (1). 

20 (3) NURSING FACILITY.—In this subsection, the 

21 term ‘‘nursing facility’’ includes a skilled nursing fa22 cility. 

23 SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE. 

24 (a) SKILLED NURSING FACILITIES.— 


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1 (1) IN GENERAL.—Section 1819 of the Social 

2 Security Act (42 U.S.C. 1395i–3) is amended— 

3 (A) by redesignating subsection (i) as sub4 section (j); and 

5 (B) by inserting after subsection (h) the 

6 following new subsection: 

7 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

8 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA9 TION.— 

10 ‘‘(A) IN GENERAL.—The Secretary shall 

11 ensure that the Department of Health and 

12 Human Services includes, as part of the infor13 mation provided for comparison of nursing 

14 homes on the official Internet website of the 

15 Federal Government for Medicare beneficiaries 

16 (commonly referred to as the ‘Nursing Home 

17 Compare’ Medicare website) (or a successor 

18 website), the following information in a manner 

19 that is prominent, easily accessible, readily un20 derstandable to consumers of long-term care 

21 services, and searchable: 

22 ‘‘(i) Information that is reported to 

23 the Secretary under section 1124(c)(4). 

24 ‘‘(ii) Information on the ‘Special 

25 Focus Facility program’ (or a successor 


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1 program) established by the Centers for 

2 Medicare and Medicaid Services, according 

3 to procedures established by the Secretary. 

4 Such procedures shall provide for the in5 clusion of information with respect to, and 

6 the names and locations of, those facilities 

7 that, since the previous quarter— 

8 ‘‘(I) were newly enrolled in the 

9 program; 

10 ‘‘(II) are enrolled in the program 

11 and have failed to significantly im12 prove; 

13 ‘‘(III) are enrolled in the pro14 gram and have significantly improved; 

15 ‘‘(IV) have graduated from the 

16 program; and 

17 ‘‘(V) have closed voluntarily or 

18 no longer participate under this title. 

19 ‘‘(iii) Staffing data for each facility 

20 (including resident census data and data 

21 on the hours of care provided per resident 

22 per day) based on data submitted under 

23 subsection (b)(8)(C), including information 

24 on staffing turnover and tenure, in a for25 mat that is clearly understandable to conVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00564 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sumers of long-term care services and al2 lows such consumers to compare dif3 ferences in staffing between facilities and 

4 State and national averages for the facili5 ties. Such format shall include— 

6 ‘‘(I) concise explanations of how 

7 to interpret the data (such as a plain 

8 English explanation of data reflecting 

9 ‘nursing home staff hours per resident 

10 day’); 

11 ‘‘(II) differences in types of staff 

12 (such as training associated with dif13 ferent categories of staff); 

14 ‘‘(III) the relationship between 

15 nurse staffing levels and quality of 

16 care; and 

17 ‘‘(IV) an explanation that appro18 priate staffing levels vary based on 

19 patient case mix. 

20 ‘‘(iv) Links to State Internet websites 

21 with information regarding State survey 

22 and certification programs, links to Form 

23 2567 State inspection reports (or a suc24 cessor form) on such websites, information 

25 to guide consumers in how to interpret and 


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1 understand such reports, and the facility 

2 plan of correction or other response to 

3 such report. 

4 ‘‘(v) The standardized complaint form 

5 developed under subsection (f)(8), includ6 ing explanatory material on what com7 plaint forms are, how they are used, and 

8 how to file a complaint with the State sur9 vey and certification program and the 

10 State long-term care ombudsman program. 

11 ‘‘(vi) Summary information on the 

12 number, type, severity, and outcome of 

13 substantiated complaints. 

14 ‘‘(vii) The number of adjudicated in15 stances of criminal violations by employees 

16 of a nursing facility— 

17 ‘‘(I) that were committed inside 

18 the facility; 

19 ‘‘(II) with respect to such in20 stances of violations or crimes com21 mitted inside of the facility that were 

22 the violations or crimes of abuse, ne23 glect, and exploitation, criminal sexual 

24 abuse, or other violations or crimes 


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1 that resulted in serious bodily injury; 

2 and 

3 ‘‘(III) the number of civil mone4 tary penalties levied against the facil5 ity, employees, contractors, and other 

6 agents. 

7 ‘‘(B) DEADLINE FOR PROVISION OF INFOR8 MATION.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), the Secretary shall en11 sure that the information described in sub12 paragraph (A) is included on such website 

13 (or a successor website) not later than 1 

14 year after the date of the enactment of this 

15 subsection. 

16 ‘‘(ii) EXCEPTION.—The Secretary 

17 shall ensure that the information described 

18 in subparagraph (A)(i) and (A)(iii) is in19 cluded on such website (or a successor 

20 website) not later than the date on which 

21 the requirements under section 1124(c)(4) 

22 and subsection (b)(8)(C)(ii) are imple23 mented. 

24 ‘‘(2) REVIEW AND MODIFICATION OF

25 WEBSITE.— 


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

2 establish a process— 

3 ‘‘(i) to review the accuracy, clarity of 

4 presentation, timeliness, and comprehen5 siveness of information reported on such 

6 website as of the day before the date of the 

7 enactment of this subsection; and 

8 ‘‘(ii) not later than 1 year after the 

9 date of the enactment of this subsection, to 

10 modify or revamp such website in accord11 ance with the review conducted under 

12 clause (i). 

13 ‘‘(B) CONSULTATION.—In conducting the 

14 review under subparagraph (A)(i), the Sec15 retary shall consult with— 

16 ‘‘(i) State long-term care ombudsman 

17 programs; 

18 ‘‘(ii) consumer advocacy groups; 

19 ‘‘(iii) provider stakeholder groups; and 

20 ‘‘(iv) any other representatives of pro21 grams or groups the Secretary determines 

22 appropriate.’’. 

23 (2) TIMELINESS OF SUBMISSION OF SURVEY

24 AND CERTIFICATION INFORMATION.— 


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1 (A) IN GENERAL.—Section 1819(g)(5) of 

2 the Social Security Act (42 U.S.C. 1395i– 

3 3(g)(5)) is amended by adding at the end the 

4 following new subparagraph: 

5 ‘‘(E) SUBMISSION OF SURVEY AND CER6 TIFICATION INFORMATION TO THE SEC7 RETARY.—In order to improve the timeliness of 

8 information made available to the public under 

9 subparagraph (A) and provided on the Nursing 

10 Home Compare Medicare website under sub11 section (i), each State shall submit information 

12 respecting any survey or certification made re13 specting a skilled nursing facility (including any 

14 enforcement actions taken by the State) to the 

15 Secretary not later than the date on which the 

16 State sends such information to the facility. 

17 The Secretary shall use the information sub18 mitted under the preceding sentence to update 

19 the information provided on the Nursing Home 

20 Compare Medicare website as expeditiously as 

21 practicable but not less frequently than quar22 terly.’’. 

23 (B) EFFECTIVE DATE.—The amendment 

24 made by this paragraph shall take effect 1 year 

25 after the date of the enactment of this Act. 


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1 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec2 tion 1819(f) of such Act is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(8) SPECIAL FOCUS FACILITY PROGRAM.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 conduct a special focus facility program for en7 forcement of requirements for skilled nursing 

8 facilities that the Secretary has identified as 

9 having substantially failed to meet applicable 

10 requirement of this Act. 

11 ‘‘(B) PERIODIC SURVEYS.—Under such 

12 program the Secretary shall conduct surveys of 

13 each facility in the program not less than once 

14 every 6 months.’’. 

15 (b) NURSING FACILITIES.— 

16 (1) IN GENERAL.—Section 1919 of the Social 

17 Security Act (42 U.S.C. 1396r) is amended— 

18 (A) by redesignating subsection (i) as sub19 section (j); and 

20 (B) by inserting after subsection (h) the 

21 following new subsection: 

22 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

23 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA24 TION.— 


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

2 ensure that the Department of Health and 

3 Human Services includes, as part of the infor4 mation provided for comparison of nursing 

5 homes on the official Internet website of the 

6 Federal Government for Medicare beneficiaries 

7 (commonly referred to as the ‘Nursing Home 

8 Compare’ Medicare website) (or a successor 

9 website), the following information in a manner 

10 that is prominent, easily accessible, readily un11 derstandable to consumers of long-term care 

12 services, and searchable: 

13 ‘‘(i) Staffing data for each facility (in14 cluding resident census data and data on 

15 the hours of care provided per resident per 

16 day) based on data submitted under sub17 section (b)(8)(C)(ii), including information 

18 on staffing turnover and tenure, in a for19 mat that is clearly understandable to con20 sumers of long-term care services and al21 lows such consumers to compare dif22 ferences in staffing between facilities and 

23 State and national averages for the facili24 ties. Such format shall include— 


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1 ‘‘(I) concise explanations of how 

2 to interpret the data (such as plain 

3 English explanation of data reflecting 

4 ‘nursing home staff hours per resident 

5 day’); 

6 ‘‘(II) differences in types of staff 

7 (such as training associated with dif8 ferent categories of staff); 

9 ‘‘(III) the relationship between 

10 nurse staffing levels and quality of 

11 care; and 

12 ‘‘(IV) an explanation that appro13 priate staffing levels vary based on 

14 patient case mix. 

15 ‘‘(ii) Links to State Internet websites 

16 with information regarding State survey 

17 and certification programs, links to Form 

18 2567 State inspection reports (or a suc19 cessor form) on such websites, information 

20 to guide consumers in how to interpret and 

21 understand such reports, and the facility 

22 plan of correction or other response to 

23 such report. 

24 ‘‘(iii) The standardized complaint 

25 form developed under subsection (f)(10), 


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1 including explanatory material on what 

2 complaint forms are, how they are used, 

3 and how to file a complaint with the State 

4 survey and certification program and the 

5 State long-term care ombudsman program. 

6 ‘‘(iv) Summary information on the 

7 number, type, severity, and outcome of 

8 substantiated complaints. 

9 ‘‘(v) The number of adjudicated in10 stances of criminal violations by employees 

11 of a nursing facility— 

12 ‘‘(I) that were committed inside 

13 of the facility; and 

14 ‘‘(II) with respect to such in15 stances of violations or crimes com16 mitted outside of the facility, that 

17 were the violations or crimes that re18 sulted in the serious bodily injury of 

19 an elder. 

20 ‘‘(B) DEADLINE FOR PROVISION OF INFOR21 MATION.— 

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (ii), the Secretary shall en24 sure that the information described in sub25 paragraph (A) is included on such website 


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1 (or a successor website) not later than 1 

2 year after the date of the enactment of this 

3 subsection. 

4 ‘‘(ii) EXCEPTION.—The Secretary 

5 shall ensure that the information described 

6 in subparagraph (A)(i) and (A)(iii) is in7 cluded on such website (or a successor 

8 website) not later than the date on which 

9 the requirements under section 1124(c)(4) 

10 and subsection (b)(8)(C)(ii) are imple11 mented. 

12 ‘‘(2) REVIEW AND MODIFICATION OF

13 WEBSITE.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall 

15 establish a process— 

16 ‘‘(i) to review the accuracy, clarity of 

17 presentation, timeliness, and comprehen18 siveness of information reported on such 

19 website as of the day before the date of the 

20 enactment of this subsection; and 

21 ‘‘(ii) not later than 1 year after the 

22 date of the enactment of this subsection, to 

23 modify or revamp such website in accord24 ance with the review conducted under 

25 clause (i). 


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1 ‘‘(B) CONSULTATION.—In conducting the 

2 review under subparagraph (A)(i), the Sec3 retary shall consult with— 

4 ‘‘(i) State long-term care ombudsman 

5 programs; 

6 ‘‘(ii) consumer advocacy groups; 

7 ‘‘(iii) provider stakeholder groups; 

8 ‘‘(iv) skilled nursing facility employees 

9 and their representatives; and 

10 ‘‘(v) any other representatives of pro11 grams or groups the Secretary determines 

12 appropriate.’’. 

13 (2) TIMELINESS OF SUBMISSION OF SURVEY

14 AND CERTIFICATION INFORMATION.— 

15 (A) IN GENERAL.—Section 1919(g)(5) of 

16 the Social Security Act (42 U.S.C. 1396r(g)(5)) 

17 is amended by adding at the end the following 

18 new subparagraph: 

19 ‘‘(E) SUBMISSION OF SURVEY AND CER20 TIFICATION INFORMATION TO THE SEC21 RETARY.—In order to improve the timeliness of 

22 information made available to the public under 

23 subparagraph (A) and provided on the Nursing 

24 Home Compare Medicare website under sub25 section (i), each State shall submit information 


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1 respecting any survey or certification made re2 specting a nursing facility (including any en3 forcement actions taken by the State) to the 

4 Secretary not later than the date on which the 

5 State sends such information to the facility. 

6 The Secretary shall use the information sub7 mitted under the preceding sentence to update 

8 the information provided on the Nursing Home 

9 Compare Medicare website as expeditiously as 

10 practicable but not less frequently than quar11 terly.’’. 

12 (B) EFFECTIVE DATE.—The amendment 

13 made by this paragraph shall take effect 1 year 

14 after the date of the enactment of this Act. 

15 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec16 tion 1919(f) of such Act is amended by adding at 

17 the end of the following new paragraph: 

18 ‘‘(10) SPECIAL FOCUS FACILITY PROGRAM.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 conduct a special focus facility program for en21 forcement of requirements for nursing facilities 

22 that the Secretary has identified as having sub23 stantially failed to meet applicable requirements 

24 of this Act. 


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1 ‘‘(B) PERIODIC SURVEYS.—Under such 

2 program the Secretary shall conduct surveys of 

3 each facility in the program not less often than 

4 once every 6 months.’’. 

5 (c) AVAILABILITY OF REPORTS ON SURVEYS, CER6 TIFICATIONS, AND COMPLAINT INVESTIGATIONS.— 

7 (1) SKILLED NURSING FACILITIES.—Section 

8 1819(d)(1) of the Social Security Act (42 U.S.C. 

9 1395i–3(d)(1)), as amended by sections 1411 and 

10 1412, is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(D) AVAILABILITY OF SURVEY, CERTIFI13 CATION, AND COMPLAINT INVESTIGATION RE14 PORTS.—A skilled nursing facility must— 

15 ‘‘(i) have reports with respect to any 

16 surveys, certifications, and complaint in17 vestigations made respecting the facility 

18 during the 3 preceding years available for 

19 any individual to review upon request; and 

20 ‘‘(ii) post notice of the availability of 

21 such reports in areas of the facility that 

22 are prominent and accessible to the public. 

23 The facility shall not make available under 

24 clause (i) identifying information about com25 plainants or residents.’’. 


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1 (2) NURSING FACILITIES.—Section 1919(d)(1) 

2 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

3 as amended by sections 1411 and 1412, is amended 

4 by adding at the end the following new subpara5 graph: 

6 ‘‘(D) AVAILABILITY OF SURVEY, CERTIFI7 CATION, AND COMPLAINT INVESTIGATION RE8 PORTS.—A nursing facility must— 

9 ‘‘(i) have reports with respect to any 

10 surveys, certifications, and complaint in11 vestigations made respecting the facility 

12 during the 3 preceding years available for 

13 any individual to review upon request; and 

14 ‘‘(ii) post notice of the availability of 

15 such reports in areas of the facility that 

16 are prominent and accessible to the public. 

17 The facility shall not make available under 

18 clause (i) identifying information about com19 plainants or residents.’’. 

20 (3) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall take effect 1 year after the 

22 date of the enactment of this Act. 

23 (d) GUIDANCE TO STATES ON FORM 2567 STATE IN24 SPECTION REPORTS AND COMPLAINT INVESTIGATION RE25 PORTS.— 


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1 (1) GUIDANCE.—The Secretary of Health and 

2 Human Services (in this subtitle referred to as the 

3 ‘‘Secretary’’) shall provide guidance to States on 

4 how States can establish electronic links to Form 

5 2567 State inspection reports (or a successor form), 

6 complaint investigation reports, and a facility’s plan 

7 of correction or other response to such Form 2567 

8 State inspection reports (or a successor form) on the 

9 Internet website of the State that provides informa10 tion on skilled nursing facilities and nursing facili11 ties and the Secretary shall, if possible, include such 

12 information on Nursing Home Compare. 

13 (2) REQUIREMENT.—Section 1902(a)(9) of the 

14 Social Security Act (42 U.S.C. 1396a(a)(9)) is 

15 amended— 

16 (A) by striking ‘‘and’’ at the end of sub17 paragraph (B); 

18 (B) by striking the semicolon at the end of 

19 subparagraph (C) and inserting ‘‘, and’’; and 

20 (C) by adding at the end the following new 

21 subparagraph: 

22 ‘‘(D) that the State maintain a consumer23 oriented website providing useful information to 

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1 cluding for each facility, Form 2567 State in2 spection reports (or a successor form), com3 plaint investigation reports, the facility’s plan of 

4 correction, and such other information that the 

5 State or the Secretary considers useful in as6 sisting the public to assess the quality of long 

7 term care options and the quality of care pro8 vided by individual facilities;’’. 

9 (3) DEFINITIONS.—In this subsection: 

10 (A) NURSING FACILITY.—The term ‘‘nurs11 ing facility’’ has the meaning given such term 

12 in section 1919(a) of the Social Security Act 

13 (42 U.S.C. 1396r(a)). 

14 (B) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of Health and Human 

16 Services. 

17 (C) SKILLED NURSING FACILITY.—The 

18 term ‘‘skilled nursing facility’’ has the meaning 

19 given such term in section 1819(a) of the Social 

20 Security Act (42 U.S.C. 1395i–3(a)). 

21 SEC. 1414. REPORTING OF EXPENDITURES. 

22 Section 1888 of the Social Security Act (42 U.S.C. 

23 1395yy) is amended by adding at the end the following 

24 new subsection: 


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1 ‘‘(f) REPORTING OF DIRECT CARE EXPENDI2 TURES.— 

3 ‘‘(1) IN GENERAL.—For cost reports submitted 

4 under this title for cost reporting periods beginning 

5 on or after the date that is 3 years after the date 

6 of the enactment of this subsection, skilled nursing 

7 facilities shall separately report expenditures for 

8 wages and benefits for direct care staff (breaking 

9 out (at a minimum) registered nurses, licensed pro10 fessional nurses, certified nurse assistants, and other 

11 medical and therapy staff). 

12 ‘‘(2) MODIFICATION OF FORM.—The Secretary, 

13 in consultation with private sector accountants expe14 rienced with skilled nursing facility cost reports, 

15 shall redesign such reports to meet the requirement 

16 of paragraph (1) not later than 1 year after the date 

17 of the enactment of this subsection. 

18 ‘‘(3) CATEGORIZATION BY FUNCTIONAL AC19 COUNTS.—Not later than 30 months after the date 

20 of the enactment of this subsection, the Secretary, 

21 working in consultation with the Medicare Payment 

22 Advisory Commission, the Inspector General of the 

23 Department of Health and Human Services, and 

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1 ports, as modified under paragraph (1), submitted 

2 by skilled nursing facilities and categorize such ex3 penditures, regardless of any source of payment for 

4 such expenditures, for each skilled nursing facility 

5 into the following functional accounts on an annual 

6 basis: 

7 ‘‘(A) Spending on direct care services (in8 cluding nursing, therapy, and medical services). 

9 ‘‘(B) Spending on indirect care (including 

10 housekeeping and dietary services). 

11 ‘‘(C) Capital assets (including building and 

12 land costs). 

13 ‘‘(D) Administrative services costs. 

14 ‘‘(4) AVAILABILITY OF INFORMATION SUB15 MITTED.—The Secretary shall establish procedures 

16 to make information on expenditures submitted 

17 under this subsection readily available to interested 

18 parties upon request, subject to such requirements 

19 as the Secretary may specify under the procedures 

20 established under this paragraph.’’. 

21 SEC. 1415. STANDARDIZED COMPLAINT FORM. 

22 (a) SKILLED NURSING FACILITIES.— 

23 (1) DEVELOPMENT BY THE SECRETARY.—Sec24 tion 1819(f) of the Social Security Act (42 U.S.C. 

25 1395i–3(f)), as amended by section 1413(a)(3), is 


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1 amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(9) STANDARDIZED COMPLAINT FORM.—The 

4 Secretary shall develop a standardized complaint 

5 form for use by a resident (or a person acting on the 

6 resident’s behalf) in filing a complaint with a State 

7 survey and certification agency and a State long8 term care ombudsman program with respect to a 

9 skilled nursing facility.’’. 

10 (2) STATE REQUIREMENTS.—Section 1819(e) 

11 of the Social Security Act (42 U.S.C. 1395i–3(e)) is 

12 amended by adding at the end the following new 

13 paragraph: 

14 ‘‘(6) COMPLAINT PROCESSES AND WHISTLE15 BLOWER PROTECTION.— 

16 ‘‘(A) COMPLAINT FORMS.—The State must 

17 make the standardized complaint form devel18 oped under subsection (f)(9) available upon re19 quest to— 

20 ‘‘(i) a resident of a skilled nursing fa21 cility; 

22 ‘‘(ii) any person acting on the resi23 dent’s behalf; and 


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1 ‘‘(iii) any person who works at a 

2 skilled nursing facility or is a representa3 tive of such a worker. 

4 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

5 The State must establish a complaint resolution 

6 process in order to ensure that a resident, the 

7 legal representative of a resident of a skilled 

8 nursing facility, or other responsible party is 

9 not retaliated against if the resident, legal rep10 resentative, or responsible party has com11 plained, in good faith, about the quality of care 

12 or other issues relating to the skilled nursing 

13 facility, that the legal representative of a resi14 dent of a skilled nursing facility or other re15 sponsible party is not denied access to such 

16 resident or otherwise retaliated against if such 

17 representative party has complained, in good 

18 faith, about the quality of care provided by the 

19 facility or other issues relating to the facility, 

20 and that a person who works at a skilled nurs21 ing facility is not retaliated against if the work22 er has complained, in good faith, about quality 

23 of care or services or an issue relating to the 

24 quality of care or services provided at the facil25 ity, whether the resident, legal representative, 


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1 other responsible party, or worker used the 

2 form developed under subsection (f)(9) or some 

3 other method for submitting the complaint. 

4 Such complaint resolution process shall in5 clude— 

6 ‘‘(i) procedures to assure accurate 

7 tracking of complaints received, including 

8 notification to the complainant that a com9 plaint has been received; 

10 ‘‘(ii) procedures to determine the like11 ly severity of a complaint and for the in12 vestigation of the complaint; 

13 ‘‘(iii) deadlines for responding to a 

14 complaint and for notifying the complain15 ant of the outcome of the investigation; 

16 and 

17 ‘‘(iv) procedures to ensure that the 

18 identity of the complainant will be kept 

19 confidential. 

20 ‘‘(C) WHISTLEBLOWER PROTECTION.— 

21 ‘‘(i) PROHIBITION AGAINST RETALIA22 TION.—No person who works at a skilled 

23 nursing facility may be penalized, discrimi24 nated, or retaliated against with respect to 

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1 charge, promotion, compensation, terms, 

2 conditions, or privileges of employment, or 

3 have a contract for services terminated, be4 cause the person (or anyone acting at the 

5 person’s request) complained, in good 

6 faith, about the quality of care or services 

7 provided by a nursing facility or about 

8 other issues relating to quality of care or 

9 services, whether using the form developed 

10 under subsection (f)(9) or some other 

11 method for submitting the complaint. 

12 ‘‘(ii) RETALIATORY REPORTING.—A 

13 skilled nursing facility may not file a com14 plaint or a report against a person who 

15 works (or has worked at the facility with 

16 the appropriate State professional discipli17 nary agency because the person (or anyone 

18 acting at the person’s request) complained 

19 in good faith, as described in clause (i). 

20 ‘‘(iii) COMMENCEMENT OF ACTION.— 

21 Any person who believes the person has 

22 been penalized, discriminated , or retali23 ated against or had a contract for services 

24 terminated in violation of clause (i) or 

25 against whom a complaint has been filed in 


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1 violation of clause (ii) may bring an action 

2 at law or equity in the appropriate district 

3 court of the United States, which shall 

4 have jurisdiction over such action without 

5 regard to the amount in controversy or the 

6 citizenship of the parties, and which shall 

7 have jurisdiction to grant complete relief, 

8 including, but not limited to, injunctive re9 lief (such as reinstatement, compensatory 

10 damages (which may include reimburse11 ment of lost wages, compensation, and 

12 benefits), costs of litigation (including rea13 sonable attorney and expert witness fees), 

14 exemplary damages where appropriate, and 

15 such other relief as the court deems just 

16 and proper. 

17 ‘‘(iv) RIGHTS NOT WAIVABLE.—The 

18 rights protected by this paragraph may not 

19 be diminished by contract or other agree20 ment, and nothing in this paragraph shall 

21 be construed to diminish any greater or 

22 additional protection provided by Federal 

23 or State law or by contract or other agree24 ment. 


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1 ‘‘(v) REQUIREMENT TO POST NOTICE

2 OF EMPLOYEE RIGHTS.—Each skilled 

3 nursing facility shall post conspicuously in 

4 an appropriate location a sign (in a form 

5 specified by the Secretary) specifying the 

6 rights of persons under this paragraph and 

7 including a statement that an employee 

8 may file a complaint with the Secretary 

9 against a skilled nursing facility that vio10 lates the provisions of this paragraph and 

11 information with respect to the manner of 

12 filing such a complaint. 

13 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

14 in this paragraph shall be construed as pre15 venting a resident of a skilled nursing facility 

16 (or a person acting on the resident’s behalf) 

17 from submitting a complaint in a manner or 

18 format other than by using the standardized 

19 complaint form developed under subsection 

20 (f)(9) (including submitting a complaint orally). 

21 ‘‘(E) GOOD FAITH DEFINED.—For pur22 poses of this paragraph, an individual shall be 

23 deemed to be acting in good faith with respect 

24 to the filing of a complaint if the individual rea25 sonably believes— 


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1 ‘‘(i) the information reported or dis2 closed in the complaint is true; and 

3 ‘‘(ii) the violation of this title has oc4 curred or may occur in relation to such in5 formation.’’. 

6 (b) NURSING FACILITIES.— 

7 (1) DEVELOPMENT BY THE SECRETARY.—Sec8 tion 1919(f) of the Social Security Act (42 U.S.C. 

9 1395i–3(f)), as amended by section 1413(b), is 

10 amended by adding at the end the following new 

11 paragraph: 

12 ‘‘(11) STANDARDIZED COMPLAINT FORM.—The 

13 Secretary shall develop a standardized complaint 

14 form for use by a resident (or a person acting on the 

15 resident’s behalf) in filing a complaint with a State 

16 survey and certification agency and a State long17 term care ombudsman program with respect to a 

18 nursing facility.’’. 

19 (2) STATE REQUIREMENTS.—Section 1919(e) 

20 of the Social Security Act (42 U.S.C. 1395i–3(e)) is 

21 amended by adding at the end the following new 

22 paragraph: 

23 ‘‘(8) COMPLAINT PROCESSES AND WHISTLE24 BLOWER PROTECTION.— 


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1 ‘‘(A) COMPLAINT FORMS.—The State must 

2 make the standardized complaint form devel3 oped under subsection (f)(11) available upon re4 quest to— 

5 ‘‘(i) a resident of a nursing facility; 

6 ‘‘(ii) any person acting on the resi7 dent’s behalf; and 

8 ‘‘(iii) any person who works at a nurs9 ing facility or a representative of such a 

10 worker. 

11 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

12 The State must establish a complaint resolution 

13 process in order to ensure that a resident, the 

14 legal representative of a resident of a nursing 

15 facility, or other responsible party is not retali16 ated against if the resident, legal representa17 tive, or responsible party has complained, in 

18 good faith, about the quality of care or other 

19 issues relating to the nursing facility, that the 

20 legal representative of a resident of a nursing 

21 facility or other responsible party is not denied 

22 access to such resident or otherwise retaliated 

23 against if such representative party has com24 plained, in good faith, about the quality of care 

25 provided by the facility or other issues relating 


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1 to the facility, and that a person who works at 

2 a nursing facility is not retaliated against if the 

3 worker has complained, in good faith, about 

4 quality of care or services or an issue relating 

5 to the quality of care or services provided at the 

6 facility, whether the resident, legal representa7 tive, other responsible party, or worker used the 

8 form developed under subsection (f)(11) or 

9 some other method for submitting the com10 plaint. Such complaint resolution process shall 

11 include— 

12 ‘‘(i) procedures to assure accurate 

13 tracking of complaints received, including 

14 notification to the complainant that a com15 plaint has been received; 

16 ‘‘(ii) procedures to determine the like17 ly severity of a complaint and for the in18 vestigation of the complaint; 

19 ‘‘(iii) deadlines for responding to a 

20 complaint and for notifying the complain21 ant of the outcome of the investigation; 

22 and 

23 ‘‘(iv) procedures to ensure that the 

24 identity of the complainant will be kept 

25 confidential. 


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1 ‘‘(C) WHISTLEBLOWER PROTECTION.— 

2 ‘‘(i) PROHIBITION AGAINST RETALIA3 TION.—No person who works at a nursing 

4 facility may be penalized, discriminated, or 

5 retaliated against with respect to any as6 pect of employment, including discharge, 

7 promotion, compensation, terms, condi8 tions, or privileges of employment, or have 

9 a contract for services terminated, because 

10 the person (or anyone acting at the per11 son’s request) complained, in good faith, 

12 about the quality of care or services pro13 vided by a nursing facility or about other 

14 issues relating to quality of care or serv15 ices, whether using the form developed 

16 under subsection (f)(11) or some other 

17 method for submitting the complaint. 

18 ‘‘(ii) RETALIATORY REPORTING.—A 

19 nursing facility may not file a complaint or 

20 a report against a person who works (or 

21 has worked at the facility with the appro22 priate State professional disciplinary agen23 cy because the person (or anyone acting at 

24 the person’s request) complained in good 

25 faith, as described in clause (i). 


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1 ‘‘(iii) COMMENCEMENT OF ACTION.— 

2 Any person who believes the person has 

3 been penalized, discriminated, or retaliated 

4 against or had a contract for services ter5 minated in violation of clause (i) or against 

6 whom a complaint has been filed in viola7 tion of clause (ii) may bring an action at 

8 law or equity in the appropriate district 

9 court of the United States, which shall 

10 have jurisdiction over such action without 

11 regard to the amount in controversy or the 

12 citizenship of the parties, and which shall 

13 have jurisdiction to grant complete relief, 

14 including, but not limited to, injunctive re15 lief (such as reinstatement, compensatory 

16 damages (which may include reimburse17 ment of lost wages, compensation, and 

18 benefits), costs of litigation (including rea19 sonable attorney and expert witness fees), 

20 exemplary damages where appropriate, and 

21 such other relief as the court deems just 

22 and proper. 

23 ‘‘(iv) RIGHTS NOT WAIVABLE.—The 

24 rights protected by this paragraph may not 

25 be diminished by contract or other agreeVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00593 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ment, and nothing in this paragraph shall 

2 be construed to diminish any greater or 

3 additional protection provided by Federal 

4 or State law or by contract or other agree5 ment. 

6 ‘‘(v) REQUIREMENT TO POST NOTICE

7 OF EMPLOYEE RIGHTS.—Each nursing fa8 cility shall post conspicuously in an appro9 priate location a sign (in a form specified 

10 by the Secretary) specifying the rights of 

11 persons under this paragraph and includ12 ing a statement that an employee may file 

13 a complaint with the Secretary against a 

14 nursing facility that violates the provisions 

15 of this paragraph and information with re16 spect to the manner of filing such a com17 plaint. 

18 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

19 in this paragraph shall be construed as pre20 venting a resident of a nursing facility (or a 

21 person acting on the resident’s behalf) from 

22 submitting a complaint in a manner or format 

23 other than by using the standardized complaint 

24 form developed under subsection (f)(11) (in25 cluding submitting a complaint orally). 


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1 ‘‘(E) GOOD FAITH DEFINED.—For pur2 poses of this paragraph, an individual shall be 

3 deemed to be acting in good faith with respect 

4 to the filing of a complaint if the individual rea5 sonably believes— 

6 ‘‘(i) the information reported or dis7 closed in the complaint is true; and 

8 ‘‘(ii) the violation of this title has oc9 curred or may occur in relation to such in10 formation.’’. 

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

12 this section shall take effect 1 year after the date of the 

13 enactment of this Act. 

14 SEC. 1416. ENSURING STAFFING ACCOUNTABILITY. 

15 (a) SKILLED NURSING FACILITIES.—Section 

16 1819(b)(8) of the Social Security Act (42 U.S.C. 1395i– 

17 3(b)(8)) is amended by adding at the end the following 

18 new subparagraph: 

19 ‘‘(C) SUBMISSION OF STAFFING INFORMA20 TION BASED ON PAYROLL DATA IN A UNIFORM

21 FORMAT.—Beginning not later than 2 years 

22 after the date of the enactment of this subpara23 graph, and after consulting with State long24 term care ombudsman programs, consumer ad25 vocacy groups, provider stakeholder groups, emVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00595 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ployees and their representatives, and other 

2 parties the Secretary deems appropriate, the 

3 Secretary shall require a skilled nursing facility 

4 to electronically submit to the Secretary direct 

5 care staffing information (including information 

6 with respect to agency and contract staff) based 

7 on payroll and other verifiable and auditable 

8 data in a uniform format (according to speci9 fications established by the Secretary in con10 sultation with such programs, groups, and par11 ties). Such specifications shall require that the 

12 information submitted under the preceding sen13 tence— 

14 ‘‘(i) specify the category of work a 

15 certified employee performs (such as 

16 whether the employee is a registered nurse, 

17 licensed practical nurse, licensed vocational 

18 nurse, certified nursing assistant, thera19 pist, or other medical personnel); 

20 ‘‘(ii) include resident census data and 

21 information on resident case mix; 

22 ‘‘(iii) include a regular reporting 

23 schedule; and 

24 ‘‘(iv) include information on employee 

25 turnover and tenure and on the hours of 


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1 care provided by each category of certified 

2 employees referenced in clause (i) per resi3 dent per day. 

4 Nothing in this subparagraph shall be con5 strued as preventing the Secretary from requir6 ing submission of such information with respect 

7 to specific categories, such as nursing staff, be8 fore other categories of certified employees. In9 formation under this subparagraph with respect 

10 to agency and contract staff shall be kept sepa11 rate from information on employee staffing.’’. 

12 (b) NURSING FACILITIES.—Section 1919(b)(8) of the 

13 Social Security Act (42 U.S.C. 1396r(b)(8)) is amended 

14 by adding at the end the following new subparagraph: 

15 ‘‘(C) SUBMISSION OF STAFFING INFORMA16 TION BASED ON PAYROLL DATA IN A UNIFORM

17 FORMAT.—Beginning not later than 2 years 

18 after the date of the enactment of this subpara19 graph, and after consulting with State long20 term care ombudsman programs, consumer ad21 vocacy groups, provider stakeholder groups, em22 ployees and their representatives, and other 

23 parties the Secretary deems appropriate, the 

24 Secretary shall require a nursing facility to elec25 tronically submit to the Secretary direct care 


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1 staffing information (including information with 

2 respect to agency and contract staff) based on 

3 payroll and other verifiable and auditable data 

4 in a uniform format (according to specifications 

5 established by the Secretary in consultation 

6 with such programs, groups, and parties). Such 

7 specifications shall require that the information 

8 submitted under the preceding sentence— 

9 ‘‘(i) specify the category of work a 

10 certified employee performs (such as 

11 whether the employee is a registered nurse, 

12 licensed practical nurse, licensed vocational 

13 nurse, certified nursing assistant, thera14 pist, or other medical personnel); 

15 ‘‘(ii) include resident census data and 

16 information on resident case mix; 

17 ‘‘(iii) include a regular reporting 

18 schedule; and 

19 ‘‘(iv) include information on employee 

20 turnover and tenure and on the hours of 

21 care provided by each category of certified 

22 employees referenced in clause (i) per resi23 dent per day. 

24 Nothing in this subparagraph shall be con25 strued as preventing the Secretary from requirVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00598 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ing submission of such information with respect 

2 to specific categories, such as nursing staff, be3 fore other categories of certified employees. In4 formation under this subparagraph with respect 

5 to agency and contract staff shall be kept sepa6 rate from information on employee staffing.’’. 

7 PART 2—TARGETING ENFORCEMENT 

8 SEC. 1421. CIVIL MONEY PENALTIES. 

9 (a) SKILLED NURSING FACILITIES.— 

10 (1) IN GENERAL.—Section 1819(h)(2)(B)(ii) of 

11 the Social Security Act (42 U.S.C. 1395i– 

12 3(h)(2)(B)(ii)) is amended to read as follows: 

13 ‘‘(ii) AUTHORITY WITH RESPECT TO

14 CIVIL MONEY PENALTIES.— 

15 ‘‘(I) AMOUNT.—The Secretary 

16 may impose a civil money penalty in 

17 the applicable per instance or per day 

18 amount (as defined in subclause (II) 

19 and (III)) for each day or instance, 

20 respectively, of noncompliance (as de21 termined appropriate by the Sec22 retary). 

23 ‘‘(II) APPLICABLE PER INSTANCE

24 AMOUNT.—In this clause, the term 


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1 ‘applicable per instance amount’ 

2 means— 

3 ‘‘(aa) in the case where the 

4 deficiency is found to be a direct 

5 proximate cause of death of a 

6 resident of the facility, an 

7 amount not to exceed $100,000. 

8 ‘‘(bb) in each case of a defi9 ciency where the facility is cited 

10 for actual harm or immediate 

11 jeopardy, an amount not less 

12 than $3,050 and not more than 

13 $25,000; and 

14 ‘‘(cc) in each case of any 

15 other deficiency, an amount not 

16 less than $250 and not to exceed 

17 $3050. 

18 ‘‘(III) APPLICABLE PER DAY

19 AMOUNT.—In this clause, the term 

20 ‘applicable per day amount’ means— 

21 ‘‘(aa) in each case of a defi22 ciency where the facility is cited 

23 for actual harm or immediate 

24 jeopardy, an amount not less 


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1 than $3,050 and not more than 

2 $25,000 and 

3 ‘‘(bb) in each case of any 

4 other deficiency, an amount not 

5 less than $250 and not to exceed 

6 $3,050. 

7 ‘‘(IV) REDUCTION OF CIVIL

8 MONEY PENALTIES IN CERTAIN CIR9 CUMSTANCES.—Subject to subclauses 

10 (V) and (VI), in the case where a fa11 cility self-reports and promptly cor12 rects a deficiency for which a penalty 

13 was imposed under this clause not 

14 later than 10 calendar days after the 

15 date of such imposition, the Secretary 

16 may reduce the amount of the penalty 

17 imposed by not more than 50 percent. 

18 ‘‘(V) PROHIBITION ON REDUC19 TION FOR CERTAIN DEFICIENCIES.— 

20 ‘‘(aa) REPEAT DEFI21 CIENCIES.—The Secretary may 

22 not reduce under subclause (IV) 

23 the amount of a penalty if the 

24 deficiency is a repeat deficiency. 


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1 ‘‘(bb) CERTAIN OTHER DE2 FICIENCIES.—The Secretary may 

3 not reduce under subclause (IV) 

4 the amount of a penalty if the 

5 penalty is imposed for a defi6 ciency described in subclause 

7 (II)(aa) or (III)(aa) and the ac8 tual harm or widespread harm 

9 immediately jeopardizes the 

10 health or safety of a resident or 

11 residents of the facility, or if the 

12 penalty is imposed for a defi13 ciency described in subclause 

14 (II)(bb). 

15 ‘‘(VI) LIMITATION ON AGGRE16 GATE REDUCTIONS.—The aggregate 

17 reduction in a penalty under sub18 clause (IV) may not exceed 35 percent 

19 on the basis of self-reporting, on the 

20 basis of a waiver or an appeal (as pro21 vided for under regulations under sec22 tion 488.436 of title 42, Code of Fed23 eral Regulations), or on the basis of 

24 both. 


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1 ‘‘(VII) COLLECTION OF CIVIL

2 MONEY PENALTIES.—In the case of a 

3 civil money penalty imposed under 

4 this clause, the Secretary— 

5 ‘‘(aa) subject to item (cc), 

6 shall, not later than 30 days 

7 after the date of imposition of 

8 the penalty, provide the oppor9 tunity for the facility to partici10 pate in an independent informal 

11 dispute resolution process which 

12 generates a written record prior 

13 to the collection of such penalty, 

14 but such opportunity shall not af15 fect the responsibility of the 

16 State survey agency for making 

17 final recommendations for such 

18 penalties; 

19 ‘‘(bb) in the case where the 

20 penalty is imposed for each day 

21 of noncompliance, shall not im22 pose a penalty for any day during 

23 the period beginning on the ini24 tial day of the imposition of the 

25 penalty and ending on the day on 


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1 which the informal dispute reso2 lution process under item (aa) is 

3 completed; 

4 ‘‘(cc) may provide for the 

5 collection of such civil money 

6 penalty and the placement of 

7 such amounts collected in an es8 crow account under the direction 

9 of the Secretary on the earlier of 

10 the date on which the informal 

11 dispute resolution process under 

12 item (aa) is completed or the 

13 date that is 90 days after the 

14 date of the imposition of the pen15 alty; 

16 ‘‘(dd) may provide that such 

17 amounts collected are kept in 

18 such account pending the resolu19 tion of any subsequent appeals; 

20 ‘‘(ee) in the case where the 

21 facility successfully appeals the 

22 penalty, may provide for the re23 turn of such amounts collected 

24 (plus interest) to the facility; and 


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1 ‘‘(ff) in the case where all 

2 such appeals are unsuccessful, 

3 may provide that some portion of 

4 such amounts collected may be 

5 used to support activities that 

6 benefit residents, including as7 sistance to support and protect 

8 residents of a facility that closes 

9 (voluntarily or involuntarily) or is 

10 decertified (including offsetting 

11 costs of relocating residents to 

12 home and community-based set13 tings or another facility), projects 

14 that support resident and family 

15 councils and other consumer in16 volvement in assuring quality 

17 care in facilities, and facility im18 provement initiatives approved by 

19 the Secretary (including joint 

20 training of facility staff and sur21 veyors, technical assistance for 

22 facilities under quality assurance 

23 programs, the appointment of 

24 temporary management, and 


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1 other activities approved by the 

2 Secretary). 

3 ‘‘(VIII) PROCEDURE.—The pro4 visions of section 1128A (other than 

5 subsections (a) and (b) and except to 

6 the extent that such provisions require 

7 a hearing prior to the imposition of a 

8 civil money penalty) shall apply to a 

9 civil money penalty under this clause 

10 in the same manner as such provi11 sions apply to a penalty or proceeding 

12 under section 1128A(a).’’. 

13 (2) CONFORMING AMENDMENT.—The second 

14 sentence of section 1819(h)(5) of the Social Security 

15 Act (42 U.S.C. 1395i–3(h)(5)) is amended by insert16 ing ‘‘(ii),’’after ‘‘(i),’’. 

17 (b) NURSING FACILITIES.— 

18 (1) PENALTIES IMPOSED BY THE STATE.— 

19 (A) IN GENERAL.—Section 1919(h)(2) of 

20 the Social Security Act (42 U.S.C. 1396r(h)(2)) 

21 is amended— 

22 (i) in subparagraph (A)(ii), by strik23 ing the first sentence and inserting the fol24 lowing: ‘‘A civil money penalty in accord25 ance with subparagraph (G).’’; and 


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1 (ii) by adding at the end the following 

2 new subparagraph: 

3 ‘‘(G) CIVIL MONEY PENALTIES.— 

4 ‘‘(i) IN GENERAL.—The State may 

5 impose a civil money penalty under sub6 paragraph (A)(ii) in the applicable per in7 stance or per day amount (as defined in 

8 subclause (II) and (III)) for each day or 

9 instance, respectively, of noncompliance (as 

10 determined appropriate by the Secretary). 

11 ‘‘(ii) APPLICABLE PER INSTANCE

12 AMOUNT.—In this subparagraph, the term 

13 ‘applicable per instance amount’ means— 

14 ‘‘(I) in the case where the defi15 ciency is found to be a direct proxi16 mate cause of death of a resident of 

17 the facility, an amount not to exceed 

18 $100,000. 

19 ‘‘(II) in each case of a deficiency 

20 where the facility is cited for actual 

21 harm or immediate jeopardy, an 

22 amount not less than $3,050 and not 

23 more than $25,000; and 


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1 ‘‘(III) in each case of any other 

2 deficiency, an amount not less than 

3 $250 and not to exceed $3050. 

4 ‘‘(iii) APPLICABLE PER DAY

5 AMOUNT.—In this subparagraph, the term 

6 ‘applicable per day amount’ means— 

7 ‘‘(I) in each case of a deficiency 

8 where the facility is cited for actual 

9 harm or immediate jeopardy, an 

10 amount not less than $3,050 and not 

11 more than $25,000 and 

12 ‘‘(II) in each case of any other 

13 deficiency, an amount not less than 

14 $250 and not to exceed $3,050. 

15 ‘‘(iv) REDUCTION OF CIVIL MONEY

16 PENALTIES IN CERTAIN CIR17 CUMSTANCES.—Subject to clauses (v) and 

18 (vi), in the case where a facility self-re19 ports and promptly corrects a deficiency 

20 for which a penalty was imposed under 

21 subparagraph (A)(ii) not later than 10 cal22 endar days after the date of such imposi23 tion, the State may reduce the amount of 

24 the penalty imposed by not more than 50 

25 percent. 


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1 ‘‘(v) PROHIBITION ON REDUCTION

2 FOR CERTAIN DEFICIENCIES.— 

3 ‘‘(I) REPEAT DEFICIENCIES.— 

4 The State may not reduce under 

5 clause (iv) the amount of a penalty if 

6 the State had reduced a penalty im7 posed on the facility in the preceding 

8 year under such clause with respect to 

9 a repeat deficiency. 

10 ‘‘(II) CERTAIN OTHER DEFI11 CIENCIES.—The State may not reduce 

12 under clause (iv) the amount of a pen13 alty if the penalty is imposed for a de14 ficiency described in clause (ii)(II) or 

15 (iii)(I) and the actual harm or wide16 spread harm that immediately jeop17 ardizes the health or safety of a resi18 dent or residents of the facility, or if 

19 the penalty is imposed for a deficiency 

20 described in clause (ii)(I). 

21 ‘‘(III) LIMITATION ON AGGRE22 GATE REDUCTIONS.—The aggregate 

23 reduction in a penalty under clause 

24 (iv) may not exceed 35 percent on the 

25 basis of self-reporting, on the basis of 


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1 a waiver or an appeal (as provided for 

2 under regulations under section 

3 488.436 of title 42, Code of Federal 

4 Regulations), or on the basis of both. 

5 ‘‘(vi) COLLECTION OF CIVIL MONEY

6 PENALTIES.—In the case of a civil money 

7 penalty imposed under subparagraph 

8 (A)(ii), the State— 

9 ‘‘(I) subject to subclause (III), 

10 shall, not later than 30 days after the 

11 date of imposition of the penalty, pro12 vide the opportunity for the facility to 

13 participate in an independent informal 

14 dispute resolution process which gen15 erates a written record prior to the 

16 collection of such penalty, but such 

17 opportunity shall not affect the re18 sponsibility of the State survey agency 

19 for making final recommendations for 

20 such penalties; 

21 ‘‘(II) in the case where the pen22 alty is imposed for each day of non23 compliance, shall not impose a penalty 

24 for any day during the period begin25 ning on the initial day of the imposiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00610 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion of the penalty and ending on the 

2 day on which the informal dispute res3 olution process under subclause (I) is 

4 completed; 

5 ‘‘(III) may provide for the collec6 tion of such civil money penalty and 

7 the placement of such amounts col8 lected in an escrow account under the 

9 direction of the State on the earlier of 

10 the date on which the informal dis11 pute resolution process under sub12 clause (I) is completed or the date 

13 that is 90 days after the date of the 

14 imposition of the penalty; 

15 ‘‘(IV) may provide that such 

16 amounts collected are kept in such ac17 count pending the resolution of any 

18 subsequent appeals; 

19 ‘‘(V) in the case where the facil20 ity successfully appeals the penalty, 

21 may provide for the return of such 

22 amounts collected (plus interest) to 

23 the facility; and 

24 ‘‘(VI) in the case where all such 

25 appeals are unsuccessful, may provide 


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1 that such funds collected shall be used 

2 for the purposes described in the sec3 ond sentence of subparagraph 

4 (A)(ii).’’. 

5 (B) CONFORMING AMENDMENT.—The sec6 ond sentence of section 1919(h)(2)(A)(ii) of the 

7 Social Security Act (42 U.S.C. 

8 1396r(h)(2)(A)(ii)) is amended by inserting be9 fore the period at the end the following: ‘‘, and 

10 some portion of such funds may be used to sup11 port activities that benefit residents, including 

12 assistance to support and protect residents of a 

13 facility that closes (voluntarily or involuntarily) 

14 or is decertified (including offsetting costs of re15 locating residents to home and community16 based settings or another facility), projects that 

17 support resident and family councils and other 

18 consumer involvement in assuring quality care 

19 in facilities, and facility improvement initiatives 

20 approved by the Secretary (including joint 

21 training of facility staff and surveyors, pro22 viding technical assistance to facilities under 

23 quality assurance programs, the appointment of 

24 temporary management, and other activities ap25 proved by the Secretary)’’. 


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1 (2) PENALTIES IMPOSED BY THE SEC2 RETARY.— 

3 (A) IN GENERAL.—Section 

4 1919(h)(3)(C)(ii) of the Social Security Act (42 

5 U.S.C. 1396r(h)(3)(C)) is amended to read as 

6 follows: 

7 ‘‘(ii) AUTHORITY WITH RESPECT TO

8 CIVIL MONEY PENALTIES.— 

9 ‘‘(I) AMOUNT.—Subject to sub10 clause (II), the Secretary may impose 

11 a civil money penalty in an amount 

12 not to exceed $10,000 for each day or 

13 each instance of noncompliance (as 

14 determined appropriate by the Sec15 retary). 

16 ‘‘(II) REDUCTION OF CIVIL

17 MONEY PENALTIES IN CERTAIN CIR18 CUMSTANCES.—Subject to subclause 

19 (III), in the case where a facility self20 reports and promptly corrects a defi21 ciency for which a penalty was im22 posed under this clause not later than 

23 10 calendar days after the date of 

24 such imposition, the Secretary may 


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1 reduce the amount of the penalty im2 posed by not more than 50 percent. 

3 ‘‘(III) PROHIBITION ON REDUC4 TION FOR REPEAT DEFICIENCIES.— 

5 The Secretary may not reduce the 

6 amount of a penalty under subclause 

7 (II) if the Secretary had reduced a 

8 penalty imposed on the facility in the 

9 preceding year under such subclause 

10 with respect to a repeat deficiency. 

11 ‘‘(IV) COLLECTION OF CIVIL

12 MONEY PENALTIES.—In the case of a 

13 civil money penalty imposed under 

14 this clause, the Secretary— 

15 ‘‘(aa) subject to item (bb), 

16 shall, not later than 30 days 

17 after the date of imposition of 

18 the penalty, provide the oppor19 tunity for the facility to partici20 pate in an independent informal 

21 dispute resolution process which 

22 generates a written record prior 

23 to the collection of such penalty; 

24 ‘‘(bb) in the case where the 

25 penalty is imposed for each day 


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1 of noncompliance, shall not im2 pose a penalty for any day during 

3 the period beginning on the ini4 tial day of the imposition of the 

5 penalty and ending on the day on 

6 which the informal dispute reso7 lution process under item (aa) is 

8 completed; 

9 ‘‘(cc) may provide for the 

10 collection of such civil money 

11 penalty and the placement of 

12 such amounts collected in an es13 crow account under the direction 

14 of the Secretary on the earlier of 

15 the date on which the informal 

16 dispute resolution process under 

17 item (aa) is completed or the 

18 date that is 90 days after the 

19 date of the imposition of the pen20 alty; 

21 ‘‘(dd) may provide that such 

22 amounts collected are kept in 

23 such account pending the resolu24 tion of any subsequent appeals; 


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1 ‘‘(ee) in the case where the 

2 facility successfully appeals the 

3 penalty, may provide for the re4 turn of such amounts collected 

5 (plus interest) to the facility; and 

6 ‘‘(ff) in the case where all 

7 such appeals are unsuccessful, 

8 may provide that some portion of 

9 such amounts collected may be 

10 used to support activities that 

11 benefit residents, including as12 sistance to support and protect 

13 residents of a facility that closes 

14 (voluntarily or involuntarily) or is 

15 decertified (including offsetting 

16 costs of relocating residents to 

17 home and community-based set18 tings or another facility), projects 

19 that support resident and family 

20 councils and other consumer in21 volvement in assuring quality 

22 care in facilities, and facility im23 provement initiatives approved by 

24 the Secretary (including joint 

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1 veyors, technical assistance for 

2 facilities under quality assurance 

3 programs, the appointment of 

4 temporary management, and 

5 other activities approved by the 

6 Secretary). 

7 ‘‘(V) PROCEDURE.—The provi8 sions of section 1128A (other than 

9 subsections (a) and (b) and except to 

10 the extent that such provisions require 

11 a hearing prior to the imposition of a 

12 civil money penalty) shall apply to a 

13 civil money penalty under this clause 

14 in the same manner as such provi15 sions apply to a penalty or proceeding 

16 under section 1128A(a).’’. 

17 (B) CONFORMING AMENDMENT.—Section 

18 1919(h)(8) of the Social Security Act (42 

19 U.S.C. 1396r(h)(5)(8)) is amended by inserting 

20 ‘‘and in paragraph (3)(C)(ii)’’ after ‘‘paragraph 

21 (2)(A)’’. 

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

23 this section shall take effect 1 year after the date of the 

24 enactment of this Act. 


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1 SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PRO2 GRAM. 

3 (a) ESTABLISHMENT.— 

4 (1) IN GENERAL.—The Secretary, in consulta5 tion with the Inspector General of the Department 

6 of Health and Human Services, shall establish a 

7 pilot program (in this section referred to as the 

8 ‘‘pilot program’’) to develop, test, and implement use 

9 of an independent monitor to oversee interstate and 

10 large intrastate chains of skilled nursing facilities 

11 and nursing facilities. 

12 (2) SELECTION.—The Secretary shall select 

13 chains of skilled nursing facilities and nursing facili14 ties described in paragraph (1) to participate in the 

15 pilot program from among those chains that submit 

16 an application to the Secretary at such time, in such 

17 manner, and containing such information as the Sec18 retary may require. 

19 (3) DURATION.—The Secretary shall conduct 

20 the pilot program for a two-year period. 

21 (4) IMPLEMENTATION.—The Secretary shall 

22 implement the pilot program not later than one year 

23 after the date of the enactment of this Act. 

24 (b) REQUIREMENTS.—The Secretary shall evaluate 

25 chains selected to participate in the pilot program based 

26 on criteria selected by the Secretary, including where eviVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00618 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 dence suggests that one or more facilities of the chain are 

2 experiencing serious safety and quality of care problems. 

3 Such criteria may include the evaluation of a chain that 

4 includes one or more facilities participating in the ‘‘Special 

5 Focus Facility’’ program (or a successor program) or one 

6 or more facilities with a record of repeated serious safety 

7 and quality of care deficiencies. 

8 (c) RESPONSIBILITIES OF THE INDEPENDENT MON9 ITOR.—An independent monitor that enters into a con10 tract with the Secretary to participate in the conduct of 

11 such program shall— 

12 (1) conduct periodic reviews and prepare root13 cause quality and deficiency analyses of a chain to 

14 assess if facilities of the chain are in compliance 

15 with State and Federal laws and regulations applica16 ble to the facilities; 

17 (2) undertake sustained oversight of the chain, 

18 whether publicly or privately held, to involve the 

19 owners of the chain and the principal business part20 ners of such owners in facilitating compliance by fa21 cilities of the chain with State and Federal laws and 

22 regulations applicable to the facilities; 

23 (3) analyze the management structure, distribu24 tion of expenditures, and nurse staffing levels of faVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00619 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cilities of the chain in relation to resident census, 

2 staff turnover rates, and tenure; 

3 (4) report findings and recommendations with 

4 respect to such reviews, analyses, and oversight to 

5 the chain and facilities of the chain, to the Secretary 

6 and to relevant States; and 

7 (5) publish the results of such reviews, anal8 yses, and oversight. 

9 (d) IMPLEMENTATION OF RECOMMENDATIONS.— 

10 (1) RECEIPT OF FINDING BY CHAIN.—Not later 

11 than 10 days after receipt of a finding of an inde12 pendent monitor under subsection (c)(4), a chain 

13 participating in the pilot program shall submit to 

14 the independent monitor a report— 

15 (A) outlining corrective actions the chain 

16 will take to implement the recommendations in 

17 such report; or 

18 (B) indicating that the chain will not im19 plement such recommendations and why it will 

20 not do so. 

21 (2) RECEIPT OF REPORT BY INDEPENDENT

22 MONITOR.—Not later than 10 days after the date of 

23 receipt of a report submitted by a chain under para24 graph (1), an independent monitor shall finalize its 

25 recommendations and submit a report to the chain 


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1 and facilities of the chain, the Secretary, and the 

2 State (or States) involved, as appropriate, containing 

3 such final recommendations. 

4 (e) COST OF APPOINTMENT.—A chain shall be re5 sponsible for a portion of the costs associated with the 

6 appointment of independent monitors under the pilot pro7 gram. The chain shall pay such portion to the Secretary 

8 (in an amount and in accordance with procedures estab9 lished by the Secretary). 

10 (f) WAIVER AUTHORITY.—The Secretary may waive 

11 such requirements of titles XVIII and XIX of the Social 

12 Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as 

13 may be necessary for the purpose of carrying out the pilot 

14 program. 

15 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

16 are authorized to be appropriated such sums as may be 

17 necessary to carry out this section. 

18 (h) DEFINITIONS.—In this section: 

19 (1) FACILITY.—The term ‘‘facility’’ means a 

20 skilled nursing facility or a nursing facility. 

21 (2) NURSING FACILITY.—The term ‘‘nursing 

22 facility’’ has the meaning given such term in section 

23 1919(a) of the Social Security Act (42 U.S.C. 

24 1396r(a)). 


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1 (3) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Health and Human Services, acting 

3 through the Assistant Secretary for Planning and 

4 Evaluation. 

5 (4) SKILLED NURSING FACILITY.—The term 

6 ‘‘skilled nursing facility’’ has the meaning given such 

7 term in section 1819(a) of the Social Security Act 

8 (42 U.S.C. 1395(a)). 

9 (i) EVALUATION AND REPORT.— 

10 (1) EVALUATION.—The Inspector General of 

11 the Department of Health and Human Services shall 

12 evaluate the pilot program. Such evaluation shall— 

13 (A) determine whether the independent 

14 monitor program should be established on a 

15 permanent basis; and 

16 (B) if the Inspector General determines 

17 that the independent monitor program should 

18 be established on a permanent basis, rec19 ommend appropriate procedures and mecha20 nisms for such establishment. 

21 (2) REPORT.—Not later than 180 days after 

22 the completion of the pilot program, the Inspector 

23 General shall submit to Congress and the Secretary 

24 a report containing the results of the evaluation con25 ducted under paragraph (1), together with recVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00622 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ommendations for such legislation and administra2 tive action as the Inspector General determines ap3 propriate. 

4 SEC. 1423. NOTIFICATION OF FACILITY CLOSURE. 

5 (a) SKILLED NURSING FACILITIES.— 

6 (1) IN GENERAL.—Section 1819(c) of the So7 cial Security Act (42 U.S.C. 1395i–3(c)) is amended 

8 by adding at the end the following new paragraph: 

9 ‘‘(7) NOTIFICATION OF FACILITY CLOSURE.— 

10 ‘‘(A) IN GENERAL.—Any individual who is 

11 the administrator of a skilled nursing facility 

12 must— 

13 ‘‘(i) submit to the Secretary, the State 

14 long-term care ombudsman, residents of 

15 the facility, and the legal representatives of 

16 such residents or other responsible parties, 

17 written notification of an impending clo18 sure— 

19 ‘‘(I) subject to subclause (II), not 

20 later than the date that is 60 days 

21 prior to the date of such closure; and 

22 ‘‘(II) in the case of a facility 

23 where the Secretary terminates the fa24 cility’s participation under this title, 


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1 not later than the date that the Sec2 retary determines appropriate; 

3 ‘‘(ii) ensure that the facility does not 

4 admit any new residents on or after the 

5 date on which such written notification is 

6 submitted; and 

7 ‘‘(iii) include in the notice a plan for 

8 the transfer and adequate relocation of the 

9 residents of the facility by a specified date 

10 prior to closure that has been approved by 

11 the State, including assurances that the 

12 residents will be transferred to the most 

13 appropriate facility or other setting in 

14 terms of quality, services, and location, 

15 taking into consideration the needs and 

16 best interests of each resident. 

17 ‘‘(B) RELOCATION.— 

18 ‘‘(i) IN GENERAL.—The State shall 

19 ensure that, before a facility closes, all 

20 residents of the facility have been success21 fully relocated to another facility or an al22 ternative home and community-based set23 ting. 

24 ‘‘(ii) CONTINUATION OF PAYMENTS

25 UNTIL RESIDENTS RELOCATED.—The SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00624 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary may, as the Secretary determines 

2 appropriate, continue to make payments 

3 under this title with respect to residents of 

4 a facility that has submitted a notification 

5 under subparagraph (A) during the period 

6 beginning on the date such notification is 

7 submitted and ending on the date on which 

8 the resident is successfully relocated.’’. 

9 (2) CONFORMING AMENDMENTS.—Section 

10 1819(h)(4) of the Social Security Act (42 U.S.C. 

11 1395i–3(h)(4)) is amended— 

12 (A) in the first sentence, by striking ‘‘the 

13 Secretary shall terminate’’ and inserting ‘‘the 

14 Secretary, subject to subsection (c)(7), shall 

15 terminate’’; and 

16 (B) in the second sentence, by striking 

17 ‘‘subsection (c)(2)’’ and inserting ‘‘paragraphs 

18 (2) and (7) of subsection (c)’’. 

19 (b) NURSING FACILITIES.— 

20 (1) IN GENERAL.—Section 1919(c) of the So21 cial Security Act (42 U.S.C. 1396r(c)) is amended 

22 by adding at the end the following new paragraph: 

23 ‘‘(9) NOTIFICATION OF FACILITY CLOSURE.— 

24 ‘‘(A) IN GENERAL.—Any individual who is 

25 an administrator of a nursing facility must— 


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1 ‘‘(i) submit to the Secretary, the State 

2 long-term care ombudsman, residents of 

3 the facility, and the legal representatives of 

4 such residents or other responsible parties, 

5 written notification of an impending clo6 sure— 

7 ‘‘(I) subject to subclause (II), not 

8 later than the date that is 60 days 

9 prior to the date of such closure; and 

10 ‘‘(II) in the case of a facility 

11 where the Secretary terminates the fa12 cility’s participation under this title, 

13 not later than the date that the Sec14 retary determines appropriate; 

15 ‘‘(ii) ensure that the facility does not 

16 admit any new residents on or after the 

17 date on which such written notification is 

18 submitted; and 

19 ‘‘(iii) include in the notice a plan for 

20 the transfer and adequate relocation of the 

21 residents of the facility by a specified date 

22 prior to closure that has been approved by 

23 the State, including assurances that the 

24 residents will be transferred to the most 

25 appropriate facility or other setting in 


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1 terms of quality, services, and location, 

2 taking into consideration the needs and 

3 best interests of each resident. 

4 ‘‘(B) RELOCATION.— 

5 ‘‘(i) IN GENERAL.—The State shall 

6 ensure that, before a facility closes, all 

7 residents of the facility have been success8 fully relocated to another facility or an al9 ternative home and community-based set10 ting. 

11 ‘‘(ii) CONTINUATION OF PAYMENTS

12 UNTIL RESIDENTS RELOCATED.—The Sec13 retary may, as the Secretary determines 

14 appropriate, continue to make payments 

15 under this title with respect to residents of 

16 a facility that has submitted a notification 

17 under subparagraph (A) during the period 

18 beginning on the date such notification is 

19 submitted and ending on the date on which 

20 the resident is successfully relocated.’’. 

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

22 this section shall take effect 1 year after the date of the 

23 enactment of this Act. 


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1 PART 3—IMPROVING STAFF TRAINING 

2 SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING. 

3 (a) SKILLED NURSING FACILITIES.—Section 

4 1819(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C. 

5 1395i–3(f)(2)(A)(i)(I)) is amended by inserting ‘‘(includ6 ing, in the case of initial training and, if the Secretary 

7 determines appropriate, in the case of ongoing training, 

8 dementia management training and resident abuse preven9 tion training)’’ after ‘‘curriculum’’. 

10 (b) NURSING FACILITIES.—Section 

11 1919(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C. 

12 1396r(f)(2)(A)(i)(I)) is amended by inserting ‘‘(including, 

13 in the case of initial training and, if the Secretary deter14 mines appropriate, in the case of ongoing training, demen15 tia management training and resident abuse prevention 

16 training)’’ after ‘‘curriculum’’. 

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

18 this section shall take effect 1 year after the date of the 

19 enactment of this Act. 

20 SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED 

21 FOR CERTIFIED NURSE AIDES AND SUPER22 VISORY STAFF. 

23 (a) STUDY.— 

24 (1) IN GENERAL.—The Secretary shall conduct 

25 a study on the content of training for certified nurse 

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1 ties and nursing facilities. The study shall include an 

2 analysis of the following: 

3 (A) Whether the number of initial training 

4 hours for certified nurse aides required under 

5 sections 1819(f)(2)(A)(i)(II) and 

6 1919(f)(2)(A)(i)(II) of the Social Security Act 

7 (42 U.S.C. 1395i–3(f)(2)(A)(i)(II); 

8 1396r(f)(2)(A)(i)(II)) should be increased from 

9 75 and, if so, what the required number of ini10 tial training hours should be, including any rec11 ommendations for the content of such training 

12 (including training related to dementia). 

13 (B) Whether requirements for ongoing 

14 training under such sections 

15 1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) 

16 should be increased from 12 hours per year, in17 cluding any recommendations for the content of 

18 such training. 

19 (2) CONSULTATION.—In conducting the anal20 ysis under paragraph (1)(A), the Secretary shall 

21 consult with States that, as of the date of the enact22 ment of this Act, require more than 75 hours of 

23 training for certified nurse aides. 

24 (3) DEFINITIONS.—In this section: 


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1 (A) NURSING FACILITY.—The term ‘‘nurs2 ing facility’’ has the meaning given such term 

3 in section 1919(a) of the Social Security Act 

4 (42 U.S.C. 1396r(a)). 

5 (B) SECRETARY.—The term ‘‘Secretary’’ 

6 means the Secretary of Health and Human 

7 Services, acting through the Assistant Secretary 

8 for Planning and Evaluation. 

9 (C) SKILLED NURSING FACILITY.—The 

10 term ‘‘skilled nursing facility’’ has the meaning 

11 given such term in section 1819(a) of the Social 

12 Security Act (42 U.S.C. 1395(a)). 

13 (b) REPORT.—Not later than 2 years after the date 

14 of the enactment of this Act, the Secretary shall submit 

15 to Congress a report containing the results of the study 

16 conducted under subsection (a), together with rec17 ommendations for such legislation and administrative ac18 tion as the Secretary determines appropriate. 

19 Subtitle C—Quality Measurements 

20 SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR 

21 QUALITY IMPROVEMENT. 

22 Title XI of the Social Security Act, as amended by 

23 section 1401(a), is further amended by adding at the end 

24 the following new part: 


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1 ‘‘PART E—QUALITY IMPROVEMENT

2 ‘‘ESTABLISHMENT OF NATIONAL PRIORITIES FOR

3 PERFORMANCE IMPROVEMENT

4 ‘‘SEC. 1191. (a) ESTABLISHMENT OF NATIONAL PRI5 ORITIES BY THE SECRETARY.—The Secretary shall estab6 lish and periodically update, not less frequently than tri7 ennially, national priorities for performance improvement. 

8 ‘‘(b) RECOMMENDATIONS FOR NATIONAL PRIOR9 ITIES.—In establishing and updating national priorities 

10 under subsection (a), the Secretary shall solicit and con11 sider recommendations from multiple outside stake12 holders. 

13 ‘‘(c) CONSIDERATIONS IN SETTING NATIONAL PRI14 ORITIES.—With respect to such priorities, the Secretary 

15 shall ensure that priority is given to areas in the delivery 

16 of health care services in the United States that— 

17 ‘‘(1) contribute to a large burden of disease, in18 cluding those that address the health care provided 

19 to patients with prevalent, high-cost chronic dis20 eases; 

21 ‘‘(2) have the greatest potential to decrease 

22 morbidity and mortality in this country, including 

23 those that are designed to eliminate harm to pa24 tients; 


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1 ‘‘(3) have the greatest potential for improving 

2 the performance, affordability, and patient3 centeredness of health care, including those due to 

4 variations in care; 

5 ‘‘(4) address health disparities across groups 

6 and areas; and 

7 ‘‘(5) have the potential for rapid improvement 

8 due to existing evidence, standards of care or other 

9 reasons. 

10 ‘‘(d) DEFINITIONS.—In this part: 

11 ‘‘(1) CONSENSUS-BASED ENTITY.—The term 

12 ‘consensus-based entity’ means an entity with a con13 tract with the Secretary under section 1890. 

14 ‘‘(2) QUALITY MEASURE.—The term ‘quality 

15 measure’ means a national consensus standard for 

16 measuring the performance and improvement of pop17 ulation health, or of institutional providers of serv18 ices, physicians, and other health care practitioners 

19 in the delivery of health care services. 

20 ‘‘(e) FUNDING.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall provide 

22 for the transfer, from the Federal Hospital Insur23 ance Trust Fund under section 1817 and the Fed24 eral Supplementary Medical Insurance Trust Fund 

25 under section 1841 (in such proportion as the SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00632 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary determines appropriate), of $2,000,000, for 

2 the activities under this section for each of the fiscal 

3 years 2010 through 2014. 

4 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

5 For purposes of carrying out the provisions of this 

6 section, in addition to funds otherwise available, out 

7 of any funds in the Treasury not otherwise appro8 priated, there are appropriated to the Secretary of 

9 Health and Human Services $2,000,000 for each of 

10 the fiscal years 2010 through 2014.’’. 

11 SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; 

12 GAO EVALUATION OF DATA COLLECTION 

13 PROCESS FOR QUALITY MEASUREMENT. 

14 Part E of title XI of the Social Security Act, as added 

15 by section 1441, is amended by adding at the end the fol16 lowing new sections: 

17 ‘‘SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES. 

18 ‘‘(a) AGREEMENTS WITH QUALIFIED ENTITIES.— 

19 ‘‘(1) IN GENERAL.—The Secretary shall enter 

20 into agreements with qualified entities to develop 

21 quality measures for the delivery of health care serv22 ices in the United States. 

23 ‘‘(2) FORM OF AGREEMENTS.—The Secretary 

24 may carry out paragraph (1) by contract, grant, or 

25 otherwise. 


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1 ‘‘(3) RECOMMENDATIONS OF CONSENSUS2 BASED ENTITY.—In carrying out this section, the 

3 Secretary shall— 

4 ‘‘(A) seek public input; and 

5 ‘‘(B) take into consideration recommenda6 tions of the consensus-based entity with a con7 tract with the Secretary under section 1890(a). 

8 ‘‘(b) DETERMINATION OF AREAS WHERE QUALITY

9 MEASURES ARE REQUIRED.—Consistent with the na10 tional priorities established under this part and with the 

11 programs administered by the Centers for Medicare & 

12 Medicaid Services and in consultation with other relevant 

13 Federal agencies, the Secretary shall determine areas in 

14 which quality measures for assessing health care services 

15 in the United States are needed. 

16 ‘‘(c) DEVELOPMENT OF QUALITY MEASURES.— 

17 ‘‘(1) PATIENT-CENTERED AND POPULATION18 BASED MEASURES.—Quality measures developed 

19 under agreements under subsection (a) shall be de20 signed— 

21 ‘‘(A) to assess outcomes and functional 

22 status of patients; 

23 ‘‘(B) to assess the continuity and coordina24 tion of care and care transitions for patients 


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1 across providers and health care settings, in2 cluding end of life care; 

3 ‘‘(C) to assess patient experience and pa4 tient engagement; 

5 ‘‘(D) to assess the safety, effectiveness, 

6 and timeliness of care; 

7 ‘‘(E) to assess health disparities including 

8 those associated with individual race, ethnicity, 

9 age, gender, place of residence or language; 

10 ‘‘(F) to assess the efficiency and resource 

11 use in the provision of care; 

12 ‘‘(G) to the extent feasible, to be collected 

13 as part of health information technologies sup14 porting better delivery of health care services; 

15 ‘‘(H) to be available free of charge to users 

16 for the use of such measures; and 

17 ‘‘(I) to assess delivery of health care serv18 ices to individuals regardless of age. 

19 ‘‘(2) AVAILABILITY OF MEASURES.—The Sec20 retary shall make quality measures developed under 

21 this section available to the public. 

22 ‘‘(3) TESTING OF PROPOSED MEASURES.—The 

23 Secretary may use amounts made available under 

24 subsection (f) to fund the testing of proposed quality 

25 measures by qualified entities. Testing funded under 


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1 this paragraph shall include testing of the feasibility 

2 and usability of proposed measures. 

3 ‘‘(4) UPDATING OF ENDORSED MEASURES.— 

4 The Secretary may use amounts made available 

5 under subsection (f) to fund the updating (and test6 ing, if applicable) by consensus-based entities of 

7 quality measures that have been previously endorsed 

8 by such an entity as new evidence is developed, in 

9 a manner consistent with section 1890(b)(3). 

10 ‘‘(d) QUALIFIED ENTITIES.—Before entering into 

11 agreements with a qualified entity, the Secretary shall en12 sure that the entity is a public, nonprofit or academic in13 stitution with technical expertise in the area of health 

14 quality measurement. 

15 ‘‘(e) APPLICATION FOR GRANT.—A grant may be 

16 made under this section only if an application for the 

17 grant is submitted to the Secretary and the application 

18 is in such form, is made in such manner, and contains 

19 such agreements, assurances, and information as the Sec20 retary determines to be necessary to carry out this section. 

21 ‘‘(f) FUNDING.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall provide 

23 for the transfer, from the Federal Hospital Insur24 ance Trust Fund under section 1817 and the Fed25 eral Supplementary Medical Insurance Trust Fund 


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1 under section 1841 (in such proportion as the Sec2 retary determines appropriate), of $25,000,000, to 

3 the Secretary for purposes of carrying out this sec4 tion for each of the fiscal years 2010 through 2014. 

5 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

6 For purposes of carrying out the provisions of this 

7 section, in addition to funds otherwise available, out 

8 of any funds in the Treasury not otherwise appro9 priated, there are appropriated to the Secretary of 

10 Health and Human Services $25,000,000 for each 

11 of the fiscal years 2010 through 2014. 

12 ‘‘SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROC13 ESS FOR QUALITY MEASUREMENT. 

14 ‘‘(a) GAO EVALUATIONS.—The Comptroller General 

15 of the United States shall conduct periodic evaluations of 

16 the implementation of the data collection processes for 

17 quality measures used by the Secretary. 

18 ‘‘(b) CONSIDERATIONS.—In carrying out the evalua19 tion under subsection (a), the Comptroller General shall 

20 determine— 

21 ‘‘(1) whether the system for the collection of 

22 data for quality measures provides for validation of 

23 data as relevant and scientifically credible; 

24 ‘‘(2) whether data collection efforts under the 

25 system use the most efficient and cost-effective 


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1 means in a manner that minimizes administrative 

2 burden on persons required to collect data and that 

3 adequately protects the privacy of patients’ personal 

4 health information and provides data security; 

5 ‘‘(3) whether standards under the system pro6 vide for an appropriate opportunity for physicians 

7 and other clinicians and institutional providers of 

8 services to review and correct findings; and 

9 ‘‘(4) the extent to which quality measures are 

10 consistent with section 1192(c)(1) or result in direct 

11 or indirect costs to users of such measures. 

12 ‘‘(c) REPORT.—The Comptroller General shall sub13 mit reports to Congress and to the Secretary containing 

14 a description of the findings and conclusions of the results 

15 of each such evaluation.’’. 

16 SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT 

17 INTO SELECTION OF QUALITY MEASURES. 

18 Section 1808 of the Social Security Act (42 U.S.C. 

19 1395b–9) is amended by adding at the end the following 

20 new subsection: 

21 ‘‘(d) MULTI-STAKEHOLDER PRE-RULEMAKING INPUT

22 INTO SELECTION OF QUALITY MEASURES.— 

23 ‘‘(1) LIST OF MEASURES.—Not later than De24 cember 1 before each year (beginning with 2011), 

25 the Secretary shall make public a list of measures 


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1 being considered for selection for quality measure2 ment by the Secretary in rulemaking with respect to 

3 payment systems under this title beginning in the 

4 payment year beginning in such year and for pay5 ment systems beginning in the calendar year fol6 lowing such year, as the case may be. 

7 ‘‘(2) CONSULTATION ON SELECTION OF EN8 DORSED QUALITY MEASURES.—A consensus-based 

9 entity that has entered into a contract under section 

10 1890 shall, as part of such contract, convene multi11 stakeholder groups to provide recommendations on 

12 the selection of individual or composite quality meas13 ures, for use in reporting performance information 

14 to the public or for use in public health care pro15 grams. 

16 ‘‘(3) MULTI-STAKEHOLDER INPUT.—Not later 

17 than February 1 of each year (beginning with 

18 2011), the consensus-based entity described in para19 graph (2) shall transmit to the Secretary the rec20 ommendations of multi-stakeholder groups provided 

21 under paragraph (2). Such recommendations shall 

22 be included in the transmissions the consensus-based 

23 entity makes to the Secretary under the contract 

24 provided for under section 1890. 


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1 ‘‘(4) REQUIREMENT FOR TRANSPARENCY IN

2 PROCESS.— 

3 ‘‘(A) IN GENERAL.—In convening multi4 stakeholder groups under paragraph (2) with 

5 respect to the selection of quality measures, the 

6 consensus-based entity described in such para7 graph shall provide for an open and transparent 

8 process for the activities conducted pursuant to 

9 such convening. 

10 ‘‘(B) SELECTION OF ORGANIZATIONS PAR11 TICIPATING IN MULTI-STAKEHOLDER

12 GROUPS.—The process under paragraph (2) 

13 shall ensure that the selection of representatives 

14 of multi-stakeholder groups includes provision 

15 for public nominations for, and the opportunity 

16 for public comment on, such selection. 

17 ‘‘(5) USE OF INPUT.—The respective proposed 

18 rule shall contain a summary of the recommenda19 tions made by the multi-stakeholder groups under 

20 paragraph (2), as well as other comments received 

21 regarding the proposed measures, and the extent to 

22 which such proposed rule follows such recommenda23 tions and the rationale for not following such rec24 ommendations. 


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1 ‘‘(6) MULTI-STAKEHOLDER GROUPS.—For pur2 poses of this subsection, the term ‘multi-stakeholder 

3 groups’ means, with respect to a quality measure, a 

4 voluntary collaborative of organizations representing 

5 persons interested in or affected by the use of such 

6 quality measure, such as the following: 

7 ‘‘(A) Hospitals and other institutional pro8 viders. 

9 ‘‘(B) Physicians. 

10 ‘‘(C) Health care quality alliances. 

11 ‘‘(D) Nurses and other health care practi12 tioners. 

13 ‘‘(E) Health plans. 

14 ‘‘(F) Patient advocates and consumer 

15 groups. 

16 ‘‘(G) Employers. 

17 ‘‘(H) Public and private purchasers of 

18 health care items and services. 

19 ‘‘(I) Labor organizations. 

20 ‘‘(J) Relevant departments or agencies of 

21 the United States. 

22 ‘‘(K) Biopharmaceutical companies and 

23 manufacturers of medical devices. 

24 ‘‘(L) Licensing, credentialing, and accred25 iting bodies. 


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1 ‘‘(7) FUNDING.— 

2 ‘‘(A) IN GENERAL.—The Secretary shall 

3 provide for the transfer, from the Federal Hos4 pital Insurance Trust Fund under section 1817 

5 and the Federal Supplementary Medical Insur6 ance Trust Fund under section 1841 (in such 

7 proportion as the Secretary determines appro8 priate), of $1,000,000, to the Secretary for pur9 poses of carrying out this subsection for each of 

10 the fiscal years 2010 through 2014. 

11 ‘‘(B) AUTHORIZATION OF APPROPRIA12 TIONS.—For purposes of carrying out the provi13 sions of this subsection, in addition to funds 

14 otherwise available, out of any funds in the 

15 Treasury not otherwise appropriated, there are 

16 appropriated to the Secretary of Health and 

17 Human Services $1,000,000 for each of the fis18 cal years 2010 through 2014.’’. 

19 SEC. 1444. APPLICATION OF QUALITY MEASURES. 

20 (a) INPATIENT HOSPITAL SERVICES.—Section 

21 1886(b)(3)(B) of such Act (42 U.S.C. 1395ww(b)(3)(B)) 

22 is amended by adding at the end the following new clause: 

23 ‘‘(x)(I) Subject to subclause (II), for purposes of re24 porting data on quality measures for inpatient hospital 

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1 quent fiscal year, the quality measures specified under 

2 clause (viii) shall be measures selected by the Secretary 

3 from measures that have been endorsed by the entity with 

4 a contract with the Secretary under section 1890(a). 

5 ‘‘(II) In the case of a specified area or medical topic 

6 determined appropriate by the Secretary for which a fea7 sible and practical quality measure has not been endorsed 

8 by the entity with a contract under section 1890(a), the 

9 Secretary may specify a measure that is not so endorsed 

10 as long as due consideration is given to measures that 

11 have been endorsed or adopted by a consensus organiza12 tion identified by the Secretary. The Secretary shall sub13 mit such a non-endorsed measure to the entity for consid14 eration for endorsement. If the entity considers but does 

15 not endorse such a measure and if the Secretary does not 

16 phase-out use of such measure, the Secretary shall include 

17 the rationale for continued use of such a measure in rule18 making.’’. 

19 (b) OUTPATIENT HOSPITAL SERVICES.—Section 

20 1833(t)(17) of such Act (42 U.S.C. 1395l(t)(17)) is 

21 amended by adding at the end the following new subpara22 graph: 

23 ‘‘(F) USE OF ENDORSED QUALITY MEAS24 URES.—The provisions of clause (x) of section 

25 1886(b)(3)(C) shall apply to quality measures 


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1 for covered OPD services under this paragraph 

2 in the same manner as such provisions apply to 

3 quality measures for inpatient hospital serv4 ices.’’. 

5 (c) PHYSICIANS’ SERVICES.—Section 

6 1848(k)(2)(C)(ii) of such Act (42 U.S.C. 1395w7 4(k)(2)(C)(ii)) is amended by adding at the end the fol8 lowing: ‘‘The Secretary shall submit such a non-endorsed 

9 measure to the entity for consideration for endorsement. 

10 If the entity considers but does not endorse such a meas11 ure and if the Secretary does not phase-out use of such 

12 measure, the Secretary shall include the rationale for con13 tinued use of such a measure in rulemaking.’’. 

14 (d) RENAL DIALYSIS SERVICES.—Section 

15 1881(h)(2)(B)(ii) of such Act (42 U.S.C. 

16 1395rr(h)(2)(B)(ii)) is amended by adding at the end the 

17 following: ‘‘The Secretary shall submit such a non-en18 dorsed measure to the entity for consideration for endorse19 ment. If the entity considers but does not endorse such 

20 a measure and if the Secretary does not phase-out use 

21 of such measure, the Secretary shall include the rationale 

22 for continued use of such a measure in rulemaking.’’. 

23 (e) ENDORSEMENT OF STANDARDS.—Section 

24 1890(b)(2) of the Social Security Act (42 U.S.C. 


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1 1395aaa(b)(2)) is amended by adding after and below sub2 paragraph (B) the following: 

3 ‘‘If the entity does not endorse a measure, such enti4 ty shall explain the reasons and provide suggestions 

5 about changes to such measure that might make it 

6 a potentially endorsable measure.’’. 

7 (f) EFFECTIVE DATE.—Except as otherwise pro8 vided, the amendments made by this section shall apply 

9 to quality measures applied for payment years beginning 

10 with 2012 or fiscal year 2012, as the case may be. 

11 SEC. 1445. CONSENSUS-BASED ENTITY FUNDING. 

12 Section 1890(d) of the Social Security Act (42 U.S.C. 

13 1395aaa(d)) is amended by striking ‘‘for each of fiscal 

14 years 2009 through 2012’’ and inserting ‘‘for fiscal year 

15 2009, and $12,000,000 for each of the fiscal years 2010 

16 through 2012’’ 


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1 Subtitle D—Physician Payments 

2 Sunshine Provision 

3 SEC. 1451. REPORTS ON FINANCIAL RELATIONSHIPS BE4 TWEEN MANUFACTURERS AND DISTRIBU5 TORS OF COVERED DRUGS, DEVICES, 

6 BIOLOGICALS, OR MEDICAL SUPPLIES 

7 UNDER MEDICARE, MEDICAID, OR CHIP AND 

8 PHYSICIANS AND OTHER HEALTH CARE ENTI9 TIES AND BETWEEN PHYSICIANS AND OTHER 

10 HEALTH CARE ENTITIES. 

11 (a) IN GENERAL.—Part A of title XI of the Social 

12 Security Act (42 U.S.C. 1301 et seq.), as amended by sec13 tion 1631(a), is further amended by inserting after section 

14 1128G the following new section: 

15 ‘‘SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS’ FINAN16 CIAL RELATIONSHIPS WITH MANUFACTUR17 ERS AND DISTRIBUTORS OF COVERED 

18 DRUGS, DEVICES, BIOLOGICALS, OR MEDICAL 

19 SUPPLIES UNDER MEDICARE, MEDICAID, OR 

20 CHIP AND WITH ENTITIES THAT BILL FOR 

21 SERVICES UNDER MEDICARE. 

22 ‘‘(a) REPORTING OF PAYMENTS OR OTHER TRANS23 FERS OF VALUE.— 

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

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1 nually thereafter, each applicable manufacturer or 

2 distributor that provides a payment or other transfer 

3 of value to a covered recipient, or to an entity or in4 dividual at the request of or designated on behalf of 

5 a covered recipient, shall submit to the Secretary, in 

6 such electronic form as the Secretary shall require, 

7 the following information with respect to the pre8 ceding calendar year: 

9 ‘‘(A) With respect to the covered recipient, 

10 the recipient’s name, business address, physi11 cian specialty, and national provider identifier. 

12 ‘‘(B) With respect to the payment or other 

13 transfer of value, other than a drug sample— 

14 ‘‘(i) its value and date; 

15 ‘‘(ii) the name of the related drug, de16 vice, or supply, if available; and 

17 ‘‘(iii) a description of its form, indi18 cated (as appropriate for all that apply) 

19 as— 

20 ‘‘(I) cash or a cash equivalent; 

21 ‘‘(II) in-kind items or services; 

22 ‘‘(III) stock, a stock option, or 

23 any other ownership interest, divi24 dend, profit, or other return on invest25 ment; or 


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1 ‘‘(IV) any other form (as defined 

2 by the Secretary). 

3 ‘‘(C) With respect to a drug sample, the 

4 name, number, date, and dosage units of the 

5 sample. 

6 ‘‘(2) AGGREGATE REPORTING.—Information 

7 submitted by an applicable manufacturer or dis8 tributor under paragraph (1) shall include the ag9 gregate amount of all payments or other transfers of 

10 value provided by the manufacturer or distributor to 

11 covered recipients (and to entities or individuals at 

12 the request of or designated on behalf of a covered 

13 recipient) during the year involved, including all pay14 ments and transfers of value regardless of whether 

15 such payments or transfer of value were individually 

16 disclosed. 

17 ‘‘(3) SPECIAL RULE FOR CERTAIN PAYMENTS

18 OR OTHER TRANSFERS OF VALUE.—In the case 

19 where an applicable manufacturer or distributor pro20 vides a payment or other transfer of value to an en21 tity or individual at the request of or designated on 

22 behalf of a covered recipient, the manufacturer or 

23 distributor shall disclose that payment or other 

24 transfer of value under the name of the covered re25 cipient. 


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1 ‘‘(4) DELAYED REPORTING FOR PAYMENTS

2 MADE PURSUANT TO PRODUCT DEVELOPMENT

3 AGREEMENTS.—In the case of a payment or other 

4 transfer of value made to a covered recipient by an 

5 applicable manufacturer or distributor pursuant to a 

6 product development agreement for services fur7 nished in connection with the development of a new 

8 drug, device, biological, or medical supply, the appli9 cable manufacturer or distributor may report the 

10 value and recipient of such payment or other trans11 fer of value in the first reporting period under this 

12 subsection in the next reporting deadline after the 

13 earlier of the following: 

14 ‘‘(A) The date of the approval or clearance 

15 of the covered drug, device, biological, or med16 ical supply by the Food and Drug Administra17 tion. 

18 ‘‘(B) Two calendar years after the date 

19 such payment or other transfer of value was 

20 made. 

21 ‘‘(5) DELAYED REPORTING FOR PAYMENTS

22 MADE PURSUANT TO CLINICAL INVESTIGATIONS.—In 

23 the case of a payment or other transfer of value 

24 made to a covered recipient by an applicable manu25 facturer or distributor in connection with a clinical 


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1 investigation regarding a new drug, device, biologi2 cal, or medical supply, the applicable manufacturer 

3 or distributor may report as required under this sec4 tion in the next reporting period under this sub5 section after the earlier of the following: 

6 ‘‘(A) The date that the clinical investiga7 tion is registered on the website maintained by 

8 the National Institutes of Health pursuant to 

9 section 671 of the Food and Drug Administra10 tion Amendments Act of 2007. 

11 ‘‘(B) Two calendar years after the date 

12 such payment or other transfer of value was 

13 made. 

14 ‘‘(6) CONFIDENTIALITY.—Information de15 scribed in paragraph (4) or (5) shall be considered 

16 confidential and shall not be subject to disclosure 

17 under section 552 of title 5, United States Code, or 

18 any other similar Federal, State, or local law, until 

19 or after the date on which the information is made 

20 available to the public under such paragraph. 

21 ‘‘(b) REPORTING OF OWNERSHIP INTEREST BY PHY22 SICIANS IN HOSPITALS AND OTHER ENTITIES THAT BILL

23 MEDICARE.—Not later than March 31 of each year (be24 ginning with 2011), each hospital or other health care en25 tity (not including a Medicare Advantage organization) 


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1 that bills the Secretary under part A or part B of title 

2 XVIII for services shall report on the ownership shares 

3 (other than ownership shares described in section 1877(c)) 

4 of each physician who, directly or indirectly, owns an in5 terest in the entity. In this subsection, the term ‘physician’ 

6 includes a physician’s immediate family members (as de7 fined for purposes of section 1877(a)). 

8 ‘‘(c) PUBLIC AVAILABILITY.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall estab10 lish procedures to ensure that, not later than Sep11 tember 30, 2011, and on June 30 of each year be12 ginning thereafter, the information submitted under 

13 subsections (a) and (b), other than information re14 gard drug samples, with respect to the preceding 

15 calendar year is made available through an Internet 

16 website that— 

17 ‘‘(A) is searchable and is in a format that 

18 is clear and understandable; 

19 ‘‘(B) contains information that is pre20 sented by the name of the applicable manufac21 turer or distributor, the name of the covered re22 cipient, the business address of the covered re23 cipient, the specialty (if applicable) of the cov24 ered recipient, the value of the payment or 

25 other transfer of value, the date on which the 


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1 payment or other transfer of value was provided 

2 to the covered recipient, the form of the pay3 ment or other transfer of value, indicated (as 

4 appropriate) under subsection (a)(1)(B)(ii), the 

5 nature of the payment or other transfer of 

6 value, indicated (as appropriate) under sub7 section (a)(1)(B)(iii), and the name of the cov8 ered drug, device, biological, or medical supply, 

9 as applicable; 

10 ‘‘(C) contains information that is able to 

11 be easily aggregated and downloaded; 

12 ‘‘(D) contains a description of any enforce13 ment actions taken to carry out this section, in14 cluding any penalties imposed under subsection 

15 (d), during the preceding year; 

16 ‘‘(E) contains background information on 

17 industry-physician relationships; 

18 ‘‘(F) in the case of information submitted 

19 with respect to a payment or other transfer of 

20 value described in subsection (a)(5), lists such 

21 information separately from the other informa22 tion submitted under subsection (a) and des23 ignates such separately listed information as 

24 funding for clinical research; 


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1 ‘‘(G) contains any other information the 

2 Secretary determines would be helpful to the 

3 average consumer; and 

4 ‘‘(H) provides the covered recipient an op5 portunity to submit corrections to the informa6 tion made available to the public with respect to 

7 the covered recipient. 

8 ‘‘(2) ACCURACY OF REPORTING.—The accuracy 

9 of the information that is submitted under sub10 sections (a) and (b) and made available under para11 graph (1) shall be the responsibility of the applicable 

12 manufacturer or distributor of a covered drug, de13 vice, biological, or medical supply reporting under 

14 subsection (a) or hospital or other health care entity 

15 reporting physician ownership under subsection (b). 

16 The Secretary shall establish procedures to ensure 

17 that the covered recipient is provided with an oppor18 tunity to submit corrections to the manufacturer, 

19 distributor, hospital, or other entity reporting under 

20 subsection (a) or (b) with regard to information 

21 made public with respect to the covered recipient 

22 and, under such procedures, the corrections shall be 

23 transmitted to the Secretary. 

24 ‘‘(3) SPECIAL RULE FOR DRUG SAMPLES.—In25 formation relating to drug samples provided under 


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1 subsection (a) shall not be made available to the 

2 public by the Secretary but may be made available 

3 outside the Department of Health and Human Serv4 ices by the Secretary for research or legitimate busi5 ness purposes pursuant to data use agreements. 

6 ‘‘(4) SPECIAL RULE FOR NATIONAL PROVIDER

7 IDENTIFIERS.—Information relating to national pro8 vider identifiers provided under subsection (a) shall 

9 not be made available to the public by the Secretary 

10 but may be made available outside the Department 

11 of Health and Human Services by the Secretary for 

12 research or legitimate business purposes pursuant to 

13 data use agreements. 

14 ‘‘(d) PENALTIES FOR NONCOMPLIANCE.— 

15 ‘‘(1) FAILURE TO REPORT.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), except as provided in paragraph (2), 

18 any applicable manufacturer or distributor that 

19 fails to submit information required under sub20 section (a) in a timely manner in accordance 

21 with regulations promulgated to carry out such 

22 subsection, and any hospital or other entity that 

23 fails to submit information required under sub24 section (b) in a timely manner in accordance 

25 with regulations promulgated to carry out such 


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1 subsection shall be subject to a civil money pen2 alty of not less than $1,000, but not more than 

3 $10,000, for each payment or other transfer of 

4 value or ownership or investment interest not 

5 reported as required under such subsection. 

6 Such penalty shall be imposed and collected in 

7 the same manner as civil money penalties under 

8 subsection (a) of section 1128A are imposed 

9 and collected under that section. 

10 ‘‘(B) LIMITATION.—The total amount of 

11 civil money penalties imposed under subpara12 graph (A) with respect to each annual submis13 sion of information under subsection (a) by an 

14 applicable manufacturer or distributor or other 

15 entity shall not exceed $150,000. 

16 ‘‘(2) KNOWING FAILURE TO REPORT.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), any applicable manufacturer or dis19 tributor that knowingly fails to submit informa20 tion required under subsection (a) in a timely 

21 manner in accordance with regulations promul22 gated to carry out such subsection and any hos23 pital or other entity that fails to submit infor24 mation required under subsection (b) in a time25 ly manner in accordance with regulations proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00655 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mulgated to carry out such subsection, shall be 

2 subject to a civil money penalty of not less than 

3 $10,000, but not more than $100,000, for each 

4 payment or other transfer of value or ownership 

5 or investment interest not reported as required 

6 under such subsection. Such penalty shall be 

7 imposed and collected in the same manner as 

8 civil money penalties under subsection (a) of 

9 section 1128A are imposed and collected under 

10 that section. 

11 ‘‘(B) LIMITATION.—The total amount of 

12 civil money penalties imposed under subpara13 graph (A) with respect to each annual submis14 sion of information under subsection (a) or (b) 

15 by an applicable manufacturer, distributor, or 

16 entity shall not exceed $1,000,000, or, if great17 er, 0.1 percentage of the total annual revenues 

18 of the manufacturer, distributor, or entity. 

19 ‘‘(3) USE OF FUNDS.—Funds collected by the 

20 Secretary as a result of the imposition of a civil 

21 money penalty under this subsection shall be used to 

22 carry out this section. 

23 ‘‘(4) ENFORCEMENT THROUGH STATE ATTOR24 NEYS GENERAL.—The attorney general of a State, 

25 after providing notice to the Secretary of an intent 


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1 to proceed under this paragraph in a specific case 

2 and providing the Secretary with an opportunity to 

3 bring an action under this subsection and the Sec4 retary declining such opportunity, may proceed 

5 under this subsection against a manufacturer or dis6 tributor in the State. 

7 ‘‘(e) ANNUAL REPORT TO CONGRESS.—Not later 

8 than April 1 of each year beginning with 2011, the Sec9 retary shall submit to Congress a report that includes the 

10 following: 

11 ‘‘(1) The information submitted under this sec12 tion during the preceding year, aggregated for each 

13 applicable manufacturer or distributor of a covered 

14 drug, device, biological, or medical supply that sub15 mitted such information during such year. 

16 ‘‘(2) A description of any enforcement actions 

17 taken to carry out this section, including any pen18 alties imposed under subsection (d), during the pre19 ceding year. 

20 ‘‘(f) DEFINITIONS.—In this section: 

21 ‘‘(1) APPLICABLE MANUFACTURER; APPLICA22 BLE DISTRIBUTOR.—The term ‘applicable manufac23 turer’ means a manufacturer of a covered drug, de24 vice, biological, or medical supply, and the term ‘apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00657 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plicable distributor’ means a distributor of a covered 

2 drug, device, or medical supply. 

3 ‘‘(2) CLINICAL INVESTIGATION.—The term 

4 ‘clinical investigation’ means any experiment involv5 ing one or more human subjects, or materials de6 rived from human subjects, in which a drug or de7 vice is administered, dispensed, or used. 

8 ‘‘(3) COVERED DRUG, DEVICE, BIOLOGICAL, OR

9 MEDICAL SUPPLY.—The term ‘covered’ means, with 

10 respect to a drug, device, biological, or medical sup11 ply, such a drug, device, biological, or medical supply 

12 for which payment is available under title XVIII or 

13 a State plan under title XIX or XXI (or a waiver 

14 of such a plan). 

15 ‘‘(4) COVERED RECIPIENT.—The term ‘covered 

16 recipient’ means the following: 

17 ‘‘(A) A physician. 

18 ‘‘(B) A physician group practice. 

19 ‘‘(C) Any other prescriber of a covered 

20 drug, device, biological, or medical supply. 

21 ‘‘(D) A pharmacy or pharmacist. 

22 ‘‘(E) A health insurance issuer, group 

23 health plan, or other entity offering a health 

24 benefits plan, including any employee of such 

25 an issuer, plan, or entity. 


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1 ‘‘(F) A pharmacy benefit manager, includ2 ing any employee of such a manager. 

3 ‘‘(G) A hospital. 

4 ‘‘(H) A medical school. 

5 ‘‘(I) A sponsor of a continuing medical 

6 education program. 

7 ‘‘(J) A patient advocacy or disease specific 

8 group. 

9 ‘‘(K) A organization of health care profes10 sionals. 

11 ‘‘(L) A biomedical researcher. 

12 ‘‘(M) A group purchasing organization. 

13 ‘‘(5) DISTRIBUTOR OF A COVERED DRUG, DE14 VICE, OR MEDICAL SUPPLY.—The term ‘distributor 

15 of a covered drug, device, or medical supply’ means 

16 any entity which is engaged in the marketing or dis17 tribution of a covered drug, device, or medical sup18 ply (or any subsidiary of or entity affiliated with 

19 such entity), but does not include a wholesale phar20 maceutical distributor. 

21 ‘‘(6) EMPLOYEE.—The term ‘employee’ has the 

22 meaning given such term in section 1877(h)(2). 

23 ‘‘(7) KNOWINGLY.—The term ‘knowingly’ has 

24 the meaning given such term in section 3729(b) of 

25 title 31, United States Code. 


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1 ‘‘(8) MANUFACTURER OF A COVERED DRUG, 

2 DEVICE, BIOLOGICAL, OR MEDICAL SUPPLY.—The 

3 term ‘manufacturer of a covered drug, device, bio4 logical, or medical supply’ means any entity which is 

5 engaged in the production, preparation, propagation, 

6 compounding, conversion, processing, marketing, or 

7 distribution of a covered drug, device, biological, or 

8 medical supply (or any subsidiary of or entity affili9 ated with such entity). 

10 ‘‘(9) PAYMENT OR OTHER TRANSFER OF

11 VALUE.— 

12 ‘‘(A) IN GENERAL.—The term ‘payment or 

13 other transfer of value’ means a transfer of 

14 anything of value for or of any of the following: 

15 ‘‘(i) Gift, food, or entertainment. 

16 ‘‘(ii) Travel or trip. 

17 ‘‘(iii) Honoraria. 

18 ‘‘(iv) Research funding or grant. 

19 ‘‘(v) Education or conference funding. 

20 ‘‘(vi) Consulting fees. 

21 ‘‘(vii) Ownership or investment inter22 est and royalties or license fee. 

23 ‘‘(B) INCLUSIONS.—Subject to subpara24 graph (C), the term ‘payment or other transfer 

25 of value’ includes any compensation, gift, honoVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00660 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 rarium, speaking fee, consulting fee, travel, 

2 services, dividend, profit distribution, stock or 

3 stock option grant, or any ownership or invest4 ment interest held by a physician in a manufac5 turer (excluding a dividend or other profit dis6 tribution from, or ownership or investment in7 terest in, a publicly traded security or mutual 

8 fund (as described in section 1877(c))). 

9 ‘‘(C) EXCLUSIONS.—The term ‘payment or 

10 other transfer of value’ does not include the fol11 lowing: 

12 ‘‘(i) Any payment or other transfer of 

13 value provided by an applicable manufac14 turer or distributor to a covered recipient 

15 where the amount transferred to, requested 

16 by, or designated on behalf of the covered 

17 recipient does not exceed $5. 

18 ‘‘(ii) The loan of a covered device for 

19 a short-term trial period, not to exceed 90 

20 days, to permit evaluation of the covered 

21 device by the covered recipient. 

22 ‘‘(iii) Items or services provided under 

23 a contractual warranty, including the re24 placement of a covered device, where the 

25 terms of the warranty are set forth in the 


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1 purchase or lease agreement for the cov2 ered device. 

3 ‘‘(iv) A transfer of anything of value 

4 to a covered recipient when the covered re5 cipient is a patient and not acting in the 

6 professional capacity of a covered recipient. 

7 ‘‘(v) In-kind items used for the provi8 sion of charity care. 

9 ‘‘(vi) A dividend or other profit dis10 tribution from, or ownership or investment 

11 interest in, a publicly traded security and 

12 mutual fund (as described in section 

13 1877(c)). 

14 ‘‘(vii) Compensation paid by a manu15 facturer or distributor of a covered drug, 

16 device, biological, or medical supply to a 

17 covered recipient who is directly employed 

18 by and works solely for such manufacturer 

19 or distributor. 

20 ‘‘(viii) Any discount or cash rebate. 

21 ‘‘(10) PHYSICIAN.—The term ‘physician’ has 

22 the meaning given that term in section 1861(r). For 

23 purposes of this section, such term does not include 

24 a physician who is an employee of the applicable 


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1 manufacturer that is required to submit information 

2 under subsection (a). 

3 ‘‘(g) ANNUAL REPORTS TO STATES.—Not later than 

4 April 1 of each year beginning with 2011, the Secretary 

5 shall submit to States a report that includes a summary 

6 of the information submitted under subsections (a) and 

7 (d) during the preceding year with respect to covered re8 cipients or other hospitals and entities in the State. 

9 ‘‘(h) RELATION TO STATE LAWS.— 

10 ‘‘(1) IN GENERAL.—Effective on January 1, 

11 2011, subject to paragraph (2), the provisions of 

12 this section shall preempt any law or regulation of 

13 a State or of a political subdivision of a State that 

14 requires an applicable manufacturer and applicable 

15 distributor (as such terms are defined in subsection 

16 (f)) to disclose or report, in any format, the type of 

17 information (described in subsection (a)) regarding a 

18 payment or other transfer of value provided by the 

19 manufacturer to a covered recipient (as so defined). 

20 ‘‘(2) NO PREEMPTION OF ADDITIONAL RE21 QUIREMENTS.—Paragraph (1) shall not preempt any 

22 law or regulation of a State or of a political subdivi23 sion of a State that requires any of the following: 


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1 ‘‘(A) The disclosure or reporting of infor2 mation not of the type required to be disclosed 

3 or reported under this section. 

4 ‘‘(B) The disclosure or reporting, in any 

5 format, of the type of information required to 

6 be disclosed or reported under this section to a 

7 Federal, State, or local governmental agency for 

8 public health surveillance, investigation, or 

9 other public health purposes or health oversight 

10 purposes. 

11 ‘‘(C) The discovery or admissibility of in12 formation described in this section in a crimi13 nal, civil, or administrative proceeding.’’. 

14 (b) AVAILABILITY OF INFORMATION FROM THE DIS15 CLOSURE OF FINANCIAL RELATIONSHIP REPORT

16 (DFRR).—The Secretary of Health and Human Services 

17 shall submit to Congress a report on the full results of 

18 the Disclosure of Physician Financial Relationships sur19 veys required pursuant to section 5006 of the Deficit Re20 duction Act of 2005. Such report shall be submitted to 

21 Congress not later than the date that is 6 months after 

22 the date such surveys are collected and shall be made pub23 licly available on an Internet website of the Department 

24 of Health and Human Services. 


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1 Subtitle E—Public Reporting on 

2 Health Care-Associated Infections 

3 SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY 

4 HOSPITALS AND AMBULATORY SURGICAL 

5 CENTERS ON HEALTH CARE-ASSOCIATED IN6 FECTIONS. 

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

8 is amended by inserting after section 1138 the following 

9 section: 

10 ‘‘SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY 

11 HOSPITALS AND AMBULATORY SURGICAL 

12 CENTERS ON HEALTH CARE-ASSOCIATED IN13 FECTIONS. 

14 ‘‘(a) REPORTING REQUIREMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall provide 

16 that a hospital (as defined in subsection (g)) or am17 bulatory surgical center meeting the requirements of 

18 titles XVIII or XIX may participate in the programs 

19 established under such titles (pursuant to the appli20 cable provisions of law, including sections 

21 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in accord22 ance with this section, the hospital or center reports 

23 such information on health care-associated infections 

24 that develop in the hospital or center (and such deVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00665 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mographic information associated with such infec2 tions) as the Secretary specifies. 

3 ‘‘(2) REPORTING PROTOCOLS.— Such informa4 tion shall be reported in accordance with reporting 

5 protocols established by the Secretary through the 

6 Director of the Centers for Disease Control and Pre7 vention (in this section referred to as the ‘CDC’) 

8 and to the National Healthcare Safety Network of 

9 the CDC or under such another reporting system of 

10 such Centers as determined appropriate by the Sec11 retary in consultation with such Director. 

12 ‘‘(3) COORDINATION WITH HIT.—The Sec13 retary, through the Director of the CDC and the Of14 fice of the National Coordinator for Health Informa15 tion Technology, shall ensure that the transmission 

16 of information under this subsection is coordinated 

17 with systems established under the HITECH Act, 

18 where appropriate. 

19 ‘‘(4) PROCEDURES TO ENSURE THE VALIDITY

20 OF INFORMATION.—The Secretary shall establish 

21 procedures regarding the validity of the information 

22 submitted under this subsection in order to ensure 

23 that such information is appropriately compared 

24 across hospitals and centers. Such procedures shall 


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1 address failures to report as well as errors in report2 ing. 

3 ‘‘(5) IMPLEMENTATION.—Not later than 1 year 

4 after the date of enactment of this section, the Sec5 retary, through the Director of CDC, shall promul6 gate regulations to carry out this section. 

7 ‘‘(b) PUBLIC POSTING OF INFORMATION.—The Sec8 retary shall promptly post, on the official public Internet 

9 site of the Department of Health and Human Services, 

10 the information reported under subsection (a). Such infor11 mation shall be set forth in a manner that allows for the 

12 comparison of information on health care-associated infec13 tions— 

14 ‘‘(1) among hospitals and ambulatory surgical 

15 centers; and 

16 ‘‘(2) by demographic information. 

17 ‘‘(c) ANNUAL REPORT TO CONGRESS.—On an annual 

18 basis the Secretary shall submit to the Congress a report 

19 that summarizes each of the following: 

20 ‘‘(1) The number and types of health care-asso21 ciated infections reported under subsection (a) in 

22 hospitals and ambulatory surgical centers during 

23 such year. 


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1 ‘‘(2) Factors that contribute to the occurrence 

2 of such infections, including health care worker im3 munization rates. 

4 ‘‘(3) Based on the most recent information 

5 available to the Secretary on the composition of the 

6 professional staff of hospitals and ambulatory sur7 gical centers, the number of certified infection con8 trol professionals on the staff of hospitals and ambu9 latory surgical centers. 

10 ‘‘(4) The total increases or decreases in health 

11 care costs that resulted from increases or decreases 

12 in the rates of occurrence of each such type of infec13 tion during such year. 

14 ‘‘(5) Recommendations, in coordination with the 

15 Center for Quality Improvement established under 

16 section 931 of the Public Health Service Act, for 

17 best practices to eliminate the rates of occurrence of 

18 each such type of infection in hospitals and ambula19 tory surgical centers. 

20 ‘‘(d) NON-PREEMPTION OF STATE LAWS.—Nothing 

21 in this section shall be construed as preempting or other22 wise affecting any provision of State law relating to the 

23 disclosure of information on health care-associated infec24 tions or patient safety procedures for a hospital or ambu25 latory surgical center. 


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1 ‘‘(e) HEALTH CARE-ASSOCIATED INFECTION.—For 

2 purposes of this section: 

3 ‘‘(1) IN GENERAL.—The term ‘health care-asso4 ciated infection’ means an infection that develops in 

5 a patient who has received care in any institutional 

6 setting where health care is delivered and is related 

7 to receiving health care. 

8 ‘‘(2) RELATED TO RECEIVING HEALTH CARE.— 

9 The term ‘related to receiving health care’, with re10 spect to an infection, means that the infection was 

11 not incubating or present at the time health care 

12 was provided. 

13 ‘‘(f) APPLICATION TO CRITICAL ACCESS HOS14 PITALS.—For purposes of this section, the term ‘hospital’ 

15 includes a critical access hospital, as defined in section 

16 1861(mm)(1).’’. 

17 (b) EFFECTIVE DATE.—With respect to section 

18 1138A of the Social Security Act (as inserted by sub19 section (a) of this section), the requirement under such 

20 section that hospitals and ambulatory surgical centers 

21 submit reports takes effect on such date (not later than 

22 2 years after the date of the enactment of this Act) as 

23 the Secretary of Health and Human Services shall specify. 

24 In order to meet such deadline, the Secretary may imple25 ment such section through guidance or other instructions. 


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1 (c) GAO REPORT.—Not later than 18 months after 

2 the date of the enactment of this Act, the Comptroller 

3 General of the United States shall submit to Congress a 

4 report on the program established under section 1138A 

5 of the Social Security Act, as inserted by subsection (a). 

6 Such report shall include an analysis of the appropriate7 ness of the types of information required for submission, 

8 compliance with reporting requirements, the success of the 

9 validity procedures established, and any conflict or overlap 

10 between the reporting required under such section and any 

11 other reporting systems mandated by either the States or 

12 the Federal Government. 

13 (d) REPORT ON ADDITIONAL DATA.—Not later than 

14 18 months after the date of the enactment of this Act, 

15 the Secretary of Health and Human Services shall submit 

16 to the Congress a report on the appropriateness of expand17 ing the requirements under such section to include addi18 tional information (such as health care worker immuniza19 tion rates), in order to improve health care quality and 

20 patient safety. 


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1 TITLE V—MEDICARE GRADUATE 

2 MEDICAL EDUCATION 

3 SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSI4 TIONS. 

5 (a) IN GENERAL.—Section 1886(h) of the Social Se6 curity Act (42 U.S.C. 1395ww(h)) is amended— 

7 (1) in paragraph (4)(F)(i), by striking ‘‘para8 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

9 (2) in paragraph (4)(H)(i), by striking ‘‘para10 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

11 (3) in paragraph (7)(E), by inserting ‘‘and 

12 paragraph (8)’’ after ‘‘this paragraph’’; and 

13 (4) by adding at the end the following new 

14 paragraph: 

15 ‘‘(8) ADDITIONAL REDISTRIBUTION OF UNUSED

16 RESIDENCY POSITIONS.— 

17 ‘‘(A) REDUCTIONS IN LIMIT BASED ON UN18 USED POSITIONS.— 

19 ‘‘(i) PROGRAMS SUBJECT TO REDUC20 TION.—If a hospital’s reference resident 

21 level (specified in clause (ii)) is less than 

22 the otherwise applicable resident limit (as 

23 defined in subparagraph (C)(ii)), effective 

24 for portions of cost reporting periods oc25 curring on or after July 1, 2011, the othVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00671 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erwise applicable resident limit shall be re2 duced by 90 percent of the difference be3 tween such otherwise applicable resident 

4 limit and such reference resident level. 

5 ‘‘(ii) REFERENCE RESIDENT LEVEL.— 

6 ‘‘(I) IN GENERAL.—Except as 

7 otherwise provided in a subsequent 

8 subclause, the reference resident level 

9 specified in this clause for a hospital 

10 is the highest resident level for any of 

11 the 3 most recent cost reporting peri12 ods (ending before the date of the en13 actment of this paragraph) of the hos14 pital for which a cost report has been 

15 settled (or, if not, submitted (subject 

16 to audit)), as determined by the Sec17 retary. 

18 ‘‘(II) USE OF MOST RECENT AC19 COUNTING PERIOD TO RECOGNIZE EX20 PANSION OF EXISTING PROGRAMS.—If 

21 a hospital submits a timely request to 

22 increase its resident level due to an 

23 expansion, or planned expansion, of 

24 an existing residency training pro25 gram that is not reflected on the most 


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1 recent settled or submitted cost re2 port, after audit and subject to the 

3 discretion of the Secretary, subject to 

4 subclause (IV), the reference resident 

5 level for such hospital is the resident 

6 level that includes the additional resi7 dents attributable to such expansion 

8 or establishment, as determined by 

9 the Secretary. The Secretary is au10 thorized to determine an alternative 

11 reference resident level for a hospital 

12 that submitted to the Secretary a 

13 timely request, before the start of the 

14 2009–2010 academic year, for an in15 crease in its reference resident level 

16 due to a planned expansion. 

17 ‘‘(III) SPECIAL PROVIDER

18 AGREEMENT.—In the case of a hos19 pital described in paragraph 

20 (4)(H)(v), the reference resident level 

21 specified in this clause is the limita22 tion applicable under subclause (I) of 

23 such paragraph. 

24 ‘‘(IV) PREVIOUS REDISTRIBU25 TION.—The reference resident level 


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1 specified in this clause for a hospital 

2 shall be increased to the extent re3 quired to take into account an in4 crease in resident positions made 

5 available to the hospital under para6 graph (7)(B) that are not otherwise 

7 taken into account under a previous 

8 subclause. 

9 ‘‘(iii) AFFILIATION.—The provisions 

10 of clause (i) shall be applied to hospitals 

11 which are members of the same affiliated 

12 group (as defined by the Secretary under 

13 paragraph (4)(H)(ii)) and to the extent the 

14 hospitals can demonstrate that they are 

15 filling any additional resident slots allo16 cated to other hospitals through an affili17 ation agreement, the Secretary shall adjust 

18 the determination of available slots accord19 ingly, or which the Secretary otherwise has 

20 permitted the resident positions (under 

21 section 402 of the Social Security Amend22 ments of 1967) to be aggregated for pur23 poses of applying the resident position lim24 itations under this subsection. 

25 ‘‘(B) REDISTRIBUTION.— 


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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall increase the otherwise applicable resi3 dent limit for each qualifying hospital that 

4 submits an application under this subpara5 graph by such number as the Secretary 

6 may approve for portions of cost reporting 

7 periods occurring on or after July 1, 2011. 

8 The estimated aggregate number of in9 creases in the otherwise applicable resident 

10 limit under this subparagraph may not ex11 ceed the Secretary’s estimate of the aggre12 gate reduction in such limits attributable 

13 to subparagraph (A). 

14 ‘‘(ii) REQUIREMENTS FOR QUALI15 FYING HOSPITALS.—A hospital is not a 

16 qualifying hospital for purposes of this 

17 paragraph unless the following require18 ments are met: 

19 ‘‘(I) MAINTENANCE OF PRIMARY

20 CARE RESIDENT LEVEL.—The hos21 pital maintains the number of primary 

22 care residents at a level that is not 

23 less than the base level of primary 

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1 dent positions provided to the hospital 

2 under this subparagraph. For pur3 poses of this subparagraph, the ‘base 

4 level of primary care residents’ for a 

5 hospital is the level of such residents 

6 as of a base period (specified by the 

7 Secretary), determined without regard 

8 to whether such positions were in ex9 cess of the otherwise applicable resi10 dent limit for such period but taking 

11 into account the application of sub12 clauses (II) and (III) of subparagraph 

13 (A)(ii). 

14 ‘‘(II) DEDICATED ASSIGNMENT

15 OF ADDITIONAL RESIDENT POSITIONS

16 TO PRIMARY CARE.—The hospital as17 signs all such additional resident posi18 tions for primary care residents. 

19 ‘‘(III) ACCREDITATION.—The 

20 hospital’s residency programs in pri21 mary care are fully accredited or, in 

22 the case of a residency training pro23 gram not in operation as of the base 

24 year, the hospital is actively applying 

25 for such accreditation for the program 


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1 for such additional resident positions 

2 (as determined by the Secretary). 

3 ‘‘(iii) CONSIDERATIONS IN REDIS4 TRIBUTION.—In determining for which 

5 qualifying hospitals the increase in the oth6 erwise applicable resident limit is provided 

7 under this subparagraph, the Secretary 

8 shall take into account the demonstrated 

9 likelihood of the hospital filling the posi10 tions within the first 3 cost reporting peri11 ods beginning on or after July 1, 2011, 

12 made available under this subparagraph, 

13 as determined by the Secretary. 

14 ‘‘(iv) PRIORITY FOR CERTAIN HOS15 PITALS.—In determining for which quali16 fying hospitals the increase in the other17 wise applicable resident limit is provided 

18 under this subparagraph, the Secretary 

19 shall distribute the increase to qualifying 

20 hospitals based on the following criteria: 

21 ‘‘(I) The Secretary shall give 

22 preference to hospitals that had a re23 duction in resident training positions 

24 under subparagraph (A). 


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1 ‘‘(II) The Secretary shall give 

2 preference to hospitals with 3-year 

3 primary care residency training pro4 grams, such as family practice and 

5 general internal medicine. 

6 ‘‘(III) The Secretary shall give 

7 preference to hospitals insofar as they 

8 have in effect formal arrangements 

9 (as determined by the Secretary) that 

10 place greater emphasis upon training 

11 in Federally qualified health centers, 

12 rural health clinics, and other nonpro13 vider settings, and to hospitals that 

14 receive additional payments under 

15 subsection (d)(5)(F) and emphasize 

16 training in an outpatient department. 

17 ‘‘(IV) The Secretary shall give 

18 preference to hospitals with a number 

19 of positions (as of July 1, 2009) in 

20 excess of the otherwise applicable resi21 dent limit for such period. 

22 ‘‘(V) The Secretary shall give 

23 preference to hospitals that place 

24 greater emphasis upon training in a 

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1 ignated under section 332 of the Pub2 lic Health Service Act) or a health 

3 professional needs area (designated 

4 under section 2211 of such Act). 

5 ‘‘(VI) The Secretary shall give 

6 preference to hospitals in States that 

7 have low resident-to-population ratios 

8 (including a greater preference for 

9 those States with lower resident-to10 population ratios). 

11 ‘‘(v) LIMITATION.—In no case shall 

12 more than 20 full-time equivalent addi13 tional residency positions be made available 

14 under this subparagraph with respect to 

15 any hospital. 

16 ‘‘(vi) APPLICATION OF PER RESIDENT

17 AMOUNTS FOR PRIMARY CARE.—With re18 spect to additional residency positions in a 

19 hospital attributable to the increase pro20 vided under this subparagraph, the ap21 proved FTE resident amounts are deemed 

22 to be equal to the hospital per resident 

23 amounts for primary care and nonprimary 

24 care computed under paragraph (2)(D) for 

25 that hospital. 


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1 ‘‘(vii) DISTRIBUTION.—The Secretary 

2 shall distribute the increase in resident 

3 training positions to qualifying hospitals 

4 under this subparagraph not later than 

5 July 1, 2011. 

6 ‘‘(C) RESIDENT LEVEL AND LIMIT DE7 FINED.—In this paragraph: 

8 ‘‘(i) The term ‘resident level’ has the 

9 meaning given such term in paragraph 

10 (7)(C)(i). 

11 ‘‘(ii) The term ‘otherwise applicable 

12 resident limit’ means, with respect to a 

13 hospital, the limit otherwise applicable 

14 under subparagraphs (F)(i) and (H) of 

15 paragraph (4) on the resident level for the 

16 hospital determined without regard to this 

17 paragraph but taking into account para18 graph (7)(A). 

19 ‘‘(D) MAINTENANCE OF PRIMARY CARE

20 RESIDENT LEVEL.—In carrying out this para21 graph, the Secretary shall require hospitals that 

22 receive additional resident positions under sub23 paragraph (B)— 

24 ‘‘(i) to maintain records, and periodi25 cally report to the Secretary, on the numVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00680 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ber of primary care residents in its resi2 dency training programs; and 

3 ‘‘(ii) as a condition of payment for a 

4 cost reporting period under this subsection 

5 for such positions, to maintain the level of 

6 such positions at not less than the sum 

7 of— 

8 ‘‘(I) the base level of primary 

9 care resident positions (as determined 

10 under subparagraph (B)(ii)(I)) before 

11 receiving such additional positions; 

12 and 

13 ‘‘(II) the number of such addi14 tional positions.’’. 

15 (b) IME.— 

16 (1) IN GENERAL.—Section 1886(d)(5)(B)(v) of 

17 the Social Security Act (42 U.S.C. 

18 1395ww(d)(5)(B)(v)), in the third sentence, is 

19 amended— 

20 (A) by striking ‘‘subsection (h)(7)’’ and in21 serting ‘‘subsections (h)(7) and (h)(8)’’; and 

22 (B) by striking ‘‘it applies’’ and inserting 

23 ‘‘they apply’’. 

24 (2) CONFORMING PROVISION.—Section 

25 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 


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1 1395ww(d)(5)(B)) is amended by adding at the end 

2 the following clause: 

3 ‘‘(x) For discharges occurring on or after July 1, 

4 2011, insofar as an additional payment amount under this 

5 subparagraph is attributable to resident positions distrib6 uted to a hospital under subsection (h)(8)(B), the indirect 

7 teaching adjustment factor shall be computed in the same 

8 manner as provided under clause (ii) with respect to such 

9 resident positions.’’. 

10 (c) CONFORMING AMENDMENT.—Section 422(b)(2) 

11 of the Medicare Prescription Drug, Improvement, and 

12 Modernization Act of 2003 (Public Law 108–173) is 

13 amended by striking ‘‘section 1886(h)(7)’’ and all that fol14 lows and inserting ‘‘paragraphs (7) and (8) of subsection 

15 (h) of section 1886 of the Social Security Act.’’. 

16 SEC. 1502. INCREASING TRAINING IN NONPROVIDER SET17 TINGS. 

18 (a) DIRECT GME.—Section 1886(h)(4)(E) of the So19 cial Security Act (42 U.S.C. 1395ww(h)) is amended— 

20 (1) by designating the first sentence as a clause 

21 (i) with the heading ‘‘IN GENERAL.—’’ and appro22 priate indentation; 

23 (2) by striking ‘‘shall be counted and that all 

24 the time’’ and inserting ‘‘shall be counted and 

25 that— 


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1 ‘‘(I) effective for cost reporting 

2 periods beginning before July 1, 2009, 

3 all the time’’; 

4 (3) in subclause (I), as inserted by paragraph 

5 (1), by striking the period at the end and inserting 

6 ‘‘; and’’; and 

7 (A) by inserting after subclause (I), as so 

8 inserted, the following: 

9 ‘‘(II) effective for cost reporting 

10 periods beginning on or after July 1, 

11 2009, all the time so spent by a resi12 dent shall be counted towards the de13 termination of full-time equivalency, 

14 without regard to the setting in which 

15 the activities are performed, if the 

16 hospital incurs the costs of the sti17 pends and fringe benefits of the resi18 dent during the time the resident 

19 spends in that setting. 

20 Any hospital claiming under this subpara21 graph for time spent in a nonprovider set22 ting shall maintain and make available to 

23 the Secretary records regarding the 

24 amount of such time and such amount in 

25 comparison with amounts of such time in 


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1 such base year as the Secretary shall speci2 fy.’’. 

3 (b) IME.—Section 1886(d)(5)(B)(iv) of the Social 

4 Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amend5 ed— 

6 (1) by striking ‘‘(iv) Effective for discharges oc7 curring on or after October 1, 1997’’ and inserting 

8 ‘‘(iv)(I) Effective for discharges occurring on or 

9 after October 1, 1997, and before July 1, 2009’’; 

10 and 

11 (2) by inserting after subclause (I), as inserted 

12 by paragraph (1), the following new subclause: 

13 ‘‘(II) Effective for discharges occurring on or 

14 after July 1, 2009, all the time spent by an intern 

15 or resident in patient care activities at an entity in 

16 a nonprovider setting shall be counted towards the 

17 determination of full-time equivalency if the hospital 

18 incurs the costs of the stipends and fringe benefits 

19 of the intern or resident during the time the intern 

20 or resident spends in that setting.’’. 

21 (c) OIG STUDY ON IMPACT ON TRAINING.—The In22 spector General of the Department of Health and Human 

23 Services shall analyze the data collected by the Secretary 

24 of Health and Human Services from the records made 

25 available to the Secretary under section 1886(h)(4)(E) of 


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

2 order to assess the extent to which there is an increase 

3 in time spent by medical residents in training in nonpro4 vider settings as a result of the amendments made by this 

5 section. Not later than 4 years after the date of the enact6 ment of this Act, the Inspector General shall submit a re7 port to Congress on such analysis and assessment. 

8 (d) DEMONSTRATION PROJECT FOR APPROVED

9 TEACHING HEALTH CENTERS.— 

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

11 Human Services shall conduct a demonstration 

12 project under which an approved teaching health 

13 center (as defined in paragraph (3)) would be eligi14 ble for payment under subsections (h) and (k) of 

15 section 1886 of the Social Security Act (42 U.S.C. 

16 1395ww) of amounts for its own direct costs of 

17 graduate medical education activities for primary 

18 care residents, as well as for the direct costs of grad19 uate medical education activities of its contracting 

20 hospital for such residents, in a manner similar to 

21 the manner in which such payments would be made 

22 to a hospital if the hospital were to operate such a 

23 program. 

24 (2) CONDITIONS.—Under the demonstration 

25 project— 


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1 (A) an approved teaching health center 

2 shall contract with an accredited teaching hos3 pital to carry out the inpatient responsibilities 

4 of the primary care residency program of the 

5 hospital involved and is responsible for payment 

6 to the hospital for the hospital’s costs of the 

7 salary and fringe benefits for residents in the 

8 program; 

9 (B) the number of primary care residents 

10 of the center shall not count against the con11 tracting hospital’s resident limit; and 

12 (C) the contracting hospital shall agree not 

13 to diminish the number of residents in its pri14 mary care residency training program. 

15 (3) APPROVED TEACHING HEALTH CENTER DE16 FINED.—In this subsection, the term ‘‘approved 

17 teaching health center’’ means a nonprovider setting, 

18 such as a Federally qualified health center or rural 

19 health clinic (as defined in section 1861(aa) of the 

20 Social Security Act), that develops and operates an 

21 accredited primary care residency program for which 

22 funding would be available if it were operated by a 

23 hospital. 


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1 SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI2 DACTIC AND SCHOLARLY ACTIVITIES AND 

3 OTHER ACTIVITIES. 

4 (a) DIRECT GME.—Section 1886(h) of the Social Se5 curity Act (42 U.S.C. 1395ww(h)) is amended— 

6 (1) in paragraph (4)(E), as amended by section 

7 1502(a)— 

8 (A) in clause (i), by striking ‘‘Such rules’’ 

9 and inserting ‘‘Subject to clause (ii), such 

10 rules’’; and 

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

12 clause: 

13 ‘‘(ii) TREATMENT OF CERTAIN NON14 PROVIDER AND DIDACTIC ACTIVITIES.— 

15 Such rules shall provide that all time spent 

16 by an intern or resident in an approved 

17 medical residency training program in a 

18 nonprovider setting that is primarily en19 gaged in furnishing patient care (as de20 fined in paragraph (5)(K)) in nonpatient 

21 care activities, such as didactic conferences 

22 and seminars, but not including research 

23 not associated with the treatment or diag24 nosis of a particular patient, as such time 

25 and activities are defined by the Secretary, 


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1 shall be counted toward the determination 

2 of full-time equivalency.’’; 

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

4 following new subparagraph: 

5 ‘‘(I) TREATMENT OF CERTAIN TIME IN AP6 PROVED MEDICAL RESIDENCY TRAINING PRO7 GRAMING.—In determining the hospital’s num8 ber of full-time equivalent residents for pur9 poses of this subsection, all the time that is 

10 spent by an intern or resident in an approved 

11 medical residency training program on vacation, 

12 sick leave, or other approved leave, as such time 

13 is defined by the Secretary, and that does not 

14 prolong the total time the resident is partici15 pating in the approved program beyond the nor16 mal duration of the program shall be counted 

17 toward the determination of full-time equiva18 lency.’’; and 

19 (3) in paragraph (5), by adding at the end the 

20 following new subparagraph: 

21 ‘‘(K) NONPROVIDER SETTING THAT IS PRI22 MARILY ENGAGED IN FURNISHING PATIENT

23 CARE.—The term ‘nonprovider setting that is 

24 primarily engaged in furnishing patient care’ 

25 means a nonprovider setting in which the priVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00688 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mary activity is the care and treatment of pa2 tients, as defined by the Secretary.’’. 

3 (b) IME DETERMINATIONS.—Section 1886(d)(5)(B) 

4 of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by 

5 section 1501(b), is amended by adding at the end the fol6 lowing new clause: 

7 ‘‘(xi)(I) The provisions of subparagraph (I) of sub8 section (h)(4) shall apply under this subparagraph in the 

9 same manner as they apply under such subsection. 

10 ‘‘(II) In determining the hospital’s number of full11 time equivalent residents for purposes of this subpara12 graph, all the time spent by an intern or resident in an 

13 approved medical residency training program in non14 patient care activities, such as didactic conferences and 

15 seminars, as such time and activities are defined by the 

16 Secretary, that occurs in the hospital shall be counted to17 ward the determination of full-time equivalency if the hos18 pital— 

19 ‘‘(aa) is recognized as a subsection (d) hospital; 

20 ‘‘(bb) is recognized as a subsection (d) Puerto 

21 Rico hospital; 

22 ‘‘(cc) is reimbursed under a reimbursement sys23 tem authorized under section 1814(b)(3); or 

24 ‘‘(dd) is a provider-based hospital outpatient de25 partment. 


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1 ‘‘(III) In determining the hospital’s number of full2 time equivalent residents for purposes of this subpara3 graph, all the time spent by an intern or resident in an 

4 approved medical residency training program in research 

5 activities that are not associated with the treatment or di6 agnosis of a particular patient, as such time and activities 

7 are defined by the Secretary, shall not be counted toward 

8 the determination of full-time equivalency.’’. 

9 (c) EFFECTIVE DATES; APPLICATION.— 

10 (1) IN GENERAL.—Except as otherwise pro11 vided, the Secretary of Health and Human Services 

12 shall implement the amendments made by this sec13 tion in a manner so as to apply to cost reporting pe14 riods beginning on or after January 1, 1983. 

15 (2) DIRECT GME.—Section 1886(h)(4)(E)(ii) of 

16 the Social Security Act, as added by subsection 

17 (a)(1)(B), shall apply to cost reporting periods be18 ginning on or after July 1, 2008. 

19 (3) IME.—Section 1886(d)(5)(B)(x)(III) of the 

20 Social Security Act, as added by subsection (b), shall 

21 apply to cost reporting periods beginning on or after 

22 October 1, 2001. Such section, as so added, shall 

23 not give rise to any inference on how the law in ef24 fect prior to such date should be interpreted. 


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1 (4) APPLICATION.—The amendments made by 

2 this section shall not be applied in a manner that re3 quires reopening of any settled hospital cost reports 

4 as to which there is not a jurisdictionally proper ap5 peal pending as of the date of the enactment of this 

6 Act on the issue of payment for indirect costs of 

7 medical education under section 1886(d)(5)(B) of 

8 the Social Security Act or for direct graduate med9 ical education costs under section 1886(h) of such 

10 Act. 

11 SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS 

12 FROM CLOSED HOSPITALS. 

13 (a) DIRECT GME.—Section 1886(h)(4)(H) of the So14 cial Security Act (42 U.S.C. Section 1395ww(h)(4)(H)) 

15 is amended by adding at the end the following new clause: 

16 ‘‘(vi) REDISTRIBUTION OF RESIDENCY

17 SLOTS AFTER A HOSPITAL CLOSES.— 

18 ‘‘(I) IN GENERAL.—The Sec19 retary shall, by regulation, establish a 

20 process consistent with subclauses (II) 

21 and (III) under which, in the case 

22 where a hospital (other than a hos23 pital described in clause (v)) with an 

24 approved medical residency program 

25 in a State closes on or after the date 


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1 that is 2 years before the date of the 

2 enactment of this clause, the Sec3 retary shall increase the otherwise ap4 plicable resident limit under this para5 graph for other hospitals in the State 

6 in accordance with this clause. 

7 ‘‘(II) PROCESS FOR HOSPITALS

8 IN CERTAIN AREAS.—In determining 

9 for which hospitals the increase in the 

10 otherwise applicable resident limit de11 scribed in subclause (I) is provided, 

12 the Secretary shall establish a process 

13 to provide for such increase to one or 

14 more hospitals located in the State. 

15 Such process shall take into consider16 ation the recommendations submitted 

17 to the Secretary by the senior health 

18 official (as designated by the chief ex19 ecutive officer of such State) if such 

20 recommendations are submitted not 

21 later than 180 days after the date of 

22 the hospital closure involved (or, in 

23 the case of a hospital that closed after 

24 the date that is 2 years before the 

25 date of the enactment of this clause, 


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1 180 days after such date of enact2 ment). 

3 ‘‘(III) LIMITATION.—The esti4 mated aggregate number of increases 

5 in the otherwise applicable resident 

6 limits for hospitals under this clause 

7 shall be equal to the estimated num8 ber of resident positions in the ap9 proved medical residency programs 

10 that closed on or after the date de11 scribed in subclause (I).’’. 

12 (b) NO EFFECT ON TEMPORARY FTE CAP ADJUST13 MENTS.—The amendments made by this section shall not 

14 effect any temporary adjustment to a hospital’s FTE cap 

15 under section 413.79(h) of title 42, Code of Federal Regu16 lations (as in effect on the date of enactment of this Act) 

17 and shall not affect the application of section 

18 1886(h)(4)(H)(v) of the Social Security Act. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) Section 422(b)(2) of the Medicare Prescrip21 tion Drug, Improvement, and Modernization Act of 

22 2003 (Public Law 108–173), as amended by section 

23 1501(c), is amended by striking ‘‘(7) and’’ and in24 serting ‘‘(4)(H)(vi), (7), and’’. 


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1 (2) Section 1886(h)(7)(E) of the Social Secu2 rity Act (42 U.S.C. 1395ww(h)(7)(E)) is amended 

3 by inserting ‘‘or under paragraph (4)(H)(vi)’’ after 

4 ‘‘under this paragraph’’. 

5 SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED 

6 MEDICAL RESIDENCY TRAINING. 

7 (a) SPECIFICATION OF GOALS FOR APPROVED MED8 ICAL RESIDENCY TRAINING PROGRAMS.—Section 

9 1886(h)(1) of the Social Security Act (42 U.S.C. 

10 1395ww(h)(1)) is amended— 

11 (1) by designating the matter beginning with 

12 ‘‘Notwithstanding’’ as a subparagraph (A) with the 

13 heading ‘‘IN GENERAL.—’’ and with appropriate in14 dentation; and 

15 (2) by adding at the end the following new sub16 paragraph: 

17 ‘‘(B) GOALS AND ACCOUNTABILITY FOR

18 APPROVED MEDICAL RESIDENCY TRAINING PRO19 GRAMS.—The goals of medical residency train20 ing programs are to foster a physician work21 force so that physicians are trained to be able 

22 to do the following: 

23 ‘‘(i) Work effectively in various health 

24 care delivery settings, such as nonprovider 

25 settings. 


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1 ‘‘(ii) Coordinate patient care within 

2 and across settings relevant to their spe3 cialties. 

4 ‘‘(iii) Understand the relevant cost 

5 and value of various diagnostic and treat6 ment options. 

7 ‘‘(iv) Work in inter-professional teams 

8 and multi-disciplinary team-based models 

9 in provider and nonprovider settings to en10 hance safety and improve quality of patient 

11 care. 

12 ‘‘(v) Be knowledgeable in methods of 

13 identifying systematic errors in health care 

14 delivery and in implementing systematic 

15 solutions in case of such errors, including 

16 experience and participation in continuous 

17 quality improvement projects to improve 

18 health outcomes of the population the phy19 sicians serve. 

20 ‘‘(vi) Be meaningful EHR users (as 

21 determined under section 1848(o)(2)) in 

22 the delivery of care and in improving the 

23 quality of the health of the community and 

24 the individuals that the hospital serves.’’ 


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1 (b) GAO STUDY ON EVALUATION OF TRAINING PRO2 GRAMS.— 

3 (1) IN GENERAL.—The Comptroller General of 

4 the United States shall conduct a study to evaluate 

5 the extent to which medical residency training pro6 grams— 

7 (A) are meeting the goals described in sec8 tion 1886(h)(1)(B) of the Social Security Act, 

9 as added by subsection (a), in a range of resi10 dency programs, including primary care and 

11 other specialties; and 

12 (B) have the appropriate faculty expertise 

13 to teach the topics required to achieve such 

14 goals. 

15 (2) REPORT.—Not later than 18 months after 

16 the date of the enactment of this Act, the Comp17 troller General shall submit to Congress a report on 

18 such study and shall include in such report rec19 ommendations as to how medical residency training 

20 programs could be further encouraged to meet such 

21 goals through means such as— 

22 (A) development of curriculum require23 ments; and 

24 (B) assessment of the accreditation proc25 esses of the Accreditation Council for Graduate 


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1 Medical Education and the American Osteo2 pathic Association and effectiveness of those 

3 processes in accrediting medical residency pro4 grams that meet the goals referred to in para5 graph (1)(A). 

6 TITLE VI—PROGRAM INTEGRITY 

7 Subtitle A—Increased Funding to 

8 Fight Waste, Fraud, and Abuse 

9 SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO 

10 FIGHT FRAUD AND ABUSE. 

11 (a) IN GENERAL.—Section 1817(k) of the Social Se12 curity Act (42 U.S.C. 1395i(k)) is amended— 

13 (1) by adding at the end the following new 

14 paragraph: 

15 ‘‘(7) ADDITIONAL FUNDING.—In addition to the 

16 funds otherwise appropriated to the Account from 

17 the Trust Fund under paragraphs (3) and (4) and 

18 for purposes described in paragraphs (3)(C) and 

19 (4)(A), there are hereby appropriated an additional 

20 $100,000,000 to such Account from such Trust 

21 Fund for each fiscal year beginning with 2011. The 

22 funds appropriated under this paragraph shall be al23 located in the same proportion as the total funding 

24 appropriated with respect to paragraphs (3)(A) and 

25 (4)(A) was allocated with respect to fiscal year 


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1 2010, and shall be available without further appro2 priation until expended.’’. 

3 (2) in paragraph (4)(A)— 

4 (A) by inserting ‘‘for activities described in 

5 paragraph (3)(C) and’’ after ‘‘necessary’’; and 

6 (B) by inserting ‘‘until expended’’ after 

7 ‘‘appropriation’’. 

8 (b) FLEXIBILITY IN PURSUING FRAUD AND

9 ABUSE.—Section 1893(a) of the Social Security Act (42 

10 U.S.C. 1395ddd(a)) is amended by inserting ‘‘, or other11 wise,’’ after ‘‘entities’’. 

12 Subtitle B—Enhanced Penalties for 

13 Fraud and Abuse 

14 SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS 

15 ON PROVIDER OR SUPPLIER ENROLLMENT 

16 APPLICATIONS. 

17 (a) IN GENERAL.—Section 1128A(a) of the Social 

18 Security Act (42 U.S.C. 1320a–7a(a)) is amended— 

19 (1) in paragraph (1)(D), by striking all that fol20 lows ‘‘in which the person was excluded’’ and insert21 ing ‘‘under Federal law from the Federal health care 

22 program under which the claim was made, or’’; 

23 (2) by striking ‘‘or’’ at the end of paragraph 

24 (6); 


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1 (3) in paragraph (7), by inserting at the end 

2 ‘‘or’’; 

3 (4) by inserting after paragraph (7) the fol4 lowing new paragraph: 

5 ‘‘(8) knowingly makes or causes to be made any 

6 false statement, omission, or misrepresentation of a 

7 material fact in any application, agreement, bid, or 

8 contract to participate or enroll as a provider of 

9 services or supplier under a Federal health care pro10 gram, including managed care organizations under 

11 title XIX, Medicare Advantage organizations under 

12 part C of title XVIII, prescription drug plan spon13 sors under part D of title XVIII, and entities that 

14 apply to participate as providers of services or sup15 pliers in such managed care organizations and such 

16 plans;’’; 

17 (5) in the matter following paragraph (8), as 

18 inserted by paragraph (4), by striking ‘‘or in cases 

19 under paragraph (7), $50,000 for each such act)’’ 

20 and inserting ‘‘in cases under paragraph (7), 

21 $50,000 for each such act, or in cases under para22 graph (8), $50,000 for each false statement, omis23 sion, or misrepresentation of a material fact)’’; and 

24 (6) in the second sentence, by striking ‘‘for a 

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1 pose, or in cases under paragraph (8), an assess2 ment of not more than 3 times the amount claimed 

3 as the result of the false statement, omission, or 

4 misrepresentation of material fact claimed by a pro5 vider of services or supplier whose application to 

6 participate contained such false statement, omission, 

7 or misrepresentation)’’. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 subsection (a) shall apply to acts committed on or after 

10 January 1, 2010. 

11 SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF 

12 FALSE STATEMENTS MATERIAL TO A FALSE 

13 CLAIM. 

14 (a) IN GENERAL.—Section 1128A(a) of the Social 

15 Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec16 tion 1611, is further amended— 

17 (1) in paragraph (7), by striking ‘‘or’’ at the 

18 end; 

19 (2) in paragraph (8), by inserting ‘‘or’’ at the 

20 end; and 

21 (3) by inserting after paragraph (8), the fol22 lowing new paragraph: 

23 ‘‘(9) knowingly makes, uses, or causes to be 

24 made or used, a false record or statement material 

25 to a false or fraudulent claim for payment for items 


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1 and services furnished under a Federal health care 

2 program;’’; and 

3 (4) in the matter following paragraph (9), as 

4 inserted by paragraph (3)— 

5 (A) by striking ‘‘or in cases under para6 graph (8)’’ and inserting ‘‘in cases under para7 graph (8)’’; and 

8 (B) by striking ‘‘a material fact)’’ and in9 serting ‘‘a material fact, in cases under para10 graph (9), $50,000 for each false record or 

11 statement)’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to acts committed on or after 

14 January 1, 2010. 

15 SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPEC16 TIONS. 

17 (a) IN GENERAL.—Section 1128A(a) of the Social 

18 Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec19 tions 1611 and 1612, is further amended— 

20 (1) in paragraph (8), by striking ‘‘or’’ at the 

21 end; 

22 (2) in paragraph (9), by inserting ‘‘or’’ at the 

23 end; 

24 (3) by inserting after paragraph (9) the fol25 lowing new paragraph: 


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1 ‘‘(10) fails to grant timely access, upon reason2 able request (as defined by the Secretary in regula3 tions), to the Inspector General of the Department 

4 of Health and Human Services, for the purpose of 

5 audits, investigations, evaluations, or other statutory 

6 functions of the Inspector General of the Depart7 ment of Health and Human Services;’’; and 

8 (4) in the matter following paragraph (10), as 

9 inserted by paragraph (3), by inserting ‘‘, or in cases 

10 under paragraph (10), $15,000 for each day of the 

11 failure described in such paragraph’’ after ‘‘false 

12 record or statement’’. 

13 (b) ENSURING TIMELY INSPECTIONS RELATING TO

14 CONTRACTS WITH MA ORGANIZATIONS.—Section 

15 1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is 

16 amended— 

17 (1) in subparagraph (A), by inserting ‘‘timely’’ 

18 before ‘‘inspect’’; and 

19 (2) in subparagraph (B), by inserting ‘‘timely’’ 

20 before ‘‘audit and inspect’’. 

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

22 subsection (a) shall apply to violations committed on or 

23 after January 1, 2010. 


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1 SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS. 

2 (a) MEDICARE.—Part A of title XVIII of the Social 

3 Security Act is amended by inserting after section 1819 

4 the following new section: 

5 ‘‘SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE 

6 CARE. 

7 ‘‘(a) IN GENERAL.—If the Secretary determines on 

8 the basis of a survey or otherwise, that a hospice program 

9 that is certified for participation under this title has dem10 onstrated a substandard quality of care and failed to meet 

11 such other requirements as the Secretary may find nec12 essary in the interest of the health and safety of the indi13 viduals who are provided care and services by the agency 

14 or organization involved and determines— 

15 ‘‘(1) that the deficiencies involved immediately 

16 jeopardize the health and safety of the individuals to 

17 whom the program furnishes items and services, the 

18 Secretary shall take immediate action to remove the 

19 jeopardy and correct the deficiencies through the 

20 remedy specified in subsection (b)(2)(A)(iii) or ter21 minate the certification of the program, and may 

22 provide, in addition, for 1 or more of the other rem23 edies described in subsection (b)(2)(A); or 

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1 viduals to whom the program furnishes items and 

2 services, the Secretary may— 

3 ‘‘(A) impose intermediate sanctions devel4 oped pursuant to subsection (b), in lieu of ter5 minating the certification of the program; and 

6 ‘‘(B) if, after such a period of intermediate 

7 sanctions, the program is still not in compliance 

8 with such requirements, the Secretary shall ter9 minate the certification of the program. 

10 If the Secretary determines that a hospice program 

11 that is certified for participation under this title is 

12 in compliance with such requirements but, as of a 

13 previous period, was not in compliance with such re14 quirements, the Secretary may provide for a civil 

15 money penalty under subsection (b)(2)(A)(i) for the 

16 days in which it finds that the program was not in 

17 compliance with such requirements. 

18 ‘‘(b) INTERMEDIATE SANCTIONS.— 

19 ‘‘(1) DEVELOPMENT AND IMPLEMENTATION.— 

20 The Secretary shall develop and implement, by not 

21 later than July 1, 2012— 

22 ‘‘(A) a range of intermediate sanctions to 

23 apply to hospice programs under the conditions 

24 described in subsection (a), and 


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1 ‘‘(B) appropriate procedures for appealing 

2 determinations relating to the imposition of 

3 such sanctions. 

4 ‘‘(2) SPECIFIED SANCTIONS.— 

5 ‘‘(A) IN GENERAL.—The intermediate 

6 sanctions developed under paragraph (1) may 

7 include— 

8 ‘‘(i) civil money penalties in an 

9 amount not to exceed $10,000 for each day 

10 of noncompliance or, in the case of a per 

11 instance penalty applied by the Secretary, 

12 not to exceed $25,000, 

13 ‘‘(ii) denial of all or part of the pay14 ments to which a hospice program would 

15 otherwise be entitled under this title with 

16 respect to items and services furnished by 

17 a hospice program on or after the date on 

18 which the Secretary determines that inter19 mediate sanctions should be imposed pur20 suant to subsection (a)(2), 

21 ‘‘(iii) the appointment of temporary 

22 management to oversee the operation of 

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1 uals under the care of the program while 

2 improvements are made, 

3 ‘‘(iv) corrective action plans, and 

4 ‘‘(v) in-service training for staff. 

5 The provisions of section 1128A (other than 

6 subsections (a) and (b)) shall apply to a civil 

7 money penalty under clause (i) in the same 

8 manner as such provisions apply to a penalty or 

9 proceeding under section 1128A(a). The tem10 porary management under clause (iii) shall not 

11 be terminated until the Secretary has deter12 mined that the program has the management 

13 capability to ensure continued compliance with 

14 all requirements referred to in that clause. 

15 ‘‘(B) CLARIFICATION.—The sanctions 

16 specified in subparagraph (A) are in addition to 

17 sanctions otherwise available under State or 

18 Federal law and shall not be construed as lim19 iting other remedies, including any remedy 

20 available to an individual at common law. 

21 ‘‘(C) COMMENCEMENT OF PAYMENT.—A 

22 denial of payment under subparagraph (A)(ii) 

23 shall terminate when the Secretary determines 

24 that the hospice program no longer dem25 onstrates a substandard quality of care and 


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1 meets such other requirements as the Secretary 

2 may find necessary in the interest of the health 

3 and safety of the individuals who are provided 

4 care and services by the agency or organization 

5 involved. 

6 ‘‘(3) SECRETARIAL AUTHORITY.—The Secretary 

7 shall develop and implement, by not later than July 

8 1, 2011, specific procedures with respect to the con9 ditions under which each of the intermediate sanc10 tions developed under paragraph (1) is to be applied, 

11 including the amount of any fines and the severity 

12 of each of these sanctions. Such procedures shall be 

13 designed so as to minimize the time between identi14 fication of deficiencies and imposition of these sanc15 tions and shall provide for the imposition of incre16 mentally more severe fines for repeated or uncor17 rected deficiencies.’’. 

18 (b) APPLICATION TO MEDICAID.—Section 1905(o) of 

19 the Social Security Act (42 U.S.C. 1396d(o)) is amended 

20 by adding at the end the following new paragraph: 

21 ‘‘(4) The provisions of section 1819A shall apply to 

22 a hospice program providing hospice care under this title 

23 in the same manner as such provisions apply to a hospice 

24 program providing hospice care under title XVIII.’’. 


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1 (c) APPLICATION TO CHIP.—Title XXI of the Social 

2 Security Act is amended by adding at the end the fol3 lowing new section: 

4 ‘‘SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE. 

5 ‘‘The provisions of section 1819A shall apply to a 

6 hospice program providing hospice care under this title in 

7 the same manner such provisions apply to a hospice pro8 gram providing hospice care under title XVIII.’’. 

9 SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EX10 CLUDED FROM PROGRAM PARTICIPATION. 

11 (a) IN GENERAL.—Section 1128A(a) of the Social 

12 Security Act (42 U.S.C. 1320a–7a(a)), as amended by the 

13 previous sections, is further amended— 

14 (1) by striking ‘‘or’’ at the end of paragraph 

15 (9); 

16 (2) by inserting ‘‘or’’ at the end of paragraph 

17 (10); 

18 (3) by inserting after paragraph (10) the fol19 lowing new paragraph: 

20 ‘‘(11) orders or prescribes an item or service, 

21 including without limitation home health care, diag22 nostic and clinical lab tests, prescription drugs, du23 rable medical equipment, ambulance services, phys24 ical or occupational therapy, or any other item or 

25 service, during a period when the person has been 


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1 excluded from participation in a Federal health care 

2 program, and the person knows or should know that 

3 a claim for such item or service will be presented to 

4 such a program;’’; and 

5 (4) in the matter following paragraph (11), as 

6 inserted by paragraph (2), by striking ‘‘$15,000 for 

7 each day of the failure described in such paragraph’’ 

8 and inserting ‘‘$15,000 for each day of the failure 

9 described in such paragraph, or in cases under para10 graph (11), $50,000 for each order or prescription 

11 for an item or service by an excluded individual’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to violations committed on or 

14 after January 1, 2010. 

15 SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF 

16 FALSE INFORMATION BY MEDICARE ADVAN17 TAGE AND PART D PLANS. 

18 (a) IN GENERAL.—Section 1857(g)(2)(A) of the So19 cial Security Act (42 U.S.C. 1395w—27(g)(2)(A)) is 

20 amended by inserting ‘‘except with respect to a determina21 tion under subparagraph (E), an assessment of not more 

22 than 3 times the amount claimed by such plan or plan 

23 sponsor based upon the misrepresentation or falsified in24 formation involved,’’ after ‘‘for each such determination,’’. 


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

2 subsection (a) shall apply to violations committed on or 

3 after January 1, 2010. 

4 SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVAN5 TAGE AND PART D MARKETING VIOLATIONS. 

6 (a) IN GENERAL.—Section 1857(g)(1) of the Social 

7 Security Act (42 U.S.C. 1395w—27(g)(1)), as amended 

8 by section 1221(b), is amended— 

9 (1) in subparagraph (G), by striking ‘‘or’’ at 

10 the end; 

11 (2) by inserting after subparagraph (H) the fol12 lowing new subparagraphs: 

13 ‘‘(I) except as provided under subpara14 graph (C) or (D) of section 1860D–1(b)(1), en15 rolls an individual in any plan under this part 

16 without the prior consent of the individual or 

17 the designee of the individual; 

18 ‘‘(J) transfers an individual enrolled under 

19 this part from one plan to another without the 

20 prior consent of the individual or the designee 

21 of the individual or solely for the purpose of 

22 earning a commission; 

23 ‘‘(K) fails to comply with marketing re24 strictions described in subsections (h) and (j) of 


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1 section 1851 or applicable implementing regula2 tions or guidance; or 

3 ‘‘(L) employs or contracts with any indi4 vidual or entity who engages in the conduct de5 scribed in subparagraphs (A) through (K) of 

6 this paragraph;’’; and 

7 (3) by adding at the end the following new sen8 tence: ‘‘The Secretary may provide, in addition to 

9 any other remedies authorized by law, for any of the 

10 remedies described in paragraph (2), if the Secretary 

11 determines that any employee or agent of such orga12 nization, or any provider or supplier who contracts 

13 with such organization, has engaged in any conduct 

14 described in subparagraphs (A) through (L) of this 

15 paragraph.’’ 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 subsection (a) shall apply to violations committed on or 

18 after January 1, 2010. 

19 SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF 

20 PROGRAM AUDITS. 

21 (a) IN GENERAL.—Section 1128(b)(2) of the Social 

22 Security Act (42 U.S.C. 1320a–7(b)(2)) is amended— 

23 (1) in the heading, by inserting ‘‘OR AUDIT’’ 

24 after ‘‘INVESTIGATION’’; and 


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1 (2) by striking ‘‘investigation into’’ and all that 

2 follows through the period and inserting ‘‘investiga3 tion or audit related to—’’ 

4 ‘‘(i) any offense described in para5 graph (1) or in subsection (a); or 

6 ‘‘(ii) the use of funds received, directly 

7 or indirectly, from any Federal health care 

8 program (as defined in section 

9 1128B(f)).’’. 

10 (b) EFFECTIVE DATE.—The amendments made by 

11 subsection (a) shall apply to violations committed on or 

12 after January 1, 2010. 

13 SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND EN14 TITIES FROM PARTICIPATION IN MEDICARE 

15 AND STATE HEALTH CARE PROGRAMS. 

16 (a) IN GENERAL.—Section 1128(c) of the Social Se17 curity Act, as previously amended by this subdivision, is 

18 further amended— 

19 (1) in the heading, by striking ‘‘AND PERIOD’’ 

20 and inserting ‘‘PERIOD, AND EFFECT’’; and 

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

22 paragraph: 

23 ‘‘(4)(A) For purposes of this Act, subject to subpara24 graph (C), the effect of exclusion is that no payment may 

25 be made by any Federal health care program (as defined 


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1 in section 1128B(f)) with respect to any item or service 

2 furnished— 

3 ‘‘(i) by an excluded individual or entity; or 

4 ‘‘(ii) at the medical direction or on the prescrip5 tion of a physician or other authorized individual 

6 when the person submitting a claim for such item or 

7 service knew or had reason to know of the exclusion 

8 of such individual. 

9 ‘‘(B) For purposes of this section and sections 1128A 

10 and 1128B, subject to subparagraph (C), an item or serv11 ice has been furnished by an individual or entity if the 

12 individual or entity directly or indirectly provided, ordered, 

13 manufactured, distributed, prescribed, or otherwise sup14 plied the item or service regardless of how the item or 

15 service was paid for by a Federal health care program or 

16 to whom such payment was made. 

17 ‘‘(C)(i) Payment may be made under a Federal 

18 health care program for emergency items or services (not 

19 including items or services furnished in an emergency 

20 room of a hospital) furnished by an excluded individual 

21 or entity, or at the medical direction or on the prescription 

22 of an excluded physician or other authorized individual 

23 during the period of such individual’s exclusion. 

24 ‘‘(ii) In the case that an individual eligible for bene25 fits under title XVIII or XIX submits a claim for payment 


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1 for items or services furnished by an excluded individual 

2 or entity, and such individual eligible for such benefits did 

3 not know or have reason to know that such excluded indi4 vidual or entity was so excluded, then, notwithstanding 

5 such exclusion, payment shall be made for such items or 

6 services. In such case the Secretary shall notify such indi7 vidual eligible for such benefits of the exclusion of the indi8 vidual or entity furnishing the items or services. Payment 

9 shall not be made for items or services furnished by an 

10 excluded individual or entity to an individual eligible for 

11 such benefits after a reasonable time (as determined by 

12 the Secretary in regulations) after the Secretary has noti13 fied the individual eligible for such benefits of the exclu14 sion of the individual or entity furnishing the items or 

15 services. 

16 ‘‘(iii) In the case that a claim for payment for items 

17 or services furnished by an excluded individual or entity 

18 is submitted by an individual or entity other than an indi19 vidual eligible for benefits under title XVIII or XIX or 

20 the excluded individual or entity, and the Secretary deter21 mines that the individual or entity that submitted the 

22 claim took reasonable steps to learn of the exclusion and 

23 reasonably relied upon inaccurate or misleading informa24 tion from the relevant Federal health care program or its 

25 contractor, the Secretary may waive repayment of the 


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1 amount paid in violation of the exclusion to the individual 

2 or entity that submitted the claim for the items or services 

3 furnished by the excluded individual or entity. If a Federal 

4 health care program contractor provided inaccurate or 

5 misleading information that resulted in the waiver of an 

6 overpayment under this clause, the Secretary shall take 

7 appropriate action to recover the improperly paid amount 

8 from the contractor.’’. 

9 Subtitle C—Enhanced Program 

10 and Provider Protections 

11 SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AU12 THORITY. 

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

14 (42 U.S.C. 1301 et seq.) is amended by inserting after 

15 section 1128F the following new section: 

16 ‘‘SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PRO17 TECTIONS IN THE MEDICARE, MEDICAID, AND 

18 CHIP PROGRAMS. 

19 ‘‘(a) CERTAIN AUTHORIZED SCREENING, ENHANCED

20 OVERSIGHT PERIODS, AND ENROLLMENT MORATORIA.— 

21 ‘‘(1) IN GENERAL.—For periods beginning after 

22 January 1, 2011, in the case that the Secretary de23 termines there is a significant risk of fraudulent ac24 tivity (as determined by the Secretary based on rel25 evant complaints, reports, referrals by law enforceVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00715 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ment or other sources, data analysis, trending infor2 mation, or claims submissions by providers of serv3 ices and suppliers) with respect to a category of pro4 vider of services or supplier of items or services, in5 cluding a category within a geographic area, under 

6 title XVIII, XIX, or XXI, the Secretary may impose 

7 any of the following requirements with respect to a 

8 provider of services or a supplier (whether such pro9 vider or supplier is initially enrolling in the program 

10 or is renewing such enrollment): 

11 ‘‘(A) Screening under paragraph (2). 

12 ‘‘(B) Enhanced oversight periods under 

13 paragraph (3). 

14 ‘‘(C) Enrollment moratoria under para15 graph (4). 

16 In applying this subsection for purposes of title XIX 

17 and XXI the Secretary may require a State to carry 

18 out the provisions of this subsection as a require19 ment of the State plan under title XIX or the child 

20 health plan under title XXI. Actions taken and de21 terminations made under this subsection shall not be 

22 subject to review by a judicial tribunal. 

23 ‘‘(2) SCREENING.—For purposes of paragraph 

24 (1), the Secretary shall establish procedures under 

25 which screening is conducted with respect to proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00716 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 viders of services and suppliers described in such 

2 paragraph. Such screening may include— 

3 ‘‘(A) licensing board checks; 

4 ‘‘(B) screening against the list of individ5 uals and entities excluded from the program 

6 under title XVIII, XIX, or XXI; 

7 ‘‘(C) the excluded provider list system; 

8 ‘‘(D) background checks; and 

9 ‘‘(E) unannounced pre-enrollment or other 

10 site visits. 

11 ‘‘(3) ENHANCED OVERSIGHT PERIOD.—For 

12 purposes of paragraph (1), the Secretary shall estab13 lish procedures to provide for a period of not less 

14 than 30 days and not more than 365 days during 

15 which providers of services and suppliers described 

16 in such paragraph, as the Secretary determines ap17 propriate, would be subject to enhanced oversight, 

18 such as required or unannounced (or required and 

19 unannounced) site visits or inspections, prepayment 

20 review, enhanced review of claims, and such other 

21 actions as specified by the Secretary, under the pro22 grams under titles XVIII, XIX, and XXI. Under 

23 such procedures, the Secretary may extend such pe24 riod for more than 365 days if the Secretary deterVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00717 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mines that after the initial period such additional 

2 period of oversight is necessary. 

3 ‘‘(4) MORATORIUM ON ENROLLMENT OF PRO4 VIDERS AND SUPPLIERS.—For purposes of para5 graph (1), the Secretary, based upon a finding of a 

6 risk of serious ongoing fraud within a program 

7 under title XVIII, XIX, or XXI, may impose a mor8 atorium on the enrollment of providers of services 

9 and suppliers within a category of providers of serv10 ices and suppliers (including a category within a spe11 cific geographic area) under such title. Such a mora12 torium may only be imposed if the Secretary makes 

13 a determination that the moratorium would not ad14 versely impact access of individuals to care under 

15 such program. 

16 ‘‘(5) CLARIFICATION.—Nothing in this sub17 section shall be interpreted to preclude or limit the 

18 ability of a State to engage in provider screening or 

19 enhanced provider oversight activities beyond those 

20 required by the Secretary.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) MEDICAID.—Section 1902(a) of the Social 

23 Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is 

24 amended— 


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1 (A) in paragraph (23), by inserting before 

2 the semicolon at the end the following: ‘‘or by 

3 a person to whom or entity to which a morato4 rium under section 1128G(a)(4) is applied dur5 ing the period of such moratorium’’; 

6 (B) in paragraph (72); by striking at the 

7 end ‘‘and’’; 

8 (C) in paragraph (73), by striking the pe9 riod at the end and inserting ‘‘; and’’; and 

10 (D) by adding after paragraph (73) the 

11 following new paragraph: 

12 ‘‘(74) provide that the State will enforce any 

13 determination made by the Secretary under sub14 section (a) of section 1128G (relating to a signifi15 cant risk of fraudulent activity with respect to a cat16 egory of provider or supplier described in such sub17 section (a) through use of the appropriate proce18 dures described in such subsection (a)), and that the 

19 State will carry out any activities as required by the 

20 Secretary for purposes of such subsection (a).’’. 

21 (2) CHIP.—Section 2102 of such Act (42 

22 U.S.C. 1397bb) is amended by adding at the end the 

23 following new subsection: 


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1 ‘‘(d) PROGRAM INTEGRITY.—A State child health 

2 plan shall include a description of the procedures to be 

3 used by the State— 

4 ‘‘(1) to enforce any determination made by the 

5 Secretary under subsection (a) of section 1128G (re6 lating to a significant risk of fraudulent activity with 

7 respect to a category of provider or supplier de8 scribed in such subsection through use of the appro9 priate procedures described in such subsection); and 

10 ‘‘(2) to carry out any activities as required by 

11 the Secretary for purposes of such subsection.’’. 

12 (3) MEDICARE.—Section 1866(j) of such Act 

13 (42 U.S.C. 1395cc(j)) is amended by adding at the 

14 end the following new paragraph: 

15 ‘‘(3) PROGRAM INTEGRITY.—The provisions of 

16 section 1128G(a) apply to enrollments and renewals 

17 of enrollments of providers of services and suppliers 

18 under this title.’’. 

19 SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP 

20 PROGRAM DISCLOSURE REQUIREMENTS RE21 LATING TO PREVIOUS AFFILIATIONS. 

22 (a) IN GENERAL.—Section 1128G of the Social Secu23 rity Act, as inserted by section 1631, is amended by add24 ing at the end the following new subsection: 


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1 ‘‘(b) ENHANCED PROGRAM DISCLOSURE REQUIRE2 MENTS.— 

3 ‘‘(1) DISCLOSURE.—A provider of services or 

4 supplier who submits on or after July 1, 2011, an 

5 application for enrollment and renewing enrollment 

6 in a program under title XVIII, XIX, or XXI shall 

7 disclose (in a form and manner determined by the 

8 Secretary) any current affiliation or affiliation with9 in the previous 10-year period with a provider of 

10 services or supplier that has uncollected debt or with 

11 a person or entity that has been suspended or ex12 cluded under such program, subject to a payment 

13 suspension, or has had its billing privileges revoked. 

14 ‘‘(2) ENHANCED SAFEGUARDS.—If the Sec15 retary determines that such previous affiliation of 

16 such provider or supplier poses a risk of fraud, 

17 waste, or abuse, the Secretary may apply such en18 hanced safeguards as the Secretary determines nec19 essary to reduce such risk associated with such pro20 vider or supplier enrolling or participating in the 

21 program under title XVIII, XIX, or XXI. Such safe22 guards may include enhanced oversight, such as en23 hanced screening of claims, required or unannounced 

24 (or required and unannounced) site visits or inspec25 tions, additional information reporting requirements, 


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1 and conditioning such enrollment on the provision of 

2 a surety bond. 

3 ‘‘(3) AUTHORITY TO DENY PARTICIPATION.—If 

4 the Secretary determines that there has been at 

5 least one such affiliation and that such affiliation or 

6 affiliations, as applicable, of such provider or sup7 plier poses a serious risk of fraud, waste, or abuse, 

8 the Secretary may deny the application of such pro9 vider or supplier.’’. 

10 (b) CONFORMING AMENDMENTS.— 

11 (1) MEDICAID.—Paragraph (74) of section 

12 1902(a) of such Act (42 U.S.C. 1396a(a)), as added 

13 by section 1631(b)(1), is amended— 

14 (A) by inserting ‘‘or subsection (b) of such 

15 section (relating to disclosure requirements)’’ 

16 before ‘‘, and that the State’’; and 

17 (B) by inserting before the period the fol18 lowing: ‘‘and apply any enhanced safeguards, 

19 with respect to a provider or supplier described 

20 in such subsection (b), as the Secretary deter21 mines necessary under such subsection (b)’’. 

22 (2) CHIP.—Subsection (d) of section 2102 of 

23 such Act (42 U.S.C. 1397bb), as added by section 

24 1631(b)(2), is amended— 


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1 (A) in paragraph (1), by striking at the 

2 end ‘‘and’’; 

3 (B) in paragraph (2) by striking the period 

4 at the end and inserting ‘‘; and’ ’’ and 

5 (C) by adding at the end the following new 

6 paragraph: 

7 ‘‘(3) to enforce any determination made by the 

8 Secretary under subsection (b) of section 1128G (re9 lating to disclosure requirements) and to apply any 

10 enhanced safeguards, with respect to a provider or 

11 supplier described in such subsection, as the Sec12 retary determines necessary under such subsection.’’. 

13 SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER 

14 FOR CERTAIN EVALUATION AND MANAGE15 MENT SERVICES. 

16 Section 1848 of the Social Security Act (42 U.S.C. 

17 1395w–4), as amended by section 4101 of the HITECH 

18 Act (Public Law 111–5), is amended by adding at the end 

19 the following new subsection: 

20 ‘‘(p) PAYMENT MODIFIER FOR CERTAIN EVALUA21 TION AND MANAGEMENT SERVICES.—The Secretary shall 

22 establish a payment modifier under the fee schedule under 

23 this section for evaluation and management services (as 

24 specified in section 1842(b)(16)(B)(ii)) that result in the 

25 ordering of additional services (such as lab tests), the preVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00723 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 scription of drugs, the furnishing or ordering of durable 

2 medical equipment in order to enable better monitoring 

3 of claims for payment for such additional services under 

4 this title, or the ordering, furnishing, or prescribing of 

5 other items and services determined by the Secretary to 

6 pose a high risk of waste, fraud, and abuse. The Secretary 

7 may require providers of services or suppliers to report 

8 such modifier in claims submitted for payment.’’. 

9 SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER 

10 MEDICARE INTEGRITY PROGRAM. 

11 (a) IN GENERAL.—Section 1893(c) of the Social Se12 curity Act (42 U.S.C. 1395ddd(c)) is amended— 

13 (1) in paragraph (3), by striking at the end 

14 ‘‘and’’; 

15 (2) by redesignating paragraph (4) as para16 graph (5); and 

17 (3) by inserting after paragraph (3) the fol18 lowing new paragraph: 

19 ‘‘(4) for the contract year beginning in 2011 

20 and each subsequent contract year, the entity pro21 vides assurances to the satisfaction of the Secretary 

22 that the entity will conduct periodic evaluations of 

23 the effectiveness of the activities carried out by such 

24 entity under the Program and will submit to the 

25 Secretary an annual report on such activities; and’’. 


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1 (b) REFERENCE TO MEDICAID INTEGRITY PRO2 GRAM.—For a similar provision with respect to the Med3 icaid Integrity Program, see section 1752. 

4 SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO 

5 ADOPT PROGRAMS TO REDUCE WASTE, 

6 FRAUD, AND ABUSE. 

7 (a) IN GENERAL.—Section 1874 of the Social Secu8 rity Act (42 U.S.C. 42 U.S.C. 1395kk) is amended by 

9 adding at the end the following new subsection: 

10 ‘‘(e) COMPLIANCE PROGRAMS FOR PROVIDERS OF

11 SERVICES AND SUPPLIERS.— 

12 ‘‘(1) IN GENERAL.—The Secretary may 

13 disenroll a provider of services or a supplier (other 

14 than a physician or a skilled nursing facility) under 

15 this title (or may impose any civil monetary penalty 

16 or other intermediate sanction under paragraph (4)) 

17 if such provider of services or supplier fails to, sub18 ject to paragraph (5), establish a compliance pro19 gram that contains the core elements established 

20 under paragraph (2). 

21 ‘‘(2) ESTABLISHMENT OF CORE ELEMENTS.— 

22 The Secretary, in consultation with the Inspector 

23 General of the Department of Health and Human 

24 Services, shall establish core elements for a compli25 ance program under paragraph (1). Such elements 


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1 may include written policies, procedures, and stand2 ards of conduct, a designated compliance officer and 

3 a compliance committee; effective training and edu4 cation pertaining to fraud, waste, and abuse for the 

5 organization’s employees and contractors; a con6 fidential or anonymous mechanism, such as a hot7 line, to receive compliance questions and reports of 

8 fraud, waste, or abuse; disciplinary guidelines for en9 forcement of standards; internal monitoring and au10 diting procedures, including monitoring and auditing 

11 of contractors; procedures for ensuring prompt re12 sponses to detected offenses and development of cor13 rective action initiatives, including responses to po14 tential offenses; and procedures to return all identi15 fied overpayments to the programs under this title, 

16 title XIX, and title XXI. 

17 ‘‘(3) TIMELINE FOR IMPLEMENTATION.—The 

18 Secretary shall determine a timeline for the estab19 lishment of the core elements under paragraph (2) 

20 and the date on which a provider of services and 

21 suppliers (other than physicians) shall be required to 

22 have established such a program for purposes of this 

23 subsection. 

24 ‘‘(4) CMS ENFORCEMENT AUTHORITY.—The 

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1 icaid Services shall have the authority to determine 

2 whether a provider of services or supplier described 

3 in subparagraph (3) has met the requirement of this 

4 subsection and to impose a civil monetary penalty 

5 not to exceed $50,000 for each violation. The Sec6 retary may also impose other intermediate sanctions, 

7 including corrective action plans and additional mon8 itoring in the case of a violation of this subsection. 

9 ‘‘(5) PILOT PROGRAM.—The Secretary may 

10 conduct a pilot program on the application of this 

11 subsection with respect to a category of providers of 

12 services or suppliers (other than physicians) that the 

13 Secretary determines to be a category which is at 

14 high risk for waste, fraud, and abuse before imple15 menting the requirements of this subsection to all 

16 providers of services and suppliers described in para17 graph (3).’’. 

18 (b) REFERENCE TO SIMILAR MEDICAID PROVI19 SION.—For a similar provision with respect to the Med20 icaid program under title XIX of the Social Security Act, 

21 see section 1753. 


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1 SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDI2 CARE CLAIMS REDUCED TO NOT MORE THAN 

3 12 MONTHS. 

4 (a) PURPOSE.—In general, the 36-month period cur5 rently allowed for claims filing under parts A, B, C, and, 

6 D of title XVIII of the Social Security Act presents oppor7 tunities for fraud schemes in which processing patterns 

8 of the Centers for Medicare & Medicaid Services can be 

9 observed and exploited. Narrowing the window for claims 

10 processing will not overburden providers and will reduce 

11 fraud and abuse. 

12 (b) REDUCING MAXIMUM PERIOD FOR SUBMIS13 SION.— 

14 (1) PART A.—Section 1814(a) of the Social Se15 curity Act (42 U.S.C. 1395f(a)) is amended— 

16 (A) in paragraph (1), by striking ‘‘period 

17 of 3 calendar years’’ and all that follows and in18 serting ‘‘period of 1 calendar year from which 

19 such services are furnished; and’’; and 

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

21 sentence: ‘‘In applying paragraph (1), the Sec22 retary may specify exceptions to the 1 calendar 

23 year period specified in such paragraph.’’. 

24 (2) PART B.—Section 1835(a) of such Act (42 

25 U.S.C. 1395n(a)) is amended— 


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1 (A) in paragraph (1), by striking ‘‘period 

2 of 3 calendar years’’ and all that follows and in3 serting ‘‘period of 1 calendar year from which 

4 such services are furnished; and’’; and 

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

6 sentence: ‘‘In applying paragraph (1), the Sec7 retary may specify exceptions to the 1 calendar 

8 year period specified in such paragraph.’’. 

9 (3) PARTS C AND D.—Section 1857(d) of such 

10 Act is amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(7) PERIOD FOR SUBMISSION OF CLAIMS.— 

13 The contract shall require an MA organization or 

14 PDP sponsor to require any provider of services 

15 under contract with, in partnership with, or affili16 ated with such organization or sponsor to ensure 

17 that, with respect to items and services furnished by 

18 such provider to an enrollee of such organization, 

19 written request, signed by such enrollee, except in 

20 cases in which the Secretary finds it impracticable 

21 for the enrollee to do so, is filed for payment for 

22 such items and services in such form, in such man23 ner, and by such person or persons as the Secretary 

24 may by regulation prescribe, no later than the close 

25 of the 1 calendar year period after such items and 


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1 services are furnished. In applying the previous sen2 tence, the Secretary may specify exceptions to the 1 

3 calendar year period specified.’’. 

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

5 subsection (b) shall be effective for items and services fur6 nished on or after January 1, 2011. 

7 SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL 

8 EQUIPMENT OR HOME HEALTH SERVICES RE9 QUIRED TO BE MEDICARE ENROLLED PHYSI10 CIANS OR ELIGIBLE PROFESSIONALS. 

11 (a) DME.—Section 1834(a)(11)(B) of the Social Se12 curity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

13 striking ‘‘physician’’ and inserting ‘‘physician enrolled 

14 under section 1866(j) or an eligible professional under sec15 tion 1848(k)(3)(B)’’. 

16 (b) HOME HEALTH SERVICES.— 

17 (1) PART A.—Section 1814(a)(2) of such Act 

18 (42 U.S.C. 1395(a)(2)) is amended in the matter 

19 preceding subparagraph (A) by inserting ‘‘in the 

20 case of services described in subparagraph (C), a 

21 physician enrolled under section 1866(j) or an eligi22 ble professional under section 1848(k)(3)(B),’’ be23 fore ‘‘or, in the case of services’’. 

24 (2) PART B.—Section 1835(a)(2) of such Act 

25 (42 U.S.C. 1395n(a)(2)) is amended in the matter 


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1 preceding subparagraph (A) by inserting ‘‘, or in the 

2 case of services described in subparagraph (A), a 

3 physician enrolled under section 1866(j) or an eligi4 ble professional under section 1848(k)(3)(B),’’ after 

5 ‘‘a physician’’. 

6 (c) DISCRETION TO EXPAND APPLICATION.—The 

7 Secretary may extend the requirement applied by the 

8 amendments made by subsections (a) and (b) to durable 

9 medical equipment and home health services (relating to 

10 requiring certifications and written orders to be made by 

11 enrolled physicians and health professions) to other cat12 egories of items or services under this title, including cov13 ered part D drugs as defined in section 1860D–2(e), if 

14 the Secretary determines that such application would help 

15 to reduce the risk of waste, fraud, and abuse with respect 

16 to such other categories under title XVIII of the Social 

17 Security Act. 

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

19 this section shall apply to written orders and certifications 

20 made on or after July 1, 2010. 


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1 SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE 

2 DOCUMENTATION ON REFERRALS TO PRO3 GRAMS AT HIGH RISK OF WASTE AND ABUSE. 

4 (a) PHYSICIANS AND OTHER SUPPLIERS.—Section 

5 1842(h) of the Social Security Act, is amended by adding 

6 at the end the following new paragraph 

7 ‘‘(10) The Secretary may disenroll, for a period of 

8 not more than one year for each act, a physician or sup9 plier under section 1866(j) if such physician or supplier 

10 fails to maintain and, upon request of the Secretary, pro11 vide access to documentation relating to written orders or 

12 requests for payment for durable medical equipment, cer13 tifications for home health services, or referrals for other 

14 items or services written or ordered by such physician or 

15 supplier under this title, as specified by the Secretary.’’. 

16 (b) PROVIDERS OF SERVICES.—Section 1866(a)(1) 

17 of such Act (42 U.S.C. 1395cc), is amended— 

18 (1) in subparagraph (U), by striking at the end 

19 ‘‘and’’; 

20 (2) in subparagraph (V), by striking the period 

21 at the end and adding ‘‘; and’’; and 

22 (3) by adding at the end the following new sub23 paragraph: 

24 ‘‘(W) maintain and, upon request of the 

25 Secretary, provide access to documentation re26 lating to written orders or requests for payment 


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1 for durable medical equipment, certifications for 

2 home health services, or referrals for other 

3 items or services written or ordered by the pro4 vider under this title, as specified by the Sec5 retary.’’. 

6 (c) OIG PERMISSIVE EXCLUSION AUTHORITY.—Sec7 tion 1128(b)(11) of the Social Security Act (42 U.S.C. 

8 1320a–7(b)(11)) is amended by inserting ‘‘, ordering, re9 ferring for furnishing, or certifying the need for’’ after 

10 ‘‘furnishing’’. 

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

12 this section shall apply to orders, certifications, and refer13 rals made on or after January 1, 2010. 

14 SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT RE15 QUIRED BEFORE PHYSICIANS MAY CERTIFY 

16 ELIGIBILITY FOR HOME HEALTH SERVICES 

17 OR DURABLE MEDICAL EQUIPMENT UNDER 

18 MEDICARE. 

19 (a) CONDITION OF PAYMENT FOR HOME HEALTH

20 SERVICES.— 

21 (1) PART A.—Section 1814(a)(2)(C) of such 

22 Act is amended— 

23 (A) by striking ‘‘and such services’’ and in24 serting ‘‘such services’’; and 


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1 (B) by inserting after ‘‘care of a physi2 cian’’ the following: ‘‘, and, in the case of a cer3 tification or recertification made by a physician 

4 after January 1, 2010, prior to making such 

5 certification the physician must document that 

6 the physician has had a face-to-face encounter 

7 (including through use of telehealth and other 

8 than with respect to encounters that are inci9 dent to services involved) with the individual 

10 during the 6-month period preceding such cer11 tification, or other reasonable timeframe as de12 termined by the Secretary’’. 

13 (2) PART B.—Section 1835(a)(2)(A) of the So14 cial Security Act is amended— 

15 (A) by striking ‘‘and’’ before ‘‘(iii)’’; and 

16 (B) by inserting after ‘‘care of a physi17 cian’’ the following: ‘‘, and (iv) in the case of 

18 a certification or recertification after January 

19 1, 2010, prior to making such certification the 

20 physician must document that the physician has 

21 had a face-to-face encounter (including through 

22 use of telehealth and other than with respect to 

23 encounters that are incident to services in24 volved) with the individual during the 6-month 

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1 cation, or other reasonable timeframe as deter2 mined by the Secretary’’. 

3 (b) CONDITION OF PAYMENT FOR DURABLE MED4 ICAL EQUIPMENT.—Section 1834(a)(11)(B) of the Social 

5 Security Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

6 adding before the period at the end the following: ‘‘and 

7 shall require that such an order be written pursuant to 

8 the physician documenting that the physician has had a 

9 face-to-face encounter (including through use of telehealth 

10 and other than with respect to encounters that are inci11 dent to services involved) with the individual involved dur12 ing the 6-month period preceding such written order, or 

13 other reasonable timeframe as determined by the Sec14 retary’’. 

15 (c) APPLICATION TO OTHER AREAS UNDER MEDI16 CARE.—The Secretary may apply the face-to-face encoun17 ter requirement described in the amendments made by 

18 subsections (a) and (b) to other items and services for 

19 which payment is provided under title XVIII of the Social 

20 Security Act based upon a finding that such an decision 

21 would reduce the risk of waste, fraud, or abuse. 

22 (d) APPLICATION TO MEDICAID AND CHIP.—The re23 quirements pursuant to the amendments made by sub24 sections (a) and (b) shall apply in the case of physicians 

25 making certifications for home health services under title 


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1 XIX or XXI of the Social Security Act, in the same man2 ner and to the same extent as such requirements apply 

3 in the case of physicians making such certifications under 

4 title XVIII of such Act. 

5 SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AU6 THORITY TO PROGRAM EXCLUSION INVES7 TIGATIONS. 

8 (a) IN GENERAL.—Section 1128(f) of the Social Se9 curity Act (42 U.S.C. 1320a-7(f)) is amended by adding 

10 at the end the following new paragraph: 

11 ‘‘(4) The provisions of subsections (d) and (e) of sec12 tion 205 shall apply with respect to this section to the 

13 same extent as they are applicable with respect to title 

14 II. The Secretary may delegate the authority granted by 

15 section 205(d) (as made applicable to this section) to the 

16 Inspector General of the Department of Health and 

17 Human Services or the Administrator of the Centers for 

18 Medicare & Medicaid Services for purposes of any inves19 tigation under this section.’’. 

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

21 subsection (a) shall apply to investigations beginning on 

22 or after January 1, 2010. 


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1 SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND 

2 MEDICAID OVERPAYMENTS. 

3 Section 1128G of the Social Security Act, as inserted 

4 by section 1631 and amended by section 1632, is further 

5 amended by adding at the end the following new sub6 section: 

7 ‘‘(c) REPORTS ON AND REPAYMENT OF OVERPAY8 MENTS IDENTIFIED THROUGH INTERNAL AUDITS AND

9 REVIEWS.— 

10 ‘‘(1) REPORTING AND RETURNING OVERPAY11 MENTS.—If a person knows of an overpayment, the 

12 person must— 

13 ‘‘(A) report and return the overpayment to 

14 the Secretary, the State, an intermediary, a 

15 carrier, or a contractor, as appropriate, at the 

16 correct address, and 

17 ‘‘(B) notify the Secretary, the State, inter18 mediary, carrier, or contractor to whom the 

19 overpayment was returned in writing of the rea20 son for the overpayment. 

21 ‘‘(2) TIMING.—An overpayment must be re22 ported and returned under paragraph (1)(A) by not 

23 later than the date that is 60 days after the date the 

24 person knows of the overpayment. 

25 Any known overpayment retained later than the ap26 plicable date specified in this paragraph creates an 


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1 obligation as defined in section 3729(b)(3) of title 

2 31 of the United States Code. 

3 ‘‘(3) CLARIFICATION.—Repayment of any over4 payments (or refunding by withholding of future 

5 payments) by a provider of services or supplier does 

6 not otherwise limit the provider or supplier’s poten7 tial liability for administrative obligations such as 

8 applicable interests, fines, and specialties or civil or 

9 criminal sanctions involving the same claim if it is 

10 determined later that the reason for the overpay11 ment was related to fraud by the provider or sup12 plier or the employees or agents of such provider or 

13 supplier. 

14 ‘‘(4) DEFINITIONS.—In this subsection: 

15 ‘‘(A) KNOWS.—The term ‘knows’ has the 

16 meaning given the terms ‘knowing’ and ‘know17 ingly’ in section 3729(b) of title 31 of the 

18 United States Code. 

19 ‘‘(B) OVERPAYMENT.—The term ‘‘overpay20 ment’’ means any finally determined funds that 

21 a person receives or retains under title XVIII, 

22 XIX, or XXI to which the person, after applica23 ble reconciliation, is not entitled under such 

24 title. 


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1 ‘‘(C) PERSON.—The term ‘person’ means a 

2 provider of services, supplier, Medicaid man3 aged care organization (as defined in section 

4 1903(m)(1)(A)), Medicare Advantage organiza5 tion (as defined in section 1859(a)(1)), or PDP 

6 sponsor (as defined in section 1860D– 

7 41(a)(13)), but excluding a beneficiary.’’. 

8 SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIV9 ERS FOR OIG EXCLUSIONS TO BENE10 FICIARIES OF ANY FEDERAL HEALTH CARE 

11 PROGRAM. 

12 Section 1128(c)(3)(B) of the Social Security Act (42 

13 U.S.C. 1320a–7(c)(3)(B)) is amended by striking ‘‘indi14 viduals entitled to benefits under part A of title XVIII 

15 or enrolled under part B of such title, or both’’ and insert16 ing ‘‘beneficiaries (as defined in section 1128A(i)(5)) of 

17 that program’’. 

18 SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL 

19 DIALYSIS FACILITIES. 

20 Section 1881(b) of the Social Security Act (42 U.S.C. 

21 1395rr(b)) is amended by adding at the end the following 

22 new paragraph: 

23 ‘‘(15) For purposes of evaluating or auditing pay24 ments made to renal dialysis facilities for items and serv25 ices under this section under paragraph (1), each such 


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1 renal dialysis facility, upon the request of the Secretary, 

2 shall provide to the Secretary access to information relat3 ing to any ownership or compensation arrangement be4 tween such facility and the medical director of such facility 

5 or between such facility and any physician.’’. 

6 SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

7 ALTERNATE PAYEES REQUIRED TO REG8 ISTER UNDER MEDICARE. 

9 (a) MEDICARE.—Section 1866(j)(1) of the Social Se10 curity Act (42 U.S.C. 1395cc(j)(1)) is amended by adding 

11 at the end the following new subparagraph: 

12 ‘‘(D) BILLING AGENTS AND CLEARING13 HOUSES REQUIRED TO BE REGISTERED UNDER

14 MEDICARE.—Any agent, clearinghouse, or other 

15 alternate payee that submits claims on behalf of 

16 a health care provider must be registered with 

17 the Secretary in a form and manner specified 

18 by the Secretary.’’. 

19 (b) MEDICAID.—For a similar provision with respect 

20 to the Medicaid program under title XIX of the Social Se21 curity Act, see section 1759. 

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

23 subsection (a) shall apply to claims submitted on or after 

24 January 1, 2012. 


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1 SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO 

2 FALSE CLAIMS ACT AMENDMENTS. 

3 Section 1128A of the Social Security Act, as amended 

4 by sections 1611, 1612, 1613, and 1615, is further 

5 amended— 

6 (1) in subsection (a)— 

7 (A) in paragraph (1), by striking ‘‘to an 

8 officer, employee, or agent of the United States, 

9 or of any department or agency thereof, or of 

10 any State agency (as defined in subsection 

11 (i)(1))’’; 

12 (B) in paragraph (4)— 

13 (i) in the matter preceding subpara14 graph (A), by striking ‘‘participating in a 

15 program under title XVIII or a State 

16 health care program’’ and inserting ‘‘par17 ticipating in a Federal health care program 

18 (as defined in section 1128B(f))’’; and 

19 (ii) in subparagraph (A), by striking 

20 ‘‘title XVIII or a State health care pro21 gram’’ and inserting ‘‘a Federal health 

22 care program (as defined in section 

23 1128B(f))’’; 

24 (C) by striking ‘‘or’’ at the end of para25 graph (10); 


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1 (D) by inserting after paragraph (11) the 

2 following new paragraphs: 

3 ‘‘(12) conspires to commit a violation of this 

4 section; or 

5 ‘‘(13) knowingly makes, uses, or causes to be 

6 made or used, a false record or statement material 

7 to an obligation to pay or transmit money or prop8 erty to a Federal health care program, or knowingly 

9 conceals or knowingly and improperly avoids or de10 creases an obligation to pay or transmit money or 

11 property to a Federal health care program;’’; and 

12 (E) in the matter following paragraph 

13 (13), as inserted by subparagraph (D)— 

14 (i) by striking ‘‘or’’ before ‘‘in cases 

15 under paragraph (11)’’; and 

16 (ii) by inserting ‘‘, in cases under 

17 paragraph (12), $50,000 for any violation 

18 described in this section committed in fur19 therance of the conspiracy involved; or in 

20 cases under paragraph (13), $50,000 for 

21 each false record or statement, or conceal22 ment, avoidance, or decrease’’ after ‘‘by an 

23 excluded individual’’; and 

24 (F) in the second sentence, by striking 

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1 sentation)’’ and inserting ‘‘such false statement 

2 or misrepresentation, in cases under paragraph 

3 (12), an assessment of not more than 3 times 

4 the total amount that would otherwise apply for 

5 any violation described in this section com6 mitted in furtherance of the conspiracy in7 volved, or in cases under paragraph (13), an as8 sessment of not more than 3 times the total 

9 amount of the obligation to which the false 

10 record or statement was material or that was 

11 avoided or decreased)’’. 

12 (2) in subsection (c)(1), by striking ‘‘six years’’ 

13 and inserting ‘‘10 years’’; and 

14 (3) in subsection (i)— 

15 (A) by amending paragraph (2) to read as 

16 follows: 

17 ‘‘(2) The term ‘claim’ means any application, 

18 request, or demand, whether under contract, or oth19 erwise, for money or property for items and services 

20 under a Federal health care program (as defined in 

21 section 1128B(f)), whether or not the United States 

22 or a State agency has title to the money or property, 

23 that— 

24 ‘‘(A) is presented or caused to be pre25 sented to an officer, employee, or agent of the 


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1 United States, or of any department or agency 

2 thereof, or of any State agency (as defined in 

3 subsection (i)(1)); or 

4 ‘‘(B) is made to a contractor, grantee, or 

5 other recipient if the money or property is to be 

6 spent or used on the Federal health care pro7 gram’s behalf or to advance a Federal health 

8 care program interest, and if the Federal health 

9 care program— 

10 ‘‘(i) provides or has provided any por11 tion of the money or property requested or 

12 demanded; or 

13 ‘‘(ii) will reimburse such contractor, 

14 grantee, or other recipient for any portion 

15 of the money or property which is re16 quested or demanded.’’; 

17 (B) by amending paragraph (3) to read as 

18 follows: 

19 ‘‘(3) The term ‘item or service’ means, without 

20 limitation, any medical, social, management, admin21 istrative, or other item or service used in connection 

22 with or directly or indirectly related to a Federal 

23 health care program.’’; 

24 (C) in paragraph (6)— 


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1 (i) in subparagraph (C), by striking at 

2 the end ‘‘or’’; 

3 (ii) in the first subparagraph (D), by 

4 striking at the end the period and inserting 

5 ‘‘; or’’; and 

6 (iii) by redesignating the second sub7 paragraph (D) as a subparagraph (E); 

8 (D) by amending paragraph (7) to read as 

9 follows: 

10 ‘‘(7) The terms ‘knowing’, ‘knowingly’, and 

11 ‘should know’ mean that a person, with respect to 

12 information— 

13 ‘‘(A) has actual knowledge of the informa14 tion; 

15 ‘‘(B) acts in deliberate ignorance of the 

16 truth or falsity of the information; or 

17 ‘‘(C) acts in reckless disregard of the truth 

18 or falsity of the information; 

19 and require no proof of specific intent to defraud.’’; 

20 and 

21 (E) by adding at the end the following new 

22 paragraphs: 

23 ‘‘(8) The term ‘obligation’ means an established 

24 duty, whether or not fixed, arising from an express 

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1 licensee relationship, from a fee-based or similar re2 lationship, from statute or regulation, or from the 

3 retention of any overpayment. 

4 ‘‘(9) The term ‘material’ means having a nat5 ural tendency to influence, or be capable of influ6 encing, the payment or receipt of money or prop7 erty.’’. 

8 Subtitle D—Access to Information 

9 Needed to Prevent Fraud, 

10 Waste, and Abuse 

11 SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDEN12 TIFY FRAUD, WASTE, AND ABUSE. 

13 Section 1128G of the Social Security Act, as added 

14 by section 1631 and amended by sections 1632 and 1641, 

15 is further amended by adding at the end the following new 

16 subsection; 

17 ‘‘(d) ACCESS TO INFORMATION NECESSARY TO IDEN18 TIFY FRAUD, WASTE, AND ABUSE.—For purposes of law 

19 enforcement activity, and to the extent consistent with ap20 plicable disclosure, privacy, and security laws, including 

21 the Health Insurance Portability and Accountability Act 

22 of 1996 and the Privacy Act of 1974, and subject to any 

23 information systems security requirements enacted by law 

24 or otherwise required by the Secretary, the Attorney Gen25 eral shall have access, facilitation by the Inspector General 


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1 of the Department of Health and Human Services, to 

2 claims and payment data relating to titles XVIII and XIX, 

3 in consultation with the Centers for Medicare & Medicaid 

4 Services or the owner of such data.’’. 

5 SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE 

6 HEALTHCARE INTEGRITY AND PROTECTION 

7 DATA BANK AND THE NATIONAL PRACTI8 TIONER DATA BANK. 

9 (a) IN GENERAL.—To eliminate duplication between 

10 the Healthcare Integrity and Protection Data Bank 

11 (HIPDB) established under section 1128E of the Social 

12 Security Act and the National Practitioner Data Bank 

13 (NPBD) established under the Health Care Quality Im14 provement Act of 1986, section 1128E of the Social Secu15 rity Act (42 U.S.C. 1320a-7e) is amended— 

16 (1) in subsection (a), by striking ‘‘Not later 

17 than’’ and inserting ‘‘Subject to subsection (h), not 

18 later than’’; 

19 (2) in the first sentence of subsection (d)(2), by 

20 striking ‘‘(other than with respect to requests by 

21 Federal agencies)’’; and 

22 (3) by adding at the end the following new sub23 section: 

24 ‘‘(h) SUNSET OF THE HEALTHCARE INTEGRITY AND

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1 fective upon the enactment of this subsection, the Sec2 retary shall implement a process to eliminate duplication 

3 between the Healthcare Integrity and Protection Data 

4 Bank (in this subsection referred to as the ‘HIPDB’ es5 tablished pursuant to subsection (a) and the National 

6 Practitioner Data Bank (in this subsection referred to as 

7 the ‘NPDB’) as implemented under the Health Care Qual8 ity Improvement Act of 1986 and section 1921 of this Act, 

9 including systems testing necessary to ensure that infor10 mation formerly collected in the HIPDB will be accessible 

11 through the NPDB, and other activities necessary to 

12 eliminate duplication between the two data banks. Upon 

13 the completion of such process, notwithstanding any other 

14 provision of law, the Secretary shall cease the operation 

15 of the HIPDB and shall collect information required to 

16 be reported under the preceding provisions of this section 

17 in the NPDB. Except as otherwise provided in this sub18 section, the provisions of subsections (a) through (g) shall 

19 continue to apply with respect to the reporting of (or fail20 ure to report), access to, and other treatment of the infor21 mation specified in this section.’’. 

22 (b) ELIMINATION OF THE RESPONSIBILITY OF THE

23 HHS OFFICE OF THE INSPECTOR GENERAL.—Section 

24 1128C(a)(1) of the Social Security Act (42 U.S.C. 1320a25 7c(a)(1)) is amended— 


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1 (1) in subparagraph (C), by adding at the end 

2 ‘‘and’’; 

3 (2) in subparagraph (D), by striking at the end 

4 ‘‘, and’’ and inserting a period; and 

5 (3) by striking subparagraph (E). 

6 (c) SPECIAL PROVISION FOR ACCESS TO THE NA7 TIONAL PRACTITIONER DATA BANK BY THE DEPART8 MENT OF VETERANS AFFAIRS.— 

9 (1) IN GENERAL.—Notwithstanding any other 

10 provision of law, during the one year period that be11 gins on the effective date specified in subsection 

12 (e)(1), the information described in paragraph (2) 

13 shall be available from the National Practitioner 

14 Data Bank (described in section 1921 of the Social 

15 Security Act) to the Secretary of Veterans Affairs 

16 without charge. 

17 (2) INFORMATION DESCRIBED.—For purposes 

18 of paragraph (1), the information described in this 

19 paragraph is the information that would, but for the 

20 amendments made by this section, have been avail21 able to the Secretary of Veterans Affairs from the 

22 Healthcare Integrity and Protection Data Bank. 

23 (d) FUNDING.—Notwithstanding any provisions of 

24 this division, sections 1128E(d)(2) and 1817(k)(3) of the 

25 Social Security Act, or any other provision of law, there 


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1 shall be available for carrying out the transition process 

2 under section 1128E(h) of the Social Security Act over 

3 the period required to complete such process, and for oper4 ation of the National Practitioner Data Bank until such 

5 process is completed, without fiscal year limitation— 

6 (1) any fees collected pursuant to section 

7 1128E(d)(2) of such Act; and 

8 (2) such additional amounts as necessary, from 

9 appropriations available to the Secretary and to the 

10 Office of the Inspector General of the Department of 

11 Health and Human Services under clauses (i) and 

12 (ii), respectively, of section 1817(k)(3)(A) of such 

13 Act, for costs of such activities during the first 12 

14 months following the date of the enactment of this 

15 Act. 

16 (e) EFFECTIVE DATE.—The amendments made— 

17 (1) by subsection (a)(2) shall take effect on the 

18 first day after the Secretary of Health and Human 

19 Services certifies that the process implemented pur20 suant to section 1128E(h) of the Social Security Act 

21 (as added by subsection (a)(3)) is complete; and 

22 (2) by subsection (b) shall take effect on the 

23 earlier of the date specified in paragraph (1) or the 

24 first day of the second succeeding fiscal year after 

25 the fiscal year during which this Act is enacted. 


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1 SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECU2 RITY STANDARDS. 

3 The provisions of sections 262(a) and 264 of the 

4 Health Insurance Portability and Accountability Act of 

5 1996 (and standards promulgated pursuant to such sec6 tions) and the Privacy Act of 1974 shall apply with respect 

7 to the provisions of this subtitle and amendments made 

8 by this subtitle. 

9 TITLE VII—MEDICAID AND CHIP 

10 Subtitle A—Medicaid and Health 

11 Reform 

12 SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME 

BELOW 1331 13 ⁄3 PERCENT OF THE FEDERAL 

14 POVERTY LEVEL. 

15 (a) ELIGIBILITY FOR NON-TRADITIONAL INDIVID16 UALS WITH INCOME BELOW 133 PERCENT OF THE FED17 ERAL POVERTY LEVEL.— 

18 (1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 

19 the Social Security Act (42 U.S.C. 

20 1396b(a)(10)(A)(i) is amended— 

21 (A) by striking ‘‘or’’ at the end of sub22 clause (VI); 

23 (B) by adding ‘‘or’’ at the end of subclause 

24 (VII); and 

25 (C) by adding at the end the following new 

26 subclause: 


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1 ‘‘(VIII) who are under 65 years 

2 of age, who are not described in a pre3 vious subclause of this clause, and 

4 who are in families whose income (de5 termined using methodologies and 

6 procedures specified by the Secretary 

7 in consultation with the Health 

8 Choices Commissioner) does not exceed 1331 9 ⁄3 percent of the income offi10 cial poverty line (as defined by the Of11 fice of Management and Budget, and 

12 revised annually in accordance with 

13 section 673(2) of the Omnibus Budget 

14 Reconciliation Act of 1981) applicable 

15 to a family of the size involved;’’. 

16 (2) 100% FMAP FOR NON-TRADITIONAL MED17 ICAID ELIGIBLE INDIVIDUALS.—Section 1905 of 

18 such Act (42 U.S.C. 1396d) is amended— 

19 (A) in the third sentence of subsection (b) 

20 by inserting before the period at the end the 

21 following: ‘‘and with respect to amounts de22 scribed in subsection (y)’’; and 

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

24 subsection: 


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1 ‘‘(y) ADDITIONAL EXPENDITURES SUBJECT TO

2 100% FMAP.—For purposes of section 1905(b), the 

3 amounts described in this subsection are the following: 

4 ‘‘(1) Amounts expended for medical assistance 

5 for individuals described in subclause (VIII) of sec6 tion 1902(a)(10)(A)(i).’’. 

7 (3) CONSTRUCTION.—Nothing in this sub8 section shall be construed as not providing for cov9 erage under subclause (VIII) of section 

10 1902(a)(10)(A)(i) of the Social Security Act, as 

11 added by paragraph (1) of, and an increased FMAP 

12 under the amendment made by paragraph (2) for, 

13 an individual who has been provided medical assist14 ance under title XIX of the Act under a demonstra15 tion waiver approved under section 1115 of such Act 

16 or with State funds. 

17 (4) CONFORMING AMENDMENT.—Section 

18 1903(f)(4) of the Social Security Act (42 U.S.C. 

19 1396b(f)(4)) is amended by inserting 

20 ‘‘1902(a)(10)(A)(i)(VIII),’’ after 

21 ‘‘1902(a)(10)(A)(i)(VII),’’. 

22 (b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELI23 GIBLE INDIVIDUALS WITH INCOME NOT EXCEEDING

1331 24 ⁄3 PERCENT OF THE FEDERAL POVERTY LEVEL.— 


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1 (1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 

2 the Social Security Act (42 U.S.C. 

3 1396b(a)(10)(A)(i)), as amended by subsection (a), 

4 is amended— 

5 (A) by striking ‘‘or’’ at the end of sub6 clause (VII); 

7 (B) by adding ‘‘or’’ at the end of subclause 

8 (VIII); and 

9 (C) by adding at the end the following new 

10 subclause: 

11 ‘‘(IX) who are under 65 years of 

12 age, who would be eligible for medical 

13 assistance under the State plan under 

14 one of subclauses (I) through (VII) 

15 (based on the income standards, 

16 methodologies, and procedures in ef17 fect as of June 16, 2009) but for in18 come and who are in families whose 

income does not exceed 1331 19 ⁄3 percent 

20 of the income official poverty line (as 

21 defined by the Office of Management 

22 and Budget, and revised annually in 

23 accordance with section 673(2) of the 

24 Omnibus Budget Reconciliation Act of 


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1 1981) applicable to a family of the 

2 size involved;’’. 

3 (2) 100% FMAP FOR CERTAIN TRADITIONAL

4 MEDICAID ELIGIBLE INDIVIDUALS.—Section 1905(y) 

5 of such Act (42 U.S.C. 1396d(b)), as added by sub6 section (a)(2)(B), is amended by inserting ‘‘or (IX)’’ 

7 after ‘‘(VIII)’’. 

8 (3) CONSTRUCTION.—Nothing in this sub9 section shall be construed as not providing for cov10 erage under subclause (IX) of section 

11 1902(a)(10)(A)(i) of the Social Security Act, as 

12 added by paragraph (1) of, and an increased FMAP 

13 under the amendment made by paragraph (2) for, 

14 an individual who has been provided medical assist15 ance under title XIX of the Act under a demonstra16 tion waiver approved under section 1115 of such Act 

17 or with State funds. 

18 (4) CONFORMING AMENDMENT.—Section 

19 1903(f)(4) of the Social Security Act (42 U.S.C. 

20 1396b(f)(4)), as amended by subsection (a)(4), is 

21 amended by inserting ‘‘1902(a)(10)(A)(i)(IX),’’ after 

22 ‘‘1902(a)(10)(A)(i)(VIII),’’. 

23 (c) 100% MATCHING RATE FOR TEMPORARY COV24 ERAGE OF CERTAIN NEWBORNS.—Section 1905(y) of 

25 such Act, as added by subsection (a)(2)(B), is amended— 


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1 (1) in paragraph (1), by inserting before the pe2 riod at the end the following: ‘‘, and who is not pro3 vided medical assistance under section 1943(b)(2) of 

4 this title or section 205(d)(1)(B) of the America’s 

5 Affordable Health Choices Act of 2009’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(2) Amounts expended for medical assistance 

8 for children described in section 203(d)(1)(A) of the 

9 America’s Affordable Health Choices Act of 2009 

10 during the time period specified in such section.’’. 

11 (d) NETWORK ADEQUACY.—Section 1932(a)(2) of 

12 the Social Security Act (42 U.S.C. 1396u–2(a)(2)) is 

13 amended by adding at the end the following new subpara14 graph: 

15 ‘‘(D) ENROLLMENT OF NON-TRADITIONAL

16 MEDICAID ELIGIBLES.—A State may not re17 quire under paragraph (1) the enrollment in a 

18 managed care entity of an individual described 

19 in section 1902(a)(10)(A)(i)(VIII) unless the 

20 State demonstrates, to the satisfaction of the 

21 Secretary, that the entity, through its provider 

22 network and other arrangements, has the ca23 pacity to meet the health, mental health, and 

24 substance abuse needs of such individuals.’’. 


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect on the first day of Y1, and 

3 shall apply with respect to items and services furnished 

4 on or after such date. 

5 SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER6 TAIN MEDICAID ELIGIBLE INDIVIDUALS. 

7 (a) IN GENERAL.—Title XIX of the Social Security 

8 Act is amended by adding at the end the following new 

9 section: 

10 ‘‘REQUIREMENTS AND SPECIAL RULES FOR CERTAIN

11 MEDICAID ELIGIBLE INDIVIDUALS

12 ‘‘SEC. 1943. (a) COORDINATION WITH NHI EX13 CHANGE THROUGH MEMORANDUM OF UNDER14 STANDING.— 

15 ‘‘(1) IN GENERAL.—The State shall enter into 

16 a Medicaid memorandum of understanding described 

17 in section 204(e)(4) of the America’s Affordable 

18 Health Choices Act of 2009 with the Health Choices 

19 Commissioner, acting in consultation with the Sec20 retary, with respect to coordinating the implementa21 tion of the provisions of subdivision A of such Act 

22 with the State plan under this title in order to en23 sure the enrollment of Medicaid eligible individuals 

24 in acceptable coverage. Nothing in this section shall 

25 be construed as permitting such memorandum to 


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1 modify or vitiate any requirement of a State plan 

2 under this title. 

3 ‘‘(2) ENROLLMENT OF EXCHANGE-REFERRED

4 INDIVIDUALS.— 

5 ‘‘(A) NON-TRADITIONAL INDIVIDUALS.— 

6 Pursuant to such memorandum the State shall 

7 accept without further determination the enroll8 ment under this title of an individual deter9 mined by the Commissioner to be a non-tradi10 tional Medicaid eligible individual. The State 

11 shall not do any redeterminations of eligibility 

12 for such individuals unless the periodicity of 

13 such redeterminations is consistent with the pe14 riodicity for redeterminations by the Commis15 sioner of eligibility for affordability credits 

16 under subtitle C of title II of subdivision A of 

17 the America’s Affordable Health Choices Act of 

18 2009, as specified under such memorandum. 

19 ‘‘(B) TRADITIONAL INDIVIDUALS.— 

20 ‘‘(i) REGULAR ENROLLMENT OP21 TION.—Pursuant to such memorandum, 

22 insofar as the memorandum has selected 

23 the option described in section 

24 205(e)(3)(A) of the America’s Affordable 

25 Health Choices Act of 2009, the State 


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1 shall accept without further determination 

2 the enrollment under this title of an indi3 vidual determined by the Commissioner to 

4 be a traditional Medicaid eligible indi5 vidual. The State may do redeterminations 

6 of eligibility of such individual consistent 

7 with such section and the memorandum. 

8 ‘‘(ii) PRESUMPTIVE ELIGIBILITY OP9 TION.—Pursuant to such memorandum, 

10 insofar as the memorandum has selected 

11 the option described in section 

12 205(e)(3)(B) of the America’s Affordable 

13 Health Choices Act of 2009, the State 

14 shall provide for making medical assistance 

15 available during the presumptive eligibility 

16 period and shall, upon application of the 

17 individual for medical assistance under this 

18 title, promptly make a determination (and 

19 subsequent redeterminations) of eligibility 

20 in the same manner as if the individual 

21 had applied directly to the State for such 

22 assistance except that the State shall use 

23 the income-related information used by the 

24 Commissioner and provided to the State 

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1 sumptive eligibility determination to the 

2 maximum extent feasible. 

3 ‘‘(3) DETERMINATIONS OF ELIGIBILITY FOR

4 AFFORDABILITY CREDITS.—If the Commissioner de5 termines that a State Medicaid agency has the ca6 pacity to make determinations of eligibility for af7 fordability credits under subtitle C of title II of sub8 division A of the America’s Affordable Health 

9 Choices Act of 2009, under such memorandum— 

10 ‘‘(A) the State Medicaid agency shall con11 duct such determinations for any Exchange-eli12 gible individual who requests such a determina13 tion; 

14 ‘‘(B) in the case that a State Medicaid 

15 agency determines that an Exchange-eligible in16 dividual is not eligible for affordability credits, 

17 the agency shall forward the information on the 

18 basis of which such determination was made to 

19 the Commissioner; and 

20 ‘‘(C) the Commissioner shall reimburse the 

21 State Medicaid agency for the costs of con22 ducting such determinations. 

23 ‘‘(b) TREATMENT OF CERTAIN NEWBORNS.— 

24 ‘‘(1) IN GENERAL.—In the case of a child who 

25 is deemed under section 205(d)(1) of the America’s 


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1 Affordable Health Choices Act of 2009 to be a non2 traditional Medicaid eligible individual and enrolled 

3 under this title pursuant to such section, the State 

4 shall provide for a determination, by not later than 

5 the end of the period referred to in subparagraph 

6 (A) of such section, of the child’s eligibility for med7 ical assistance under this title. 

8 ‘‘(2) EXTENDED TREATMENT AS TRADITIONAL

9 MEDICAID ELIGIBLE INDIVIDUAL.—In accordance 

10 with subparagraph (B) of section 205(d)(1) of the 

11 America’s Affordable Health Choices Act of 2009, in 

12 the case of a child described in subparagraph (A) of 

13 such section who at the end of the period referred 

14 to in such subparagraph is not otherwise covered 

15 under acceptable coverage, the child shall be deemed 

16 (until such time as the child obtains such coverage 

17 or the State otherwise makes a determination of the 

18 child’s eligibility for medical assistance under its 

19 plan under this title pursuant to paragraph (1)) to 

20 be a traditional Medicaid eligible individual de21 scribed in section 1902(l)(1)(B). 

22 ‘‘(c) DEFINITIONS .—In this section: 

23 ‘‘(1) MEDICAID ELIGIBLE INDIVIDUALS.—In 

24 this section, the terms ‘Medicaid eligible individual’, 

25 ‘traditional Medicaid eligible individual’, and ‘nonVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00761 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 traditional Medicaid eligible individual’ have the 

2 meanings given such terms in section 205(e)(5) of 

3 the America’s Affordable Health Choices Act of 

4 2009. 

5 ‘‘(2) MEMORANDUM.—The term ‘memorandum’ 

6 means a Medicaid memorandum of understanding 

7 under section 205(e)(4) of the America’s Affordable 

8 Health Choices Act of 2009. 

9 ‘‘(3) Y1.—The term ‘Y1’ has the meaning given 

10 such term in section 100(c) of the America’s Afford11 able Health Choices Act of 2009.’’. 

12 (b) CONFORMING AMENDMENTS TO ERROR RATE.— 

13 (1) Section 1903(u)(1)(D) of the Social Secu14 rity Act (42 U.S.C. 1396b(u)(1)(D)) is amended by 

15 adding at the end the following new clause: 

16 ‘‘(vi) In determining the amount of erroneous excess 

17 payments, there shall not be included any erroneous pay18 ments made that are attributable to an error in an eligi19 bility determination under subtitle C of title II of subdivi20 sion A of the America’s Affordable Health Choices Act of 

21 2009.’’. 

22 (2) Section 2105(c)(11) of such Act (42 U.S.C. 

23 1397ee(c)(11)) is amended by adding at the end the 

24 following new sentence: ‘‘Clause (vi) of section 

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1 cation of such requirements under this title and title 

2 XIX.’’. 

3 SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT. 

4 (a) CHIP MAINTENANCE OF EFFORT.—Section 

5 1902 of the Social Security Act (42 U.S.C. 1396a) is 

6 amended— 

7 (1) in subsection (a), as amended by section 

8 1631(b)(1)(D)— 

9 (A) by striking ‘‘and’’ at the end of para10 graph (72); 

11 (B) by striking the period at the end of 

12 paragraph (73) and inserting ‘‘; and’’; and 

13 (C) by inserting after paragraph (74) the 

14 following new paragraph: 

15 ‘‘(75) provide for maintenance of effort under 

16 the State child health plan under title XXI in ac17 cordance with subsection (gg).’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(gg) CHIP MAINTENANCE OF EFFORT REQUIRE21 MENT.— 

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

23 as a condition of its State plan under this title under 

24 subsection (a)(75) and receipt of any Federal finan25 cial assistance under section 1903(a) for calendar 


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1 quarters beginning after the date of the enactment 

2 of this subsection and before CHIP MOE termi3 nation date specified in paragraph (3), a State shall 

4 not have in effect eligibility standards, methodolo5 gies, or procedures under its State child health plan 

6 under title XXI (including any waiver under such 

7 title or under section 1115 that is permitted to con8 tinue effect) that are more restrictive than the eligi9 bility standards, methodologies, or procedures, re10 spectively, under such plan (or waiver) as in effect 

11 on June 16, 2009. 

12 ‘‘(2) LIMITATION.—Paragraph (1) shall not be 

13 construed as preventing a State from imposing a 

14 limitation described in section 2110(b)(5)(C)(i)(II) 

15 for a fiscal year in order to limit expenditures under 

16 its State child health plan under title XXI to those 

17 for which Federal financial participation is available 

18 under section 2105 for the fiscal year. 

19 ‘‘(3) CHIP MOE TERMINATION DATE.—In para20 graph (1), the ‘CHIP MOE termination date’ for a 

21 State is the date that is the first day of Y1 (as de22 fined in section 100(c) of the America’s Affordable 

23 Health Choices Act of 2009) or, if later, the first 

24 day after such date that both of the following deter25 minations have been made: 


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1 ‘‘(A) The Health Choices Commissioner 

2 has determined that the Health Insurance Ex3 change has the capacity to support the partici4 pation of CHIP enrollees who are Exchange-eli5 gible individuals (as defined in section 202(b) of 

6 the America’s Affordable Health Choices Act of 

7 2009), 

8 ‘‘(B) The Secretary has determined that 

9 such Exchange, the State, and employers have 

10 procedures in effect to ensure the timely transi11 tion without interruption of coverage of CHIP 

12 enrollees from assistance under title XXI to ac13 ceptable coverage (as defined for purposes of 

14 such Act). 

15 In this paragraph, the term ‘CHIP enrollee’ means 

16 a targeted low-income child or (if the State has 

17 elected the option under section 2112, a targeted 

18 low-income pregnant woman) who is or otherwise 

19 would be (but for acceptable coverage) eligible for 

20 child health assistance or pregnancy-related assist21 ance, respectively, under the State child health plan 

22 referred to in paragraph (1).’’. 

23 (b) MEDICAID MAINTENANCE OF EFFORT; SIMPLI24 FYING AND COORDINATING ELIGIBILITY RULES BE25 TWEEN EXCHANGE AND MEDICAID.— 


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1 (1) IN GENERAL.—Section 1903 of such Act 

2 (42 U.S.C. 1396b) is amended by adding at the end 

3 the following new subsection: 

4 ‘‘(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI5 FYING AND COORDINATING ELIGIBILITY RULES BE6 TWEEN HEALTH INSURANCE EXCHANGE AND MED7 ICAID.— 

8 ‘‘(1) MAINTENANCE OF EFFORT.—A State is 

9 not eligible for payment under subsection (a) for a 

10 calendar quarter beginning after the date of the en11 actment of this subsection if eligibility standards, 

12 methodologies, or procedures under its plan under 

13 this title (including any waiver under this title or 

14 under section 1115 that is permitted to continue ef15 fect) that are more restrictive than the eligibility 

16 standards, methodologies, or procedures, respec17 tively, under such plan (or waiver) as in effect on 

18 June 16, 2009. The Secretary shall extend such a 

19 waiver (including the availability of Federal financial 

20 participation under such waiver) for such period as 

21 may be required for a State to meet the requirement 

22 of the previous sentence. 

23 ‘‘(2) REMOVAL OF ASSET TEST FOR CERTAIN

24 ELIGIBILITY CATEGORIES.— 


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1 ‘‘(A) IN GENERAL.—A State is not eligible 

2 for payment under subsection (a) for a calendar 

3 quarter beginning on or after the first day of 

4 Y1 (as defined in section 100(c) of the Amer5 ica’s Affordable Health Choices Act of 2009), if 

6 the State applies any asset or resource test in 

7 determining (or redetermining) eligibility of any 

8 individual on or after such first day under any 

9 of the following: 

10 ‘‘(i) Subclause (I), (III), (IV), or (VI) 

11 of section 1902(a)(10)(A)(i). 

12 ‘‘(ii) Subclause (II), (IX), (XIV) or 

13 (XVII) of section 1902(a)(10)(A)(ii). 

14 ‘‘(iii) Section 1931(b). 

15 ‘‘(B) OVERRIDING CONTRARY PROVISIONS; 

16 REFERENCES.—The provisions of this title that 

17 prevent the waiver of an asset or resource test 

18 described in subparagraph (A) are hereby 

19 waived. 

20 ‘‘(C) REFERENCES.—Any reference to a 

21 provision described in a provision in subpara22 graph (A) shall be deemed to be a reference to 

23 such provision as modified through the applica24 tion of subparagraphs (A) and (B).’’. 


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1 (2) CONFORMING AMENDMENTS.—(A) Section 

2 1902(a)(10)(A) of such Act (42 U.S.C. 

3 1396a(a)(10)(A)) is amended, in the matter before 

4 clause (i), by inserting ‘‘subject to section 

5 1903(aa)(2),’’ after ‘‘(A)’’. 

6 (B) Section 1931(b)(2) of such Act (42 U.S.C. 

7 1396u–1(b)(1)) is amended by inserting ‘‘subject to 

8 section 1903(aa)(2)’’ after ‘‘and (3)’’. 

9 (c) STANDARDS FOR BENCHMARK PACKAGES.—Sec10 tion 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is 

11 amended— 

12 (1) in paragraph (1), by inserting ‘‘subject to 

13 paragraph (5)’’; and 

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

15 paragraph: 

16 ‘‘(5) MINIMUM STANDARDS.—Effective January 

17 1, 2013, any benchmark benefit package (or bench18 mark equivalent coverage under paragraph (2)) 

19 must meet the minimum benefits and cost-sharing 

20 standards of a basic plan offered through the Health 

21 Insurance Exchange.’’. 

22 SEC. 1704. REDUCTION IN MEDICAID DSH. 

23 (a) REPORT.— 

24 (1) IN GENERAL.—Not later than January 1, 

25 2016, the Secretary of Health and Human Services 


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1 (in this title referred to as the ‘‘Secretary’’) shall 

2 submit to Congress a report concerning the extent to 

3 which, based upon the impact of the health care re4 forms carried out under subdivision A in reducing 

5 the number of uninsured individuals, there is a con6 tinued role for Medicaid DSH. In preparing the re7 port, the Secretary shall consult with community8 based health care networks serving low-income bene9 ficiaries. 

10 (2) MATTERS TO BE INCLUDED.—The report 

11 shall include the following: 

12 (A) RECOMMENDATIONS.—Recommenda13 tions regarding— 

14 (i) the appropriate targeting of Med15 icaid DSH within States; and 

16 (ii) the distribution of Medicaid DSH 

17 among the States. 

18 (B) SPECIFICATION OF DSH HEALTH RE19 FORM METHODOLOGY.—The DSH Health Re20 form methodology described in paragraph (2) of 

21 subsection (b) for purposes of implementing the 

22 requirements of such subsection. 

23 (3) COORDINATION WITH MEDICARE DSH RE24 PORT.—The Secretary shall coordinate the report 


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1 under this subsection with the report on Medicare 

2 DSH under section 1112. 

3 (4) MEDICAID DSH.—In this section, the term 

4 ‘‘Medicaid DSH’’ means adjustments in payments 

5 under section 1923 of the Social Security Act for in6 patient hospital services furnished by dispropor7 tionate share hospitals. 

8 (b) MEDICAID DSH REDUCTIONS.— 

9 (1) IN GENERAL.—The Secretary shall reduce 

10 Medicaid DSH so as to reduce total Federal pay11 ments to all States for such purpose by 

12 $1,500,000,000 in fiscal year 2017, $2,500,000,000 

13 in fiscal year 2018, and $6,000,000,000 in fiscal 

14 year 2019. 

15 (2) DSH HEALTH REFORM METHODOLOGY.— 

16 The Secretary shall carry out paragraph (1) through 

17 use of a DSH Health Reform methodology issued by 

18 the Secretary that imposes the largest percentage re19 ductions on the States that— 

20 (A) have the lowest percentages of unin21 sured individuals (determined on the basis of 

22 audited hospital cost reports) during the most 

23 recent year for which such data are available; 

24 or 


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1 (B) do not target their DSH payments 

2 on— 

3 (i) hospitals with high volumes of 

4 Medicaid inpatients (as defined in section 

5 1923(b)(1)(A) of the Social Security Act 

6 (42 U.S.C. 1396r–4(b)(1)(A)); and 

7 (ii) hospitals that have high levels of 

8 uncompensated care (excluding bad debt). 

9 (3) DSH ALLOTMENT PUBLICATIONS.— 

10 (A) IN GENERAL.—Not later than the pub11 lication deadline specified in subparagraph (B), 

12 the Secretary shall publish in the Federal Reg13 ister a notice specifying the DSH allotment to 

14 each State under 1923(f) of the Social Security 

15 Act for the respective fiscal year specified in 

16 such subparagraph, consistent with the applica17 tion of the DSH Health Reform methodology 

18 described in paragraph (2). 

19 (B) PUBLICATION DEADLINE.—The publi20 cation deadline specified in this subparagraph 

21 is— 

22 (i) January 1, 2016, with respect to 

23 DSH allotments described in subparagraph 

24 (A) for fiscal year 2017; 


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1 (ii) January 1, 2017, with respect to 

2 DSH allotments described in subparagraph 

3 (A) for fiscal year 2018; and 

4 (iii) January 1, 2018, with respect to 

5 DSH allotments described in subparagraph 

6 (A) for fiscal year 2019. 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) Section 1923(f) of the Social Security Act 

9 (42 U.S.C. 1396r–4(f)) is amended— 

10 (A) by redesignating paragraph (7) as 

11 paragraph (8); and 

12 (B) by inserting after paragraph (6) the 

13 following new paragraph: 

14 ‘‘(7) SPECIAL RULE FOR FISCAL YEARS 2017, 

15 2018, AND 2019.— 

16 ‘‘(A) FISCAL YEAR 2017.—Notwithstanding 

17 paragraph (2), the total DSH allotments for all 

18 States for— 

19 ‘‘(i) fiscal year 2017, shall be the total 

20 DSH allotments that would otherwise be 

21 determined under this subsection for such 

22 fiscal year decreased by $1,500,000,000; 

23 ‘‘(ii) fiscal year 2018, shall be the 

24 total DSH allotments that would otherwise 

25 be determined under this subsection for 


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1 such fiscal year decreased by 

2 $2,500,000,000; and 

3 ‘‘(iii) fiscal year 2019, shall be the 

4 total DSH allotments that would otherwise 

5 be determined under this subsection for 

6 such fiscal year decreased by 

7 $6,000,000,000.’’. 

8 (2) Section 1923(b)(4) of such Act (42 U.S.C. 

9 1396r–4(b)(4)) is amended by adding before the pe10 riod the following: ‘‘or to affect the authority of the 

11 Secretary to issue and implement the DSH Health 

12 Reform methodology under section 1704(b)(2) of the 

13 America’s Health Choices Act of 2009’’. 

14 (d) DISPROPORTIONATE SHARE HOSPITALS (DSH) 

15 AND ESSENTIAL ACCESS HOSPITAL (EAH) NON-DIS16 CRIMINATION.— 

17 (1) IN GENERAL.—Section 1923(d) of the So18 cial Security Act (42 U.S.C. 1396r-4) is amended by 

19 adding at the end the following new paragraph: 

20 ‘‘(4) No hospital may be defined or deemed as 

21 a disproportionate share hospital, or as an essential 

22 access hospital (for purposes of subsection 

23 (f)(6)(A)(iv), under a State plan under this title or 

24 subsection (b) of this section (including any waiver 

25 under section 1115) unless the hospital— 


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1 ‘‘(A) provides services to beneficiaries 

2 under this title without discrimination on the 

3 ground of race, color, national origin, creed, 

4 source of payment, status as a beneficiary 

5 under this title, or any other ground unrelated 

6 to such beneficiary’s need for the services or the 

7 availability of the needed services in the hos8 pital; and 

9 ‘‘(B) makes arrangements for, and accepts, 

10 reimbursement under this title for services pro11 vided to eligible beneficiaries under this title.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by subsection (a) shall be apply to expenditures 

14 made on or after July 1, 2010. 

15 SEC. 1705. EXPANDED OUTSTATIONING. 

16 (a) IN GENERAL.—Section 1902(a)(55) of the Social 

17 Security Act (42 U.S.C. 1396a(a)(55)) is amended by 

18 striking ‘‘under subsection (a)(10)(A)(i)(IV), 

19 (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

20 (a)(10)(A)(ii)(IX)’’ and inserting ‘‘(including receipt and 

21 processing of applications of individuals for affordability 

22 credits under subtitle C of title II of subdivision A of the 

23 America’s Affordable Health Choices Act of 2009 pursu24 ant to a Medicaid memorandum of understanding under 

25 section 1943(a)(1))’’. 


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1 (b) EFFECTIVE DATE.— 

2 (1) Except as provided in paragraph (2), the 

3 amendment made by subsection (a) shall apply to 

4 services furnished on or after July 1, 2010, without 

5 regard to whether or not final regulations to carry 

6 out such amendment have been promulgated by such 

7 date. 

8 (2) In the case of a State plan for medical as9 sistance under title XIX of the Social Security Act 

10 which the Secretary of Health and Human Services 

11 determines requires State legislation (other than leg12 islation appropriating funds) in order for the plan to 

13 meet the additional requirement imposed by the 

14 amendment made by this section, the State plan 

15 shall not be regarded as failing to comply with the 

16 requirements of such title solely on the basis of its 

17 failure to meet this additional requirement before 

18 the first day of the first calendar quarter beginning 

19 after the close of the first regular session of the 

20 State legislature that begins after the date of the en21 actment of this Act. For purposes of the previous 

22 sentence, in the case of a State that has a 2-year 

23 legislative session, each year of such session shall be 

24 deemed to be a separate regular session of the State 

25 legislature. 


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1 Subtitle B—Prevention 

2 SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERV3 ICES. 

4 (a) COVERAGE.—Section 1905 of the Social Security 

5 Act (42 U.S.C. 1396d), as amended by section 

6 1701(a)(2)(B), is amended— 

7 (1) in subsection (a)(4)— 

8 (A) by striking ‘‘and’’ before ‘‘(C)’’; and 

9 (B) by inserting before the semicolon at 

10 the end the following: ‘‘and (D) preventive serv11 ices described in subsection (z)’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(z) PREVENTIVE SERVICES.—The preventive serv15 ices described in this subsection are services not otherwise 

16 described in subsection (a) or (r) that the Secretary deter17 mines are— 

18 ‘‘(1)(A) recommended with a grade of A or B 

19 by the Task Force for Clinical Preventive Services; 

20 or 

21 ‘‘(B) vaccines recommended for use as appro22 priate by the Director of the Centers for Disease 

23 Control and Prevention; and 

24 ‘‘(2) appropriate for individuals entitled to med25 ical assistance under this title.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 1928 of 

2 such Act (42 U.S.C. 1396s) is amended— 

3 (1) in subsection (c)(2)(B)(i), by striking ‘‘the 

4 advisory committee referred to in subsection (e)’’ 

5 and inserting ‘‘the Director of the Centers for Dis6 ease Control and Prevention’’; 

7 (2) in subsection (e), by striking ‘‘Advisory 

8 Committee’’ and all that follows and inserting ‘‘Di9 rector of the Centers for Disease Control and Pre10 vention.’’; and 

11 (3) by striking subsection (g). 

12 (c) EFFECTIVE DATE.— 

13 (1) Except as provided in paragraph (2), the 

14 amendments made by this section shall apply to 

15 services furnished on or after July 1, 2010, without 

16 regard to whether or not final regulations to carry 

17 out such amendments have been promulgated by 

18 such date. 

19 (2) In the case of a State plan for medical as20 sistance under title XIX of the Social Security Act 

21 which the Secretary of Health and Human Services 

22 determines requires State legislation (other than leg23 islation appropriating funds) in order for the plan to 

24 meet the additional requirements imposed by the 

25 amendments made by this section, the State plan 


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1 shall not be regarded as failing to comply with the 

2 requirements of such title solely on the basis of its 

3 failure to meet these additional requirements before 

4 the first day of the first calendar quarter beginning 

5 after the close of the first regular session of the 

6 State legislature that begins after the date of the en7 actment of this Act. For purposes of the previous 

8 sentence, in the case of a State that has a 2-year 

9 legislative session, each year of such session shall be 

10 deemed to be a separate regular session of the State 

11 legislature. 

12 SEC. 1712. TOBACCO CESSATION. 

13 (a) DROPPING TOBACCO CESSATION EXCLUSION

14 FROM COVERED OUTPATIENT DRUGS.—Section 

15 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r– 

16 8(d)(2)) is amended— 

17 (1) by striking subparagraph (E); 

18 (2) in subparagraph (G), by inserting before the 

19 period at the end the following: ‘‘, except agents ap20 proved by the Food and Drug Administration for 

21 purposes of promoting, and when used to promote, 

22 tobacco cessation’’; and 

23 (3) by redesignating subparagraphs (F) 

24 through (K) as subparagraphs (E) through (J), re25 spectively. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to drugs and services furnished 

3 on or after January 1, 2010. 

4 SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITA5 TION SERVICES. 

6 (a) IN GENERAL.—Section 1905 of the Social Secu7 rity Act (42 U.S.C. 1396d), as amended by sections 

8 1701(a)(2) and 1711(a), is amended— 

9 (1) in subsection (a)— 

10 (A) in paragraph (27), by striking ‘‘and’’ 

11 at the end; 

12 (B) by redesignating paragraph (28) as 

13 paragraph (29); and 

14 (C) by inserting after paragraph (27) the 

15 following new paragraph: 

16 ‘‘(28) nurse home visitation services (as defined 

17 in subsection (aa)); and’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(aa) The term ‘nurse home visitation services’ 

21 means home visits by trained nurses to families with a 

22 first-time pregnant woman, or a child (under 2 years of 

23 age), who is eligible for medical assistance under this title, 

24 but only, to the extent determined by the Secretary based 


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1 upon evidence, that such services are effective in one or 

2 more of the following: 

3 ‘‘(1) Improving maternal or child health and 

4 pregnancy outcomes or increasing birth intervals be5 tween pregnancies. 

6 ‘‘(2) Reducing the incidence of child abuse, ne7 glect, and injury, improving family stability (includ8 ing reduction in the incidence of intimate partner vi9 olence), or reducing maternal and child involvement 

10 in the criminal justice system. 

11 ‘‘(3) Increasing economic self-sufficiency, em12 ployment advancement, school-readiness, and edu13 cational achievement, or reducing dependence on 

14 public assistance.’’. 

15 (b) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to services furnished on or after 

17 January 1, 2010. 

18 (c) CONSTRUCTION.—Nothing in the amendments 

19 made by this section shall be construed as affecting the 

20 ability of a State under title XIX or XXI of the Social 

21 Security Act to provide nurse home visitation services as 

22 part of another class of items and services falling within 

23 the definition of medical assistance or child health assist24 ance under the respective title, or as an administrative ex25 penditure for which payment is made under section 


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1 1903(a) or 2105(a) of such Act, respectively, on or after 

2 the date of the enactment of this Act. 

3 SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLAN4 NING SERVICES. 

5 (a) COVERAGE AS OPTIONAL CATEGORICALLY

6 NEEDY GROUP.— 

7 (1) IN GENERAL.—Section 1902(a)(10)(A)(ii) 

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

9 1396a(a)(10)(A)(ii)) is amended— 

10 (A) in subclause (XVIII), by striking ‘‘or’’ 

11 at the end; 

12 (B) in subclause (XIX), by adding ‘‘or’’ at 

13 the end; and 

14 (C) by adding at the end the following new 

15 subclause: 

16 ‘‘(XX) who are described in subsection (hh) (re17 lating to individuals who meet certain income stand18 ards);’’. 

19 (2) GROUP DESCRIBED.—Section 1902 of such 

20 Act (42 U.S.C. 1396a), as amended by section 1703, 

21 is amended by adding at the end the following new 

22 subsection: 

23 ‘‘(hh)(1) Individuals described in this subsection are 

24 individuals— 


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1 ‘‘(A) whose income does not exceed an in2 come eligibility level established by the State 

3 that does not exceed the highest income eligi4 bility level established under the State plan 

5 under this title (or under its State child health 

6 plan under title XXI) for pregnant women; and 

7 ‘‘(B) who are not pregnant. 

8 ‘‘(2) At the option of a State, individuals de9 scribed in this subsection may include individuals 

10 who, had individuals applied on or before January 1, 

11 2007, would have been made eligible pursuant to the 

12 standards and processes imposed by that State for 

13 benefits described in clause (XV) of the matter fol14 lowing subparagraph (G) of section subsection 

15 (a)(10) pursuant to a waiver granted under section 

16 1115. 

17 ‘‘(3) At the option of a State, for purposes of 

18 subsection (a)(17)(B), in determining eligibility for 

19 services under this subsection, the State may con20 sider only the income of the applicant or recipient.’’. 

21 (3) LIMITATION ON BENEFITS.—Section 

22 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) 

23 is amended in the matter following subparagraph 

24 (G)— 


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1 (A) by striking ‘‘and (XIV)’’ and inserting 

2 ‘‘(XIV)’’; and 

3 (B) by inserting ‘‘, and (XV) the medical 

4 assistance made available to an individual de5 scribed in subsection (hh) shall be limited to 

6 family planning services and supplies described 

7 in section 1905(a)(4)(C) including medical di8 agnosis and treatment services that are pro9 vided pursuant to a family planning service in 

10 a family planning setting’’ after ‘‘cervical can11 cer’’. 

12 (4) CONFORMING AMENDMENTS.—Section 

13 1905(a) of such Act (42 U.S.C. 1396d(a)), as 

14 amended by section 1731(c), is amended in the mat15 ter preceding paragraph (1)— 

16 (A) in clause (xiii), by striking ‘‘or’’ at the 

17 end; 

18 (B) in clause (xiv), by adding ‘‘or’’ at the 

19 end; and 

20 (C) by inserting after clause (xiv) the fol21 lowing: 

22 ‘‘(xv) individuals described in section 

23 1902(hh),’’. 

24 (b) PRESUMPTIVE ELIGIBILITY.— 


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1 (1) IN GENERAL.—Title XIX of the Social Se2 curity Act (42 U.S.C. 1396 et seq.) is amended by 

3 inserting after section 1920B the following: 

4 ‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING

5 SERVICES

6 ‘‘SEC. 1920C. (a) STATE OPTION.—State plan ap7 proved under section 1902 may provide for making med8 ical assistance available to an individual described in sec9 tion 1902(hh) (relating to individuals who meet certain 

10 income eligibility standard) during a presumptive eligi11 bility period. In the case of an individual described in sec12 tion 1902(hh), such medical assistance shall be limited to 

13 family planning services and supplies described in 

14 1905(a)(4)(C) and, at the State’s option, medical diag15 nosis and treatment services that are provided in conjunc16 tion with a family planning service in a family planning 

17 setting. 

18 ‘‘(b) DEFINITIONS.—For purposes of this section: 

19 ‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The 

20 term ‘presumptive eligibility period’ means, with re21 spect to an individual described in subsection (a), 

22 the period that— 

23 ‘‘(A) begins with the date on which a 

24 qualified entity determines, on the basis of pre25 liminary information, that the individual is de26 scribed in section 1902(hh); and 


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1 ‘‘(B) ends with (and includes) the earlier 

2 of— 

3 ‘‘(i) the day on which a determination 

4 is made with respect to the eligibility of 

5 such individual for services under the State 

6 plan; or 

7 ‘‘(ii) in the case of such an individual 

8 who does not file an application by the last 

9 day of the month following the month dur10 ing which the entity makes the determina11 tion referred to in subparagraph (A), such 

12 last day. 

13 ‘‘(2) QUALIFIED ENTITY.— 

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), the term ‘qualified entity’ means 

16 any entity that— 

17 ‘‘(i) is eligible for payments under a 

18 State plan approved under this title; and 

19 ‘‘(ii) is determined by the State agen20 cy to be capable of making determinations 

21 of the type described in paragraph (1)(A). 

22 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 

23 in this paragraph shall be construed as pre24 venting a State from limiting the classes of enVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00785 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tities that may become qualified entities in 

2 order to prevent fraud and abuse. 

3 ‘‘(c) ADMINISTRATION.— 

4 ‘‘(1) IN GENERAL.—The State agency shall pro5 vide qualified entities with— 

6 ‘‘(A) such forms as are necessary for an 

7 application to be made by an individual de8 scribed in subsection (a) for medical assistance 

9 under the State plan; and 

10 ‘‘(B) information on how to assist such in11 dividuals in completing and filing such forms. 

12 ‘‘(2) NOTIFICATION REQUIREMENTS.—A quali13 fied entity that determines under subsection 

14 (b)(1)(A) that an individual described in subsection 

15 (a) is presumptively eligible for medical assistance 

16 under a State plan shall— 

17 ‘‘(A) notify the State agency of the deter18 mination within 5 working days after the date 

19 on which determination is made; and 

20 ‘‘(B) inform such individual at the time 

21 the determination is made that an application 

22 for medical assistance is required to be made by 

23 not later than the last day of the month fol24 lowing the month during which the determina25 tion is made. 


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1 ‘‘(3) APPLICATION FOR MEDICAL ASSIST2 ANCE.—In the case of an individual described in 

3 subsection (a) who is determined by a qualified enti4 ty to be presumptively eligible for medical assistance 

5 under a State plan, the individual shall apply for 

6 medical assistance by not later than the last day of 

7 the month following the month during which the de8 termination is made. 

9 ‘‘(d) PAYMENT.—Notwithstanding any other provi10 sion of law, medical assistance that— 

11 ‘‘(1) is furnished to an individual described in 

12 subsection (a)— 

13 ‘‘(A) during a presumptive eligibility pe14 riod; 

15 ‘‘(B) by a entity that is eligible for pay16 ments under the State plan; and 

17 ‘‘(2) is included in the care and services covered 

18 by the State plan, 

19 shall be treated as medical assistance provided by such 

20 plan for purposes of clause (4) of the first sentence of 

21 section 1905(b).’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Section 1902(a)(47) of the Social Se24 curity Act (42 U.S.C. 1396a(a)(47)) is amend25 ed by inserting before the semicolon at the end 


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1 the following: ‘‘and provide for making medical 

2 assistance available to individuals described in 

3 subsection (a) of section 1920C during a pre4 sumptive eligibility period in accordance with 

5 such section’’. 

6 (B) Section 1903(u)(1)(D)(v) of such Act 

7 (42 U.S.C. 1396b(u)(1)(D)(v)) is amended— 

8 (i) by striking ‘‘or for’’ and inserting 

9 ‘‘for’’; and 

10 (ii) by inserting before the period the 

11 following: ‘‘, or for medical assistance pro12 vided to an individual described in sub13 section (a) of section 1920C during a pre14 sumptive eligibility period under such sec15 tion’’. 

16 (c) CLARIFICATION OF COVERAGE OF FAMILY PLAN17 NING SERVICES AND SUPPLIES.—Section 1937(b) of the 

18 Social Security Act (42 U.S.C. 1396u–7(b)) is amended 

19 by adding at the end the following: 

20 ‘‘(5) COVERAGE OF FAMILY PLANNING SERV21 ICES AND SUPPLIES.—Notwithstanding the previous 

22 provisions of this section, a State may not provide 

23 for medical assistance through enrollment of an indi24 vidual with benchmark coverage or benchmark-equiv25 alent coverage under this section unless such covVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00788 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erage includes for any individual described in section 

2 1905(a)(4)(C), medical assistance for family plan3 ning services and supplies in accordance with such 

4 section.’’. 

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

6 this section take effect on the date of the enactment of 

7 this Act and shall apply to items and services furnished 

8 on or after such date. 

9 Subtitle C—Access 

10 SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS. 

11 (a) IN GENERAL.— 

12 (1) FEE-FOR-SERVICE PAYMENTS.—Section 

13 1902(a)(13) of the Social Security Act (42 U.S.C. 

14 1396b(a)(13)) is amended— 

15 (A) by striking ‘‘and’’ at the end of sub16 paragraph (A); 

17 (B) by adding ‘‘and’’ at the end of sub18 paragraph (B); and 

19 (C) by adding at the end the following new 

20 subparagraph: 

21 ‘‘(C) payment for primary care services (as 

22 defined in section 1848(j)(5)(A), but applied 

23 without regard to clause (ii) thereof) furnished 

24 by physicians (or for services furnished by other 

25 health care professionals that would be primary 


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1 care services under such section if furnished by 

2 a physician) at a rate not less than 80 percent 

3 of the payment rate applicable to such services 

4 and physicians or professionals (as the case 

5 may be) under part B of title XVIII for services 

6 furnished in 2010, 90 percent of such rate for 

7 services and physicians (or professionals) fur8 nished in 2011, and 100 percent of such pay9 ment rate for services and physicians (or pro10 fessionals) furnished in 2012 or a subsequent 

11 year;’’. 

12 (2) UNDER MEDICAID MANAGED CARE

13 PLANS.—Section 1923(f) of such Act (42 U.S.C. 

14 1396u–2(f)) is amended— 

15 (A) in the heading, by adding at the end 

16 the following: ‘‘; ADEQUACY OF PAYMENT FOR

17 PRIMARY CARE SERVICES’’; and 

18 (B) by inserting before the period at the 

19 end the following: ‘‘and, in the case of primary 

20 care services described in section 

21 1902(a)(13)(C), consistent with the minimum 

22 payment rates specified in such section (regard23 less of the manner in which such payments are 

24 made, including in the form of capitation or 

25 partial capitation)’’. 


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1 (b) INCREASE IN PAYMENT USING 100% FMAP.— 

2 Section 1905(y), as added by section 1701(a)(2)(B) and 

3 as amended by section 1701(c)(2), is amended by adding 

4 at the end the following: 

5 ‘‘(3)(A) The portion of the amounts expended 

6 for medical assistance for services described in sec7 tion 1902(a)(13)(C) furnished on or after January 

8 1, 2010, that is attributable to the amount by which 

9 the minimum payment rate required under such sec10 tion (or, by application, section 1932(f)) exceeds the 

11 payment rate applicable to such services under the 

12 State plan as of June 16, 2009. 

13 ‘‘(B) Subparagraphs (A) shall not be construed 

14 as preventing the payment of Federal financial par15 ticipation based on the Federal medical assistance 

16 percentage for amounts in excess of those specified 

17 under such subparagraphs.’’. 

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

19 this section shall apply to services furnished on or after 

20 January 1, 2010. 

21 SEC. 1722. MEDICAL HOME PILOT PROGRAM. 

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

23 Human Services shall establish under this section a med24 ical home pilot program under which a State may apply 

25 to the Secretary for approval of a medical home pilot 


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1 project described in subsection (b) (in this section referred 

2 to as a ‘‘pilot project’’) for the application of the medical 

3 home concept under title XIX of the Social Security Act. 

4 The pilot program shall operate for a period of up to 5 

5 years. 

6 (b) PILOT PROJECT DESCRIBED.— 

7 (1) IN GENERAL.—A pilot project is a project 

8 that applies one or more of the medical home models 

9 described in section 1866E(a)(3) of the Social Secu10 rity Act (as inserted by section 1302(a)) or such 

11 other model as the Secretary may approve, to high 

12 need beneficiaries (including medically fragile chil13 dren and high-risk pregnant women) who are eligible 

14 for medical assistance under title XIX of the Social 

15 Security Act. The Secretary shall provide for appro16 priate coordination of the pilot program under this 

17 section with the medical home pilot program under 

18 section 1866E of such Act. 

19 (2) LIMITATION.—A pilot project shall be for a 

20 duration of not more than 5 years. 

21 (c) ADDITIONAL INCENTIVES.—In the case of a pilot 

22 project, the Secretary may— 

23 (1) waive the requirements of section 

24 1902(a)(1) of the Social Security Act (relating to 


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1 statewideness) and section 1902(a)(10)(B) of such 

2 Act (relating to comparability); and 

3 (2) increase to up to 90 percent (for the first 

4 2 years of the pilot program) or 75 percent (for the 

5 next 3 years) the matching percentage for adminis6 trative expenditures (such as those for community 

7 care workers). 

8 (d) MEDICALLY FRAGILE CHILDREN.—In the case of 

9 a model involving medically fragile children, the model 

10 shall ensure that the patient-centered medical home serv11 ices received by each child, in addition to fulfilling the re12 quirements under 1866E(b)(1) of the Social Security Act, 

13 provide for continuous involvement and education of the 

14 parent or caregiver and for assistance to the child in ob15 taining necessary transitional care if a child’s enrollment 

16 ceases for any reason. 

17 (e) EVALUATION; REPORT.— 

18 (1) EVALUATION.—The Secretary, using the 

19 criteria described in section 1866E(g)(1) of the So20 cial Security Act (as inserted by section 1123), shall 

21 conduct an evaluation of the pilot program under 

22 this section. 

23 (2) REPORT.—Not later than 60 days after the 

24 date of completion of the evaluation under para25 graph (1), the Secretary shall submit to Congress 


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1 and make available to the public a report on the 

2 findings of the evaluation under such paragraph. 

3 (f) FUNDING.—The additional Federal financial par4 ticipation resulting from the implementation of the pilot 

5 program under this section may not exceed in the aggre6 gate $1,235,000,000 over the 5-year period of the pro7 gram. 

8 SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES. 

9 (a) IN GENERAL.—Section 1903(a)(2)(E) of the So10 cial Security Act (42 U.S.C. 1396b(a)(2)), as added by 

11 section 201(b)(2)(A) of the Children’s Health Insurance 

12 Program Reauthorization Act of 2009 (Public Law 111– 

13 3), is amended by inserting ‘‘and other individuals’’ after 

14 ‘‘children of families’’. 

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

16 subsection (a) shall apply to payment for translation or 

17 interpretation services furnished on or after January 1, 

18 2010. 

19 SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING 

20 BIRTH CENTER SERVICES. 

21 (a) IN GENERAL.—Section 1905 of the Social Secu22 rity Act (42 U.S.C. 1396d), as amended by section 

23 1713(a), is amended— 

24 (1) in subsection (a)— 


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1 (A) by redesignating paragraph (29) as 

2 paragraph (30); 

3 (B) in paragraph (28), by striking at the 

4 end ‘‘and’’; and 

5 (C) by inserting after paragraph (28) the 

6 following new paragraph: 

7 ‘‘(29) freestanding birth center services (as de8 fined in subsection (l)(3)(A)) and other ambulatory 

9 services that are offered by a freestanding birth cen10 ter (as defined in subsection (l)(3)(B)) and that are 

11 otherwise included in the plan; and’’; and 

12 (2) in subsection (l), by adding at the end the 

13 following new paragraph: 

14 ‘‘(3)(A) The term ‘freestanding birth center services’ 

15 means services furnished to an individual at a freestanding 

16 birth center (as defined in subparagraph (B)), including 

17 by a licensed birth attendant (as defined in subparagraph 

18 (C)) at such center. 

19 ‘‘(B) The term ‘freestanding birth center’ means a 

20 health facility— 

21 ‘‘(i) that is not a hospital; and 

22 ‘‘(ii) where childbirth is planned to occur away 

23 from the pregnant woman’s residence. 

24 ‘‘(C) The term ‘licensed birth attendant’ means an 

25 individual who is licensed or registered by the State inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00795 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 volved to provide health care at childbirth and who pro2 vides such care within the scope of practice under which 

3 the individual is legally authorized to perform such care 

4 under State law (or the State regulatory mechanism pro5 vided by State law), regardless of whether the individual 

6 is under the supervision of, or associated with, a physician 

7 or other health care provider. Nothing in this subpara8 graph shall be construed as changing State law require9 ments applicable to a licensed birth attendant.’’. 

10 (b) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to items and services furnished on 

12 or after the date of the enactment of this Act. 

13 SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER 

14 THE VACCINES FOR CHILDREN PROGRAM. 

15 Section 1928(b)(2)(A)(iii)(I) of the Social Security 

16 Act (42 U.S.C. 1396s(b)(2)(A)(iii)(I)) is amended— 

17 (1) by striking ‘‘or a rural health clinic’’ and in18 serting ‘‘, a rural health clinic’’; and 

19 (2) by inserting ‘‘or a public health clinic,’’ 

20 after ‘‘‘1905(l)(1)),’’. 


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1 Subtitle D—Coverage 

2 SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-IN3 COME HIV-INFECTED INDIVIDUALS. 

4 (a) IN GENERAL.—Section 1902 of the Social Secu5 rity Act (42 U.S.C. 1396a), as amended by section 

6 1714(a)(1), is amended— 

7 (1) in subsection (a)(10)(A)(ii)— 

8 (A) by striking ‘‘or’’ at the end of sub9 clause (XIX); 

10 (B) by adding ‘‘or’’ at the end of subclause 

11 (XX); and 

12 (C) by adding at the end the following: 

13 ‘‘(XXI) who are described in subsection (ii) (re14 lating to HIV-infected individuals);’’; and 

15 (2) by adding at the end, as amended by sec16 tions 1703 and 1714(a), the following: 

17 ‘‘(ii) individuals described in this subsection are indi18 viduals not described in subsection (a)(10)(A)(i)— 

19 ‘‘(1) who have HIV infection; 

20 ‘‘(2) whose income (as determined under the 

21 State plan under this title with respect to disabled 

22 individuals) does not exceed the maximum amount 

23 of income a disabled individual described in sub24 section (a)(10)(A)(i) may have and obtain medical 

25 assistance under the plan; and 


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1 ‘‘(3) whose resources (as determined under the 

2 State plan under this title with respect to disabled 

3 individuals) do not exceed the maximum amount of 

4 resources a disabled individual described in sub5 section (a)(10)(A)(i) may have and obtain medical 

6 assistance under the plan.’’. 

7 (b) ENHANCED MATCH.—The first sentence of sec8 tion 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended 

9 by striking ‘‘section 1902(a)(10)(A)(ii)(XVIII)’’ and in10 serting ‘‘subclause (XVIII) or (XX) of section 

11 1902(a)(10)(A)(ii)’’. 

12 (c) CONFORMING AMENDMENTS.—Section 1905(a) of 

13 such Act (42 U.S.C. 1396d(a)) is amended, in the matter 

14 preceding paragraph (1)— 

15 (1) by striking ‘‘or’’ at the end of clause (xii); 

16 (2) by adding ‘‘or’’ at the end of clause (xiii); 

17 and 

18 (3) by inserting after clause (xiii) the following: 

19 ‘‘(xiv) individuals described in section 

20 1902(ii),’’. 

21 (d) EXEMPTION FROM FUNDING LIMITATION FOR

22 TERRITORIES.—Section 1108(g) of the Social Security 

23 Act (42 U.S.C. 1308(g)) is amended by adding at the end 

24 the following: 


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1 ‘‘(5) DISREGARDING MEDICAL ASSISTANCE FOR

2 OPTIONAL LOW-INCOME HIV-INFECTED INDIVID3 UALS.—The limitations under subsection (f) and the 

4 previous provisions of this subsection shall not apply 

5 to amounts expended for medical assistance for indi6 viduals described in section 1902(ii) who are only el7 igible for such assistance on the basis of section 

8 1902(a)(10)(A)(ii)(XX).’’. 

9 (e) EFFECTIVE DATE; SUNSET.—The amendments 

10 made by this section shall apply to expenditures for cal11 endar quarters beginning on or after the date of the enact12 ment of this Act, and before January 1, 2013, without 

13 regard to whether or not final regulations to carry out 

14 such amendments have been promulgated by such date. 

15 SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSIST16 ANCE (TMA). 

17 Sections 1902(e)(1)(B) and 1925(f) of the Social Se18 curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)), as 

19 amended by section 5004(a)(1) of the American Recovery 

20 and Reinvestment Act of 2009 (Public Law 111–5), are 

21 each amended by striking ‘‘December 31, 2010’’ and in22 serting ‘‘December 31, 2012’’. 


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1 SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COV2 ERAGE UNDER CERTAIN CHIP PROGRAMS. 

3 (a) IN GENERAL.—Section 2102(b) of the Social Se4 curity Act (42 U.S.C. 1397bb(b)) is amended by adding 

5 at the end the following new paragraph: 

6 ‘‘(6) REQUIREMENT FOR 12-MONTH CONTIN7 UOUS ELIGIBILITY.—In the case of a State child 

8 health plan that provides child health assistance 

9 under this title through a means other than de10 scribed in section 2101(a)(2), the plan shall provide 

11 for implementation under this title of the 12-month 

12 continuous eligibility option described in section 

13 1902(e)(12) for targeted low-income children whose 

14 family income is below 200 percent of the poverty 

15 line.’’. 

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

17 subsection (a) shall apply to determinations (and redeter18 minations) of eligibility made on or after January 1, 2010. 

19 Subtitle E—Financing 

20 SEC. 1741. PAYMENTS TO PHARMACISTS. 

21 (a) PHARMACY REIMBURSEMENT LIMITS.— 

22 (1) IN GENERAL.—Section 1927(e) of the So23 cial Security Act (42 U.S.C. 1396r–8(e)) is amend24 ed— 

25 (A) by striking paragraph (5) and insert26 ing the following: 


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1 ‘‘(5) USE OF AMP IN UPPER PAYMENT LIM2 ITS.—The Secretary shall calculate the Federal 

3 upper reimbursement limit established under para4 graph (4) as 130 percent of the weighted average 

5 (determined on the basis of manufacturer utiliza6 tion) of monthly average manufacturer prices.’’. 

7 (2) DEFINITION OF AMP.—Section 

8 1927(k)(1)(B) of such Act (42 U.S.C. 1396r– 

9 8(k)(1)(B)) is amended— 

10 (B) in the heading, by striking ‘‘EX11 TENDED TO WHOLESALERS’’ and inserting 

12 ‘‘AND OTHER PAYMENTS’’; and 

13 (C) by striking ‘‘regard to’’ and all that 

14 follows through the period and inserting the fol15 lowing: ‘‘regard to— 

16 ‘‘(i) customary prompt pay discounts 

17 extended to wholesalers; 

18 ‘‘(ii) bona fide service fees paid by 

19 manufacturers; 

20 ‘‘(iii) reimbursement by manufactur21 ers for recalled, damaged, expired, or oth22 erwise unsalable returned goods, including 

23 reimbursement for the cost of the goods 

24 and any reimbursement of costs associated 


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1 with return goods handling and processing, 

2 reverse logistics, and drug destruction; 

3 ‘‘(iv) sales directly to, or rebates, dis4 counts, or other price concessions provided 

5 to, pharmacy benefit managers, managed 

6 care organizations, health maintenance or7 ganizations, insurers, mail order phar8 macies that are not open to all members of 

9 the public, or long term care providers, 

10 provided that these rebates, discounts, or 

11 price concessions are not passed through to 

12 retail pharmacies; 

13 ‘‘(v) sales directly to, or rebates, dis14 counts, or other price concessions provided 

15 to, hospitals, clinics, and physicians, unless 

16 the drug is an inhalation, infusion, or 

17 injectable drug, or unless the Secretary de18 termines, as allowed for in Agency admin19 istrative procedures, that it is necessary to 

20 include such sales, rebates, discounts, and 

21 price concessions in order to obtain an ac22 curate AMP for the drug. Such a deter23 mination shall not be subject to judicial re24 view; or 


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1 ‘‘(vi) rebates, discounts, and other 

2 price concessions required to be provided 

3 under agreements under subsections (f) 

4 and (g) of section 1860D–2(f).’’. 

5 (3) MANUFACTURER REPORTING REQUIRE6 MENTS.—Section 1927(b)(3) of such Act (42 U.S.C. 

7 1396r–8(b)(3)) is amended— 

8 (A) in subparagraph (A), by adding at the 

9 end the following new clause: 

10 ‘‘(iv) not later than 30 days after the 

11 last day of each month of a rebate period 

12 under the agreement, on the manufactur13 er’s total number of units that are used to 

14 calculate the monthly average manufac15 turer price for each covered outpatient 

16 drug.’’. 

17 (4) AUTHORITY TO PROMULGATE REGULA18 TION.—The Secretary of Health and Human Serv19 ices may promulgate regulations to clarify the re20 quirements for upper payment limits and for the de21 termination of the average manufacturer price in an 

22 expedited manner. Such regulations may become ef23 fective on an interim final basis, pending oppor24 tunity for public comment. 


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1 (5) PHARMACY REIMBURSEMENTS THROUGH

2 DECEMBER 31, 2010.—The specific upper limit under 

3 section 447.332 of title 42, Code of Federal Regula4 tions (as in effect on December 31, 2006) applicable 

5 to payments made by a State for multiple source 

6 drugs under a State Medicaid plan shall continue to 

7 apply through December 31, 2010, for purposes of 

8 the availability of Federal financial participation for 

9 such payments. 

10 (b) DISCLOSURE OF PRICE INFORMATION TO THE

11 PUBLIC.—Section 1927(b)(3) of such Act (42 U.S.C. 

12 1396r–8(b)(3)) is amended— 

13 (1) in subparagraph (A)— 

14 (A) in clause (i), in the matter preceding 

15 subclause (I), by inserting ‘‘month of a’’ after 

16 ‘‘each’’; and 

17 (B) in the last sentence, by striking ‘‘and 

18 shall,’’ and all that follows through the period; 

19 and 

20 (2) in subparagraph (D)(v), by inserting 

21 ‘‘weighted’’ before ‘‘average manufacturer prices’’. 

22 SEC. 1742. PRESCRIPTION DRUG REBATES. 

23 (a) ADDITIONAL REBATE FOR NEW FORMULATIONS

24 OF EXISTING DRUGS.— 


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1 (1) IN GENERAL.—Section 1927(c)(2) of the 

2 Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 

3 amended by adding at the end the following new 

4 subparagraph: 

5 ‘‘(C) TREATMENT OF NEW FORMULA6 TIONS.—In the case of a drug that is a line ex7 tension of a single source drug or an innovator 

8 multiple source drug that is an oral solid dos9 age form, the rebate obligation with respect to 

10 such drug under this section shall be the 

11 amount computed under this section for such 

12 new drug or, if greater, the product of— 

13 ‘‘(i) the average manufacturer price of 

14 the line extension of a single source drug 

15 or an innovator multiple source drug that 

16 is an oral solid dosage form; 

17 ‘‘(ii) the highest additional rebate 

18 (calculated as a percentage of average 

19 manufacturer price) under this section for 

20 any strength of the original single source 

21 drug or innovator multiple source drug; 

22 and 

23 ‘‘(iii) the total number of units of 

24 each dosage form and strength of the line 

25 extension product paid for under the State 


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1 plan in the rebate period (as reported by 

2 the State). 

3 In this subparagraph, the term ‘line extension’ 

4 means, with respect to a drug, an extended re5 lease formulation of the drug.’’. 

6 (2) EFFECTIVE DATE.—The amendment made 

7 by paragraph (1) shall apply to drugs dispensed 

8 after December 31, 2009. 

9 (b) INCREASE MINIMUM REBATE PERCENTAGE FOR

10 SINGLE SOURCE DRUGS.—Section 1927(c)(1)(B)(i) of the 

11 Social Security Act (42 U.S.C. 1396r–8(c)(1)(B)(i)) is 

12 amended— 

13 (1) in subclause (IV), by striking ‘‘and’’ at the 

14 end; 

15 (2) in subclause (V)— 

16 (A) by inserting ‘‘and before January 1, 

17 2010’’ after ‘‘December 31, 1995,’’; and 

18 (B) by striking the period at the end and 

19 inserting ‘‘; and’’; and 

20 (3) by adding at the end the following new sub21 clause: 

22 ‘‘(VI) after December 31, 2009, 

23 is 22.1 percent.’’. 


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1 SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DIS2 COUNTS TO ENROLLEES OF MEDICAID MAN3 AGED CARE ORGANIZATIONS. 

4 (a) IN GENERAL.—Section 1903(m)(2)(A) of the So5 cial Security Act (42 U.S.C. 1396b(m)(2)(A)) is amend6 ed— 

7 (1) in clause (xi), by striking ‘‘and’’ at the end; 

8 (2) in clause (xii), by striking the period at the 

9 end and inserting ‘‘; and’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(xiii) such contract provides that the entity 

12 shall report to the State such information, on such 

13 timely and periodic basis as specified by the Sec14 retary, as the State may require in order to include, 

15 in the information submitted by the State to a man16 ufacturer under section 1927(b)(2)(A), information 

17 on covered outpatient drugs dispensed to individuals 

18 eligible for medical assistance who are enrolled with 

19 the entity and for which the entity is responsible for 

20 coverage of such drugs under this subsection.’’. 

21 (b) CONFORMING AMENDMENTS.—Section 1927 of 

22 such Act (42 U.S.C. 1396r-8) is amended—— 

23 (1) in the first sentence of subsection (b)(1)(A), 

24 by inserting before the period at the end the fol25 lowing: ‘‘, including such drugs dispensed to individ26 uals enrolled with a medicaid managed care organiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00807 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 zation if the organization is responsible for coverage 

2 of such drugs’’; 

3 (2) in subsection (b)(2), by adding at the end 

4 the following new subparagraph: 

5 ‘‘(C) REPORTING ON MMCO DRUGS.—On a 

6 quarterly basis, each State shall report to the 

7 Secretary the total amount of rebates in dollars 

8 received from pharmacy manufacturers for 

9 drugs provided to individuals enrolled with 

10 Medicaid managed care organizations that con11 tract under section 1903(m).’’; and 

12 (3) in subsection (j)— 

13 (A) in the heading by striking ‘‘EXEMP14 TION’’ and inserting ‘‘SPECIAL RULES’’; and 

15 (B) in paragraph (1), by striking ‘‘not’’. 

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

17 this section take effect on July 1, 2010, and shall apply 

18 to drugs dispensed on or after such date, without regard 

19 to whether or not final regulations to carry out such 

20 amendments have been promulgated by such date. 

21 SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDU22 CATION. 

23 (a) IN GENERAL.—Section 1905 of the Social Secu24 rity Act (42 U.S.C. 1396d), as amended by sections 


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1 1701(a)(2), 1711(a), and 1713(a), is amended by adding 

2 at the end the following new subsection: 

3 ‘‘(bb) PAYMENT FOR GRADUATE MEDICAL EDU4 CATION.— 

5 ‘‘(1) IN GENERAL.—The term ‘medical assist6 ance’ includes payment for costs of graduate medical 

7 education consistent with this subsection, whether 

8 provided in or outside of a hospital. 

9 ‘‘(2) SUBMISSION OF INFORMATION.—For pur10 poses of paragraph (1) and section 

11 1902(a)(13)(A)(v), payment for such costs is not 

12 consistent with this subsection unless— 

13 ‘‘(A) the State submits to the Secretary, in 

14 a timely manner and on an annual basis speci15 fied by the Secretary, information on total pay16 ments for graduate medical education and how 

17 such payments are being used for graduate 

18 medical education, including— 

19 ‘‘(i) the institutions and programs eli20 gible for receiving the funding; 

21 ‘‘(ii) the manner in which such pay22 ments are calculated; 

23 ‘‘(iii) the types and fields of education 

24 being supported; 


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1 ‘‘(iv) the workforce or other goals to 

2 which the funding is being applied; 

3 ‘‘(v) State progress in meeting such 

4 goals; and 

5 ‘‘(vi) such other information as the 

6 Secretary determines will assist in carrying 

7 out paragraphs (3) and (4); and 

8 ‘‘(B) such expenditures are made con9 sistent with such goals and requirements as are 

10 established under paragraph (4). 

11 ‘‘(3) REVIEW OF INFORMATION.—The Secretary 

12 shall make the information submitted under para13 graph (2) available to the Advisory Committee on 

14 Health Workforce Evaluation and Assessment (es15 tablished under section 2261 of the Public Health 

16 Service Act). The Secretary and the Advisory Com17 mittee shall independently review the information 

18 submitted under paragraph (2), taking into account 

19 State and local workforce needs. 

20 ‘‘(4) SPECIFICATION OF GOALS AND REQUIRE21 MENTS.—The Secretary shall specify by rule, ini22 tially published by not later than December 31, 

23 2011— 

24 ‘‘(A) program goals for the use of funds 

25 described in paragraph (1), taking into account 


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1 recommendations of the such Advisory Com2 mittee and the goals for approved medical resi3 dency training programs described in section 

4 1886(h)(1)(B); and 

5 ‘‘(B) requirements for use of such funds 

6 consistent with such goals. 

7 Such rule may be effective on an interim basis pend8 ing revision after an opportunity for public com9 ment.’’. 

10 (b) CONFORMING AMENDMENT.—Section 

11 1902(a)(13)(A) of such Act (42 U.S.C. 1396a(a)(13)(A)) 

12 is amended— 

13 (1) by striking ‘‘and’’ at the end of clause (iii); 

14 (2) by striking ‘‘; and’’ and inserting ‘‘, and’’; 

15 and 

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

17 clause: 

18 ‘‘(v) in the case of hospitals and at 

19 the option of a State, such rates may in20 clude, to the extent consistent with section 

21 1905(bb), payment for graduate medical 

22 education; and’’. 

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

24 this section shall take effect on the date of the enactment 

25 of this Act. Nothing in this section shall be construed as 


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1 affecting payments made before such date under a State 

2 plan under title XIX of the Social Security Act for grad3 uate medical education. 

4 Subtitle F—Waste, Fraud, and 

5 Abuse 

6 SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS. 

7 (a) MEDICAID NON-PAYMENT FOR CERTAIN HEALTH

8 CARE-ACQUIRED CONDITIONS.—Section 1903(i) of the 

9 Social Security Act (42 U.S.C. 1396b(i)) is amended— 

10 (1) by striking ‘‘or’’ at the end of paragraph 

11 (23); 

12 (2) by striking the period at the end of para13 graph (24) and inserting ‘‘; or’’; and 

14 (3) by inserting after paragraph (24) the fol15 lowing new paragraph: 

16 ‘‘(25) with respect to amounts expended for 

17 services related to the presence of a condition that 

18 could be identified by a secondary diagnostic code 

19 described in section 1886(d)(4)(D)(iv) and for any 

20 health care acquired condition determined as a non21 covered service under title XVIII.’’. 

22 (b) APPLICATION TO CHIP.—Section 2107(e)(1)(G) 

23 of such Act (42 U.S.C. 1397gg(e)(1)(G)) is amended by 

24 striking ‘‘and (17)’’ and inserting ‘‘(17), and (25)’’. 


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1 (c) PERMISSION TO INCLUDE ADDITIONAL HEALTH

2 CARE-ACQUIRED CONDITIONS.—Nothing in this section 

3 shall prevent a State from including additional health 

4 care-acquired conditions for non-payment in its Medicaid 

5 program under title XIX of the Social Security Act. 

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

7 this section shall apply to discharges occurring on or after 

8 January 1, 2010. 

9 SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER 

10 MEDICAID INTEGRITY PROGRAM. 

11 Section 1936(c)(2)) of the Social Security Act (42 

12 U.S.C. 1396u–7(c)(2)) is amended— 

13 (1) by redesignating subparagraph (D) as sub14 paragraph (E); and 

15 (2) by inserting after subparagraph (C) the fol16 lowing new subparagraph: 

17 ‘‘(D) For the contract year beginning in 

18 2011 and each subsequent contract year, the 

19 entity provides assurances to the satisfaction of 

20 the Secretary that the entity will conduct peri21 odic evaluations of the effectiveness of the ac22 tivities carried out by such entity under the 

23 Program and will submit to the Secretary an 

24 annual report on such activities.’’. 


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1 SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO 

2 ADOPT PROGRAMS TO REDUCE WASTE, 

3 FRAUD, AND ABUSE. 

4 Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 

5 1396a(a)), as amended by sections 1631(b)(1) and 1703, 

6 is further amended— 

7 (1) in paragraph (74), by striking at the end 

8 ‘‘and’’; 

9 (2) in paragraph (75), by striking at the end 

10 the period and inserting ‘‘; and’’; and 

11 (3) by inserting after paragraph (75) the fol12 lowing new paragraph: 

13 ‘‘(76) provide that any provider or supplier 

14 (other than a physician or nursing facility) providing 

15 services under such plan shall, subject to paragraph 

16 (5) of section 1874(d), establish a compliance pro17 gram described in paragraph (1) of such section in 

18 accordance with such section.’’. 

19 SEC. 1754. OVERPAYMENTS. 

20 (a) IN GENERAL.—Section 1903(d)(2)(C) of the So21 cial Security Act (42 U.S.C. 1396b(d)(2)(C)) is amended 

22 by inserting ‘‘(or 1 year in the case of overpayments due 

23 to fraud)’’ after ‘‘60 days’’. 

24 (b) EFFECTIVE DATE.—In the case overpayments 

25 discovered on or after the date of the enactment of this 

26 Act. 


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1 SEC. 1755. MANAGED CARE ORGANIZATIONS. 

2 (a) MINIMUM MEDICAL LOSS RATIO.— 

3 (1) MEDICAID.—Section 1903(m)(2)(A) of the 

4 Social Security Act (42 U.S.C. 1396b(m)(2)(A)), as 

5 amended by section 1743(a)(3), is amended— 

6 (A) by striking ‘‘and’’ at the end of clause 

7 (xii); 

8 (B) by striking the period at the end of 

9 clause (xiii) and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following new 

11 clause: 

12 ‘‘(xiv) such contract has a medical loss ratio, as 

13 determined in accordance with a methodology speci14 fied by the Secretary that is a percentage (not less 

15 than 85 percent) as specified by the Secretary.’’. 

16 (2) CHIP.—Section 2107(e)(1) of such Act (42 

17 U.S.C. 1397gg(e)(1)) is amended— 

18 (A) by redesignating subparagraphs (H) 

19 through (L) as subparagraphs (I) through (M); 

20 and 

21 (B) by inserting after subparagraph (G) 

22 the following new subparagraph: 

23 ‘‘(H) Section 1903(m)(2)(A)(xiv) (relating 

24 to application of minimum loss ratios), with re25 spect to comparable contracts under this title.’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to contracts entered 

3 into or renewed on or after July 1, 2010. 

4 (b) PATIENT ENCOUNTER DATA.— 

5 (1) IN GENERAL.—Section 1903(m)(2)(A)(xi) 

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

7 1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and 

8 for the provision of such data to the State at a fre9 quency and level of detail to be specified by the Sec10 retary’’ after ‘‘patients’’. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall apply with respect to contract 

13 years beginning on or after January 1, 2010. 

14 SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION 

15 UNDER MEDICAID AND CHIP IF TERMINATED 

16 UNDER MEDICARE OR OTHER STATE PLAN 

17 OR CHILD HEALTH PLAN. 

18 (a) STATE PLAN REQUIREMENT.—Section 

19 1902(a)(39) of the Social Security Act (42 U.S.C. 42 

20 U.S.C. 1396a(a)) is amended by inserting after ‘‘1128A,’’ 

21 the following: ‘‘terminate the participation of any indi22 vidual or entity in such program if (subject to such excep23 tions are permitted with respect to exclusion under sec24 tions 1128(b)(3)(C) and 1128(d)(3)(B)) participation of 

25 such individual or entity is terminated under title XVIII, 


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1 any other State plan under this title, or any child health 

2 plan under title XXI,’’. 

3 (b) APPLICATION TO CHIP.—Section 2107(e)(1)(A) 

4 of such Act (42 U.S.C. 1397gg(e)(1)(A)) is amended by 

5 inserting before the period at the end the following: ‘‘and 

6 section 1902(a)(39) (relating to exclusion and termination 

7 of participation)’’. 

8 (c) EFFECTIVE DATE.— 

9 (1) Except as provided in paragraph (2), the 

10 amendments made by this section shall apply to 

11 services furnished on or after January 1, 2011, 

12 without regard to whether or not final regulations to 

13 carry out such amendments have been promulgated 

14 by such date. 

15 (2) In the case of a State plan for medical as16 sistance under title XIX of the Social Security Act 

17 or a child health plan under title XXI of such Act 

18 which the Secretary of Health and Human Services 

19 determines requires State legislation (other than leg20 islation appropriating funds) in order for the plan to 

21 meet the additional requirement imposed by the 

22 amendments made by this section, the State plan or 

23 child health plan shall not be regarded as failing to 

24 comply with the requirements of such title solely on 

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1 quirement before the first day of the first calendar 

2 quarter beginning after the close of the first regular 

3 session of the State legislature that begins after the 

4 date of the enactment of this Act. For purposes of 

5 the previous sentence, in the case of a State that has 

6 a 2-year legislative session, each year of such session 

7 shall be deemed to be a separate regular session of 

8 the State legislature. 

9 SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICI10 PATION RELATING TO CERTAIN OWNERSHIP, 

11 CONTROL, AND MANAGEMENT AFFILIATIONS. 

12 (a) STATE PLAN REQUIREMENT.—Section 1902(a) 

13 of the Social Security Act (42 U.S.C. 1396a(a)), as 

14 amended by sections 1631(b)(1), 1703, and 1753, is fur15 ther amended— 

16 (1) in paragraph (75), by striking at the end 

17 ‘‘and’’; 

18 (2) in paragraph (76), by striking at the end 

19 the period and inserting ‘‘; and’’; and 

20 (3) by inserting after paragraph (76) the fol21 lowing new paragraph: 

22 ‘‘(77) provide that the State agency described 

23 in paragraph (9) exclude, with respect to a period, 

24 any individual or entity from participation in the 

25 program under the State plan if such individual or 


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1 entity owns, controls, or manages an entity that (or 

2 if such entity is owned, controlled, or managed by an 

3 individual or entity that)— 

4 ‘‘(A) has unpaid overpayments under this 

5 title during such period determined by the Sec6 retary or the State agency to be delinquent; 

7 ‘‘(B) is suspended or excluded from par8 ticipation under or whose participation is termi9 nated under this title during such period; or 

10 ‘‘(C) is affiliated with an individual or enti11 ty that has been suspended or excluded from 

12 participation under this title or whose participa13 tion is terminated under this title during such 

14 period.’’. 

15 (b) CHILD HEALTH PLAN REQUIREMENT.—Section 

16 2107(e)(1)(A) of such Act (42 U.S.C. 1397gg(e)(1)(A)), 

17 as amended by section 1756(b), is amended by striking 

18 ‘‘section 1902(a)(39)’’ and inserting ‘‘sections 

19 1902(a)(39) and 1902(a)(77)’’. 

20 (c) EFFECTIVE DATE.— 

21 (1) Except as provided in paragraph (2), the 

22 amendments made by this section shall apply to 

23 services furnished on or after January 1, 2011, 

24 without regard to whether or not final regulations to 


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1 carry out such amendments have been promulgated 

2 by such date. 

3 (2) In the case of a State plan for medical as4 sistance under title XIX of the Social Security Act 

5 or a child health plan under title XXI of such Act 

6 which the Secretary of Health and Human Services 

7 determines requires State legislation (other than leg8 islation appropriating funds) in order for the plan to 

9 meet the additional requirement imposed by the 

10 amendments made by this section, the State plan or 

11 child health plan shall not be regarded as failing to 

12 comply with the requirements of such title solely on 

13 the basis of its failure to meet this additional re14 quirement before the first day of the first calendar 

15 quarter beginning after the close of the first regular 

16 session of the State legislature that begins after the 

17 date of the enactment of this Act. For purposes of 

18 the previous sentence, in the case of a State that has 

19 a 2-year legislative session, each year of such session 

20 shall be deemed to be a separate regular session of 

21 the State legislature. 


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1 SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF 

2 DATA ELEMENTS UNDER MMIS TO DETECT 

3 FRAUD AND ABUSE. 

4 Section 1903(r)(1)(F) of the Social Security Act (42 

5 U.S.C. 1396b(r)(1)(F)) is amended by inserting after 

6 ‘‘necessary’’ the following: ‘‘and including, for data sub7 mitted to the Secretary on or after July 1, 2010, data 

8 elements from the automated data system that the Sec9 retary determines to be necessary for detection of waste, 

10 fraud, and abuse’’. 

11 SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

12 ALTERNATE PAYEES REQUIRED TO REG13 ISTER UNDER MEDICAID. 

14 (a) IN GENERAL.—Section 1902(a) of the Social Se15 curity Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended 

16 by sections 1631(b), 1703, 1753, and 1757, is further 

17 amended— 

18 (1) in paragraph (76); by striking at the end 

19 ‘‘and’’; 

20 (2) in paragraph (77), by striking the period at 

21 the end and inserting ‘‘and’’; and 

22 (3) by inserting after paragraph (77) the fol23 lowing new paragraph: 

24 ‘‘(78) provide that any agent, clearinghouse, or 

25 other alternate payee that submits claims on behalf 

26 of a health care provider must register with the 


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1 State and the Secretary in a form and manner speci2 fied by the Secretary under section 1866(j)(1)(D).’’. 

3 (b) DENIAL OF PAYMENT.—Section 1903(i) of such 

4 Act (42 U.S.C. 1396b(i)), as amended by section 1753, 

5 is amended— 

6 (1) by striking ‘‘or’’ at the end of paragraph 

7 (24); 

8 (2) by striking the period at the end of para9 graph (25) and inserting ‘‘; or’’; and 

10 (3) by inserting after paragraph (25) the fol11 lowing new paragraph: 

12 ‘‘(26) with respect to any amount paid to a bill13 ing agent, clearinghouse, or other alternate payee 

14 that is not registered with the State and the Sec15 retary as required under section 1902(a)(78).’’. 

16 (c) EFFECTIVE DATE.— 

17 (1) Except as provided in paragraph (2), the 

18 amendments made by this section shall apply to 

19 claims submitted on or after January 1, 2012, with20 out regard to whether or not final regulations to 

21 carry out such amendments have been promulgated 

22 by such date. 

23 (2) In the case of a State plan for medical as24 sistance under title XIX of the Social Security Act 

25 which the Secretary of Health and Human Services 


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1 determines requires State legislation (other than leg2 islation appropriating funds) in order for the plan to 

3 meet the additional requirement imposed by the 

4 amendments made by this section, the State plan or 

5 child health plan shall not be regarded as failing to 

6 comply with the requirements of such title solely on 

7 the basis of its failure to meet this additional re8 quirement before the first day of the first calendar 

9 quarter beginning after the close of the first regular 

10 session of the State legislature that begins after the 

11 date of the enactment of this Act. For purposes of 

12 the previous sentence, in the case of a State that has 

13 a 2-year legislative session, each year of such session 

14 shall be deemed to be a separate regular session of 

15 the State legislature. 

16 SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RE17 LATED MISCONDUCT. 

18 (a) IN GENERAL.—Section 1903(i) of the Social Se19 curity Act (42 U.S.C. 1396b(i)), as previously amended 

20 is amended— 

21 (1) by striking ‘‘or’’ at the end of paragraph 

22 (25); 

23 (2) by striking the period at the end of para24 graph (26) and inserting a semicolon; and 


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1 (3) by inserting after paragraph (26) the fol2 lowing new paragraphs: 

3 ‘‘(27) with respect to any amount expended— 

4 ‘‘(A) on litigation in which a court imposes 

5 sanctions on the State, its employees, or its 

6 counsel for litigation-related misconduct; or 

7 ‘‘(B) to reimburse (or otherwise com8 pensate) a managed care entity for payment of 

9 legal expenses associated with any action in 

10 which a court imposes sanctions on the man11 aged care entity for litigation-related mis12 conduct.’’. 

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

14 subsection (a) shall apply to amounts expended on or after 

15 January 1, 2010. 

16 Subtitle G—Puerto Rico and the 

17 Territories 

18 SEC. 1771. PUERTO RICO AND TERRITORIES. 

19 (a) INCREASE IN CAP.— 

20 (1) IN GENERAL.—Section 1108(g) of the So21 cial Security Act (42 U.S.C. 1308(g)) is amended— 

22 (A) in paragraph (4) by striking ‘‘and (3)’’ 

23 and by inserting ‘‘(3), (6), and (7)’’; and 


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1 (B) by inserting after paragraph (5), as 

2 added by section 1731(d), the following new 

3 paragraph: 

4 ‘‘(6) FISCAL YEARS 2011 THROUGH 2019.—The 

5 amounts otherwise determined under this subsection 

6 for Puerto Rico, the Virgin Islands, Guam, the 

7 Northern Mariana Islands, and American Samoa for 

8 fiscal year 2011 and each succeeding fiscal year 

9 through fiscal year 2019 shall be increased by the 

10 percentage specified under section 1771(c) of the 

11 America’s Affordable Health Choices Act of 2009 

12 for purposes of this paragraph of the amounts other13 wise determined under this section (without regard 

14 to this paragraph). 

15 ‘‘(7) FISCAL YEAR 2020 AND SUBSEQUENT FIS16 CAL YEARS.—The amounts otherwise determined 

17 under this subsection for Puerto Rico, the Virgin Is18 lands, Guam, the Northern Mariana Islands, and 

19 American Samoa for fiscal year 2020 and each suc20 ceeding fiscal year shall be the amount provided in 

21 paragraph (6) or this paragraph for the preceding 

22 fiscal year for the respective territory increased by 

23 the percentage increase referred to in paragraph 

24 (1)(B), rounded to the nearest $10,000 (or 

25 $100,000 in the case of Puerto Rico).’’. 


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1 (2) COORDINATION WITH ARRA.—Section 

2 5001(d) of the American Recovery and Reinvestment 

3 Act of 2009 shall not apply during any period for 

4 which section 1108(g)(6) of the Social Security Act, 

5 as added by paragraph (1), applies. 

6 (b) INCREASE IN FMAP.— 

7 (1) IN GENERAL.—Section 1905(b)(2) of the 

8 Social Security Act (42 U.S.C. 1396d(b)(2)) is 

9 amended by striking ‘‘50 per centum’’ and inserting 

10 ‘‘for fiscal years 2011 through 2019, the percentage 

11 specified under section 1771(c) of the America’s Af12 fordable Health Choices Act of 2009 for purposes of 

13 this clause for such fiscal year and for subsequent 

14 fiscal years the percentage so specified for fiscal 

15 year 2019’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by subsection (a) shall apply to items and services 

18 furnished on or after October 1, 2010. 

19 (c) SPECIFICATION OF PERCENTAGES.—The Sec20 retary of Health and Human Services shall specify, before 

21 January 1, 2011, the percentages to be applied under sec22 tion 1108(g)(6) of the Social Security Act, as added by 

23 subsection (a)(1), and under section 1905(b)(2) of such 

24 Act, as amended by subsection (b)(1), in a manner so that 

25 for the period beginning with 2011 and ending with 2019 


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1 the total estimated additional Federal expenditures result2 ing from the application of such percentages will be equal 

3 to $10,350,000,000. 

4 Subtitle H—Miscellaneous 

5 SEC. 1781. TECHNICAL CORRECTIONS. 

6 (a) TECHNICAL CORRECTION TO SECTION 1144 OF

7 THE SOCIAL SECURITY ACT.—The first sentence of sec8 tion 1144(c)(3) of the Social Security Act (42 U.S.C. 

9 1320b—14(c)(3)) is amended— 

10 (1) by striking ‘‘transmittal’’; and 

11 (2) by inserting before the period the following: 

12 ‘‘as specified in section 1935(a)(4)’’. 

13 (b) CLARIFYING AMENDMENT TO SECTION 1935 OF

14 THE SOCIAL SECURITY ACT.—Section 1935(a)(4) of the 

15 Social Security Act (42 U.S.C. 1396u—5(a)(4)), as 

16 amended by section 113(b) of Public Law 110–275, is 

17 amended— 

18 (1) by striking the second sentence; 

19 (2) by redesignating the first sentence as a sub20 paragraph (A) with appropriate indentation and 

21 with the following heading: ‘‘IN GENERAL’’; 

22 (3) by adding at the end the following subpara23 graphs: 

24 ‘‘(B) FURNISHING MEDICAL ASSISTANCE

25 WITH REASONABLE PROMPTNESS.—For the 


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1 purpose of a State’s obligation under section 

2 1902(a)(8) to furnish medical assistance with 

3 reasonable promptness, the date of the elec4 tronic transmission of low-income subsidy pro5 gram data, as described in section 1144(c), 

6 from the Commissioner of Social Security to the 

7 State Medicaid Agency, shall constitute the date 

8 of filing of such application for benefits under 

9 the Medicare Savings Program. 

10 ‘‘(C) DETERMINING AVAILABILITY OF

11 MEDICAL ASSISTANCE.—For the purpose of de12 termining when medical assistance will be made 

13 available, the State shall consider the date of 

14 the individual’s application for the low income 

15 subsidy program to constitute the date of filing 

16 for benefits under the Medicare Savings Pro17 gram.’’. 

18 (c) EFFECTIVE DATE RELATING TO MEDICAID

19 AGENCY CONSIDERATION OF LOW-INCOME SUBSIDY AP20 PLICATION AND DATA TRANSMITTAL.—The amendments 

21 made by subsections (a) and (b) shall be effective as if 

22 included in the enactment of section 113(b) of Public Law 

23 110–275. 

24 (d) TECHNICAL CORRECTION TO SECTION 605 OF

25 CHIPRA.—Section 605 of the Children’s Health InsurVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00828 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ance Program Reauthorization Act of 2009 (Public Law 

2 111–3) is amended by striking ‘‘legal residents’’ and in3 serting ‘‘lawfully residing in the United States’’. 

4 (e) TECHNICAL CORRECTION TO SECTION 1905 OF

5 THE SOCIAL SECURITY ACT.—Section 1905(a) of the So6 cial Security Act (42 U.S.C. 1396d(a)) is amended by in7 serting ‘‘or the care and services themselves, or both’’ be8 fore ‘‘(if provided in or after’’. 

9 (f) CLARIFYING AMENDMENT TO SECTION 1115 OF

10 THE SOCIAL SECURITY ACT.—Section 1115(a) of the So11 cial Security Act (42 U.S.C. 1315(a)) is amended by add12 ing at the end the following: ‘‘If an experimental, pilot, 

13 or demonstration project that relates to title XIX is ap14 proved pursuant to any part of this subsection, such 

15 project shall be treated as part of the State plan, all med16 ical assistance provided on behalf of any individuals af17 fected by such project shall be medical assistance provided 

18 under the State plan, and all provisions of this Act not 

19 explicitly waived in approving such project shall remain 

20 fully applicable to all individuals receiving benefits under 

21 the State plan.’’. 

22 SEC. 1782. EXTENSION OF QI PROGRAM. 

23 (a) IN GENERAL.—Section 1902(a)(10)(E)(iv) of the 

24 Social Security Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is 

25 amended— 


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1 (1) by striking ‘‘sections 1933 and’’ and by in2 serting ‘‘section’’; and 

3 (2) by striking ‘‘December 2010’’ and inserting 

4 ‘‘December 2012’’. 

5 (b) ELIMINATION OF FUNDING LIMITATION.— 

6 (1) IN GENERAL.—Section 1933 of such Act 

7 (42 U.S.C. 1396u–3) is amended— 

8 (A) in subsection (a), by striking ‘‘who are 

9 selected to receive such assistance under sub10 section (b)’’; 

11 (B) by striking subsections (b), (c), (e), 

12 and (g); 

13 (C) in subsection (d), by striking ‘‘fur14 nished in a State’’ and all that follows and in15 serting ‘‘the Federal medical assistance percent16 age shall be equal to 100 percent.’’; and 

17 (D) by redesignating subsections (d) and 

18 (f) as subsections (b) and (c), respectively. 

19 (2) CONFORMING AMENDMENT.—Section 

20 1905(b) of such Act (42 U.S.C. 1396d(b)) is amend21 ed by striking ‘‘1933(d)’’ and inserting ‘‘1933(b)’’. 

22 (3) EFFECTIVE DATE.—The amendments made 

23 by paragraph (1) shall take effect on January 1, 

24 2011. 


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1 TITLE VIII—REVENUE-RELATED 

2 PROVISIONS 

3 SEC. 1801. DISCLOSURES TO FACILITATE IDENTIFICATION 

4 OF INDIVIDUALS LIKELY TO BE INELIGIBLE 

5 FOR THE LOW-INCOME ASSISTANCE UNDER 

6 THE MEDICARE PRESCRIPTION DRUG PRO7 GRAM TO ASSIST SOCIAL SECURITY ADMINIS8 TRATION’S OUTREACH TO ELIGIBLE INDIVID9 UALS. 

10 (a) IN GENERAL.—Paragraph (19) of section 6103(l) 

11 of the Internal Revenue Code of 1986 is amended to read 

12 as follows: 

13 ‘‘(19) DISCLOSURES TO FACILITATE IDENTI14 FICATION OF INDIVIDUALS LIKELY TO BE INELI15 GIBLE FOR LOW-INCOME SUBSIDIES UNDER MEDI16 CARE PRESCRIPTION DRUG PROGRAM TO ASSIST SO17 CIAL SECURITY ADMINISTRATION’S OUTREACH TO

18 ELIGIBLE INDIVIDUALS.— 

19 ‘‘(A) IN GENERAL.—Upon written request 

20 from the Commissioner of Social Security, the 

21 following return information (including such in22 formation disclosed to the Social Security Ad23 ministration under paragraph (1) or (5)) shall 

24 be disclosed to officers and employees of the So25 cial Security Administration, with respect to 


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1 any taxpayer identified by the Commissioner of 

2 Social Security— 

3 ‘‘(i) return information for the appli4 cable year from returns with respect to 

5 wages (as defined in section 3121(a) or 

6 3401(a)) and payments of retirement in7 come (as described in paragraph (1) of this 

8 subsection), 

9 ‘‘(ii) unearned income information 

10 and income information of the taxpayer 

11 from partnerships, trusts, estates, and sub12 chapter S corporations for the applicable 

13 year, 

14 ‘‘(iii) if the individual filed an income 

15 tax return for the applicable year, the fil16 ing status, number of dependents, income 

17 from farming, and income from self-em18 ployment, on such return, 

19 ‘‘(iv) if the individual is a married in20 dividual filing a separate return for the ap21 plicable year, the social security number (if 

22 reasonably available) of the spouse on such 

23 return, 

24 ‘‘(v) if the individual files a joint re25 turn for the applicable year, the social seVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00832 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 curity number, unearned income informa2 tion, and income information from partner3 ships, trusts, estates, and subchapter S 

4 corporations of the individual’s spouse on 

5 such return, and 

6 ‘‘(vi) such other return information 

7 relating to the individual (or the individ8 ual’s spouse in the case of a joint return) 

9 as is prescribed by the Secretary by regula10 tion as might indicate that the individual 

11 is likely to be ineligible for a low-income 

12 prescription drug subsidy under section 

13 1860D–14 of the Social Security Act. 

14 ‘‘(B) APPLICABLE YEAR.—For the pur15 poses of this paragraph, the term ‘applicable 

16 year’ means the most recent taxable year for 

17 which information is available in the Internal 

18 Revenue Service’s taxpayer information records. 

19 ‘‘(C) RESTRICTION ON INDIVIDUALS FOR

20 WHOM DISCLOSURE MAY BE REQUESTED.—The 

21 Commissioner of Social Security shall request 

22 information under this paragraph only with re23 spect to— 

24 ‘‘(i) individuals the Social Security 

25 Administration has identified, using all 


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1 other reasonably available information, as 

2 likely to be eligible for a low-income pre3 scription drug subsidy under section 

4 1860D–14 of the Social Security Act and 

5 who have not applied for such subsidy, and 

6 ‘‘(ii) any individual the Social Security 

7 Administration has identified as a spouse 

8 of an individual described in clause (i). 

9 ‘‘(D) RESTRICTION ON USE OF DISCLOSED

10 INFORMATION.—Return information disclosed 

11 under this paragraph may be used only by offi12 cers and employees of the Social Security Ad13 ministration solely for purposes of identifying 

14 individuals likely to be ineligible for a low-in15 come prescription drug subsidy under section 

16 1860D–14 of the Social Security Act for use in 

17 outreach efforts under section 1144 of the So18 cial Security Act.’’. 

19 (b) SAFEGUARDS.—Paragraph (4) of section 6103(p) 

20 of such Code is amended— 

21 (1) by striking ‘‘(19),’’ each place it appears, 

22 and 

23 (2) by striking ‘‘or (17)’’ each place it appears 

24 and inserting ‘‘(17), or (19)’’. 


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1 (c) CONFORMING AMENDMENT.—Paragraph (3) of 

2 section 6103(a) of such Code is amended by striking 

3 ‘‘(19),’’. 

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

5 this section shall apply to disclosures made after the date 

6 which is 12 months after the date of the enactment of 

7 this Act. 

8 SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH 

9 TRUST FUND; FINANCING FOR TRUST FUND. 

10 (a) ESTABLISHMENT OF TRUST FUND.— 

11 (1) IN GENERAL.—Subchapter A of chapter 98 

12 of the Internal Revenue Code of 1986 (relating to 

13 trust fund code) is amended by adding at the end 

14 the following new section: 

15 ‘‘SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS 

16 RESEARCH TRUST FUND. 

17 ‘‘(a) CREATION OF TRUST FUND.—There is estab18 lished in the Treasury of the United States a trust fund 

19 to be known as the ‘Health Care Comparative Effective20 ness Research Trust Fund’ (hereinafter in this section re21 ferred to as the ‘CERTF’), consisting of such amounts 

22 as may be appropriated or credited to such Trust Fund 

23 as provided in this section and section 9602(b). 

24 ‘‘(b) TRANSFERS TO FUND.—There are hereby ap25 propriated to the Trust Fund the following: 


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1 ‘‘(1) For fiscal year 2010, $90,000,000. 

2 ‘‘(2) For fiscal year 2011, $100,000,000. 

3 ‘‘(3) For fiscal year 2012, $110,000,000. 

4 ‘‘(4) For each fiscal year beginning with fiscal 

5 year 2013— 

6 ‘‘(A) an amount equivalent to the net reve7 nues received in the Treasury from the fees im8 posed under subchapter B of chapter 34 (relat9 ing to fees on health insurance and self-insured 

10 plans) for such fiscal year; and 

11 ‘‘(B) subject to subsection (c)(2), amounts 

12 determined by the Secretary of Health and 

13 Human Services to be equivalent to the fair 

14 share per capita amount computed under sub15 section (c)(1) for the fiscal year multiplied by 

16 the average number of individuals entitled to 

17 benefits under part A, or enrolled under part B, 

18 of title XVIII of the Social Security Act during 

19 such fiscal year. 

20 The amounts appropriated under paragraphs (1), (2), (3), 

21 and (4)(B) shall be transferred from the Federal Hospital 

22 Insurance Trust Fund and from the Federal Supple23 mentary Medical Insurance Trust Fund (established 

24 under section 1841 of such Act), and from the Medicare 

25 Prescription Drug Account within such Trust Fund, in 


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1 proportion (as estimated by the Secretary) to the total ex2 penditures during such fiscal year that are made under 

3 title XVIII of such Act from the respective trust fund or 

4 account. 

5 ‘‘(c) FAIR SHARE PER CAPITA AMOUNT.— 

6 ‘‘(1) COMPUTATION.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), the fair share per capita amount 

9 under this paragraph for a fiscal year (begin10 ning with fiscal year 2013) is an amount com11 puted by the Secretary of Health and Human 

12 Services for such fiscal year that, when applied 

13 under this section and subchapter B of chapter 

14 34 of the Internal Revenue Code of 1986, will 

15 result in revenues to the CERTF of 

16 $375,000,000 for the fiscal year. 

17 ‘‘(B) ALTERNATIVE COMPUTATION.— 

18 ‘‘(i) IN GENERAL.—If the Secretary is 

19 unable to compute the fair share per capita 

20 amount under subparagraph (A) for a fis21 cal year, the fair share per capita amount 

22 under this paragraph for the fiscal year 

23 shall be the default amount determined 

24 under clause (ii) for the fiscal year. 


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1 ‘‘(ii) DEFAULT AMOUNT.—The default 

2 amount under this clause for— 

3 ‘‘(I) fiscal year 2013 is equal to 

4 $2; or 

5 ‘‘(II) a subsequent year is equal 

6 to the default amount under this 

7 clause for the preceding fiscal year in8 creased by the annual percentage in9 crease in the medical care component 

10 of the consumer price index (United 

11 States city average) for the 12-month 

12 period ending with April of the pre13 ceding fiscal year. 

14 Any amount determined under subclause 

15 (II) shall be rounded to the nearest penny. 

16 ‘‘(2) LIMITATION ON MEDICARE FUNDING.—In 

17 no case shall the amount transferred under sub18 section (b)(4)(B) for any fiscal year exceed 

19 $90,000,000. 

20 ‘‘(d) EXPENDITURES FROM FUND.— 

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

22 amounts in the CERTF are available, without the 

23 need for further appropriations and without fiscal 

24 year limitation, to the Secretary of Health and 


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1 Human Services for carrying out section 1181 of the 

2 Social Security Act. 

3 ‘‘(2) ALLOCATION FOR COMMISSION.—Not less 

4 than the following amounts in the CERTF for a fis5 cal year shall be available to carry out the activities 

6 of the Comparative Effectiveness Research Commis7 sion established under section 1181(b) of the Social 

8 Security Act for such fiscal year: 

9 ‘‘(A) For fiscal year 2010, $7,000,000. 

10 ‘‘(B) For fiscal year 2011, $9,000,000. 

11 ‘‘(C) For each fiscal year beginning with 

12 2012, $10,000,000. 

13 Nothing in this paragraph shall be construed as pre14 venting additional amounts in the CERTF from 

15 being made available to the Comparative Effective16 ness Research Commission for such activities. 

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

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

19 the Secretary based on the excess of— 

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

21 subchapter B of chapter 34, over 

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

23 1 resulting from the fees imposed by such sub24 chapter.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for such subchapter A is amended by adding 

3 at the end thereof the following new item: 

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

4 (b) FINANCING FOR FUND FROM FEES ON INSURED

5 AND SELF-INSURED HEALTH PLANS.— 

6 (1) GENERAL RULE.—Chapter 34 of the Inter7 nal Revenue Code of 1986 is amended by adding at 

8 the end the following new subchapter: 

9 ‘‘Subchapter B—Insured and Self-Insured 

10 Health Plans 

‘‘Sec. 4375. Health insurance. 

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

‘‘Sec. 4377. Definitions and special rules. 

11 ‘‘SEC. 4375. HEALTH INSURANCE. 

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

13 on each specified health insurance policy for each policy 

14 year a fee equal to the fair share per capita amount deter15 mined under section 9511(c)(1) multiplied by the average 

16 number of lives covered under the policy. 

17 ‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub18 section (a) shall be paid by the issuer of the policy. 

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

20 purposes of this section: 

21 ‘‘(1) IN GENERAL.—Except as otherwise pro22 vided in this section, the term ‘specified health in23 surance policy’ means any accident or health insurVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00840 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ance policy issued with respect to individuals resid2 ing in the United States. 

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

4 term ‘specified health insurance policy’ does not in5 clude any insurance if substantially all of its cov6 erage is of excepted benefits described in section 

7 9832(c). 

8 ‘‘(3) TREATMENT OF PREPAID HEALTH COV9 ERAGE ARRANGEMENTS.— 

10 ‘‘(A) IN GENERAL.—In the case of any ar11 rangement described in subparagraph (B)— 

12 ‘‘(i) such arrangement shall be treated 

13 as a specified health insurance policy, and 

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

15 subparagraph shall be treated as the 

16 issuer. 

17 ‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 

18 An arrangement is described in this subpara19 graph if under such arrangement fixed pay20 ments or premiums are received as consider21 ation for any person’s agreement to provide or 

22 arrange for the provision of accident or health 

23 coverage to residents of the United States, re24 gardless of how such coverage is provided or ar25 ranged to be provided. 


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

2 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli3 cable self-insured health plan for each plan year, there is 

4 hereby imposed a fee equal to the fair share per capita 

5 amount determined under section 9511(c)(1) multiplied by 

6 the average number of lives covered under the plan. 

7 ‘‘(b) LIABILITY FOR FEE.— 

8 ‘‘(1) IN GENERAL.—The fee imposed by sub9 section (a) shall be paid by the plan sponsor. 

10 ‘‘(2) PLAN SPONSOR.—For purposes of para11 graph (1) the term ‘plan sponsor’ means— 

12 ‘‘(A) the employer in the case of a plan es13 tablished or maintained by a single employer, 

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

15 of a plan established or maintained by an em16 ployee organization, 

17 ‘‘(C) in the case of— 

18 ‘‘(i) a plan established or maintained 

19 by 2 or more employers or jointly by 1 or 

20 more employers and 1 or more employee 

21 organizations, 

22 ‘‘(ii) a multiple employer welfare ar23 rangement, or 

24 ‘‘(iii) a voluntary employees’ bene25 ficiary association described in section 

26 501(c)(9), 


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1 the association, committee, joint board of trust2 ees, or other similar group of representatives of 

3 the parties who establish or maintain the plan, 

4 or 

5 ‘‘(D) the cooperative or association de6 scribed in subsection (c)(2)(F) in the case of a 

7 plan established or maintained by such a coop8 erative or association. 

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

10 For purposes of this section, the term ‘applicable self-in11 sured health plan’ means any plan for providing accident 

12 or health coverage if— 

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

14 other than through an insurance policy, and 

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

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

17 benefit of their employees or former employees, 

18 ‘‘(B) by one or more employee organiza19 tions for the benefit of their members or former 

20 members, 

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

22 or more employee organizations for the benefit 

23 of employees or former employees, 

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

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


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1 ‘‘(E) by any organization described in sec2 tion 501(c)(6), or 

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

4 the preceding subparagraphs, by a multiple em5 ployer welfare arrangement (as defined in sec6 tion 3(40) of Employee Retirement Income Se7 curity Act of 1974), a rural electric cooperative 

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

9 or a rural telephone cooperative association (as 

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

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

12 ‘‘(a) DEFINITIONS.—For purposes of this sub13 chapter— 

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

15 term ‘accident and health coverage’ means any cov16 erage which, if provided by an insurance policy, 

17 would cause such policy to be a specified health in18 surance policy (as defined in section 4375(c)). 

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

20 policy’ means any policy or other instrument where21 by a contract of insurance is issued, renewed, or ex22 tended. 

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

24 States’ includes any possession of the United States. 

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


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1 ‘‘(1) IN GENERAL.—For purposes of this sub2 chapter— 

3 ‘‘(A) the term ‘person’ includes any gov4 ernmental entity, and 

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

6 of law, governmental entities shall not be ex7 empt from the fees imposed by this subchapter 

8 except as provided in paragraph (2). 

9 ‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL

10 PROGRAMS.—In the case of an exempt governmental 

11 program, no fee shall be imposed under section 4375 

12 or section 4376 on any covered life under such pro13 gram. 

14 ‘‘(3) EXEMPT GOVERNMENTAL PROGRAM DE15 FINED.—For purposes of this subchapter, the term 

16 ‘exempt governmental program’ means— 

17 ‘‘(A) any insurance program established 

18 under title XVIII of the Social Security Act, 

19 ‘‘(B) the medical assistance program es20 tablished by title XIX or XXI of the Social Se21 curity Act, 

22 ‘‘(C) any program established by Federal 

23 law for providing medical care (other than 

24 through insurance policies) to individuals (or 


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1 the spouses and dependents thereof) by reason 

2 of such individuals being— 

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

4 the United States, or 

5 ‘‘(ii) veterans, and 

6 ‘‘(D) any program established by Federal 

7 law for providing medical care (other than 

8 through insurance policies) to members of In9 dian tribes (as defined in section 4(d) of the In10 dian Health Care Improvement Act). 

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

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

13 as if they were taxes. 

14 ‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith15 standing any other provision of law, no amount collected 

16 under this subchapter shall be covered over to any posses17 sion of the United States.’’. 

18 (2) CLERICAL AMENDMENTS.— 

19 (A) Chapter 34 of such Code is amended 

20 by striking the chapter heading and inserting 

21 the following: 

22 ‘‘CHAPTER 34—TAXES ON CERTAIN 

23 INSURANCE POLICIES 

‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS

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


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1 ‘‘Subchapter A—Policies Issued By Foreign 

2 Insurers’’. 

3 (B) The table of chapters for subtitle D of 

4 such Code is amended by striking the item re5 lating to chapter 34 and inserting the following 

6 new item: 

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

7 (3) EFFECTIVE DATE.—The amendments made 

8 by this subsection shall apply with respect to policies 

9 and plans for portions of policy or plan years begin10 ning on or after October 1, 2012. 

11 TITLE IX—MISCELLANEOUS 

12 PROVISIONS 

13 SEC. 1901. REPEAL OF TRIGGER PROVISION. 

14 Subtitle A of title VIII of the Medicare Prescription 

15 Drug, Improvement, and Modernization Act of 2003 (Pub16 lic Law 108–173) is repealed and the provisions of law 

17 amended by such subtitle are restored as if such subtitle 

18 had never been enacted. 

19 SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT 

20 (CCA) PROGRAM. 

21 Section 1860C–1 of the Social Security Act (42 

22 U.S.C. 1395w–29), as added by section 241(a) of the 

23 Medicare Prescription Drug, Improvement, and Mod24 ernization Act of 2003 (Public Law 108–173), is repealed. 


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1 SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION. 

2 (a) IN GENERAL.—Subsection (d)(3) of section 5007 

3 of the Deficit Reduction Act of 2005 (Public Law 109– 

4 171) is amended by inserting ‘‘(or September 30, 2011, 

5 in the case of a demonstration project in operation as of 

6 October 1, 2008)’’ after ‘‘December 31, 2009’’. 

7 (b) FUNDING.— 

8 (1) IN GENERAL.—Subsection (f)(1) of such 

9 section is amended by inserting ‘‘and for fiscal year 

10 2010, $1,600,000,’’ after ‘‘$6,000,000,’’. 

11 (2) AVAILABILITY.—Subsection (f)(2) of such 

12 section is amended by striking ‘‘2010’’ and inserting 

13 ‘‘2014 or until expended’’. 

14 (c) REPORTS.— 

15 (1) QUALITY IMPROVEMENT AND SAVINGS.— 

16 Subsection (e)(3) of such section is amended by 

17 striking ‘‘December 1, 2008’’ and inserting ‘‘March 

18 31, 2011’’. 

19 (2) FINAL REPORT.—Subsection (e)(4) of such 

20 section is amended by striking ‘‘May 1, 2010’’ and 

21 inserting ‘‘March 31, 2013’’. 


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1 SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITA2 TION PROGRAMS FOR FAMILIES WITH YOUNG 

3 CHILDREN AND FAMILIES EXPECTING CHIL4 DREN. 

5 Part B of title IV of the Social Security Act (42 

6 U.S.C. 621–629i) is amended by adding at the end the 

7 following: 

8 ‘‘Subpart 3—Support for Quality Home Visitation 

9 Programs 

10 ‘‘SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES 

11 WITH YOUNG CHILDREN AND FAMILIES EX12 PECTING CHILDREN. 

13 ‘‘(a) PURPOSE.—The purpose of this section is to im14 prove the well-being, health, and development of children 

15 by enabling the establishment and expansion of high qual16 ity programs providing voluntary home visitation for fami17 lies with young children and families expecting children. 

18 ‘‘(b) GRANT APPLICATION.—A State that desires to 

19 receive a grant under this section shall submit to the Sec20 retary for approval, at such time and in such manner as 

21 the Secretary may require, an application for the grant 

22 that includes the following: 

23 ‘‘(1) DESCRIPTION OF HOME VISITATION PRO24 GRAMS.—A description of the high quality programs 

25 of home visitation for families with young children 

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1 ported by a grant made to the State under this sec2 tion, the outcomes the programs are intended to 

3 achieve, and the evidence supporting the effective4 ness of the programs. 

5 ‘‘(2) RESULTS OF NEEDS ASSESSMENT.—The 

6 results of a statewide needs assessment that de7 scribes— 

8 ‘‘(A) the number, quality, and capacity of 

9 home visitation programs for families with 

10 young children and families expecting children 

11 in the State; 

12 ‘‘(B) the number and types of families who 

13 are receiving services under the programs; 

14 ‘‘(C) the sources and amount of funding 

15 provided to the programs; 

16 ‘‘(D) the gaps in home visitation in the 

17 State, including identification of communities 

18 that are in high need of the services; and 

19 ‘‘(E) training and technical assistance ac20 tivities designed to achieve or support the goals 

21 of the programs. 

22 ‘‘(3) ASSURANCES.—Assurances from the State 

23 that— 

24 ‘‘(A) in supporting home visitation pro25 grams using funds provided under this section, 


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1 the State shall identify and prioritize serving 

2 communities that are in high need of such serv3 ices, especially communities with a high propor4 tion of low-income families or a high incidence 

5 of child maltreatment; 

6 ‘‘(B) the State will reserve 5 percent of the 

7 grant funds for training and technical assist8 ance to the home visitation programs using 

9 such funds; 

10 ‘‘(C) in supporting home visitation pro11 grams using funds provided under this section, 

12 the State will promote coordination and collabo13 ration with other home visitation programs (in14 cluding programs funded under title XIX) and 

15 with other child and family services, health 

16 services, income supports, and other related as17 sistance; 

18 ‘‘(D) home visitation programs supported 

19 using such funds will, when appropriate, pro20 vide referrals to other programs serving chil21 dren and families; and 

22 ‘‘(E) the State will comply with subsection 

23 (i), and cooperate with any evaluation con24 ducted under subsection (j). 


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1 ‘‘(4) OTHER INFORMATION.—Such other infor2 mation as the Secretary may require. 

3 ‘‘(c) ALLOTMENTS.— 

4 ‘‘(1) INDIAN TRIBES.—From the amount re5 served under subsection (l)(2) for a fiscal year, the 

6 Secretary shall allot to each Indian tribe that meets 

7 the requirement of subsection (d), if applicable, for 

8 the fiscal year the amount that bears the same ratio 

9 to the amount so reserved as the number of children 

10 in the Indian tribe whose families have income that 

11 does not exceed 200 percent of the poverty line bears 

12 to the total number of children in such Indian tribes 

13 whose families have income that does not exceed 200 

14 percent of the poverty line. 

15 ‘‘(2) STATES AND TERRITORIES.—From the 

16 amount appropriated under subsection (m) for a fis17 cal year that remains after making the reservations 

18 required by subsection (l), the Secretary shall allot 

19 to each State that is not an Indian tribe and that 

20 meets the requirement of subsection (d), if applica21 ble, for the fiscal year the amount that bears the 

22 same ratio to the remainder of the amount so appro23 priated as the number of children in the State whose 

24 families have income that does not exceed 200 per25 cent of the poverty line bears to the total number of 


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1 children in such States whose families have income 

2 that does not exceed 200 percent of the poverty line. 

3 ‘‘(3) REALLOTMENTS.—The amount of any al4 lotment to a State under a paragraph of this sub5 section for any fiscal year that the State certifies to 

6 the Secretary will not be expended by the State pur7 suant to this section shall be available for reallot8 ment using the allotment methodology specified in 

9 that paragraph. Any amount so reallotted to a State 

10 is deemed part of the allotment of the State under 

11 this subsection. 

12 ‘‘(d) MAINTENANCE OF EFFORT.—Beginning with 

13 fiscal year 2011, a State meets the requirement of this 

14 subsection for a fiscal year if the Secretary finds that the 

15 aggregate expenditures by the State from State and local 

16 sources for programs of home visitation for families with 

17 young children and families expecting children for the then 

18 preceding fiscal year was not less than 100 percent of such 

19 aggregate expenditures for the then 2nd preceding fiscal 

20 year. 

21 ‘‘(e) PAYMENT OF GRANT.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall make a 

23 grant to each State that meets the requirements of 

24 subsections (b) and (d), if applicable, for a fiscal 

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1 section (m), in an amount equal to the reimbursable 

2 percentage of the eligible expenditures of the State 

3 for the fiscal year, but not more than the amount 

4 allotted to the State under subsection (c) for the fis5 cal year. 

6 ‘‘(2) REIMBURSABLE PERCENTAGE DEFINED.— 

7 In paragraph (1), the term ‘reimbursable percent8 age’ means, with respect to a fiscal year— 

9 ‘‘(A) 85 percent, in the case of fiscal year 

10 2010; 

11 ‘‘(B) 80 percent, in the case of fiscal year 

12 2011; or 

13 ‘‘(C) 75 percent, in the case of fiscal year 

14 2012 and any succeeding fiscal year. 

15 ‘‘(f) ELIGIBLE EXPENDITURES.— 

16 ‘‘(1) IN GENERAL.—In this section, the term 

17 ‘eligible expenditures’— 

18 ‘‘(A) means expenditures to provide vol19 untary home visitation for as many families 

20 with young children (under the age of school 

21 entry) and families expecting children as prac22 ticable, through the implementation or expan23 sion of high quality home visitation programs 

24 that— 


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1 ‘‘(i) adhere to clear evidence-based 

2 models of home visitation that have dem3 onstrated positive effects on important pro4 gram-determined child and parenting out5 comes, such as reducing abuse and neglect 

6 and improving child health and develop7 ment; 

8 ‘‘(ii) employ well-trained and com9 petent staff, maintain high quality super10 vision, provide for ongoing training and 

11 professional development, and show strong 

12 organizational capacity to implement such 

13 a program; 

14 ‘‘(iii) establish appropriate linkages 

15 and referrals to other community resources 

16 and supports; 

17 ‘‘(iv) monitor fidelity of program im18 plementation to ensure that services are 

19 delivered according to the specified model; 

20 and 

21 ‘‘(v) provide parents with— 

22 ‘‘(I) knowledge of age-appro23 priate child development in cognitive, 

24 language, social, emotional, and motor 

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1 ond language acquisition, in the case 

2 of English language learners); 

3 ‘‘(II) knowledge of realistic ex4 pectations of age-appropriate child be5 haviors; 

6 ‘‘(III) knowledge of health and 

7 wellness issues for children and par8 ents; 

9 ‘‘(IV) modeling, consulting, and 

10 coaching on parenting practices; 

11 ‘‘(V) skills to interact with their 

12 child to enhance age-appropriate de13 velopment; 

14 ‘‘(VI) skills to recognize and seek 

15 help for issues related to health, devel16 opmental delays, and social, emo17 tional, and behavioral skills; and 

18 ‘‘(VII) activities designed to help 

19 parents become full partners in the 

20 education of their children; 

21 ‘‘(B) includes expenditures for training, 

22 technical assistance, and evaluations related to 

23 the programs; and 

24 ‘‘(C) does not include any expenditure with 

25 respect to which a State has submitted a claim 


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1 for payment under any other provision of Fed2 eral law. 

3 ‘‘(2) PRIORITY FUNDING FOR PROGRAMS WITH

4 STRONGEST EVIDENCE.— 

5 ‘‘(A) IN GENERAL.—The expenditures, de6 scribed in paragraph (1), of a State for a fiscal 

7 year that are attributable to the cost of pro8 grams that do not adhere to a model of home 

9 visitation with the strongest evidence of effec10 tiveness shall not be considered eligible expendi11 tures for the fiscal year to the extent that the 

12 total of the expenditures exceeds the applicable 

13 percentage for the fiscal year of the allotment 

14 of the State under subsection (c) for the fiscal 

15 year. 

16 ‘‘(B) APPLICABLE PERCENTAGE DE17 FINED.—In subparagraph (A), the term ‘appli18 cable percentage’ means, with respect to a fiscal 

19 year— 

20 ‘‘(i) 60 percent for fiscal year 2010; 

21 ‘‘(ii) 55 percent for fiscal year 2011; 

22 ‘‘(iii) 50 percent for fiscal year 2012; 

23 ‘‘(iv) 45 percent for fiscal year 2013; 

24 or 

25 ‘‘(v) 40 percent for fiscal year 2014. 


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1 ‘‘(g) NO USE OF OTHER FEDERAL FUNDS FOR

2 STATE MATCH.—A State to which a grant is made under 

3 this section may not expend any Federal funds to meet 

4 the State share of the cost of an eligible expenditure for 

5 which the State receives a payment under this section. 

6 ‘‘(h) WAIVER AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—The Secretary may waive 

8 or modify the application of any provision of this 

9 section, other than subsection (b) or (f), to an In10 dian tribe if the failure to do so would impose an 

11 undue burden on the Indian tribe. 

12 ‘‘(2) SPECIAL RULE.—An Indian tribe is 

13 deemed to meet the requirement of subsection (d) 

14 for purposes of subsections (c) and (e) if— 

15 ‘‘(A) the Secretary waives the requirement; 

16 or 

17 ‘‘(B) the Secretary modifies the require18 ment, and the Indian tribe meets the modified 

19 requirement. 

20 ‘‘(i) STATE REPORTS.—Each State to which a grant 

21 is made under this section shall submit to the Secretary 

22 an annual report on the progress made by the State in 

23 addressing the purposes of this section. Each such report 

24 shall include a description of— 


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1 ‘‘(1) the services delivered by the programs that 

2 received funds from the grant; 

3 ‘‘(2) the characteristics of each such program, 

4 including information on the service model used by 

5 the program and the performance of the program; 

6 ‘‘(3) the characteristics of the providers of serv7 ices through the program, including staff qualifica8 tions, work experience, and demographic characteris9 tics; 

10 ‘‘(4) the characteristics of the recipients of serv11 ices provided through the program, including the 

12 number of the recipients, the demographic charac13 teristics of the recipients, and family retention; 

14 ‘‘(5) the annual cost of implementing the pro15 gram, including the cost per family served under the 

16 program; 

17 ‘‘(6) the outcomes experienced by recipients of 

18 services through the program; 

19 ‘‘(7) the training and technical assistance pro20 vided to aid implementation of the program, and 

21 how the training and technical assistance contrib22 uted to the outcomes achieved through the program; 

23 ‘‘(8) the indicators and methods used to mon24 itor whether the program is being implemented as 

25 designed; and 


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1 ‘‘(9) other information as determined necessary 

2 by the Secretary. 

3 ‘‘(j) EVALUATION.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall, by 

5 grant or contract, provide for the conduct of an 

6 independent evaluation of the effectiveness of home 

7 visitation programs receiving funds provided under 

8 this section, which shall examine the following: 

9 ‘‘(A) The effect of home visitation pro10 grams on child and parent outcomes, including 

11 child maltreatment, child health and develop12 ment, school readiness, and links to community 

13 services. 

14 ‘‘(B) The effectiveness of home visitation 

15 programs on different populations, including 

16 the extent to which the ability of programs to 

17 improve outcomes varies across programs and 

18 populations. 

19 ‘‘(2) REPORTS TO THE CONGRESS.— 

20 ‘‘(A) INTERIM REPORT.—Within 3 years 

21 after the date of the enactment of this section, 

22 the Secretary shall submit to the Congress an 

23 interim report on the evaluation conducted pur24 suant to paragraph (1). 


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1 ‘‘(B) FINAL REPORT.—Within 5 years 

2 after the date of the enactment of this section, 

3 the Secretary shall submit to the Congress a 

4 final report on the evaluation conducted pursu5 ant to paragraph (1). 

6 ‘‘(k) ANNUAL REPORTS TO THE CONGRESS.—The 

7 Secretary shall submit annually to the Congress a report 

8 on the activities carried out using funds made available 

9 under this section, which shall include a description of the 

10 following: 

11 ‘‘(1) The high need communities targeted by 

12 States for programs carried out under this section. 

13 ‘‘(2) The service delivery models used in the 

14 programs receiving funds provided under this sec15 tion. 

16 ‘‘(3) The characteristics of the programs, in17 cluding— 

18 ‘‘(A) the qualifications and demographic 

19 characteristics of program staff; and 

20 ‘‘(B) recipient characteristics including the 

21 number of families served, the demographic 

22 characteristics of the families served, and fam23 ily retention and duration of services. 

24 ‘‘(4) The outcomes reported by the programs. 


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1 ‘‘(5) The research-based instruction, materials, 

2 and activities being used in the activities funded 

3 under the grant. 

4 ‘‘(6) The training and technical activities, in5 cluding on-going professional development, provided 

6 to the programs. 

7 ‘‘(7) The annual costs of implementing the pro8 grams, including the cost per family served under 

9 the programs. 

10 ‘‘(8) The indicators and methods used by States 

11 to monitor whether the programs are being been im12 plemented as designed. 

13 ‘‘(l) RESERVATIONS OF FUNDS.—From the amounts 

14 appropriated for a fiscal year under subsection (m), the 

15 Secretary shall reserve— 

16 ‘‘(1) an amount equal to 5 percent of the 

17 amounts to pay the cost of the evaluation provided 

18 for in subsection (j), and the provision to States of 

19 training and technical assistance, including the dis20 semination of best practices in early childhood home 

21 visitation; and 

22 ‘‘(2) after making the reservation required by 

23 paragraph (1), an amount equal to 3 percent of the 

24 amount so appropriated, to pay for grants to Indian 

25 tribes under this section. 


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1 ‘‘(m) APPROPRIATIONS.—Out of any money in the 

2 Treasury of the United States not otherwise appropriated, 

3 there is appropriated to the Secretary to carry out this 

4 section— 

5 ‘‘(1) $50,000,000 for fiscal year 2010; 

6 ‘‘(2) $100,000,000 for fiscal year 2011; 

7 ‘‘(3) $150,000,000 for fiscal year 2012; 

8 ‘‘(4) $200,000,000 for fiscal year 2013; and 

9 ‘‘(5) $250,000,000 for fiscal year 2014. 

10 ‘‘(n) INDIAN TRIBES TREATED AS STATES.—In this 

11 section, paragraphs (4), (5), and (6) of section 431(a) 

12 shall apply.’’. 

13 SEC. 1905. IMPROVED COORDINATION AND PROTECTION 

14 FOR DUAL ELIGIBLES. 

15 Title XI of the Social Security Act is amended by 

16 inserting after section 1150 the following new section: 

17 ‘‘IMPROVED COORDINATION AND PROTECTION FOR DUAL

18 ELIGIBLES

19 ‘‘SEC. 1150A. (a) IN GENERAL.—The Secretary shall 

20 provide, through an identifiable office or program within 

21 the Centers for Medicare & Medicaid Services, for a fo22 cused effort to provide for improved coordination between 

23 Medicare and Medicaid and protection in the case of dual 

24 eligibles (as defined in subsection (e)). The office or pro25 gram shall— 


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1 ‘‘(1) review Medicare and Medicaid policies re2 lated to enrollment, benefits, service delivery, pay3 ment, and grievance and appeals processes under 

4 parts A and B of title XVIII, under the Medicare 

5 Advantage program under part C of such title, and 

6 under title XIX; 

7 ‘‘(2) identify areas of such policies where better 

8 coordination and protection could improve care and 

9 costs; and 

10 ‘‘(3) issue guidance to States regarding improv11 ing such coordination and protection. 

12 ‘‘(b) ELEMENTS.—The improved coordination and 

13 protection under this section shall include efforts— 

14 ‘‘(1) to simplify access of dual eligibles to bene15 fits and services under Medicare and Medicaid; 

16 ‘‘(2) to improve care continuity for dual eligi17 bles and ensure safe and effective care transitions; 

18 ‘‘(3) to harmonize regulatory conflicts between 

19 Medicare and Medicaid rules with regard to dual eli20 gibles; and 

21 ‘‘(4) to improve total cost and quality perform22 ance under Medicare and Medicaid for dual eligibles. 

23 ‘‘(c) RESPONSIBILITIES.—In carrying out this sec24 tion, the Secretary shall provide for the following: 


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1 ‘‘(1) An examination of Medicare and Medicaid 

2 payment systems to develop strategies to foster more 

3 integrated and higher quality care. 

4 ‘‘(2) Development of methods to facilitate ac5 cess to post-acute and community-based services and 

6 to identify actions that could lead to better coordina7 tion of community-based care. 

8 ‘‘(3) A study of enrollment of dual eligibles in 

9 the Medicare Savings Program (as defined in section 

10 1144(c)(7)), under Medicaid, and in the low-income 

11 subsidy program under section 1860D–14 to identify 

12 methods to more efficiently and effectively reach and 

13 enroll dual eligibles. 

14 ‘‘(4) An assessment of communication strate15 gies for dual eligibles to determine whether addi16 tional informational materials or outreach is needed, 

17 including an assessment of the Medicare website, 1– 

18 800–MEDICARE, and the Medicare handbook. 

19 ‘‘(5) Research and evaluation of areas where 

20 service utilization, quality, and access to cost sharing 

21 protection could be improved and an assessment of 

22 factors related to enrollee satisfaction with services 

23 and care delivery. 

24 ‘‘(6) Collection (and making available to the 

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1 gibility, benefit and cost-sharing assistance available 

2 to dual eligibles by State. 

3 ‘‘(7) Monitoring total combined Medicare and 

4 Medicaid program costs in serving dual eligibles and 

5 making recommendations for optimizing total quality 

6 and cost performance across both programs. 

7 ‘‘(8) Coordination of activities relating to Medi8 care Advantage plans under 1859(b)(6)(B)(ii) and 

9 Medicaid. 

10 ‘‘(d) PERIODIC REPORTS.—Not later than 1 year 

11 after the date of the enactment of this section and every 

12 3 years thereafter the Secretary shall submit to Congress 

13 a report on progress in activities conducted under this sec14 tion. 

15 ‘‘(e) DEFINITIONS.—In this section: 

16 ‘‘(1) DUAL ELIGIBLE.—The term ‘dual eligible’ 

17 means an individual who is dually eligible for bene18 fits under title XVIII, and medical assistance under 

19 title XIX, including such individuals who are eligible 

20 for benefits under the Medicare Savings Program 

21 (as defined in section 1144(c)(7)). 

22 ‘‘(2) MEDICARE; MEDICAID.—The terms ‘Medi23 care’ and ‘Medicaid’ mean the programs under titles 

24 XVIII and XIX, respectively.’’. 


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1 SEC. 1906. ASSESSMENT OF MEDICARE COST-INTENSIVE 

2 DISEASES AND CONDITIONS. 

3 (a) INITIAL ASSESSMENT.— 

4 (1) IN GENERAL.—The Administrator of the 

5 Centers for Medicare & Medicaid Services shall con6 duct an assessment of the diseases and conditions 

7 that are the most cost-intensive for the Medicare 

8 program. The assessment shall inform research pri9 orities within the Department of Health and Human 

10 Services in order improve the prevention, or treat11 ment or cure, of such diseases and conditions. 

12 (2) REPORT.— Not later than January 1, 

13 2011, the Administrator shall submit to the Sec14 retary of Health and Human Services a report on 

15 such assessment and the Secretary shall transmit 

16 such report to the Congress. 

17 (b) UPDATES OF ASSESSMENT.—Not later than Jan18 uary 1, 2013, and biennially thereafter, the Administrator 

19 of the Centers for Medicare & Medicaid Services shall re20 view and update the assessment described in subsection 

21 (a) and make such recommendations to the Secretary on 

22 changes in research priorities referred to in such sub23 section as may be appropriate. The Secretary shall submit 

24 to the Congress a report on such recommendations. 

25 (c) MEDICARE COST-INTENSIVE RESEARCH FUND.— 

26 There is established in the Treasury of the United States 


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1 a Fund to be known as the Medicare Cost-Intensive Re2 search Fund (in this subsection referred to as the 

3 ‘‘Fund’’), consisting of such amounts as may be appro4 priated or credited to such Fund for research priorities 

5 identified as a result of the assessments conducted under 

6 this section. 

7 SUBDIVISION C—PUBLIC 

8 HEALTH AND WORKFORCE 

9 DEVELOPMENT 

10 SEC. 2001. TABLE OF CONTENTS; REFERENCES. 

11 (a) TABLE OF CONTENTS.—The table of contents of 

12 this subdivision is as follows: 

Sec. 2001. Table of contents; references. 

Sec. 2002. Public Health Investment Fund. 

TITLE I—COMMUNITY HEALTH CENTERS 

Sec. 2101. Increased funding. 

TITLE II—WORKFORCE 

Subtitle A—Primary Care Workforce 

PART 1—NATIONAL HEALTH SERVICE CORPS

Sec. 2201. National Health Service Corps. 

Sec. 2202. Authorizations of appropriations. 

PART 2—PROMOTION OF PRIMARY CARE AND DENTISTRY

Sec. 2211. Frontline health providers. 

‘‘SUBPART XI—HEALTH PROFESSIONAL NEEDS AREAS

‘‘Sec. 340H. In general. 

‘‘Sec. 340I. Loan repayments. 

‘‘Sec. 340J. Report. 

‘‘Sec. 340K. Allocation. 

Sec. 2212. Primary care student loan funds. 

Sec. 2213. Training in family medicine, general internal medicine, general pediatrics, geriatrics, and physician assistantship. 

Sec. 2214. Training of medical residents in community-based settings. 


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Sec. 2215. Training for general, pediatric, and public health dentists and dental 

hygienists. 

Sec. 2216. Authorization of appropriations. 

Subtitle B—Nursing Workforce 

Sec. 2221. Amendments to Public Health Service Act. 

Subtitle C—Public Health Workforce 

Sec. 2231. Public Health Workforce Corps. 

‘‘SUBPART XII—PUBLIC HEALTH WORKFORCE

‘‘Sec. 340L. Public Health Workforce Corps. 

‘‘Sec. 340M. Public Health Workforce Scholarship Program. 

‘‘Sec. 340N. Public Health Workforce Loan Repayment Program. 

Sec. 2232. Enhancing the public health workforce. 

Sec. 2233. Public health training centers. 

Sec. 2234. Preventive medicine and public health training grant program. 

Sec. 2235. Authorization of appropriations. 

Subtitle D—Adapting Workforce to Evolving Health System Needs 

PART 1—HEALTH PROFESSIONS TRAINING FOR DIVERSITY

Sec. 2241. Scholarships for disadvantaged students, loan repayments and fellowships regarding faculty positions, and educational assistance 

in the health professions regarding individuals from disadvantaged backgrounds. 

Sec. 2242. Nursing workforce diversity grants. 

Sec. 2243. Coordination of diversity and cultural competency programs. 

PART 2—INTERDISCIPLINARY TRAINING PROGRAMS

Sec. 2251. Cultural and linguistic competency training for health care professionals. 

Sec. 2252. Innovations in interdisciplinary care training. 

PART 3—ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND

ASSESSMENT

Sec. 2261. Health workforce evaluation and assessment. 

PART 4—HEALTH WORKFORCE ASSESSMENT

Sec. 2271. Health workforce assessment. 

PART 5—AUTHORIZATION OF APPROPRIATIONS

Sec. 2281. Authorization of appropriations. 

TITLE III—PREVENTION AND WELLNESS 

Sec. 2301. Prevention and wellness. 

‘‘TITLE XXXI—PREVENTION AND WELLNESS 

‘‘Subtitle A—Prevention and Wellness Trust 


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‘‘Sec. 3111. Prevention and Wellness Trust. 

‘‘Subtitle B—National Prevention and Wellness Strategy 

‘‘Sec. 3121. National Prevention and Wellness Strategy. 

‘‘Subtitle C—Prevention Task Forces 

‘‘Sec. 3131. Task Force on Clinical Preventive Services. 

‘‘Sec. 3132. Task Force on Community Preventive Services. 

‘‘Subtitle D—Prevention and Wellness Research 

‘‘Sec. 3141. Prevention and wellness research activity coordination. 

‘‘Sec. 3142. Community prevention and wellness research grants. 

‘‘Subtitle E—Delivery of Community Prevention and Wellness Services 

‘‘Sec. 3151. Community prevention and wellness services grants. 

‘‘Subtitle F—Core Public Health Infrastructure 

‘‘Sec. 3161. Core public health infrastructure for State, local, and tribal 

health departments. 

‘‘Sec. 3162. Core public health infrastructure and activities for CDC. 

‘‘Subtitle G—General Provisions 

‘‘Sec. 3171. Definitions. 

TITLE IV—QUALITY AND SURVEILLANCE 

Sec. 2401. Implementation of best practices in the delivery of health care. 

Sec. 2402. Assistant Secretary for Health Information. 

Sec. 2403. Authorization of appropriations. 

TITLE V—OTHER PROVISIONS 

Subtitle A—Drug Discount for Rural and Other Hospitals 

Sec. 2501. Expanded participation in 340B program. 

Sec. 2502. Extension of discounts to inpatient drugs. 

Sec. 2503. Effective date. 

Subtitle B—School-Based Health Clinics 

Sec. 2511. School-based health clinics. 

Subtitle C—National Medical Device Registry 

Sec. 2521. National medical device registry. 

Subtitle D—Grants for Comprehensive Programs To Provide Education to 

Nurses and Create a Pipeline to Nursing 

Sec. 2531. Establishment of grant program. 

Subtitle E—States Failing To Adhere to Certain Employment Obligations 

Sec. 2541. Limitation on Federal funds. 


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1 (b) REFERENCES.—Except as otherwise specified, 

2 whenever in this subdivision an amendment is expressed 

3 in terms of an amendment to a section or other provision, 

4 the reference shall be considered to be made to a section 

5 or other provision of the Public Health Service Act (42 

6 U.S.C. 201 et seq.). 

7 SEC. 2002. PUBLIC HEALTH INVESTMENT FUND. 

8 (a) ESTABLISHMENT OF FUNDS.— 

9 (1) IN GENERAL.—There is established a fund 

10 to be known as the ‘‘Public Health Investment 

11 Fund’’ (referred to in this section as the ‘‘Fund’’). 

12 (2) FUNDING.— 

13 (A) There shall be deposited into the 

14 Fund— 

15 (i) for fiscal year 2010, 

16 $4,600,000,000; 

17 (ii) for fiscal year 2011, 

18 $5,600,000,000; 

19 (iii) for fiscal year 2012, 

20 $6,900,000,000; 

21 (iv) for fiscal year 2013, 

22 $7,800,000,000; 

23 (v) for fiscal year 2014, 

24 $9,000,000,000; 


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1 (vi) for fiscal year 2015, 

2 $9,400,000,000; 

3 (vii) for fiscal year 2016, 

4 $10,100,000,000; 

5 (viii) for fiscal year 2017, 

6 $10,800,000,000; 

7 (ix) for fiscal year 2018, 

8 $11,800,000,000; and 

9 (x) for fiscal year 2019, 

10 $12,700,000,000. 

11 (B) Amounts deposited into the Fund shall 

12 be derived from general revenues of the Treas13 ury. 

14 (b) AUTHORIZATION OF APPROPRIATIONS FROM THE

15 FUND.— 

16 (1) NEW FUNDING.— 

17 (A) IN GENERAL.—Amounts in the Fund 

18 are authorized to be appropriated by the Com19 mittees on Appropriations of the House of Rep20 resentatives and the Senate for carrying out ac21 tivities under designated public health provi22 sions. 

23 (B) DESIGNATED PROVISIONS.—For pur24 poses of this paragraph, the term ‘‘designated 

25 public health provisions’’ means the provisions 


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1 for which amounts are authorized to be appro2 priated under section 330(s), 338(c), 338H–1, 

3 799C, 872, or 3111 of the Public Health Serv4 ice Act, as added by this subdivision. 

5 (2) BASELINE FUNDING.— 

6 (A) IN GENERAL.—Amounts in the Fund 

7 are authorized to be appropriated (as described 

8 in paragraph (1)) for a fiscal year only if (ex9 cluding any amounts in or appropriated from 

10 the Fund)— 

11 (i) the amounts specified in subpara12 graph (B) for the fiscal year involved are 

13 equal to or greater than the amounts spec14 ified in subparagraph (B) for fiscal year 

15 2008; and 

16 (ii) the amounts appropriated, out of 

17 the general fund of the Treasury, to the 

18 Prevention and Wellness Trust under sec19 tion 3111 of the Public Health Service 

20 Act, as added by this subdivision, for the 

21 fiscal year involved are equal to or greater 

22 than the funds— 

23 (I) appropriated under the head24 ing ‘‘Prevention and Wellness Fund’’ 

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1 ican Recovery and Reinvestment Act 

2 of 2009 (Public Law 111–5); and 

3 (II) allocated by the second pro4 viso under such heading for evidence5 based clinical and community-based 

6 prevention and wellness strategies. 

7 (B) AMOUNTS SPECIFIED.—The amounts 

8 specified in this subparagraph, with respect to 

9 a fiscal year, are the amounts appropriated for 

10 the following: 

11 (i) Community health centers (includ12 ing funds appropriated under the authority 

13 of section 330 of the Public Health Service 

14 Act (42 U.S.C. 254b)). 

15 (ii) The National Health Service 

16 Corps Program (including funds appro17 priated under the authority of section 338 

18 of such Act (42 U.S.C. 254k)). 

19 (iii) The National Health Service 

20 Corps Scholarship and Loan Repayment 

21 Programs (including funds appropriated 

22 under the authority of section 338H of 

23 such Act (42 U.S.C. 254q)). 

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1 cine or osteopathic medicine under the au2 thority of section 735(f) of such Act (42 

3 U.S.C. 292y(f))). 

4 (v) Primary care education programs 

5 (including funds appropriated under the 

6 authority of sections 736, 740, 741, and 

7 747 of such Act (42 U.S.C. 293, 293d, 

8 and 293k)). 

9 (vi) Sections 761 and 770 of such Act 

10 (42 U.S.C. 294n and 295e). 

11 (vii) Nursing workforce development 

12 (including funds appropriated under the 

13 authority of title VIII of such Act (42 

14 U.S.C. 296 et seq.)). 

15 (viii) The National Center for Health 

16 Statistics (including funds appropriated 

17 under the authority of sections 304, 306, 

18 307, and 308 of such Act (42 U.S.C. 

19 242b, 242k, 242l, and 242m)). 

20 (ix) The Agency for Healthcare Re21 search and Quality (including funds appro22 priated under the authority of title IX of 

23 such Act (42 U.S.C. 299 et seq.)). 

24 (3) BUDGETARY IMPLICATIONS.—Amounts ap25 propriated under this section, and outlays flowing 


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1 from such appropriations, shall not be taken into ac2 count for purposes of any budget enforcement proce3 dures including allocations under section 302(a) and 

4 (b) of the Balanced Budget and Emergency Deficit 

5 Control Act and budget resolutions for fiscal years 

6 during which appropriations are made from the 

7 Fund. 

8 TITLE I—COMMUNITY HEALTH 

9 CENTERS 

10 SEC. 2101. INCREASED FUNDING. 

11 Section 330 of the Public Health Service Act (42 

12 U.S.C. 254b) is amended— 

13 (1) in subsection (r)(1)— 

14 (A) in subparagraph (D), by striking 

15 ‘‘and’’ at the end; 

16 (B) in subparagraph (E), by striking the 

17 period at the end and inserting ‘‘; and’’; and 

18 (C) by inserting at the end the following: 

19 ‘‘(F) Such sums as may be necessary for 

20 each of fiscal years 2013 and 2019.’’; and 

21 (2) by inserting after subsection (r) the fol22 lowing: 

23 ‘‘(s) ADDITIONAL FUNDING.—For the purpose of 

24 carrying out this section, in addition to any other amounts 

25 authorized to be appropriated for such purpose, there are 


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1 authorized to be appropriated, out of any monies in the 

2 Public Health Investment Fund, the following: 

3 ‘‘(1) For fiscal year 2010, $1,000,000,000. 

4 ‘‘(2) For fiscal year 2011, $1,500,000,000. 

5 ‘‘(3) For fiscal year 2012, $2,500,000,000. 

6 ‘‘(4) For fiscal year 2013, $3,000,000,000. 

7 ‘‘(5) For fiscal year 2014, $4,000,000,000. 

8 ‘‘(6) For fiscal year 2015, $4,400,000,000. 

9 ‘‘(7) For fiscal year 2016, $4,800,000,000. 

10 ‘‘(8) For fiscal year 2017, $5,300,000,000. 

11 ‘‘(9) For fiscal year 2018, $5,900,000,000. 

12 ‘‘(10) For fiscal year 2019, $6,400,000,000.’’. 

13 TITLE II—WORKFORCE 

14 Subtitle A—Primary Care 

15 Workforce 

16 PART 1—NATIONAL HEALTH SERVICE CORPS 

17 SEC. 2201. NATIONAL HEALTH SERVICE CORPS. 

18 (a) FULFILLMENT OF OBLIGATED SERVICE RE19 QUIREMENT THROUGH HALF-TIME SERVICE.— 

20 (1) WAIVERS.—Subsection (i) of section 331 

21 (42 U.S.C. 254d) is amended— 

22 (A) in paragraph (1), by striking ‘‘In car23 rying out subpart III’’ and all that follows 

24 through the period and inserting ‘‘In carrying 

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1 ance with this subsection, issue waivers to indi2 viduals who have entered into a contract for ob3 ligated service under the Scholarship Program 

4 or the Loan Repayment Program under which 

5 the individuals are authorized to satisfy the re6 quirement of obligated service through pro7 viding clinical practice that is half-time.’’; 

8 (B) in paragraph (2)— 

9 (i) in subparagraphs (A)(ii) and (B), 

10 by striking ‘‘less than full time’’ each place 

11 it appears and inserting ‘‘half time’’; 

12 (ii) in subparagraphs (C) and (F), by 

13 striking ‘‘less than full-time service’’ each 

14 place it appears and inserting ‘‘half-time 

15 service’’; and 

16 (iii) by amending subparagraphs (D) 

17 and (E) to read as follows: 

18 ‘‘(D) the entity and the Corps member agree in 

19 writing that the Corps member will perform half20 time clinical practice; 

21 ‘‘(E) the Corps member agrees in writing to 

22 fulfill all of the service obligations under section 

23 338C through half-time clinical practice and ei24 ther— 


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1 ‘‘(i) double the period of obligated service; 

2 or 

3 ‘‘(ii) in the case of contracts entered into 

4 under section 338B, accept a minimum service 

5 obligation of 2 years with an award amount 

6 equal to 50 percent of the amount that would 

7 otherwise be payable for full-time service; and’’; 

8 and 

9 (C) in paragraph (3), by striking ‘‘In eval10 uating a demonstration project described in 

11 paragraph (1)’’ and inserting ‘‘In evaluating 

12 waivers issued under paragraph (1)’’. 

13 (2) DEFINITIONS.—Subsection (j) of section 

14 331 (42 U.S.C. 254d) is amended by adding at the 

15 end the following: 

16 ‘‘(5) The terms ‘full time’ and ‘full-time’ mean 

17 a minimum of 40 hours per week in a clinical prac18 tice, for a minimum of 45 weeks per year. 

19 ‘‘(6) The terms ‘half time’ and ‘half-time’ mean 

20 a minimum of 20 hours per week (not to exceed 39 

21 hours per week) in a clinical practice, for a min22 imum of 45 weeks per year.’’. 

23 (b) REAPPOINTMENT TO NATIONAL ADVISORY COUN24 CIL.—Section 337(b)(1) (42 U.S.C. 254j(b)(1)) is amendVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00879 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ed by striking ‘‘Members may not be reappointed to the 

2 Council.’’. 

3 (c) LOAN REPAYMENT AMOUNT.—Section 

4 338B(g)(2)(A) is amended (42 U.S.C. 254l–1(g)(2)(A)) 

5 by striking ‘‘$35,000’’ and inserting ‘‘$50,000, plus, be6 ginning with fiscal year 2012, an amount determined by 

7 the Secretary on an annual basis to reflect inflation,’’. 

8 (d) TREATMENT OF TEACHING AS OBLIGATED SERV9 ICE.—Subsection (a) of section 338C (42 U.S.C. 254m) 

10 is amended by adding at the end the following: ‘‘The Sec11 retary may treat teaching as clinical practice for up to 

12 20 percent of such period of obligated service.’’. 

13 SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS. 

14 (a) NATIONAL HEALTH SERVICE CORPS PRO15 GRAM.—Section 338 (42 U.S.C. 254k) is amended— 

16 (1) in subsection (a), by striking ‘‘2012’’ and 

17 inserting ‘‘2019’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(c) For the purpose of carrying out this subpart, 

20 in addition to any other amounts authorized to be appro21 priated for such purpose, there are authorized to be appro22 priated, out of any monies in the Public Health Invest23 ment Fund, the following: 

24 ‘‘(1) $63,000,000 for fiscal year 2010. 

25 ‘‘(2) $66,000,000 for fiscal year 2011. 


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1 ‘‘(3) $70,000,000 for fiscal year 2012. 

2 ‘‘(4) $73,000,000 for fiscal year 2013. 

3 ‘‘(5) $77,000,000 for fiscal year 2014. 

4 ‘‘(6) $81,000,000 for fiscal year 2015. 

5 ‘‘(7) $85,000,000 for fiscal year 2016. 

6 ‘‘(8) $89,000,000 for fiscal year 2017. 

7 ‘‘(9) $94,000,000 for fiscal year 2018. 

8 ‘‘(10) $98,000,000 for fiscal year 2019.’’. 

9 (b) SCHOLARSHIP AND LOAN REPAYMENT PRO10 GRAMS.—Subpart III of part D of title III of the Public 

11 Health Service Act (42 U.S.C. 254l et seq.) is amended— 

12 (1) in section 338H(a)— 

13 (A) in paragraph (4), by striking ‘‘and’’ at 

14 the end; 

15 (B) in paragraph (5), by striking the pe16 riod at the end and inserting ‘‘; and’’; and 

17 (C) by adding at the end the following: 

18 ‘‘(6) for fiscal years 2013 and 2019, such sums 

19 as may be necessary.’’; and 

20 (2) by inserting after section 338H the fol21 lowing: 

22 ‘‘SEC. 338H–1. ADDITIONAL FUNDING. 

23 ‘‘For the purpose of carrying out this subpart, in ad24 dition to any other amounts authorized to be appropriated 

25 for such purpose, there are authorized to be appropriated, 


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1 out of any monies in the Public Health Investment Fund, 

2 the following: 

3 ‘‘(1) $254,000,000 for fiscal year 2010. 

4 ‘‘(2) $266,000,000 for fiscal year 2011. 

5 ‘‘(3) $278,000,000 for fiscal year 2012. 

6 ‘‘(4) $292,000,000 for fiscal year 2013. 

7 ‘‘(5) $306,000,000 for fiscal year 2014. 

8 ‘‘(6) $321,000,000 for fiscal year 2015. 

9 ‘‘(7) $337,000,000 for fiscal year 2016. 

10 ‘‘(8) $354,000,000 for fiscal year 2017. 

11 ‘‘(9) $372,000,000 for fiscal year 2018. 

12 ‘‘(10) $391,000,000 for fiscal year 2019.’’. 

13 PART 2—PROMOTION OF PRIMARY CARE AND 

14 DENTISTRY 

15 SEC. 2211. FRONTLINE HEALTH PROVIDERS. 

16 Part D of title III (42 U.S.C. 254b et seq.) is amend17 ed by adding at the end the following: 

18 ‘‘Subpart XI—Health Professional Needs Areas 

19 ‘‘SEC. 340H. IN GENERAL. 

20 ‘‘(a) PROGRAM.—The Secretary, acting through the 

21 Administrator of the Health Resources and Services Ad22 ministration, shall establish a program, to be known as 

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1 sional needs areas through loan repayments under section 

2 340I. 

3 ‘‘(b) DESIGNATION OF HEALTH PROFESSIONAL

4 NEEDS AREAS.— 

5 ‘‘(1) IN GENERAL.—In this subpart, the term 

6 ‘health professional needs area’ means an area, pop7 ulation, or facility that is designated by the Sec8 retary in accordance with paragraph (2). 

9 ‘‘(2) DESIGNATION.—To be designated by the 

10 Secretary as a health professional needs area under 

11 this subpart: 

12 ‘‘(A) In the case of an area, the area must 

13 be a rational area for the delivery of health 

14 services. 

15 ‘‘(B) The area, population, or facility must 

16 have, in one or more health disciplines, special17 ties, or subspecialties for the population served, 

18 as determined by the Secretary— 

19 ‘‘(i) insufficient capacity of health 

20 professionals; or 

21 ‘‘(ii) high needs for health services. 

22 ‘‘(C) With respect to the delivery of pri23 mary health services, the area, population, or 

24 facility must not include a health professional 

25 shortage area (as designated under section 


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1 332), except that the area, population, or facil2 ity may include such a health professional 

3 shortage area to which no member of the Na4 tional Health Service Corps is currently as5 signed. 

6 ‘‘(c) ELIGIBILITY.—To be eligible to participate in 

7 the Program, an individual shall— 

8 ‘‘(1) hold a degree in a course of study or pro9 gram (approved by the Secretary) from a school de10 fined in section 799B(1)(A) (other than a school of 

11 public health); 

12 ‘‘(2) hold a degree in a course of study or pro13 gram (approved by the Secretary) from a school or 

14 program defined in subparagraph (C), (D), or 

15 (E)(4) of section 799B(1), as designated by the Sec16 retary; 

17 ‘‘(3) be enrolled as a full-time student— 

18 ‘‘(A) in a school or program defined in 

19 subparagraph (C), (D), or (E)(4) of section 

20 799B(1), as designated by the Secretary, or a 

21 school described in paragraph (1); and 

22 ‘‘(B) in the final year of a course of study 

23 or program, offered by such school or program 

24 and approved by the Secretary, leading to a de25 gree in a discipline referred to in subparagraph 


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1 (A) (other than a graduate degree in public 

2 health), (C), (D), or (E)(4) of section 799B(1); 

3 ‘‘(4) be a practitioner described in section 

4 1842(b)(18)(C) or 1848(k)(3)(B)(iii) or (iv) of the 

5 Social Security Act; or 

6 ‘‘(5) be a practitioner in the field of respiratory 

7 therapy, medical technology, or radiologic tech8 nology. 

9 ‘‘(d) DEFINITION.—In this subpart, the term ‘pri10 mary health services’ has the meaning given to such term 

11 in section 331(a)(3)(D). 

12 ‘‘SEC. 340I. LOAN REPAYMENTS. 

13 ‘‘(a) LOAN REPAYMENTS.—The Secretary, acting 

14 through the Administrator of the Health Resources and 

15 Services Administration, shall enter into contracts with in16 dividuals under which— 

17 ‘‘(1) the individual agrees— 

18 ‘‘(A) to serve as a full-time primary health 

19 services provider or as a full-time or part-time 

20 provider of other health services for a period of 

21 time equal to 2 years or such longer period as 

22 the individual may agree to; 

23 ‘‘(B) to serve in a health professional 

24 needs area in a health discipline, specialty, or a 

25 subspecialty for which the area, population, or 


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1 facility is designated as a health professional 

2 needs area under section 340H; and 

3 ‘‘(C) in the case of an individual described 

4 in subsection 340H(c)(3) who is in the final 

5 year of study and who has accepted employ6 ment as primary health services provider or 

7 provider of other health services in accordance 

8 with subparagraphs (A) and (B), to complete 

9 the education or training and maintain an ac10 ceptable level of academic standing (as deter11 mined by the educational institution offering 

12 the course of study or training); and 

13 ‘‘(2) the Secretary agrees to pay, for each year 

14 of such service, an amount on the principal and in15 terest of the undergraduate or graduate educational 

16 loans (or both) of the individual that is not more 

17 than 50 percent of the average award made under 

18 the National Health Service Corps Loan Repayment 

19 Program under subpart III in that year. 

20 ‘‘(b) PRACTICE SETTING.—A contract entered into 

21 under this section shall allow the individual receiving the 

22 loan repayment to satisfy the service requirement de23 scribed in subsection (a)(1) through employment in a solo 

24 or group practice, a clinic, an accredited public or private 


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1 nonprofit hospital, or any other health care entity, as 

2 deemed appropriate by the Secretary. 

3 ‘‘(c) APPLICATION OF CERTAIN PROVISIONS.—The 

4 provisions of subpart III of part D shall, except as incon5 sistent with this section, apply to the loan repayment pro6 gram under this subpart in the same manner and to the 

7 same extent as such provisions apply to the National 

8 Health Service Corps Loan Repayment Program estab9 lished under section 338B. 

10 ‘‘(d) INSUFFICIENT NUMBER OF APPLICANTS.—If 

11 there are an insufficient number of applicants for loan re12 payments under this section to obligate all appropriated 

13 funds, the Secretary shall transfer the unobligated funds 

14 to the National Health Service Corps for the purpose of— 

15 ‘‘(1) recruitment of sufficient applicants for the 

16 National Health Service Corps for the following 

17 year; or 

18 ‘‘(2) making additional loan repayments under 

19 section 338B if there is an excess number of quali20 fied applicants for loan repayments under such sec21 tion. 

22 ‘‘SEC. 340J. REPORT. 

23 ‘‘The Secretary shall submit to the Congress an an24 nual report on the program carried out under this subpart. 


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1 ‘‘SEC. 340K. ALLOCATION. 

2 ‘‘Of the amount of funds obligated under this subpart 

3 each fiscal year for loan repayments— 

4 ‘‘(1) 90 percent shall be for physicians and 

5 other health professionals providing primary health 

6 services; and 

7 ‘‘(2) 10 percent shall be for health professionals 

8 not described in paragraph (1).’’. 

9 SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS. 

10 (a) LOAN PROVISIONS.—Section 722 (42 U.S.C. 

11 292r) is amended by striking subsection (e) and inserting 

12 the following: 

13 ‘‘(e) RATE OF INTEREST.—Such loans shall bear in14 terest, on the unpaid balance of the loan, computed only 

15 for periods for which the loan is repayable, at the rate 

16 of 2 percentage points less than the applicable rate of in17 terest described in section 427A(l)(1) of the Higher Edu18 cation Act of 1965 per year.’’. 

19 (b) MEDICAL SCHOOLS AND PRIMARY HEALTH

20 CARE.—Subsection (a) of section 723 (42 U.S.C. 292s) 

21 is amended— 

22 (1) in paragraph (1), by striking subparagraph 

23 (B) and inserting the following: 

24 ‘‘(B) to practice in such care for 10 years 

25 (including residency training in primary health 


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1 care) or through the date on which the loan is 

2 repaid in full, whichever occurs first.’’; and 

3 (2) by striking paragraph (3) and inserting the 

4 following: 

5 ‘‘(3) NONCOMPLIANCE BY STUDENT.—If an in6 dividual fails to comply with an agreement entered 

7 into pursuant to paragraph (1), such agreement 

8 shall provide that the total interest to be paid on the 

9 loan, over the course of the loan period, shall equal 

10 the total amount of interest that would have been in11 curred by the individual if, from the outset of the 

12 loan, the loan was repayable at the rate of interest 

13 described in section 427A(l)(1) of the Higher Edu14 cation Act of 1965 per year instead of the rate of 

15 interest described in section 722(e).’’. 

16 (c) STUDENT LOAN GUIDELINES.— 

17 (1) IN GENERAL.—Section 735 (42 U.S.C. 

18 292y) is amended— 

19 (A) by redesignating subsection (f) as sub20 section (g); and 

21 (B) by inserting after subsection (e) the 

22 following: 

23 ‘‘(f) DETERMINATION OF FINANCIAL NEED.—The 

24 Secretary— 


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1 ‘‘(1) may require, or authorize a school or other 

2 entity to require, the submission of financial infor3 mation to determine the financial resources available 

4 to any individual seeking assistance under this sub5 part; and 

6 ‘‘(2) shall take into account the extent to which 

7 such individual is financially independent in deter8 mining whether to require or authorize the submis9 sion of such information regarding such individual’s 

10 family members.’’. 

11 (2) REVISED GUIDELINES.—The Secretary of 

12 Health and Human Services shall— 

13 (A) strike the second sentence of section 

14 57.206(b) of title 42, Code of Federal Regula15 tions; and 

16 (B) make such other revisions to guidelines 

17 and regulations in effect as of the date of the 

18 enactment of this Act as may be necessary for 

19 consistency with the amendments made by 

20 paragraph (1). 

21 SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL IN22 TERNAL MEDICINE, GENERAL PEDIATRICS, 

23 GERIATRICS, AND PHYSICIAN 

24 ASSISTANTSHIP. 

25 Section 747 (42 U.S.C. 293k) is amended— 


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1 (1) by amending the section heading to read as 

2 follows: ‘‘PRIMARY CARE TRAINING AND EN3 HANCEMENT’’; 

4 (2) by redesignating subsection (e) as sub5 section (f); and 

6 (3) by striking subsections (a) through (d) and 

7 inserting the following: 

8 ‘‘(a) PROGRAM.—The Secretary shall establish a pri9 mary care training and capacity building program con10 sisting of awarding grants and contracts under sub11 sections (b) and (c). 

12 ‘‘(b) SUPPORT AND DEVELOPMENT OF PRIMARY

13 CARE TRAINING PROGRAMS.— 

14 ‘‘(1) IN GENERAL.—The Secretary shall make 

15 grants to, or enter into contracts with, eligible enti16 ties— 

17 ‘‘(A) to plan, develop, operate, or partici18 pate in an accredited professional training pro19 gram, including an accredited residency or in20 ternship program, in the field of family medi21 cine, general internal medicine, general pediat22 rics, or geriatrics for medical students, interns, 

23 residents, or practicing physicians; 

24 ‘‘(B) to provide financial assistance in the 

25 form of traineeships and fellowships to medical 


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1 students, interns, residents, or practicing physi2 cians, who are participants in any such pro3 gram, and who plan to specialize or work in 

4 family medicine, general internal medicine, gen5 eral pediatrics, or geriatrics; 

6 ‘‘(C) to plan, develop, operate, or partici7 pate in an accredited program for the training 

8 of physicians who plan to teach in family medi9 cine, general internal medicine, general pediat10 rics, or geriatrics training programs including 

11 in community-based settings; 

12 ‘‘(D) to provide financial assistance in the 

13 form of traineeships and fellowships to prac14 ticing physicians who are participants in any 

15 such programs and who plan to teach in a fam16 ily medicine, general internal medicine, general 

17 pediatrics, or geriatrics training program; and 

18 ‘‘(E) to plan, develop, operate, or partici19 pate in an accredited program for physician as20 sistant education, and for the training of indi21 viduals who plan to teach in programs to pro22 vide such training. 

23 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

24 or contract under paragraph (1), an entity shall 

25 be— 


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1 ‘‘(A) an accredited school of medicine or 

2 osteopathic medicine, public or nonprofit private 

3 hospital, or physician assistant training pro4 gram; 

5 ‘‘(B) a public or private nonprofit entity; 

6 or 

7 ‘‘(C) a consortium of 2 or more entities de8 scribed in subparagraphs (A) and (B). 

9 ‘‘(c) CAPACITY BUILDING IN PRIMARY CARE.— 

10 ‘‘(1) IN GENERAL.—The Secretary shall make 

11 grants to or enter into contracts with eligible entities 

12 to establish, maintain, or improve— 

13 ‘‘(A) academic administrative units (in14 cluding departments, divisions, or other appro15 priate units) in the specialties of family medi16 cine, general internal medicine, general pediat17 rics, or geriatrics; or 

18 ‘‘(B) programs that improve clinical teach19 ing in such specialties. 

20 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

21 or contract under paragraph (1), an entity shall be 

22 an accredited school of medicine or osteopathic med23 icine. 


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1 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

2 under this section, the Secretary shall give preference to 

3 entities that have a demonstrated record of the following: 

4 ‘‘(1) Training the greatest percentage, or sig5 nificantly improving the percentage, of health care 

6 professionals who provide primary care. 

7 ‘‘(2) Training individuals who are from under8 represented minority groups or disadvantaged back9 grounds. 

10 ‘‘(3) A high rate of placing graduates in prac11 tice settings having the principal focus of serving in 

12 underserved areas or populations experiencing health 

13 disparities (including serving patients eligible for 

14 medical assistance under title XIX of the Social Se15 curity Act or for child health assistance under title 

16 XXI of such Act or those with special health care 

17 needs). 

18 ‘‘(4) Supporting teaching programs that ad19 dress the health care needs of vulnerable popu20 lations. 

21 ‘‘(e) REPORT.—The Secretary shall submit to the 

22 Congress an annual report on the program carried out 

23 under this section. 


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1 ‘‘(f) DEFINITION.—In this section, the term ‘health 

2 disparities’ has the meaning given the term in section 

3 3171.’’. 

4 SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMU5 NITY-BASED SETTINGS. 

6 Title VII (42 U.S.C. 292 et seq.) is amended— 

7 (1) by redesignating section 748 as 749A; and 

8 (2) by inserting after section 747 the following: 

9 ‘‘SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMU10 NITY-BASED SETTINGS. 

11 ‘‘(a) PROGRAM.—The Secretary shall establish a pro12 gram for the training of medical residents in community13 based settings consisting of awarding grants or contracts 

14 under this section. 

15 ‘‘(b) DEVELOPMENT AND OPERATION OF COMMU16 NITY-BASED PROGRAMS.—The Secretary shall make 

17 grants to, or enter into contracts with, eligible entities— 

18 ‘‘(1) to plan and develop a new primary care 

19 residency training program, which may include— 

20 ‘‘(A) planning and developing curricula; 

21 ‘‘(B) recruiting and training residents and 

22 faculty; and 

23 ‘‘(C) other activities designated to result in 

24 accreditation of such a program; or 


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1 ‘‘(2) to operate or participate in an established 

2 primary care residency training program, which may 

3 include— 

4 ‘‘(A) planning and developing curricula; 

5 ‘‘(B) recruitment and training of residents; 

6 and 

7 ‘‘(C) retention of faculty. 

8 ‘‘(c) ELIGIBLE ENTITY.—To be eligible to receive a 

9 grant or contract under subsection (b), an entity shall— 

10 ‘‘(1) be designated as a recipient of payment 

11 for the direct costs of medical education under sec12 tion 1886(k) of the Social Security Act; 

13 ‘‘(2) be designated as an approved teaching 

14 health center under section 1502(d) of the America’s 

15 Affordable Health Choices Act of 2009 and con16 tinuing to participate in the demonstration project 

17 under such section; or 

18 ‘‘(3) be an applicant for designation described 

19 in paragraph (1) or (2) and have demonstrated to 

20 the Secretary appropriate involvement of an accred21 ited teaching hospital to carry out the inpatient re22 sponsibilities associated with a primary care resi23 dency training program. 


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1 ‘‘(d) PREFERENCES.—In awarding grants and con2 tracts under paragraph (1) or (2) of subsection (b), the 

3 Secretary shall give preference to entities that— 

4 ‘‘(1) support teaching programs that address 

5 the health care needs of vulnerable populations; or 

6 ‘‘(2) are a Federally qualified health center (as 

7 defined in section 1861(aa)(4) of the Social Security 

8 Act) or a rural health clinic (as defined in section 

9 1861(aa)(2) of such Act). 

10 ‘‘(e) ADDITIONAL PREFERENCES FOR ESTABLISHED

11 PROGRAMS.—In awarding grants and contracts under 

12 subsection (b)(2), the Secretary shall give preference to 

13 entities that have a demonstrated record of training— 

14 ‘‘(1) a high or significantly improved percentage 

15 of health care professionals who provide primary 

16 care; 

17 ‘‘(2) individuals who are from underrepresented 

18 minority groups or disadvantaged backgrounds; or 

19 ‘‘(3) individuals who practice in settings having 

20 the principal focus of serving underserved areas or 

21 populations experiencing health disparities (including 

22 serving patients eligible for medical assistance under 

23 title XIX of the Social Security Act or for child 

24 health assistance under title XXI of such Act or 

25 those with special health care needs). 


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1 ‘‘(f) PERIOD OF AWARDS.— 

2 ‘‘(1) IN GENERAL.—The period of a grant or 

3 contract under this section— 

4 ‘‘(A) shall not exceed 2 years for awards 

5 under subsection (b)(1); and 

6 ‘‘(B) shall not exceed 5 years for awards 

7 under subsection (b)(2). 

8 ‘‘(2) SPECIAL RULES.— 

9 ‘‘(A) An award of a grant or contract 

10 under subsection (b)(1) shall not be renewed. 

11 ‘‘(B) The period of a grant or contract 

12 awarded to an entity under subsection (b)(2) 

13 shall not overlap with the period of any grant 

14 or contact awarded to the same entity under 

15 subsection (b)(1). 

16 ‘‘(g) REPORT.—The Secretary shall submit to the 

17 Congress an annual report on the program carried out 

18 under this section. 

19 ‘‘(h) DEFINITIONS.—In this section: 

20 ‘‘(1) PRIMARY CARE RESIDENCY TRAINING PRO21 GRAM.—The term ‘primary care residency training 

22 program’ means an approved medical residency 

23 training program described in section 1886(h)(5)(A) 

24 of the Social Security Act that is— 


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1 ‘‘(A) in the case of entities seeking awards 

2 under subsection (b)(1), actively applying to be 

3 accredited by the Accreditation Council for 

4 Graduate Medical Education; or 

5 ‘‘(B) in the case of entities seeking awards 

6 under subsection (b)(2), so accredited. 

7 ‘‘(2) HEALTH DISPARITIES.—The term ‘health 

8 disparities’ has the meaning given the term in sec9 tion 3171.’’. 

10 SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUB11 LIC HEALTH DENTISTS AND DENTAL HYGIEN12 ISTS. 

13 Title VII (42 U.S.C. 292 et seq.) is amended— 

14 (1) in section 791(a)(1), by striking ‘‘747 and 

15 750’’ and inserting ‘‘747, 749, and 750’’; and 

16 (2) by inserting after section 748, as added, the 

17 following: 

18 ‘‘SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUB19 LIC HEALTH DENTISTS AND DENTAL HYGIEN20 ISTS. 

21 ‘‘(a) PROGRAM.—The Secretary shall establish a den22 tal medicine training program consisting of awarding 

23 grants and contracts under this section. 


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1 ‘‘(b) SUPPORT AND DEVELOPMENT OF DENTAL

2 TRAINING PROGRAMS.—The Secretary shall make grants 

3 to, or enter into contracts with, eligible entities— 

4 ‘‘(1) to plan, develop, operate, or participate in 

5 an accredited professional training program for oral 

6 health professionals; 

7 ‘‘(2) to provide financial assistance to oral 

8 health professionals who are in need thereof, who 

9 are participants in any such program, and who plan 

10 to work in general, pediatric, or public heath den11 tistry, or dental hygiene; 

12 ‘‘(3) to plan, develop, operate, or participate in 

13 a program for the training of oral health profes14 sionals who plan to teach in general, pediatric, or 

15 public health dentistry, or dental hygiene; 

16 ‘‘(4) to provide financial assistance in the form 

17 of traineeships and fellowships to oral health profes18 sionals who plan to teach in general, pediatric, or 

19 public health dentistry or dental hygiene; 

20 ‘‘(5) to establish, maintain, or improve— 

21 ‘‘(A) academic administrative units (in22 cluding departments, divisions, or other appro23 priate units) in the specialties of general, pedi24 atric, or public health dentistry; or 


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1 ‘‘(B) programs that improve clinical teach2 ing in such specialties; 

3 ‘‘(6) to plan, develop, operate, or participate in 

4 predoctoral and postdoctoral training in general, pe5 diatric, or public health dentistry programs, or train6 ing for dental hygienists; 

7 ‘‘(7) to plan, develop, operate, or participate in 

8 a loan repayment program for full-time faculty in a 

9 program of general, pediatric, or public health den10 tistry; and 

11 ‘‘(8) to provide technical assistance to pediatric 

12 dental training programs in developing and imple13 menting instruction regarding the oral health status, 

14 dental care needs, and risk-based clinical disease 

15 management of all pediatric populations with an em16 phasis on underserved children. 

17 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con18 tract under subsection (a), an entity shall be— 

19 ‘‘(1) an accredited school of dentistry, training 

20 program in dental hygiene, or public or nonprofit 

21 private hospital; 

22 ‘‘(2) a training program in dental hygiene at an 

23 accredited institution of higher education; 

24 ‘‘(3) a public or private nonprofit entity; or 

25 ‘‘(4) a consortium of— 


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1 ‘‘(A) 2 or more of the entities described in 

2 paragraphs (1) through (3); and 

3 ‘‘(B) an accredited school of public health. 

4 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

5 under this section, the Secretary shall give preference to 

6 entities that have a demonstrated record of the following: 

7 ‘‘(1) Training the greatest percentage, or sig8 nificantly improving the percentage, of oral health 

9 professionals who practice general, pediatric, or pub10 lic health dentistry. 

11 ‘‘(2) Training individuals who are from under12 represented minority groups or disadvantaged back13 grounds. 

14 ‘‘(3) A high rate of placing graduates in prac15 tice settings having the principal focus of serving in 

16 underserved areas or populations experiencing health 

17 disparities (including serving patients eligible for 

18 medical assistance under title XIX of the Social Se19 curity Act or for child health assistance under title 

20 XXI of such Act or those with special health care 

21 needs). 

22 ‘‘(4) Supporting teaching programs that ad23 dress the dental needs of vulnerable populations. 

24 ‘‘(5) Providing instruction regarding the oral 

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1 ical disease management of all pediatric populations 

2 with an emphasis on underserved children. 

3 ‘‘(e) REPORT.—The Secretary shall submit to the 

4 Congress an annual report on the program carried out 

5 under this section. 

6 ‘‘(f) DEFINITION.—In this section: 

7 ‘‘(1) The term ‘health disparities’ has the 

8 meaning given the term in section 3171. 

9 ‘‘(2) The term ‘oral health professional’ means 

10 an individual training or practicing— 

11 ‘‘(A) in general dentistry, pediatric den12 tistry, public health dentistry, or dental hy13 giene; or 

14 ‘‘(B) another dental medicine specialty, as 

15 deemed appropriate by the Secretary.’’. 

16 SEC. 2216. AUTHORIZATION OF APPROPRIATIONS. 

17 (a) IN GENERAL.—Part F of title VII (42 U.S.C. 

18 295j et seq.) is amended by adding at the end the fol19 lowing: 

20 ‘‘SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVEST21 MENT FUND. 

22 ‘‘(a) PROMOTION OF PRIMARY CARE AND DEN23 TISTRY.—For the purpose of carrying out subpart XI of 

24 part D of title III and sections 723, 747, 748, and 749, 

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1 priated for such purpose, there is authorized to be appro2 priated, out of any monies in the Public Health Invest3 ment Fund, the following: 

4 ‘‘(1) $240,000,000 for fiscal year 2010. 

5 ‘‘(2) $253,000,000 for fiscal year 2011. 

6 ‘‘(3) $265,000,000 for fiscal year 2012. 

7 ‘‘(4) $278,000,000 for fiscal year 2013. 

8 ‘‘(5) $292,000,000 for fiscal year 2014. 

9 ‘‘(6) $307,000,000 for fiscal year 2015. 

10 ‘‘(7) $322,000,000 for fiscal year 2016. 

11 ‘‘(8) $338,000,000 for fiscal year 2017. 

12 ‘‘(9) $355,000,000 for fiscal year 2018. 

13 ‘‘(10) $373,000,000 for fiscal year 2019.’’. 

14 (b) EXISTING AUTHORIZATIONS OF APPROPRIA15 TIONS.— 

16 (1) SECTION 735.—Paragraph (1) of section 

17 735(g), as so redesignated, is amended by inserting 

18 ‘‘and such sums as may be necessary for subsequent 

19 years through fiscal year 2019’’ before the period at 

20 the end. 

21 (2) SECTION 747.—Subsection (f), as so redes22 ignated, of section 747 (42 U.S.C. 293k) is amended 

23 by striking ‘‘2002’’ and inserting ‘‘2019’’. 


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1 Subtitle B—Nursing Workforce 

2 SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT. 

3 (a) DEFINITIONS.—Section 801 (42 U.S.C. 296 et 

4 seq.) is amended— 

5 (1) in paragraph (1), by inserting ‘‘nurse-man6 aged health centers’’ after ‘‘nursing centers,’’; and 

7 (2) by adding at the end the following: 

8 ‘‘(16) NURSE-MANAGED HEALTH CENTER.— 

9 The term ‘nurse-managed health center’ means a 

10 nurse-practice arrangement, managed by advanced 

11 practice nurses, that provides primary care or 

12 wellness services to underserved or vulnerable popu13 lations and is associated with an accredited school of 

14 nursing, Federally qualified health center, or inde15 pendent nonprofit health or social services agency.’’. 

16 (a) GRANTS FOR HEALTH PROFESSIONS EDU17 CATION.—Title VIII (42 U.S.C. 296 et seq.) is amended 

18 by striking section 807. 

19 (b) ADVANCED EDUCATION NURSING GRANTS.—Sec20 tion 811(f) (42 U.S.C. 296j(f)) is amended— 

21 (1) by striking paragraph (2); 

22 (2) by redesignating paragraph (3) as para23 graph (2); and 

24 (3) in paragraph (2), as so redesignated, by 

25 striking ‘‘that agrees’’ and all that follows through 


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1 the end and inserting: ‘‘that agrees to expend the 

2 award— 

3 ‘‘(A) to train advanced education nurses 

4 who will practice in health professional shortage 

5 areas designated under section 332; or 

6 ‘‘(B) to increase diversity among advanced 

7 education nurses.’’. 

8 (c) NURSE EDUCATION, PRACTICE, AND RETENTION

9 GRANTS.—Section 831 (42 U.S.C. 296p) is amended— 

10 (1) in subsection (b), by amending paragraph 

11 (3) to read as follows: 

12 ‘‘(3) providing coordinated care, quality care, 

13 and other skills needed to practice nursing;’’; and 

14 (2) by striking subsection (e) and redesignating 

15 subsections (f) through (h) as subsections (e) 

16 through (g), respectively. 

17 (d) STUDENT LOANS.—Subsection (a) of section 836 

18 (42 U.S.C. 297b) is amended— 

19 (1) by striking ‘‘$2,500’’ and inserting 

20 ‘‘$3,300’’; 

21 (2) by striking ‘‘$4,000’’ and inserting 

22 ‘‘$5,200’’; 

23 (3) by striking ‘‘$13,000’’ and inserting 

24 ‘‘$17,000’’; and 


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1 (4) by adding at the end the following: ‘‘Begin2 ning with fiscal year 2012, the dollar amounts speci3 fied in this subsection shall be adjusted by an 

4 amount determined by the Secretary on an annual 

5 basis to reflect inflation.’’. 

6 (e) LOAN REPAYMENT.—Section 846 (42 U.S.C. 

7 297n) is amended— 

8 (1) in subsection (a), by amending paragraph 

9 (3) to read as follows: 

10 ‘‘(3) who enters into an agreement with the 

11 Secretary to serve for a period of not less than 2 

12 years— 

13 ‘‘(A) as a nurse at a health care facility 

14 with a critical shortage of nurses; or 

15 ‘‘(B) as a faculty member at an accredited 

16 school of nursing;’’; and 

17 (2) in subsection (g)(1), by striking ‘‘to provide 

18 health services’’ each place it appears and inserting 

19 ‘‘to provide health services or serve as a faculty 

20 member’’. 

21 (f) NURSE FACULTY LOAN PROGRAM.—Paragraph 

22 (2) of section 846A(c) (42 U.S.C. 297n–1(c)) is amended 

23 by striking ‘‘$30,000’’ and all that follows through the 

24 semicolon and inserting ‘‘$35,000, plus, beginning with 


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1 fiscal year 2012, an amount determined by the Secretary 

2 on an annual basis to reflect inflation;’’. 

3 (g) PUBLIC SERVICE ANNOUNCEMENTS.—Title VIII 

4 (42 U.S.C. 296 et seq.) is amended by striking part H. 

5 (h) TECHNICAL AND CONFORMING AMENDMENTS.— 

6 Title VIII (42 U.S.C. 296 et seq.) is amended— 

7 (1) by redesignating section 810 (relating to 

8 prohibition against discrimination by schools on the 

9 basis of sex) as section 809 and moving such section 

10 so that it follows section 808; 

11 (2) in sections 835, 836, 838, 840, and 842, by 

12 striking the term ‘‘this subpart’’ each place it ap13 pears and inserting ‘‘this part’’; 

14 (3) in section 836(h), by striking the last sen15 tence; 

16 (4) in section 836, by redesignating subsection 

17 (l) as subsection (k); 

18 (5) in section 839, by striking ‘‘839’’ and all 

19 that follows through ‘‘(a)’’ and inserting ‘‘839. (a)’’; 

20 (6) in section 835(b), by striking ‘‘841’’ each 

21 place it appears and inserting ‘‘871’’; 

22 (7) by redesignating section 841 as section 871, 

23 moving part F to the end of the title, and redesig24 nating such part as part H; 

25 (8) in part G— 


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1 (A) by redesignating section 845 as section 

2 851; and 

3 (B) by redesignating part G as part F; and 

4 (9) in part I— 

5 (A) by redesignating section 855 as section 

6 861; and 

7 (B) by redesignating part I as part G. 

8 (i) FUNDING.— 

9 (1) IN GENERAL.—Part H, as redesignated, of 

10 title VIII is amended by adding at the end the fol11 lowing: 

12 ‘‘SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVEST13 MENT FUND. 

14 ‘‘For the purpose of carrying out this title, in addi15 tion to any other amounts authorized to be appropriated 

16 for such purpose, there are authorized to be appropriated, 

17 out of any monies in the Public Health Investment Fund, 

18 the following: 

19 ‘‘(1) $115,000,000 for fiscal year 2010. 

20 ‘‘(2) $122,000,000 for fiscal year 2011. 

21 ‘‘(3) $127,000,000 for fiscal year 2012. 

22 ‘‘(4) $134,000,000 for fiscal year 2013. 

23 ‘‘(5) $140,000,000 for fiscal year 2014. 

24 ‘‘(6) $147,000,000 for fiscal year 2015. 

25 ‘‘(7) $154,000,000 for fiscal year 2016. 


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1 ‘‘(8) $162,000,000 for fiscal year 2017. 

2 ‘‘(9) $170,000,000 for fiscal year 2018. 

3 ‘‘(10) $179,000,000 for fiscal year 2019.’’. 

4 (2) EXISTING AUTHORIZATIONS OF APPROPRIA5 TIONS.— 

6 (A) SECTIONS 831, 846, 846A, AND 861.— 

7 Sections 831(g) (as so redesignated), 846(i)(1) 

8 (42 U.S.C. 297n(i)(1)), 846A(f) (42 U.S.C. 

9 297n–1(f)), and 861(e) (as so redesignated) are 

10 amended by striking ‘‘2007’’ each place it ap11 pears and inserting ‘‘2019’’. 

12 (B) SECTION 871.—Section 871, as so re13 designated, is amended to read as follows: 

14 ‘‘SEC. 871. FUNDING. 

15 ‘‘For the purpose of carrying out parts B, C, and D 

16 (subject to section 845(g)), there are authorized to be ap17 propriated such sums as may be necessary for each fiscal 

18 year through fiscal year 2019.’’. 

19 Subtitle C—Public Health 

20 Workforce 

21 SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS. 

22 Part D of title III (42 U.S.C. 254b et seq.), as 

23 amended by section 2211, is amended by adding at the 

24 end the following: 


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1 ‘‘Subpart XII—Public Health Workforce 

2 ‘‘SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS. 

3 ‘‘(a) ESTABLISHMENT.—There is established, within 

4 the Service, the Public Health Workforce Corps (in this 

5 subpart referred to as the ‘Corps’), for the purpose of en6 suring an adequate supply of public health professionals 

7 throughout the Nation. The Corps shall consist of— 

8 ‘‘(1) such officers of the Regular and Reserve 

9 Corps of the Service as the Secretary may designate; 

10 and 

11 ‘‘(2) such civilian employees of the United 

12 States as the Secretary may appoint. 

13 ‘‘(b) ADMINISTRATION.—Except as provided in sub14 section (c), the Secretary shall carry out this subpart act15 ing through the Administrator of the Health Resources 

16 and Services Administration. 

17 ‘‘(c) PLACEMENT AND ASSIGNMENT.—The Secretary, 

18 acting through the Director of the Centers for Disease 

19 Control and Prevention, shall develop a methodology for 

20 placing and assigning Corps participants as public health 

21 professionals. Such methodology may allow for placing and 

22 assigning such participants in State, local, and tribal 

23 health departments and Federally qualified health centers 

24 (as defined in section 1861(aa)(4) of the Social Security 

25 Act). 


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1 ‘‘(d) APPLICATION OF CERTAIN PROVISIONS.—The 

2 provisions of subpart II shall, except as inconsistent with 

3 this subpart, apply to the Public Health Workforce Corps 

4 in the same manner and to the same extent as such provi5 sions apply to the National Health Service Corps estab6 lished under section 331. 

7 ‘‘(e) REPORT.—The Secretary shall submit to the 

8 Congress an annual report on the programs carried out 

9 under this subpart. 

10 ‘‘SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP 

11 PROGRAM. 

12 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab13 lish the Public Health Workforce Scholarship Program 

14 (referred to in this section as the ‘Program’) for the pur15 pose described in section 340L(a). 

16 ‘‘(b) ELIGIBILITY.—To be eligible to participate in 

17 the Program, an individual shall— 

18 ‘‘(1)(A) be accepted for enrollment, or be en19 rolled, as a full-time or part-time student in a course 

20 of study or program (approved by the Secretary) at 

21 an accredited graduate school or program of public 

22 health; or 

23 ‘‘(B) have demonstrated expertise in public 

24 health and be accepted for enrollment, or be en25 rolled, as a full-time or part-time student in a course 


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1 of study or program (approved by the Secretary) 

2 at— 

3 ‘‘(i) an accredited graduate school or pro4 gram of nursing; health administration, man5 agement, or policy; preventive medicine; labora6 tory science; veterinary medicine; or dental 

7 medicine; or 

8 ‘‘(ii) another accredited graduate school or 

9 program, as deemed appropriate by Secretary; 

10 ‘‘(2) be eligible for, or hold, an appointment as 

11 a commissioned officer in the Regular or Reserve 

12 Corps of the Service or be eligible for selection for 

13 civilian service in the Corps; and 

14 ‘‘(3) sign and submit to the Secretary a written 

15 contract (described in subsection (c)) to serve full16 time as a public health professional, upon the com17 pletion of the course of study or program involved, 

18 for the period of obligated service described in sub19 section (c)(2)(E). 

20 ‘‘(c) CONTRACT.—The written contract between the 

21 Secretary and an individual under subsection (b)(3) shall 

22 contain— 

23 ‘‘(1) an agreement on the part of the Secretary 

24 that the Secretary will— 


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1 ‘‘(A) provide the individual with a scholar2 ship for a period of years (not to exceed 4 aca3 demic years) during which the individual shall 

4 pursue an approved course of study or program 

5 to prepare the individual to serve in the public 

6 health workforce; and 

7 ‘‘(B) accept (subject to the availability of 

8 appropriated funds) the individual into the 

9 Corps; 

10 ‘‘(2) an agreement on the part of the individual 

11 that the individual will— 

12 ‘‘(A) accept provision of such scholarship 

13 to the individual; 

14 ‘‘(B) maintain full-time or part-time enroll15 ment in the approved course of study or pro16 gram described in subsection (b)(1) until the in17 dividual completes that course of study or pro18 gram; 

19 ‘‘(C) while enrolled in the approved course 

20 of study or program, maintain an acceptable 

21 level of academic standing (as determined by 

22 the educational institution offering such course 

23 of study or program); 

24 ‘‘(D) if applicable, complete a residency or 

25 internship; and 


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1 ‘‘(E) serve full-time as a public health pro2 fessional for a period of time equal to the great3 er of— 

4 ‘‘(i) 1 year for each academic year for 

5 which the individual was provided a schol6 arship under the Program; or 

7 ‘‘(ii) 2 years; and 

8 ‘‘(3) an agreement by both parties as to the na9 ture and extent of the scholarship assistance, which 

10 may include— 

11 ‘‘(A) payment of reasonable educational ex12 penses of the individual, including tuition, fees, 

13 books, equipment, and laboratory expenses; and 

14 ‘‘(B) payment of a stipend of not more 

15 than $1,269 (plus, beginning with fiscal year 

16 2011, an amount determined by the Secretary 

17 on an annual basis to reflect inflation) per 

18 month for each month of the academic year in19 volved, with the dollar amount of such a stipend 

20 determined by the Secretary taking into consid21 eration whether the individual is enrolled full22 time or part-time. 

23 ‘‘(d) APPLICATION OF CERTAIN PROVISIONS.—The 

24 provisions of subpart III shall, except as inconsistent with 

25 this subpart, apply to the scholarship program under this 


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1 section in the same manner and to the same extent as 

2 such provisions apply to the National Health Service 

3 Corps Scholarship Program established under section 

4 338A. 

5 ‘‘SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAY6 MENT PROGRAM. 

7 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab8 lish the Public Health Workforce Loan Repayment Pro9 gram (referred to in this section as the ‘Program’) for the 

10 purpose described in section 340L(a). 

11 ‘‘(b) ELIGIBILITY.—To be eligible to participate in 

12 the Program, an individual shall— 

13 ‘‘(1)(A) have a graduate degree from an accred14 ited school or program of public health; 

15 ‘‘(B) have demonstrated expertise in public 

16 health and have a graduate degree in a course of 

17 study or program (approved by the Secretary) 

18 from— 

19 ‘‘(i) an accredited school or program of 

20 nursing; health administration, management, or 

21 policy; preventive medicine; laboratory science; 

22 veterinary medicine; or dental medicine; or 

23 ‘‘(ii) another accredited school or program 

24 approved by the Secretary; or 


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1 ‘‘(C) be enrolled as a full-time or part-time stu2 dent in the final year of a course of study or pro3 gram (approved by the Secretary) offered by a 

4 school or program described in subparagraph (A) or 

5 (B), leading to a graduate degree; 

6 ‘‘(2) be eligible for, or hold, an appointment as 

7 a commissioned officer in the Regular or Reserve 

8 Corps of the Service or be eligible for selection for 

9 civilian service in the Corps; 

10 ‘‘(3) if applicable, complete a residency or in11 ternship; and 

12 ‘‘(4) sign and submit to the Secretary a written 

13 contract (described in subsection (c)) to serve full14 time as a public health professional for the period of 

15 obligated service described in subsection (c)(2). 

16 ‘‘(c) CONTRACT.—The written contract between the 

17 Secretary and an individual under subsection (b)(4) shall 

18 contain— 

19 ‘‘(1) an agreement by the Secretary to repay on 

20 behalf of the individual loans incurred by the indi21 vidual in the pursuit of the relevant public health 

22 workforce educational degree in accordance with the 

23 terms of the contract; 

24 ‘‘(2) an agreement by the individual to serve 

25 full-time as a public health professional for a period 


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1 of time equal to 2 years or such longer period as the 

2 individual may agree to; and 

3 ‘‘(3) in the case of an individual described in 

4 subsection (b)(1)(C) who is in the final year of study 

5 and who has accepted employment as a public health 

6 professional, in accordance with subsection 340L(c), 

7 an agreement on the part of the individual to com8 plete the education or training, maintain an accept9 able level of academic standing (as determined by 

10 the educational institution offering the course of 

11 study or training), and serve the period of obligated 

12 service described in paragraph (2). 

13 ‘‘(d) PAYMENTS.— 

14 ‘‘(1) IN GENERAL.—A loan repayment provided 

15 for an individual under a written contract under the 

16 Program shall consist of payment, in accordance 

17 with paragraph (2), on behalf of the individual of 

18 the principal, interest, and related expenses on gov19 ernment and commercial loans received by the indi20 vidual regarding the undergraduate or graduate edu21 cation of the individual (or both), which loans were 

22 made for reasonable educational expenses, including 

23 tuition, fees, books, equipment, and laboratory ex24 penses, incurred by the individual. 

25 ‘‘(2) PAYMENTS FOR YEARS SERVED.— 


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1 ‘‘(A) IN GENERAL.—For each year of obli2 gated service that an individual contracts to 

3 serve under subsection (c), the Secretary may 

4 pay up to $35,000 (plus, beginning with fiscal 

5 year 2012, an amount determined by the Sec6 retary on an annual basis to reflect inflation) 

7 on behalf of the individual for loans described 

8 in paragraph (1). 

9 ‘‘(B) REPAYMENT SCHEDULE.—Any ar10 rangement made by the Secretary for the mak11 ing of loan repayments in accordance with this 

12 subsection shall provide that any repayments 

13 for a year of obligated service shall be made no 

14 later than the end of the fiscal year in which 

15 the individual completes such year of service. 

16 ‘‘(e) APPLICATION OF CERTAIN PROVISIONS.—The 

17 provisions of subpart III shall, except as inconsistent with 

18 this subpart, apply to the loan repayment program under 

19 this section in the same manner and to the same extent 

20 as such provisions apply to the National Health Service 

21 Corps Loan Repayment Program established under sec22 tion 338B.’’. 

23 SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE. 

24 Section 765 (42 U.S.C. 295) is amended to read as 

25 follows: 


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1 ‘‘SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE. 

2 ‘‘(a) PROGRAM.—The Secretary, acting through the 

3 Administrator of the Health Resources and Services Ad4 ministration and in consultation with the Director of the 

5 Centers for Disease Control and Prevention, shall estab6 lish a public health workforce training and enhancement 

7 program consisting of awarding grants and contracts 

8 under subsection (b). 

9 ‘‘(b) GRANTS AND CONTRACTS.—The Secretary shall 

10 award grants and contracts to eligible entities— 

11 ‘‘(1) to plan, develop, operate, or participate in, 

12 an accredited professional training program in the 

13 field of public health (including such a program in 

14 nursing; health administration, management, or pol15 icy; preventive medicine; laboratory science; veteri16 nary medicine; or dental medicine) for members of 

17 the public health workforce including mid-career 

18 professionals; 

19 ‘‘(2) to provide financial assistance in the form 

20 of traineeships and fellowships to students who are 

21 participants in any such program and who plan to 

22 specialize or work in the field of public health; 

23 ‘‘(3) to plan, develop, operate, or participate in 

24 a program for the training of public health profes25 sionals who plan to teach in any program described 

26 in paragraph (1); and 


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1 ‘‘(4) to provide financial assistance in the form 

2 of traineeships and fellowships to public health pro3 fessionals who are participants in any program de4 scribed in paragraph (1) and who plan to teach in 

5 the field of public health, including nursing; health 

6 administration, management, or policy; preventive 

7 medicine; laboratory science; veterinary medicine; or 

8 dental medicine. 

9 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con10 tract under subsection (a), an entity shall be— 

11 ‘‘(1) an accredited health professions school, in12 cluding an accredited graduate school or program of 

13 public health; nursing; health administration, man14 agement, or policy; preventive medicine; laboratory 

15 science; veterinary medicine; or dental medicine; 

16 ‘‘(2) a State, local, or tribal health department; 

17 ‘‘(3) a public or private nonprofit entity; or 

18 ‘‘(4) a consortium of 2 or more entities de19 scribed in paragraphs (1) through (3). 

20 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

21 under this section, the Secretary shall give preference to 

22 entities that have a demonstrated record of the following: 

23 ‘‘(1) Training the greatest percentage, or sig24 nificantly improving the percentage, of public health 

25 professionals who serve in underserved communities. 


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1 ‘‘(2) Training individuals who are from under2 represented minority groups or disadvantaged back3 grounds. 

4 ‘‘(3) Training individuals in public health spe5 cialties experiencing a significant shortage of public 

6 health professionals (as determined by the Sec7 retary). 

8 ‘‘(4) Training the greatest percentage, or sig9 nificantly improving the percentage, of public health 

10 professionals serving in the Federal Government or 

11 a State, local, or tribal government. 

12 ‘‘(e) REPORT.—The Secretary shall submit to the 

13 Congress an annual report on the program carried out 

14 under this section.’’. 

15 SEC. 2233. PUBLIC HEALTH TRAINING CENTERS. 

16 Section 766 (42 U.S.C. 295a) is amended— 

17 (1) in subsection (b)(1), by striking ‘‘in further18 ance of the goals established by the Secretary for 

19 the year 2000’’ and inserting ‘‘in furtherance of the 

20 goals established by the Secretary in the national 

21 prevention and wellness strategy under section 

22 3121’’; and 

23 (2) by adding at the end the following: 


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1 ‘‘(d) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the program carried out 

3 under this section.’’. 

4 SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH 

5 TRAINING GRANT PROGRAM. 

6 Section 768 (42 U.S.C. 295c) is amended to read as 

7 follows: 

8 ‘‘SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH 

9 TRAINING GRANT PROGRAM. 

10 ‘‘(a) GRANTS.—The Secretary, acting through the 

11 Administrator of the Health Resources and Services Ad12 ministration and in consultation with the Director of the 

13 Centers for Disease Control and Prevention, shall award 

14 grants to, or enter into contracts with, eligible entities to 

15 provide training to graduate medical residents in preven16 tive medicine specialties. 

17 ‘‘(b) ELIGIBILITY.—To be eligible for a grant or con18 tract under subsection (a), an entity shall be— 

19 ‘‘(1) an accredited school of public health or 

20 school of medicine or osteopathic medicine; 

21 ‘‘(2) an accredited public or private hospital; 

22 ‘‘(3) a State, local, or tribal health department; 

23 or 

24 ‘‘(4) a consortium of 2 or more entities de25 scribed in paragraphs (1) through (3). 


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1 ‘‘(c) USE OF FUNDS.—Amounts received under a 

2 grant or contract under this section shall be used to— 

3 ‘‘(1) plan, develop (including the development of 

4 curricula), operate, or participate in an accredited 

5 residency or internship program in preventive medi6 cine or public health; 

7 ‘‘(2) defray the costs of practicum experiences, 

8 as required in such a program; and 

9 ‘‘(3) establish, maintain, or improve— 

10 ‘‘(A) academic administrative units (in11 cluding departments, divisions, or other appro12 priate units) in preventive medicine and public 

13 health; or 

14 ‘‘(B) programs that improve clinical teach15 ing in preventive medicine and public health. 

16 ‘‘(d) REPORT.—The Secretary shall submit to the 

17 Congress an annual report on the program carried out 

18 under this section.’’. 

19 SEC. 2235. AUTHORIZATION OF APPROPRIATIONS. 

20 (a) IN GENERAL.—Section 799C, as added by section 

21 2216 of this division, is amended by adding at the end 

22 the following: 

23 ‘‘(b) PUBLIC HEALTH WORKFORCE.—For the pur24 pose of carrying out subpart XII of part D of title III 

25 and sections 765, 766, and 768, in addition to any other 


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1 amounts authorized to be appropriated for such purpose, 

2 there are authorized to be appropriated, out of any monies 

3 in the Public Health Investment Fund, the following: 

4 ‘‘(1) $51,000,000 for fiscal year 2010. 

5 ‘‘(2) $54,000,000 for fiscal year 2011. 

6 ‘‘(3) $57,000,000 for fiscal year 2012. 

7 ‘‘(4) $59,000,000 for fiscal year 2013. 

8 ‘‘(5) $62,000,000 for fiscal year 2014. 

9 ‘‘(6) $65,000,000 for fiscal year 2015. 

10 ‘‘(7) $68,000,000 for fiscal year 2016. 

11 ‘‘(8) $72,000,000 for fiscal year 2017. 

12 ‘‘(9) $75,000,000 for fiscal year 2018. 

13 ‘‘(10) $79,000,000 for fiscal year 2019.’’. 

14 (b) EXISTING AUTHORIZATION OF APPROPRIA15 TIONS.—Subpart (a) of section 770 (42 U.S.C. 295e) is 

16 amended by striking ‘‘2002’’ and inserting ‘‘2019’’. 


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1 Subtitle D—Adapting Workforce to 

2 Evolving Health System Needs 

3 PART 1—HEALTH PROFESSIONS TRAINING FOR 

4 DIVERSITY 

5 SEC. 2241. SCHOLARSHIPS FOR DISADVANTAGED STU6 DENTS, LOAN REPAYMENTS AND FELLOW7 SHIPS REGARDING FACULTY POSITIONS, AND 

8 EDUCATIONAL ASSISTANCE IN THE HEALTH 

9 PROFESSIONS REGARDING INDIVIDUALS 

10 FROM DISADVANTAGED BACKGROUNDS. 

11 Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) 

12 is amended by striking ‘‘not more than $20,000’’ and all 

13 that follows through the end of the paragraph and insert14 ing: ‘‘not more than $35,000 (plus, beginning with fiscal 

15 year 2012, an amount determined by the Secretary on an 

16 annual basis to reflect inflation) of the principal and inter17 est of the educational loans of such individuals.’’ 

18 SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS. 

19 Subsection (b) of section 821 (42 U.S.C. 296m) is 

20 amended— 

21 (1) in the heading, by striking ‘‘GUIDANCE’’ 

22 and inserting ‘‘CONSULTATION’’; and 

23 (2) by striking ‘‘shall take into consideration’’ 

24 and all that follows through ‘‘consult with nursing 


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1 associations’’ and inserting ‘‘shall, as appropriate, 

2 consult with nursing associations’’. 

3 SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL 

4 COMPETENCY PROGRAMS. 

5 Title VII (42 U.S.C. 292 et seq.) is amended by in6 serting after section 739 the following: 

7 ‘‘SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL 

8 COMPETENCY PROGRAMS. 

9 ‘‘The Secretary shall, to the extent practicable, co10 ordinate the activities carried out under this part and sec11 tion 821 in order to enhance the effectiveness of such ac12 tivities and avoid duplication of effort.’’. 

13 PART 2—INTERDISCIPLINARY TRAINING 

14 PROGRAMS 

15 SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY 

16 TRAINING FOR HEALTH CARE PROFES17 SIONALS. 

18 Section 741 (42 U.S.C. 293e) is amended— 

19 (1) in the section heading, by striking ‘‘GRANTS

20 FOR HEALTH PROFESSIONS EDUCATION’’ and in21 serting ‘‘CULTURAL AND LINGUISTIC COMPETENCY

22 TRAINING FOR HEALTH CARE PROFESSIONALS’’; 

23 (2) by redesignating subsection (b) as sub24 section (h); and 


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1 (3) by striking subsection (a) and inserting the 

2 following: 

3 ‘‘(a) PROGRAM.—The Secretary shall establish a cul4 tural and linguistic competency training program for 

5 health care professionals, including nurse professionals, 

6 consisting of awarding grants and contracts under sub7 section (b). 

8 ‘‘(b) CULTURAL AND LINGUISTIC COMPETENCY

9 TRAINING.—The Secretary shall award grants and con10 tracts to eligible entities— 

11 ‘‘(1) to test, develop, and evaluate models of 

12 cultural and linguistic competency training (includ13 ing continuing education) for health professionals; 

14 and 

15 ‘‘(2) to implement cultural and linguistic com16 petency training programs for health professionals 

17 developed under paragraph (1) or otherwise. 

18 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con19 tract under subsection (b), an entity shall be— 

20 ‘‘(1) an accredited health professions school or 

21 program; 

22 ‘‘(2) an academic health center; 

23 ‘‘(3) a public or private nonprofit entity; or 

24 ‘‘(4) a consortium of 2 or more entities de25 scribed in paragraphs (1) through (3). 


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1 ‘‘(d) PREFERENCE.—In awarding grants and con2 tracts under this section, the Secretary shall give pref3 erence to entities that have a demonstrated record of the 

4 following: 

5 ‘‘(1) Addressing, or partnering with an entity 

6 with experience addressing, the cultural and lin7 guistic competency needs of the population to be 

8 served through the grant or contract. 

9 ‘‘(2) Addressing health disparities. 

10 ‘‘(3) Placing health professionals in regions ex11 periencing significant changes in the cultural and 

12 linguistic demographics of populations, including 

13 communities along the United States-Mexico border. 

14 ‘‘(4) Carrying out activities described in sub15 section (b) with respect to more than one health pro16 fession discipline, specialty, or subspecialty. 

17 ‘‘(e) CONSULTATION.—The Secretary shall carry out 

18 this section in consultation with the heads of appropriate 

19 health agencies and offices in the Department of Health 

20 and Human Services, including the Office of Minority 

21 Health. 

22 ‘‘(f) DEFINITION.—In this section, the term ‘health 

23 disparities’ has the meaning given to the term in section 

24 3171. 


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1 ‘‘(g) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the program carried out 

3 under this section.’’. 

4 SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE 

5 TRAINING. 

6 Part D of title VII (42 U.S.C. 294 et seq.) is amend7 ed by adding at the end the following: 

8 ‘‘SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE 

9 TRAINING. 

10 ‘‘(a) PROGRAM.—The Secretary shall establish an in11 novations in interdisciplinary care training program con12 sisting of awarding grants and contracts under subsection 

13 (b). 

14 ‘‘(b) TRAINING PROGRAMS.—The Secretary shall 

15 award grants to, or enter into contracts with, eligible enti16 ties— 

17 ‘‘(1) to test, develop, and evaluate health pro18 fessional training programs (including continuing 

19 education) designed to promote— 

20 ‘‘(A) the delivery of health services through 

21 interdisciplinary and team-based models, which 

22 may include patient-centered medical home 

23 models, medication therapy management mod24 els, and models integrating physical, mental, or 

25 oral health services; and 


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1 ‘‘(B) coordination of the delivery of health 

2 care within and across settings, including health 

3 care institutions, community-based settings, 

4 and the patient’s home; and 

5 ‘‘(2) to implement such training programs de6 veloped under paragraph (1) or otherwise. 

7 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con8 tract under subsection (b), an entity shall be— 

9 ‘‘(1) an accredited health professions school or 

10 program; 

11 ‘‘(2) an academic health center; 

12 ‘‘(3) a public or private nonprofit entity (includ13 ing an area health education center or a geriatric 

14 education center); or 

15 ‘‘(4) a consortium of 2 or more entities de16 scribed in paragraphs (1) through (3). 

17 ‘‘(d) PREFERENCES.—In awarding grants and con18 tracts under this section, the Secretary shall give pref19 erence to entities that have a demonstrated record of the 

20 following: 

21 ‘‘(1) Training the greatest percentage, or sig22 nificantly increasing the percentage, of health pro23 fessionals who serve in underserved communities. 

24 ‘‘(2) Broad interdisciplinary team-based collabo25 rations. 


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1 ‘‘(3) Addressing health disparities. 

2 ‘‘(e) REPORT.—The Secretary shall submit to the 

3 Congress an annual report on the program carried out 

4 under this section. 

5 ‘‘(f) DEFINITIONS.—In this section: 

6 ‘‘(1) The term ‘health disparities’ has the 

7 meaning given the term in section 3171. 

8 ‘‘(2) The term ‘interdisciplinary’ means collabo9 ration across health professions and specialties, 

10 which may include public health, nursing, allied 

11 health, and appropriate medical specialties.’’. 

12 PART 3—ADVISORY COMMITTEE ON HEALTH 

13 WORKFORCE EVALUATION AND ASSESSMENT 

14 SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESS15 MENT. 

16 Subpart 1 of part E of title VII (42 U.S.C. 294n 

17 et seq.) is amended by adding at the end the following: 

18 ‘‘SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESS19 MENT. 

20 ‘‘(a) ADVISORY COMMITTEE.—The Secretary, acting 

21 through the Assistant Secretary for Health, shall establish 

22 a permanent advisory committee to be known as the Advi23 sory Committee on Health Workforce Evaluation and As24 sessment (referred to in this section as the ‘Advisory Com25 mittee’). 


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1 ‘‘(b) RESPONSIBILITIES.—The Advisory Committee 

2 shall— 

3 ‘‘(1) not later than 1 year after the date of the 

4 establishment of the Advisory Committee, submit 

5 recommendations to the Secretary on— 

6 ‘‘(A) classifications of the health workforce 

7 to ensure consistency of data collection on the 

8 health workforce; and 

9 ‘‘(B) based on such classifications, stand10 ardized methodologies and procedures to enu11 merate the health workforce; 

12 ‘‘(2) not later than 2 years after the date of the 

13 establishment of the Advisory Committee, submit 

14 recommendations to the Secretary on— 

15 ‘‘(A) the supply, diversity, and geographic 

16 distribution of the health workforce; 

17 ‘‘(B) the retention of the health workforce 

18 to ensure quality and adequacy of such work19 force; and 

20 ‘‘(C) policies to carry out the recommenda21 tions made pursuant to subparagraphs (A) and 

22 (B); and 

23 ‘‘(3) not later than 4 years after the date of the 

24 establishment of the Advisory Committee, and every 


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1 2 years thereafter, submit updated recommendations 

2 to the Secretary under paragraphs (1) and (2). 

3 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

4 ongoing administrative, research, and technical support 

5 for the operations of the Advisory Committee, including 

6 coordinating and supporting the dissemination of the rec7 ommendations of the Advisory Committee. 

8 ‘‘(d) MEMBERSHIP.— 

9 ‘‘(1) NUMBER; APPOINTMENT.—The Secretary 

10 shall appoint 15 members to serve on the Advisory 

11 Committee. 

12 ‘‘(2) TERMS.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 appoint members of the Advisory Committee for 

15 a term of 3 years and may reappoint such 

16 members, but the Secretary may not appoint 

17 any member to serve more than a total of 6 

18 years. 

19 ‘‘(B) STAGGERED TERMS.—Notwith20 standing subparagraph (A), of the members 

21 first appointed to the Advisory Committee 

22 under paragraph (1)— 

23 ‘‘(i) 5 shall be appointed for a term of 

24 1 year; 


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

2 of 2 years; and 

3 ‘‘(iii) 5 shall be appointed for a term 

4 of 3 years. 

5 ‘‘(3) QUALIFICATIONS.—Members of the Advi6 sory Committee shall be appointed from among indi7 viduals who possess expertise in at least one of the 

8 following areas: 

9 ‘‘(A) Conducting and interpreting health 

10 workforce market analysis, including health 

11 care labor workforce analysis. 

12 ‘‘(B) Conducting and interpreting health 

13 finance and economics research. 

14 ‘‘(C) Delivering and administering health 

15 care services. 

16 ‘‘(D) Delivering and administering health 

17 workforce education and training. 

18 ‘‘(4) REPRESENTATION.—In appointing mem19 bers of the Advisory Committee, the Secretary 

20 shall— 

21 ‘‘(A) include no less than one representa22 tive of each of— 

23 ‘‘(i) health professionals within the 

24 health workforce; 


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1 ‘‘(ii) health care patients and con2 sumers; 

3 ‘‘(iii) employers; 

4 ‘‘(iv) labor unions; and 

5 ‘‘(v) third-party health payors; and 

6 ‘‘(B) ensure that— 

7 ‘‘(i) all areas of expertise described in 

8 paragraph (3) are represented; 

9 ‘‘(ii) the members of the Advisory 

10 Committee include members who, collec11 tively, have significant experience working 

12 with— 

13 ‘‘(I) populations in urban and 

14 federally designated rural and non15 metropolitan areas; and 

16 ‘‘(II) populations who are under17 represented in the health professions, 

18 including underrepresented minority 

19 groups; and 

20 ‘‘(iii) individuals who are directly in21 volved in health professions education or 

22 practice do not constitute a majority of the 

23 members of the Advisory Committee. 

24 ‘‘(5) DISCLOSURE AND CONFLICTS OF INTER25 EST.—Members of the Advisory Committee shall not 


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1 be considered employees of the Federal Government 

2 by reason of service on the Advisory Committee, ex3 cept members of the Advisory Committee shall be 

4 considered to be special Government employees with5 in the meaning of section 107 of the Ethics in Gov6 ernment Act of 1978 (5 U.S.C. App.) and section 

7 208 of title 18, United States Code, for the purposes 

8 of disclosure and management of conflicts of interest 

9 under those sections. 

10 ‘‘(6) NO PAY; RECEIPT OF TRAVEL EX11 PENSES.—Members of the Advisory Committee shall 

12 not receive any pay for service on the Committee, 

13 but may receive travel expenses, including a per 

14 diem, in accordance with applicable provisions of 

15 subchapter I of chapter 57 of title 5, United States 

16 Code. 

17 ‘‘(e) CONSULTATION.—In carrying out this section, 

18 the Secretary shall consult with the Secretary of Edu19 cation and the Secretary of Labor. 

20 ‘‘(f) COLLABORATION.—The Advisory Committee 

21 shall collaborate with the advisory bodies at the Health 

22 Resources and Services Administration, the National Ad23 visory Council (as authorized in section 337), the Advisory 

24 Committee on Training in Primary Care Medicine and 

25 Dentistry (as authorized in section 749A), the Advisory 


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1 Committee on Interdisciplinary, Community-Based Link2 ages (as authorized in section 756), the Advisory Council 

3 on Graduate Medical Education (as authorized in section 

4 762), and the National Advisory Council on Nurse Edu5 cation and Practice (as authorized in section 851). 

6 ‘‘(g) FACA.—The Federal Advisory Committee Act 

7 (5 U.S.C. App.) except for section 14 of such Act shall 

8 apply to the Advisory Committee under this section only 

9 to the extent that the provisions of such Act do not conflict 

10 with the requirements of this section. 

11 ‘‘(h) REPORT.—The Secretary shall submit to the 

12 Congress an annual report on the activities of the Advisory 

13 Committee. 

14 ‘‘(i) DEFINITION.—In this section, the term ‘health 

15 workforce’ includes all health care providers with direct 

16 patient care and support responsibilities, including physi17 cians, nurses, physician assistants, pharmacists, oral 

18 health professionals (as defined in section 749(f)), allied 

19 health professionals, mental and behavioral professionals, 

20 and public health professionals (including veterinarians 

21 engaged in public health practice).’’. 

22 PART 4—HEALTH WORKFORCE ASSESSMENT 

23 SEC. 2271. HEALTH WORKFORCE ASSESSMENT. 

24 (a) IN GENERAL.—Section 761 (42 U.S.C. 294n) is 

25 amended— 


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1 (1) by redesignating subsection (c) as sub2 section (e); and 

3 (2) by striking subsections (a) and (b) and in4 serting the following: 

5 ‘‘(a) IN GENERAL.—The Secretary shall, based upon 

6 the classifications and standardized methodologies and 

7 procedures developed by the Advisory Committee on 

8 Health Workforce Evaluation and Assessment under sec9 tion 764(b)— 

10 ‘‘(1) collect data on the health workforce (as 

11 defined in section 764(i)), disaggregated by field, 

12 discipline, and specialty, with respect to— 

13 ‘‘(A) the supply (including retention) of 

14 health professionals relative to the demand for 

15 such professionals; 

16 ‘‘(B) the diversity of health professionals 

17 (including with respect to race, ethnic back18 ground, and gender); and 

19 ‘‘(C) the geographic distribution of health 

20 professionals; and 

21 ‘‘(2) collect such data on individuals partici22 pating in the programs authorized by subtitles A, B, 

23 and C and part 1 of subtitle D of title II of subdivi24 sion C of the America’s Affordable Health Choices 

25 Act of 2009. 


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1 ‘‘(b) GRANTS AND CONTRACTS FOR HEALTH WORK2 FORCE ANALYSIS.— 

3 ‘‘(1) IN GENERAL.—The Secretary may award 

4 grants or contracts to eligible entities to carry out 

5 subsection (a). 

6 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

7 or contract under this subsection, an entity shall 

8 be— 

9 ‘‘(A) an accredited health professions 

10 school or program; 

11 ‘‘(B) an academic health center; 

12 ‘‘(C) a State, local, or tribal government; 

13 ‘‘(D) a public or private entity; or 

14 ‘‘(E) a consortium of 2 or more entities de15 scribed in subparagraphs (A) through (D). 

16 ‘‘(c) COLLABORATION AND DATA SHARING.—The 

17 Secretary shall collaborate with Federal departments and 

18 agencies, health professions organizations (including 

19 health professions education organizations), and profes20 sional medical societies for the purpose of carrying out 

21 subsection (a). 

22 ‘‘(d) REPORT.—The Secretary shall submit to the 

23 Congress an annual report on the data collected under 

24 subsection (a).’’. 


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1 (b) PERIOD BEFORE COMPLETION OF NATIONAL

2 STRATEGY.—Pending completion of the classifications and 

3 standardized methodologies and procedures developed by 

4 the Advisory Committee on Health Workforce Evaluation 

5 and Assessment under section 764(b) of the Public Health 

6 Service Act, as added by section 2261, the Secretary of 

7 Health and Human Services, acting through the Adminis8 trator of the Health Resources and Services Administra9 tion and in consultation with such Advisory Committee, 

10 may make a judgment about the classifications, meth11 odologies, and procedures to be used for collection of data 

12 under section 761(a) of the Public Health Service Act, as 

13 amended by this section. 

14 PART 5—AUTHORIZATION OF APPROPRIATIONS 

15 SEC. 2281. AUTHORIZATION OF APPROPRIATIONS. 

16 (a) IN GENERAL.—Section 799C, as added by section 

17 2216 of this division, is amended by adding at the end 

18 the following: 

19 ‘‘(c) HEALTH PROFESSIONS TRAINING FOR DIVER20 SITY.—For the purpose of carrying out sections 736, 737, 

21 738, 739, and 739A, in addition to any other amounts 

22 authorized to be appropriated for such purpose, there are 

23 authorized to be appropriated, out of any monies in the 

24 Public Health Investment Fund, the following: 

25 ‘‘(1) $90,000,000 for fiscal year 2010. 


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1 ‘‘(2) $97,000,000 for fiscal year 2011. 

2 ‘‘(3) $100,000,000 for fiscal year 2012. 

3 ‘‘(4) $104,000,000 for fiscal year 2013. 

4 ‘‘(5) $110,000,000 for fiscal year 2014. 

5 ‘‘(6) $116,000,000 for fiscal year 2015. 

6 ‘‘(7) $121,000,000 for fiscal year 2016. 

7 ‘‘(8) $127,000,000 for fiscal year 2017. 

8 ‘‘(9) $133,000,000 for fiscal year 2018. 

9 ‘‘(10) $140,000,000 for fiscal year 2019. 

10 ‘‘(d) INTERDISCIPLINARY TRAINING PROGRAMS, AD11 VISORY COMMITTEE ON HEALTH WORKFORCE EVALUA12 TION AND ASSESSMENT, AND HEALTH WORKFORCE AS13 SESSMENT.—For the purpose of carrying out sections 

14 741, 759, 761, and 764, in addition to any other amounts 

15 authorized to be appropriated for such purpose, there are 

16 authorized to be appropriated, out of any monies in the 

17 Public Health Investment Fund, the following: 

18 ‘‘(1) $91,000,000 for fiscal year 2010. 

19 ‘‘(2) $97,000,000 for fiscal year 2011. 

20 ‘‘(3) $101,000,000 for fiscal year 2012. 

21 ‘‘(4) $105,000,000 for fiscal year 2013. 

22 ‘‘(5) $111,000,000 for fiscal year 2014. 

23 ‘‘(6) $117,000,000 for fiscal year 2015. 

24 ‘‘(7) $122,000,000 for fiscal year 2016. 

25 ‘‘(8) $129,000,000 for fiscal year 2017. 


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1 ‘‘(9) $135,000,000 for fiscal year 2018. 

2 ‘‘(10) $141,000,000 for fiscal year 2019.’’. 

3 (b) EXISTING AUTHORIZATIONS OF APPROPRIA4 TIONS.— 

5 (1) SECTION 736.—Paragraph (1) of section 

6 736(h) (42 U.S.C. 293(h)) is amended by striking 

7 ‘‘2002’’ and inserting ‘‘2019’’. 

8 (2) SECTIONS 737, 738, AND 739.—Subsections 

9 (a), (b), and (c) of section 740 are amended by 

10 striking ‘‘2002’’ each place it appears and inserting 

11 ‘‘2019’’. 

12 (3) SECTION 741.—Subsection (h), as so redes13 ignated, of section 741 is amended— 

14 (A) by striking ‘‘and’’ after ‘‘fiscal year 

15 2003,’’; and 

16 (B) by inserting ‘‘, and such sums as may 

17 be necessary for subsequent fiscal years 

18 through the end of fiscal year 2019’’ before the 

19 period at the end. 

20 (4) SECTION 761.—Subsection (e)(1), as so re21 designated, of section 761 is amended by striking 

22 ‘‘2002’’ and inserting ‘‘2019’’. 


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1 TITLE III—PREVENTION AND 

2 WELLNESS 

3 SEC. 2301. PREVENTION AND WELLNESS. 

4 (a) IN GENERAL.—The Public Health Service Act 

5 (42 U.S.C. 201 et seq.) is amended by adding at the end 

6 the following: 

7 ‘‘TITLE XXXI—PREVENTION AND 

8 WELLNESS 

9 ‘‘Subtitle A—Prevention and 

10 Wellness Trust 

11 ‘‘SEC. 3111. PREVENTION AND WELLNESS TRUST. 

12 ‘‘(a) DEPOSITS INTO TRUST.—There is established 

13 a Prevention and Wellness Trust. There are authorized 

14 to be appropriated to the Trust— 

15 ‘‘(1) amounts described in section 

16 2002(b)(2)(ii) of the America’s Affordable Health 

17 Choices Act of 2009 for each fiscal year; and 

18 ‘‘(2) in addition, out of any monies in the Pub19 lic Health Investment Fund— 

20 ‘‘(A) for fiscal year 2010, $2,400,000,000; 

21 ‘‘(B) for fiscal year 2011, $2,800,000,000; 

22 ‘‘(C) for fiscal year 2012, $3,100,000,000; 

23 ‘‘(D) for fiscal year 2013, $3,400,000,000; 

24 ‘‘(E) for fiscal year 2014, $3,500,000,000; 

25 ‘‘(F) for fiscal year 2015, $3,600,000,000; 


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1 ‘‘(G) for fiscal year 2016, $3,700,000,000; 

2 ‘‘(H) for fiscal year 2017, $3,900,000,000; 

3 ‘‘(I) for fiscal year 2018, $4,300,000,000; 

4 and 

5 ‘‘(J) for fiscal year 2019, $4,600,000,000. 

6 ‘‘(b) AVAILABILITY OF FUNDS.—Amounts in the Pre7 vention and Wellness Trust shall be available, as provided 

8 in advance in appropriation Acts, for carrying out this 

9 title. 

10 ‘‘(c) ALLOCATION.—Of the amounts authorized to be 

11 appropriated in subsection (a)(2), there are authorized to 

12 be appropriated— 

13 ‘‘(1) for carrying out subtitle C (Prevention 

14 Task Forces), $35,000,000 for each of fiscal years 

15 2010 through 2019; 

16 ‘‘(2) for carrying out subtitle D (Prevention 

17 and Wellness Research)— 

18 ‘‘(A) for fiscal year 2010, $100,000,000; 

19 ‘‘(B) for fiscal year 2011, $150,000,000; 

20 ‘‘(C) for fiscal year 2012, $200,000,000; 

21 ‘‘(D) for fiscal year 2013, $250,000,000; 

22 ‘‘(E) for fiscal year 2014, $300,000,000; 

23 ‘‘(F) for fiscal year 2015, $315,000,000; 

24 ‘‘(G) for fiscal year 2016, $331,000,000; 

25 ‘‘(H) for fiscal year 2017, $347,000,000; 


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1 ‘‘(I) for fiscal year 2018, $364,000,000; 

2 and 

3 ‘‘(J) for fiscal year 2019, $383,000,000. 

4 ‘‘(3) for carrying out subtitle E (Delivery of 

5 Community Preventive and Wellness Services)— 

6 ‘‘(A) for fiscal year 2010, $1,100,000,000; 

7 ‘‘(B) for fiscal year 2011, $1,300,000,000; 

8 ‘‘(C) for fiscal year 2012, $1,400,000,000; 

9 ‘‘(D) for fiscal year 2013, $1,600,000,000; 

10 ‘‘(E) for fiscal year 2014, $1,700,000,000; 

11 ‘‘(F) for fiscal year 2015, $1,800,000,000; 

12 ‘‘(G) for fiscal year 2016, $1,900,000,000; 

13 ‘‘(H) for fiscal year 2017, $2,000,000,000; 

14 ‘‘(I) for fiscal year 2018, $2,100,000,000; 

15 and 

16 ‘‘(J) for fiscal year 2019, $2,300,000,000. 

17 ‘‘(4) for carrying out section 3161 (Core Public 

18 Health Infrastructure and Activities for State and 

19 Local Health Departments)— 

20 ‘‘(A) for fiscal year 2010, $800,000,000; 

21 ‘‘(B) for fiscal year 2011, $1,000,000,000; 

22 ‘‘(C) for fiscal year 2012, $1,100,000,000; 

23 ‘‘(D) for fiscal year 2013, $1,200,000,000; 

24 ‘‘(E) for fiscal year 2014, $1,300,000,000; 

25 ‘‘(F) for fiscal year 2015, $1,400,000,000; 


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1 ‘‘(G) for fiscal year 2016, $1,500,000,000; 

2 ‘‘(H) for fiscal year 2017, $1,600,000,000; 

3 ‘‘(I) for fiscal year 2018, $1,800,000,000; 

4 and 

5 ‘‘(J) for fiscal year 2019, $1,900,000,000; 

6 and 

7 ‘‘(5) for carrying out section 3162 (Core Public 

8 Health Infrastructure and Activities for CDC), 

9 $400,000,000 for each of fiscal years 2010 through 

10 2019. 

11 ‘‘Subtitle B—National Prevention 

12 and Wellness Strategy 

13 ‘‘SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRAT14 EGY. 

15 ‘‘(a) IN GENERAL.—The Secretary shall submit to 

16 the Congress within one year after the date of the enact17 ment of this section, and at least every 2 years thereafter, 

18 a national strategy that is designed to improve the Na19 tion’s health through evidence-based clinical and commu20 nity prevention and wellness activities (in this section re21 ferred to as ‘prevention and wellness activities’), including 

22 core public health infrastructure improvement activities. 

23 ‘‘(b) CONTENTS.—The strategy under subsection (a) 

24 shall include each of the following: 


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1 ‘‘(1) Identification of specific national goals and 

2 objectives in prevention and wellness activities that 

3 take into account appropriate public health measures 

4 and standards, including departmental measures and 

5 standards (including Healthy People and National 

6 Public Health Performance Standards). 

7 ‘‘(2) Establishment of national priorities for 

8 prevention and wellness, taking into account unmet 

9 prevention and wellness needs. 

10 ‘‘(3) Establishment of national priorities for re11 search on prevention and wellness, taking into ac12 count unanswered research questions on prevention 

13 and wellness. 

14 ‘‘(4) Identification of health disparities in pre15 vention and wellness. 

16 ‘‘(5) A plan for addressing and implementing 

17 paragraphs (1) through (4). 

18 ‘‘(c) CONSULTATION.—In developing or revising the 

19 strategy under subsection (a), the Secretary shall consult 

20 with the following: 

21 ‘‘(1) The heads of appropriate health agencies 

22 and offices in the Department, including the Office 

23 of the Surgeon General of the Public Health Service, 

24 the Office of Minority Health, and the Office on 

25 Women’s Health. 


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1 ‘‘(2) As appropriate, the heads of other Federal 

2 departments and agencies whose programs have a 

3 significant impact upon health (as determined by the 

4 Secretary). 

5 ‘‘(3) As appropriate, nonprofit and for-profit 

6 entities. 

7 ‘‘(4) The Association of State and Territorial 

8 Health Officials and the National Association of 

9 County and City Health Officials. 

10 ‘‘Subtitle C—Prevention Task 

11 Forces 

12 ‘‘SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERV13 ICES. 

14 ‘‘(a) IN GENERAL.—The Secretary, acting through 

15 the Director of the Agency for Healthcare Research and 

16 Quality, shall establish a permanent task force to be 

17 known as the Task Force on Clinical Preventive Services 

18 (in this section referred to as the ‘Task Force’). 

19 ‘‘(b) RESPONSIBILITIES.—The Task Force shall— 

20 ‘‘(1) identify clinical preventive services for re21 view; 

22 ‘‘(2) review the scientific evidence related to the 

23 benefits, effectiveness, appropriateness, and costs of 

24 clinical preventive services identified under para25 graph (1) for the purpose of developing, updating, 


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1 publishing, and disseminating evidence-based rec2 ommendations on the use of such services; 

3 ‘‘(3) as appropriate, take into account health 

4 disparities in developing, updating, publishing, and 

5 disseminating evidence-based recommendations on 

6 the use of such services; 

7 ‘‘(4) identify gaps in clinical preventive services 

8 research and evaluation and recommend priority 

9 areas for such research and evaluation; 

10 ‘‘(5) as appropriate, consult with the clinical 

11 prevention stakeholders board in accordance with 

12 subsection (f); 

13 ‘‘(6) as appropriate, consult with the Task 

14 Force on Community Preventive Services established 

15 under section 3132; and 

16 ‘‘(7) as appropriate, in carrying out this sec17 tion, consider the national strategy under section 

18 3121. 

19 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

20 ongoing administrative, research, and technical support 

21 for the operations of the Task Force, including coordi22 nating and supporting the dissemination of the rec23 ommendations of the Task Force. 

24 ‘‘(d) MEMBERSHIP.— 


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1 ‘‘(1) NUMBER; APPOINTMENT.—The Task 

2 Force shall be composed of 30 members, appointed 

3 by the Secretary. 

4 ‘‘(2) TERMS.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 appoint members of the Task Force for a term 

7 of 6 years and may reappoint such members, 

8 but the Secretary may not appoint any member 

9 to serve more than a total of 12 years. 

10 ‘‘(B) STAGGERED TERMS.—Notwith11 standing subparagraph (A), of the members 

12 first appointed to serve on the Task Force after 

13 the enactment of this title— 

14 ‘‘(i) 10 shall be appointed for a term 

15 of 2 years; 

16 ‘‘(ii) 10 shall be appointed for a term 

17 of 4 years; and 

18 ‘‘(iii) 10 shall be appointed for a term 

19 of 6 years. 

20 ‘‘(3) QUALIFICATIONS.—Members of the Task 

21 Force shall be appointed from among individuals 

22 who possess expertise in at least one of the following 

23 areas: 

24 ‘‘(A) Health promotion and disease preven25 tion. 


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1 ‘‘(B) Evaluation of research and system2 atic evidence reviews. 

3 ‘‘(C) Application of systematic evidence re4 views to clinical decisionmaking or health pol5 icy. 

6 ‘‘(D) Clinical primary care in child and ad7 olescent health. 

8 ‘‘(E) Clinical primary care in adult health, 

9 including women’s health. 

10 ‘‘(F) Clinical primary care in geriatrics. 

11 ‘‘(G) Clinical counseling and behavioral 

12 services for primary care patients. 

13 ‘‘(4) REPRESENTATION.—In appointing mem14 bers of the Task Force, the Secretary shall ensure 

15 that— 

16 ‘‘(A) all areas of expertise described in 

17 paragraph (3) are represented; and 

18 ‘‘(B) the members of the Task Force in19 clude practitioners who, collectively, have sig20 nificant experience treating racially and eth21 nically diverse populations. 

22 ‘‘(e) SUBGROUPS.—As appropriate to maximize effi23 ciency, the Task Force may delegate authority for con24 ducting reviews and making recommendations to subVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00952 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 groups consisting of Task Force members, subject to final 

2 approval by the Task Force. 

3 ‘‘(f) CLINICAL PREVENTION STAKEHOLDERS

4 BOARD.— 

5 ‘‘(1) IN GENERAL.—The Task Force shall con6 vene a clinical prevention stakeholders board com7 posed of representatives of appropriate public and 

8 private entities with an interest in clinical preventive 

9 services to advise the Task Force on developing, up10 dating, publishing, and disseminating evidence-based 

11 recommendations on the use of clinical preventive 

12 services. 

13 ‘‘(2) MEMBERSHIP.—The members of the clin14 ical prevention stakeholders board shall include rep15 resentatives of the following: 

16 ‘‘(A) Health care consumers and patient 

17 groups. 

18 ‘‘(B) Providers of clinical preventive serv19 ices, including community-based providers. 

20 ‘‘(C) Federal departments and agencies, 

21 including— 

22 ‘‘(i) appropriate health agencies and 

23 offices in the Department, including the 

24 Office of the Surgeon General of the Pub25 lic Health Service, the Office of Minority 


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1 Health, and the Office on Women’s 

2 Health; and 

3 ‘‘(ii) as appropriate, other Federal de4 partments and agencies whose programs 

5 have a significant impact upon health (as 

6 determined by the Secretary). 

7 ‘‘(D) Private health care payors. 

8 ‘‘(3) RESPONSIBILITIES.—In accordance with 

9 subsection (b)(5), the clinical prevention stake10 holders board shall— 

11 ‘‘(A) recommend clinical preventive serv12 ices for review by the Task Force; 

13 ‘‘(B) suggest scientific evidence for consid14 eration by the Task Force related to reviews 

15 undertaken by the Task Force; 

16 ‘‘(C) provide feedback regarding draft rec17 ommendations by the Task Force; and 

18 ‘‘(D) assist with efforts regarding dissemi19 nation of recommendations by the Director of 

20 the Agency for Healthcare Research and Qual21 ity. 

22 ‘‘(g) DISCLOSURE AND CONFLICTS OF INTEREST.— 

23 Members of the Task Force or the clinical prevention 

24 stakeholders board shall not be considered employees of 

25 the Federal Government by reason of service on the Task 


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1 Force, except members of the Task Force shall be consid2 ered to be special Government employees within the mean3 ing of section 107 of the Ethics in Government Act of 

4 1978 (5 U.S.C. App.) and section 208 of title 18, United 

5 States Code, for the purposes of disclosure and manage6 ment of conflicts of interest under those sections. 

7 ‘‘(h) NO PAY; RECEIPT OF TRAVEL EXPENSES.— 

8 Members of the Task Force or the clinical prevention 

9 stakeholders board shall not receive any pay for service 

10 on the Task Force, but may receive travel expenses, in11 cluding a per diem, in accordance with applicable provi12 sions of subchapter I of chapter 57 of title 5, United 

13 States Code. 

14 ‘‘(i) APPLICATION OF FACA.—The Federal Advisory 

15 Committee Act (5 U.S.C. App.) except for section 14 of 

16 such Act shall apply to the Task Force to the extent that 

17 the provisions of such Act do not conflict with the provi18 sions of this title. 

19 ‘‘(j) REPORT.—The Secretary shall submit to the 

20 Congress an annual report on the Task Force, including 

21 with respect to gaps identified and recommendations made 

22 under subsection (b)(4). 


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1 ‘‘SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE 

2 SERVICES. 

3 ‘‘(a) IN GENERAL.—The Secretary, acting through 

4 the Director of the Centers for Disease Control and Pre5 vention, shall establish a permanent task force to be 

6 known as the Task Force on Community Preventive Serv7 ices (in this section referred to as the ‘Task Force’). 

8 ‘‘(b) RESPONSIBILITIES.—The Task Force shall— 

9 ‘‘(1) identify community preventive services for 

10 review; 

11 ‘‘(2) review the scientific evidence related to the 

12 benefits, effectiveness, appropriateness, and costs of 

13 community preventive services identified under para14 graph (1) for the purpose of developing, updating, 

15 publishing, and disseminating evidence-based rec16 ommendations on the use of such services; 

17 ‘‘(3) as appropriate, take into account health 

18 disparities in developing, updating, publishing, and 

19 disseminating evidence-based recommendations on 

20 the use of such services; 

21 ‘‘(4) identify gaps in community preventive 

22 services research and evaluation and recommend pri23 ority areas for such research and evaluation; 

24 ‘‘(5) as appropriate, consult with the commu25 nity prevention stakeholders board in accordance 

26 with subsection (f); 


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1 ‘‘(6) as appropriate, consult with the Task 

2 Force on Clinical Preventive Services established 

3 under section 3131; and 

4 ‘‘(7) as appropriate, in carrying out this sec5 tion, consider the national strategy under section 

6 3121. 

7 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

8 ongoing administrative, research, and technical support 

9 for the operations of the Task Force, including coordi10 nating and supporting the dissemination of the rec11 ommendations of the Task Force. 

12 ‘‘(d) MEMBERSHIP.— 

13 ‘‘(1) NUMBER; APPOINTMENT.—The Task 

14 Force shall be composed of 30 members, appointed 

15 by the Secretary. 

16 ‘‘(2) TERMS.— 

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 appoint members of the Task Force for a term 

19 of 6 years and may reappoint such members, 

20 but the Secretary may not appoint any member 

21 to serve more than a total of 12 years. 

22 ‘‘(B) STAGGERED TERMS.—Notwith23 standing subparagraph (A), of the members 

24 first appointed to serve on the Task Force after 

25 the enactment of this section— 


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1 ‘‘(i) 10 shall be appointed for a term 

2 of 2 years; 

3 ‘‘(ii) 10 shall be appointed for a term 

4 of 4 years; and 

5 ‘‘(iii) 10 shall be appointed for a term 

6 of 6 years. 

7 ‘‘(3) QUALIFICATIONS.—Members of the Task 

8 Force shall be appointed from among individuals 

9 who possess expertise in at least one of the following 

10 areas: 

11 ‘‘(A) Public health. 

12 ‘‘(B) Evaluation of research and system13 atic evidence reviews. 

14 ‘‘(C) Disciplines relevant to community 

15 preventive services, including health promotion; 

16 disease prevention; chronic disease; worksite 

17 health; qualitative and quantitative analysis; 

18 and health economics, policy, law, and statis19 tics. 

20 ‘‘(4) REPRESENTATION.—In appointing mem21 bers of the Task Force, the Secretary— 

22 ‘‘(A) shall ensure that all areas of exper23 tise described in paragraph (3) are represented; 

24 ‘‘(B) shall ensure that such members in25 clude sufficient representatives of each of— 


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1 ‘‘(i) State health officers; 

2 ‘‘(ii) local health officers; 

3 ‘‘(iii) health care practitioners; and 

4 ‘‘(iv) public health practitioners; and 

5 ‘‘(C) shall appoint individuals who, collec6 tively, have significant experience working with 

7 racially and ethnically diverse populations. 

8 ‘‘(e) SUBGROUPS.—As appropriate to maximize effi9 ciency, the Task Force may delegate authority for con10 ducting reviews and making recommendations to sub11 groups consisting of Task Force members, subject to final 

12 approval by the Task Force. 

13 ‘‘(f) COMMUNITY PREVENTION STAKEHOLDERS

14 BOARD.— 

15 ‘‘(1) IN GENERAL.—The Task Force shall con16 vene a community prevention stakeholders board 

17 composed of representatives of appropriate public 

18 and private entities with an interest in community 

19 preventive services to advise the Task Force on de20 veloping, updating, publishing, and disseminating 

21 evidence-based recommendations on the use of com22 munity preventive services. 

23 ‘‘(2) MEMBERSHIP.—The members of the com24 munity prevention stakeholders board shall include 

25 representatives of the following: 


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1 ‘‘(A) Health care consumers and patient 

2 groups. 

3 ‘‘(B) Providers of community preventive 

4 services, including community-based providers. 

5 ‘‘(C) Federal departments and agencies, 

6 including— 

7 ‘‘(i) appropriate health agencies and 

8 offices in the Department, including the 

9 Office of the Surgeon General of the Pub10 lic Health Service, the Office of Minority 

11 Health, and the Office on Women’s 

12 Health; and 

13 ‘‘(ii) as appropriate, other Federal de14 partments and agencies whose programs 

15 have a significant impact upon health (as 

16 determined by the Secretary). 

17 ‘‘(D) Private health care payors. 

18 ‘‘(3) RESPONSIBILITIES.—In accordance with 

19 subsection (b)(5), the community prevention stake20 holders board shall— 

21 ‘‘(A) recommend community preventive 

22 services for review by the Task Force; 

23 ‘‘(B) suggest scientific evidence for consid24 eration by the Task Force related to reviews 

25 undertaken by the Task Force; 


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1 ‘‘(C) provide feedback regarding draft rec2 ommendations by the Task Force; and 

3 ‘‘(D) assist with efforts regarding dissemi4 nation of recommendations by the Director of 

5 the Centers for Disease Control and Prevention. 

6 ‘‘(g) DISCLOSURE AND CONFLICTS OF INTEREST.— 

7 Members of the Task Force or the community prevention 

8 stakeholders board shall not be considered employees of 

9 the Federal Government by reason of service on the Task 

10 Force, except members of the Task Force shall be consid11 ered to be special Government employees within the mean12 ing of section 107 of the Ethics in Government Act of 

13 1978 (5 U.S.C. App.) and section 208 of title 18, United 

14 States Code, for the purposes of disclosure and manage15 ment of conflicts of interest under those sections. 

16 ‘‘(h) NO PAY; RECEIPT OF TRAVEL EXPENSES.— 

17 Members of the Task Force or the community prevention 

18 stakeholders board shall not receive any pay for service 

19 on the Task Force, but may receive travel expenses, in20 cluding a per diem, in accordance with applicable provi21 sions of subchapter I of chapter 57 of title 5, United 

22 States Code. 

23 ‘‘(i) APPLICATION OF FACA.—The Federal Advisory 

24 Committee Act (5 U.S.C. App.) except for section 14 of 

25 such Act shall apply to the Task Force to the extent that 


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1 the provisions of such Act do not conflict with the provi2 sions of this title. 

3 ‘‘(j) REPORT.—The Secretary shall submit to the 

4 Congress an annual report on the Task Force, including 

5 with respect to gaps identified and recommendations made 

6 under subsection (b)(4). 

7 ‘‘Subtitle D—Prevention and 

8 Wellness Research 

9 ‘‘SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIV10 ITY COORDINATION. 

11 ‘‘In conducting or supporting research on prevention 

12 and wellness, the Director of the Centers for Disease Con13 trol and Prevention, the Director of the National Insti14 tutes of Health, and the heads of other agencies within 

15 the Department of Health and Human Services con16 ducting or supporting such research, shall take into con17 sideration the national strategy under section 3121 and 

18 the recommendations of the Task Force on Clinical Pre19 ventive Services under section 3131 and the Task Force 

20 on Community Preventive Services under section 3132. 

21 ‘‘SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RE22 SEARCH GRANTS. 

23 ‘‘(a) IN GENERAL.—The Secretary, acting through 

24 the Director of the Centers for Disease Control and Pre25 vention, shall conduct, or award grants to eligible entities 


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1 to conduct, research in priority areas identified by the Sec2 retary in the national strategy under section 3121 or by 

3 the Task Force on Community Preventive Services as re4 quired by section 3132. 

5 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

6 this section, an entity shall be— 

7 ‘‘(1) a State, local, or tribal department of 

8 health; 

9 ‘‘(2) a public or private nonprofit entity; or 

10 ‘‘(3) a consortium of 2 or more entities de11 scribed in paragraphs (1) and (2). 

12 ‘‘(c) REPORT.—The Secretary shall submit to the 

13 Congress an annual report on the program of research 

14 under this section. 

15 ‘‘Subtitle E—Delivery of Commu16 nity Prevention and Wellness 

17 Services 

18 ‘‘SEC. 3151. COMMUNITY PREVENTION AND WELLNESS 

19 SERVICES GRANTS. 

20 ‘‘(a) IN GENERAL.—The Secretary, acting through 

21 the Director of the Centers for Disease Control and Pre22 vention, shall establish a program for the delivery of com23 munity preventive and wellness services consisting of 

24 awarding grants to eligible entities— 


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1 ‘‘(1) to provide evidence-based, community pre2 ventive and wellness services in priority areas identi3 fied by the Secretary in the national strategy under 

4 section 3121; or 

5 ‘‘(2) to plan such services. 

6 ‘‘(b) ELIGIBILITY.— 

7 ‘‘(1) DEFINITION.—To be eligible for a grant 

8 under this section, an entity shall be— 

9 ‘‘(A) a State, local, or tribal department of 

10 health; 

11 ‘‘(B) a public or private entity; or 

12 ‘‘(C) a consortium of— 

13 ‘‘(i) 2 or more entities described in 

14 subparagraph (A) or (B); and 

15 ‘‘(ii) a community partnership rep16 resenting a Health Empowerment Zone. 

17 ‘‘(2) HEALTH EMPOWERMENT ZONE.—In this 

18 subsection, the term ‘Health Empowerment Zone’ 

19 means an area— 

20 ‘‘(A) in which multiple community preven21 tive and wellness services are implemented in 

22 order to address one or more health disparities, 

23 including those identified by the Secretary in 

24 the national strategy under section 3121; and 


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1 ‘‘(B) which is represented by a community 

2 partnership that demonstrates community sup3 port and coordination with State, local, or tribal 

4 health departments and includes— 

5 ‘‘(i) a broad cross section of stake6 holders; 

7 ‘‘(ii) residents of the community; and 

8 ‘‘(iii) representatives of entities that 

9 have a history of working within and serv10 ing the community. 

11 ‘‘(c) PREFERENCES.—In awarding grants under this 

12 section, the Secretary shall give preference to entities 

13 that— 

14 ‘‘(1) will address one or more goals or objec15 tives identified by the Secretary in the national 

16 strategy under section 3121; 

17 ‘‘(2) will address significant health disparities, 

18 including those identified by the Secretary in the na19 tional strategy under section 3121; 

20 ‘‘(3) will address unmet community prevention 

21 needs and avoids duplication of effort; 

22 ‘‘(4) have been demonstrated to be effective in 

23 communities comparable to the proposed target com24 munity; 


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1 ‘‘(5) will contribute to the evidence base for 

2 community preventive and wellness services; 

3 ‘‘(6) demonstrate that the community preven4 tive services to be funded will be sustainable; and 

5 ‘‘(7) demonstrate coordination or collaboration 

6 across governmental and nongovernmental partners. 

7 ‘‘(d) HEALTH DISPARITIES.—Of the funds awarded 

8 under this section for a fiscal year, the Secretary shall 

9 award not less than 50 percent for planning or imple10 menting community preventive and wellness services 

11 whose primary purpose is to achieve a measurable reduc12 tion in one or more health disparities, including those 

13 identified by the Secretary in the national strategy under 

14 section 3121. 

15 ‘‘(e) EMPHASIS ON RECOMMENDED SERVICES.—For 

16 fiscal year 2013 and subsequent fiscal years, the Secretary 

17 shall award grants under this section only for planning 

18 or implementing services recommended by the Task Force 

19 on Community Preventive Services under section 3122 or 

20 deemed effective based on a review of comparable rigor 

21 (as determined by the Director of the Centers for Disease 

22 Control and Prevention). 

23 ‘‘(f) PROHIBITED USES OF FUNDS.—An entity that 

24 receives a grant under this section may not use funds pro25 vided through the grant— 


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1 ‘‘(1) to build or acquire real property or for 

2 construction; or 

3 ‘‘(2) for services or planning to the extent that 

4 payment has been made, or can reasonably be ex5 pected to be made— 

6 ‘‘(A) under any insurance policy; 

7 ‘‘(B) under any Federal or State health 

8 benefits program (including titles XIX and XXI 

9 of the Social Security Act); or 

10 ‘‘(C) by an entity which provides health 

11 services on a prepaid basis. 

12 ‘‘(g) REPORT.—The Secretary shall submit to the 

13 Congress an annual report on the program of grants 

14 awarded under this section. 

15 ‘‘(h) DEFINITIONS.—In this section, the term ‘evi16 dence-based’ means that methodologically sound research 

17 has demonstrated a beneficial health effect, in the judg18 ment of the Director of the Centers for Disease Control 

19 and Prevention. 


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1 ‘‘Subtitle F—Core Public Health 

2 Infrastructure 

3 ‘‘SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR 

4 STATE, LOCAL, AND TRIBAL HEALTH DEPART5 MENTS. 

6 ‘‘(a) PROGRAM.—The Secretary, acting through the 

7 Director of the Centers for Disease Control and Preven8 tion shall establish a core public health infrastructure pro9 gram consisting of awarding grants under subsection (b). 

10 ‘‘(b) GRANTS.— 

11 ‘‘(1) AWARD.—For the purpose of addressing 

12 core public health infrastructure needs, the Sec13 retary— 

14 ‘‘(A) shall award a grant to each State 

15 health department; and 

16 ‘‘(B) may award grants on a competitive 

17 basis to State, local, or tribal health depart18 ments. 

19 ‘‘(2) ALLOCATION.—Of the total amount of 

20 funds awarded as grants under this subsection for a 

21 fiscal year— 

22 ‘‘(A) not less than 50 percent shall be for 

23 grants to State health departments under para24 graph (1)(A); and 


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1 ‘‘(B) not less than 30 percent shall be for 

2 grants to State, local, or tribal health depart3 ments under paragraph (1)(B). 

4 ‘‘(c) USE OF FUNDS.—The Secretary may award a 

5 grant to an entity under subsection (b)(1) only if the enti6 ty agrees to use the grant to address core public health 

7 infrastructure needs, including those identified in the ac8 creditation process under subsection (g). 

9 ‘‘(d) FORMULA GRANTS TO STATE HEALTH DEPART10 MENTS.—In making grants under subsection (b)(1)(A), 

11 the Secretary shall award funds to each State health de12 partment in accordance with— 

13 ‘‘(1) a formula based on population size; burden 

14 of preventable disease and disability; and core public 

15 health infrastructure gaps, including those identified 

16 in the accreditation process under subsection (g); 

17 and 

18 ‘‘(2) application requirements established by the 

19 Secretary, including a requirement that the State 

20 submit a plan that demonstrates to the satisfaction 

21 of the Secretary that the State’s health department 

22 will— 

23 ‘‘(A) address its highest priority core pub24 lic health infrastructure needs; and 


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1 ‘‘(B) as appropriate, allocate funds to local 

2 health departments within the State. 

3 ‘‘(e) COMPETITIVE GRANTS TO STATE, LOCAL, AND

4 TRIBAL HEALTH DEPARTMENTS.—In making grants 

5 under subsection (b)(1)(B), the Secretary shall give pri6 ority to applicants demonstrating core public health infra7 structure needs identified in the accreditation process 

8 under subsection (g). 

9 ‘‘(f) MAINTENANCE OF EFFORT.—The Secretary 

10 may award a grant to an entity under subsection (b) only 

11 if the entity demonstrates to the satisfaction of the Sec12 retary that— 

13 ‘‘(1) funds received through the grant will be 

14 expended only to supplement, and not supplant, non15 Federal and Federal funds otherwise available to the 

16 entity for the purpose of addressing core public 

17 health infrastructure needs; and 

18 ‘‘(2) with respect to activities for which the 

19 grant is awarded, the entity will maintain expendi20 tures of non-Federal amounts for such activities at 

21 a level not less than the level of such expenditures 

22 maintained by the entity for the fiscal year pre23 ceding the fiscal year for which the entity receives 

24 the grant. 


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1 ‘‘(g) ESTABLISHMENT OF A PUBLIC HEALTH AC2 CREDITATION PROGRAM.— 

3 ‘‘(1) IN GENERAL.—The Secretary, acting 

4 through the Director of the Centers for Disease 

5 Control and Prevention, shall— 

6 ‘‘(A) develop, and periodically review and 

7 update, standards for voluntary accreditation of 

8 State, local, or tribal health departments and 

9 public health laboratories for the purpose of ad10 vancing the quality and performance of such de11 partments and laboratories; and 

12 ‘‘(B) implement a program to accredit 

13 such health departments and laboratories in ac14 cordance with such standards. 

15 ‘‘(2) COOPERATIVE AGREEMENT.—The Sec16 retary may enter into a cooperative agreement with 

17 a private nonprofit entity to carry out paragraph 

18 (1). 

19 ‘‘(h) REPORT.—The Secretary shall submit to the 

20 Congress an annual report on progress being made to ac21 credit entities under subsection (g), including— 

22 ‘‘(1) a strategy, including goals and objectives, 

23 for accrediting entities under subsection (g) and 

24 achieving the purpose described in subsection (g)(1); 

25 and 


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1 ‘‘(2) identification of gaps in research related to 

2 core public health infrastructure and recommenda3 tions of priority areas for such research. 

4 ‘‘SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND 

5 ACTIVITIES FOR CDC. 

6 ‘‘(a) IN GENERAL.—The Secretary, acting through 

7 the Director of the Centers for Disease Control and Pre8 vention, shall expand and improve the core public health 

9 infrastructure and activities of the Centers for Disease 

10 Control and Prevention to address unmet and emerging 

11 public health needs. 

12 ‘‘(b) REPORT.—The Secretary shall submit to the 

13 Congress an annual report on the activities funded 

14 through this section. 

15 ‘‘Subtitle G—General Provisions 

16 ‘‘SEC. 3171. DEFINITIONS. 

17 ‘‘In this title: 

18 ‘‘(1) The term ‘core public health infrastruc19 ture’ includes workforce capacity and competency; 

20 laboratory systems; health information, health infor21 mation systems, and health information analysis; 

22 communications; financing; other relevant compo23 nents of organizational capacity; and other related 

24 activities. 


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1 ‘‘(2) The terms ‘Department’ and ‘depart2 mental’ refer to the Department of Health and 

3 Human Services. 

4 ‘‘(3) The term ‘health disparities’ includes 

5 health and health care disparities and means popu6 lation-specific differences in the presence of disease, 

7 health outcomes, or access to health care. For pur8 poses of the preceding sentence, a population may be 

9 delineated by race, ethnicity, geographic setting, or 

10 other population or subpopulation determined appro11 priate by the Secretary. 

12 ‘‘(4) The term ‘tribal’ refers to an Indian tribe, 

13 a Tribal organization, or an Urban Indian organiza14 tion, as such terms are defined in section 4 of the 

15 Indian Health Care Improvement Act.’’. 

16 (b) TRANSITION PROVISIONS APPLICABLE TO TASK

17 FORCES.— 

18 (1) FUNCTIONS, PERSONNEL, ASSETS, LIABIL19 ITIES, AND ADMINISTRATIVE ACTIONS.—All func20 tions, personnel, assets, and liabilities of, and ad21 ministrative actions applicable to, the Preventive 

22 Services Task Force convened under section 915(a) 

23 of the Public Health Service Act and the Task Force 

24 on Community Preventive Services (as such section 

25 and Task Forces were in existence on the day before 


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1 the date of the enactment of this Act) shall be trans2 ferred to the Task Force on Clinical Preventive 

3 Services and the Task Force on Community Preven4 tive Services, respectively, established under sections 

5 3121 and 3122 of the Public Health Service Act, as 

6 added by subsection (a). 

7 (2) RECOMMENDATIONS.—All recommendations 

8 of the Preventive Services Task Force and the Task 

9 Force on Community Preventive Services, as in ex10 istence on the day before the date of the enactment 

11 of this Act, shall be considered to be recommenda12 tions of the Task Force on Clinical Preventive Serv13 ices and the Task Force on Community Preventive 

14 Services, respectively, established under sections 

15 3121 and 3122 of the Public Health Service Act, as 

16 added by subsection (a). 

17 (3) MEMBERS ALREADY SERVING.— 

18 (A) INITIAL MEMBERS.—The Secretary of 

19 Health and Human Services may select those 

20 individuals already serving on the Preventive 

21 Services Task Force and the Task Force on 

22 Community Preventive Services, as in existence 

23 on the day before the date of the enactment of 

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1 tive Services and the Task Force on Commu2 nity Preventive Services, respectively, under sec3 tions 3121 and 3122 of the Public Health Serv4 ice Act, as added by subsection (a). 

5 (B) CALCULATION OF TOTAL SERVICE.—In 

6 calculating the total years of service of a mem7 ber of a task force for purposes of section 

8 3131(d)(2)(A) or 3132(d)(2)(A) of the Public 

9 Health Service Act, as added by subsection (a), 

10 the Secretary of Health and Human Services 

11 shall not include any period of service by the 

12 member on the Preventive Services Task Force 

13 or the Task Force on Community Preventive 

14 Services, respectively, as in existence on the day 

15 before the date of the enactment of this Act. 

16 (c) PERIOD BEFORE COMPLETION OF NATIONAL

17 STRATEGY.—Pending completion of the national strategy 

18 under section 3121 of the Public Health Service Act, as 

19 added by subsection (a), the Secretary of Health and 

20 Human Services, acting through the relevant agency head, 

21 may make a judgment about how the strategy will address 

22 an issue and rely on such judgment in carrying out any 

23 provision of subtitle C, D, E, or F of title XXXI of such 

24 Act, as added by subsection (a), that requires the Sec25 retary— 


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1 (1) to take into consideration such strategy; 

2 (2) to conduct or support research or provide 

3 services in priority areas identified in such strategy; 

4 or 

5 (3) to take any other action in reliance on such 

6 strategy. 

7 (d) CONFORMING AMENDMENTS.— 

8 (1) Paragraph (61) of section 3(b) of the In9 dian Health Care Improvement Act (25 U.S.C. 

10 1602) is amended by striking ‘‘United States Pre11 ventive Services Task Force’’ and inserting ‘‘Task 

12 Force on Clinical Preventive Services’’. 

13 (2) Section 126 of the Medicare, Medicaid, and 

14 SCHIP Benefits Improvement and Protection Act of 

15 2000 (Appendix F of Public Law 106–554) is 

16 amended by striking ‘‘United States Preventive 

17 Services Task Force’’ each place it appears and in18 serting ‘‘Task Force on Clinical Preventive Serv19 ices’’. 

20 (3) Paragraph (7) of section 317D of the Pub21 lic Health Service Act (42 U.S.C. 247b–5) is amend22 ed by striking ‘‘United States Preventive Services 

23 Task Force’’ each place it appears and inserting 

24 ‘‘Task Force on Clinical Preventive Services’’. 


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1 (4) Section 915 of the Public Health Service 

2 Act (42 U.S.C. 299b–4) is amended by striking sub3 section (a). 

4 (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and 

5 (ddd)(1)(B) of section 1861 of the Social Security 

6 Act (42 U.S.C. 1395x) are amended by striking 

7 ‘‘United States Preventive Services Task Force’’ 

8 each place it appears and inserting ‘‘Task Force on 

9 Clinical Preventive Services’’. 

10 TITLE IV—QUALITY AND 

11 SURVEILLANCE 

12 SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE 

13 DELIVERY OF HEALTH CARE. 

14 (a) IN GENERAL.—Title IX of the Public Health 

15 Service Act (42 U.S.C. 299 et seq.) is amended— 

16 (1) by redesignating part D as part E; 

17 (2) by redesignating sections 931 through 938 

18 as sections 941 through 948, respectively; 

19 (3) in section 938(1), by striking ‘‘931’’ and in20 serting ‘‘941’’; and 

21 (4) by inserting after part C the following: 


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1 ‘‘PART D—IMPLEMENTATION OF BEST 

2 PRACTICES IN THE DELIVERY OF HEALTH CARE 

3 ‘‘SEC. 931. CENTER FOR QUALITY IMPROVEMENT. 

4 ‘‘(a) IN GENERAL.—There is established the Center 

5 for Quality Improvement (referred to in this part as the 

6 ‘Center’), to be headed by the Director. 

7 ‘‘(b) PRIORITIZATION.— 

8 ‘‘(1) IN GENERAL.—The Director shall 

9 prioritize areas for the identification, development, 

10 evaluation, and implementation of best practices (in11 cluding innovative methodologies and strategies) for 

12 quality improvement activities in the delivery of 

13 health care services (in this section referred to as 

14 ‘best practices’). 

15 ‘‘(2) CONSIDERATIONS.—In prioritizing areas 

16 under paragraph (1), the Director shall consider— 

17 ‘‘(A) the priorities established under sec18 tion 1191 of the Social Security Act; and 

19 ‘‘(B) the key health indicators identified by 

20 the Assistant Secretary for Health Information 

21 under section 1709. 

22 ‘‘(c) OTHER RESPONSIBILITIES.—The Director, act23 ing directly or by awarding a grant or contract to an eligi24 ble entity, shall— 

25 ‘‘(1) identify existing best practices under sub26 section (e); 


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1 ‘‘(2) develop new best practices under sub2 section (f); 

3 ‘‘(3) evaluate best practices under subsection 

4 (g); 

5 ‘‘(4) implement best practices under subsection 

6 (h); 

7 ‘‘(5) ensure that best practices are identified, 

8 developed, evaluated, and implemented under this 

9 section consistent with standards adopted by the 

10 Secretary under section 3004 for health information 

11 technology used in the collection and reporting of 

12 quality information (including for purposes of the 

13 demonstration of meaningful use of certified elec14 tronic health record (EHR) technology by physicians 

15 and hospitals under the Medicare program (under 

16 sections 1848(o)(2) and 1886(n)(3), respectively, of 

17 the Social Security Act)); and 

18 ‘‘(6) provide for dissemination of information 

19 and reporting under subsections (i) and (j). 

20 ‘‘(d) ELIGIBILITY.—To be eligible for a grant or con21 tract under subsection (c), an entity shall— 

22 ‘‘(1) be a nonprofit entity; 

23 ‘‘(2) agree to work with a variety of institu24 tional health care providers, physicians, nurses, and 

25 other health care practitioners; and 


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1 ‘‘(3) if the entity is not the organization holding 

2 a contract under section 1153 of the Social Security 

3 Act for the area to be served, agree to cooperate 

4 with and avoid duplication of the activities of such 

5 organization. 

6 ‘‘(e) IDENTIFYING EXISTING BEST PRACTICES.—The 

7 Secretary shall identify best practices that are— 

8 ‘‘(1) currently utilized by health care providers 

9 (including hospitals, physician and other clinician 

10 practices, community cooperatives, and other health 

11 care entities) that deliver consistently high-quality, 

12 efficient health care services; and 

13 ‘‘(2) easily adapted for use by other health care 

14 providers and for use across a variety of health care 

15 settings. 

16 ‘‘(f) DEVELOPING NEW BEST PRACTICES.—The Sec17 retary shall develop best practices that are— 

18 ‘‘(1) based on a review of existing scientific evi19 dence; 

20 ‘‘(2) sufficiently detailed for implementation 

21 and incorporation into the workflow of health care 

22 providers; and 

23 ‘‘(3) designed to be easily adapted for use by 

24 health care providers across a variety of health care 

25 settings. 


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1 ‘‘(g) EVALUATION OF BEST PRACTICES.—The Direc2 tor shall evaluate best practices identified or developed 

3 under this section. Such evaluation— 

4 ‘‘(1) shall include determinations of which best 

5 practices— 

6 ‘‘(A) most reliably and effectively achieve 

7 significant progress in improving the quality of 

8 patient care; and 

9 ‘‘(B) are easily adapted for use by health 

10 care providers across a variety of health care 

11 settings; 

12 ‘‘(2) shall include regular review, updating, and 

13 improvement of such best practices; and 

14 ‘‘(3) may include in-depth case studies or em15 pirical assessments of health care providers (includ16 ing hospitals, physician and other clinician practices, 

17 community cooperatives, and other health care enti18 ties) and simulations of such best practices for de19 terminations under paragraph (1). 

20 ‘‘(h) IMPLEMENTATION OF BEST PRACTICES.— 

21 ‘‘(1) IN GENERAL.—The Director shall enter 

22 into voluntary arrangements with health care pro23 viders (including hospitals and other health facilities 

24 and health practitioners) in a State or region to imVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 00981 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plement best practices identified or developed under 

2 this section. Such implementation— 

3 ‘‘(A) may include forming collaborative 

4 multi-institutional teams; and 

5 ‘‘(B) shall include an evaluation of the best 

6 practices being implemented, including the 

7 measurement of patient outcomes before, dur8 ing, and after implementation of such best 

9 practices. 

10 ‘‘(2) PREFERENCES.—In carrying out this sub11 section, the Director shall give priority to health 

12 care providers implementing best practices that— 

13 ‘‘(A) have the greatest impact on patient 

14 outcomes and satisfaction; 

15 ‘‘(B) are the most easily adapted for use 

16 by health care providers across a variety of 

17 health care settings; 

18 ‘‘(C) promote coordination of health care 

19 practitioners across the continuum of care; and 

20 ‘‘(D) engage patients and their families in 

21 improving patient care and outcomes. 

22 ‘‘(i) PUBLIC DISSEMINATION OF INFORMATION.— 

23 The Director shall provide for the public dissemination of 

24 information with respect to best practices and activities 

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1 able in appropriate formats and languages to reflect the 

2 varying needs of consumers and diverse levels of health 

3 literacy. 

4 ‘‘(j) REPORT.— 

5 ‘‘(1) IN GENERAL.—The Director shall submit 

6 an annual report to the Congress and the Secretary 

7 on activities under this section. 

8 ‘‘(2) CONTENT.—Each report under paragraph 

9 (1) shall include— 

10 ‘‘(A) information on activities conducted 

11 pursuant to grants and contracts awarded; 

12 ‘‘(B) summary data on patient outcomes 

13 before, during, and after implementation of best 

14 practices; and 

15 ‘‘(C) recommendations on the adaptability 

16 of best practices for use by health providers.’’. 

17 (b) INITIAL QUALITY IMPROVEMENT ACTIVITIES AND

18 INITIATIVES TO BE IMPLEMENTED.—Until the Director 

19 of the Agency for Healthcare Research and Quality has 

20 established initial priorities under section 931(b) of the 

21 Public Health Service Act, as added by subsection (a), the 

22 Director shall, for purposes of such section, prioritize the 

23 following: 


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1 (1) HEALTH CARE-ASSOCIATED INFECTIONS.— 

2 Reducing health care-associated infections, including 

3 infections in nursing homes and outpatient settings. 

4 (2) SURGERY.—Increasing hospital and out5 patient perioperative patient safety, including reduc6 ing surgical-site infections and surgical errors (such 

7 as wrong-site surgery and retained foreign bodies). 

8 (3) EMERGENCY ROOM.—Improving care in 

9 hospital emergency rooms, including through the use 

10 of principles of efficiency of design and delivery to 

11 improve patient flow. 

12 (4) OBSTETRICS.—Improving the provision of 

13 obstetrical and neonatal care, including the identi14 fication of interventions that are effective in reduc15 ing the risk of preterm and premature labor and the 

16 implementation of best practices for labor and deliv17 ery care. 

18 SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMA19 TION. 

20 (a) ESTABLISHMENT.—Title XVII (42 U.S.C. 300u 

21 et seq.) is amended— 

22 (1) by redesignating sections 1709 and 1710 as 

23 sections 1710 and 1711, respectively; and 

24 (2) by inserting after section 1708 the fol25 lowing: 


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1 ‘‘SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMA2 TION. 

3 ‘‘(a) IN GENERAL.—There is established within the 

4 Department an Assistant Secretary for Health Informa5 tion (in this section referred to as the ‘Assistant Sec6 retary’), to be appointed by the Secretary. 

7 ‘‘(b) RESPONSIBILITIES.—The Assistant Secretary 

8 shall— 

9 ‘‘(1) ensure the collection, collation, reporting, 

10 and publishing of information (including full and 

11 complete statistics) on key health indicators regard12 ing the Nation’s health and the performance of the 

13 Nation’s health care; 

14 ‘‘(2) facilitate and coordinate the collection, col15 lation, reporting, and publishing of information re16 garding the Nation’s health and the performance of 

17 the Nation’s health care (other than information de18 scribed in paragraph (1)); 

19 ‘‘(3)(A) develop standards for the collection of 

20 data regarding the Nation’s health and the perform21 ance of the Nation’s health care; and 

22 ‘‘(B) in carrying out subparagraph (A)— 

23 ‘‘(i) ensure appropriate specificity and 

24 standardization for data collection at the na25 tional, regional, State, and local levels; 


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1 ‘‘(ii) include standards, as appropriate, for 

2 the collection of accurate data on health and 

3 health care by race, ethnicity, primary lan4 guage, sex, sexual orientation, gender identity, 

5 disability, socioeconomic status, rural, urban, or 

6 other geographic setting, and any other popu7 lation or subpopulation determined appropriate 

8 by the Secretary; 

9 ‘‘(iii) ensure, with respect to data on race 

10 and ethnicity, consistency with the 1997 Office 

11 of Management and Budget Standards for 

12 Maintaining, Collecting and Presenting Federal 

13 Data on Race and Ethnicity (or any successor 

14 standards); and 

15 ‘‘(iv) in consultation with the Director of 

16 the Office of Minority Health, and the Director 

17 of the Office of Civil Rights, of the Department, 

18 develop standards for the collection of data on 

19 health and health care with respect to data on 

20 primary language; 

21 ‘‘(4) provide support to Federal departments 

22 and agencies whose programs have a significant im23 pact upon health (as determined by the Secretary) 

24 for the collection and collation of information de25 scribed in paragraphs (1) and (2); 


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1 ‘‘(5) ensure the sharing of information de2 scribed in paragraphs (1) and (2) among the agen3 cies of the Department; 

4 ‘‘(6) facilitate the sharing of information de5 scribed in paragraphs (1) and (2) by Federal depart6 ments and agencies whose programs have a signifi7 cant impact upon health (as determined by the Sec8 retary); 

9 ‘‘(7) identify gaps in information described in 

10 paragraphs (1) and (2) and the appropriate agency 

11 or entity to address such gaps; 

12 ‘‘(8) facilitate and coordinate identification and 

13 monitoring by the agencies of the Department of 

14 health disparities to inform program and policy ef15 forts to reduce such disparities, including facilitating 

16 and funding analyses conducted in cooperation with 

17 the Social Security Administration, the Bureau of 

18 the Census, and other appropriate agencies and enti19 ties; 

20 ‘‘(9) consistent with privacy, proprietary, and 

21 other appropriate safeguards, facilitate public acces22 sibility of datasets (such as de-identified Medicare 

23 datasets or publicly available data on key health in24 dicators) by means of the Internet; and 


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1 ‘‘(10) award grants or contracts for the collec2 tion and collation of information described in para3 graphs (1) and (2) (including through statewide sur4 veys that provide standardized information). 

5 ‘‘(c) KEY HEALTH INDICATORS.— 

6 ‘‘(1) IN GENERAL.—In carrying out subsection 

7 (b)(1), the Assistant Secretary shall— 

8 ‘‘(A) identify, and reassess at least once 

9 every 3 years, key health indicators described in 

10 such subsection; 

11 ‘‘(B) publish statistics on such key health 

12 indicators for the public— 

13 ‘‘(i) not less than annually; and 

14 ‘‘(ii) on a supplemental basis when15 ever warranted by— 

16 ‘‘(I) the rate of change for a key 

17 health indicator; or 

18 ‘‘(II) the need to inform policy 

19 regarding the Nation’s health and the 

20 performance of the Nation’s health 

21 care; and 

22 ‘‘(C) ensure consistency with the national 

23 strategy developed by the Secretary under sec24 tion 3121 and consideration of the indicators 


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1 specified in the reports under sections 308, 

2 903(a)(6), and 913(b)(2). 

3 ‘‘(2) RELEASE OF KEY HEALTH INDICATORS.— 

4 The regulations, rules, processes, and procedures of 

5 the Office of Management and Budget governing the 

6 review, release, and dissemination of key health indi7 cators shall be the same as the regulations, rules, 

8 processes, and procedures of the Office of Manage9 ment and Budget governing the review, release, and 

10 dissemination of Principal Federal Economic Indica11 tors (or equivalent statistical data) by the Bureau of 

12 Labor Statistics. 

13 ‘‘(d) COORDINATION.—In carrying out this section, 

14 the Assistant Secretary shall coordinate with— 

15 ‘‘(1) public and private entities that collect and 

16 disseminate information on health and health care, 

17 including foundations; and 

18 ‘‘(2) the head of the Office of the National Co19 ordinator for Health Information Technology to en20 sure optimal use of health information technology. 

21 ‘‘(e) REQUEST FOR INFORMATION FROM OTHER DE22 PARTMENTS AND AGENCIES.—Consistent with applicable 

23 law, the Assistant Secretary may secure directly from any 

24 Federal department or agency information necessary to 

25 enable the Assistant Secretary to carry out this section. 


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1 ‘‘(f) REPORT.— 

2 ‘‘(1) SUBMISSION.—The Assistant Secretary 

3 shall submit to the Secretary and the Congress an 

4 annual report containing— 

5 ‘‘(A) a description of national, regional, or 

6 State changes in health or health care, as re7 flected by the key health indicators identified 

8 under subsection (c)(1); 

9 ‘‘(B) a description of gaps in the collection, 

10 collation, reporting, and publishing of informa11 tion regarding the Nation’s health and the per12 formance of the Nation’s health care; 

13 ‘‘(C) recommendations for addressing such 

14 gaps and identification of the appropriate agen15 cy within the Department or other entity to ad16 dress such gaps; 

17 ‘‘(D) a description of analyses of health 

18 disparities, including the results of completed 

19 analyses, the status of ongoing longitudinal 

20 studies, and proposed or planned research; and 

21 ‘‘(E) a plan for actions to be taken by the 

22 Assistant Secretary to address gaps described 

23 in subparagraph (B). 

24 ‘‘(2) CONSIDERATION.—In preparing a report 

25 under paragraph (1), the Assistant Secretary shall 


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1 take into consideration the findings and conclusions 

2 in the reports under sections 308, 903(a)(6), and 

3 913(b)(2). 

4 ‘‘(g) PROPRIETARY AND PRIVACY PROTECTIONS.— 

5 Nothing in this section shall be construed to affect appli6 cable proprietary or privacy protections. 

7 ‘‘(h) CONSULTATION.—In carrying out this section, 

8 the Assistant Secretary shall consult with— 

9 ‘‘(1) the heads of appropriate health agencies 

10 and offices in the Department, including the Office 

11 of the Surgeon General of the Public Health Service, 

12 the Office of Minority Health, and the Office on 

13 Women’s Health; and 

14 ‘‘(2) as appropriate, the heads of other Federal 

15 departments and agencies whose programs have a 

16 significant impact upon health (as determined by the 

17 Secretary). 

18 ‘‘(i) DEFINITION.—In this section: 

19 ‘‘(1) The terms ‘agency’ and ‘agencies’ include 

20 an epidemiology center established under section 214 

21 of the Indian Health Care Improvement Act. 

22 ‘‘(2) The term ‘Department’ means the Depart23 ment of Health and Human Services. 

24 ‘‘(3) The term ‘health disparities’ has the 

25 meaning given to such term in section 3171.’’. 


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1 (b) OTHER COORDINATION RESPONSIBILITIES.— 

2 Title III (42 U.S.C. 241 et seq.) is amended— 

3 (1) in paragraphs (1) and (2) of section 304(c) 

4 (42 U.S.C. 242b(c)), by inserting ‘‘, acting through 

5 the Assistant Secretary for Health Information,’’ 

6 after ‘‘The Secretary’’ each place it appears; and 

7 (2) in section 306(j) (42 U.S.C. 242k(j)), by in8 serting ‘‘, acting through the Assistant Secretary for 

9 Health Information,’’ after ‘‘of this section, the Sec10 retary’’. 

11 SEC. 2403. AUTHORIZATION OF APPROPRIATIONS. 

12 Section 799C, as added and amended, is further 

13 amended by adding at the end the following: 

14 ‘‘(e) QUALITY AND SURVEILLANCE.—For the pur15 pose of carrying out part D of title IX and section 1709, 

16 in addition to any other amounts authorized to be appro17 priated for such purpose, there is authorized to be appro18 priated, out of any monies in the Public Health Invest19 ment Fund, $300,000,000 for each of fiscal years 2010 

20 through 2014 and $330,000,000 for each of fiscal years 

21 2015 through 2019.’’. 


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1 TITLE V—OTHER PROVISIONS 

2 Subtitle A—Drug Discount for 

3 Rural and Other Hospitals 

4 SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM. 

5 (a) EXPANSION OF COVERED ENTITIES RECEIVING

6 DISCOUNTED PRICES.—Section 340B(a)(4) (42 U.S.C. 

7 256b(a)(4)) is amended by adding at the end the fol8 lowing: 

9 ‘‘(M) A children’s hospital excluded from 

10 the Medicare prospective payment system pur11 suant to section 1886(d)(1)(B)(iii) of the Social 

12 Security Act which would meet the require13 ments of subparagraph (L), including the dis14 proportionate share adjustment percentage re15 quirement under subparagraph (L)(ii), if the 

16 hospital were a subsection (d) hospital as de17 fined in section 1886(d)(1)(B) of the Social Se18 curity Act. 

19 ‘‘(N) An entity that is a critical access hos20 pital (as determined under section 1820(c)(2) 

21 of the Social Security Act). 

22 ‘‘(O) An entity receiving funds under title 

23 V of the Social Security Act (relating to mater24 nal and child health) for the provision of health 

25 services. 


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1 ‘‘(P) An entity receiving funds under sub2 part I of part B of title XIX of the Public 

3 Health Service Act (relating to comprehensive 

4 mental health services) for the provision of com5 munity mental health services. 

6 ‘‘(Q) An entity receiving funds under sub7 part II of such part B (relating to the preven8 tion and treatment of substance abuse) for the 

9 provision of treatment services for substance 

10 abuse. 

11 ‘‘(R) An entity that is a Medicare-depend12 ent, small rural hospital (as defined in section 

13 1886(d)(5)(G)(iv) of the Social Security Act). 

14 ‘‘(S) An entity that is a sole community 

15 hospital (as defined in section 

16 1886(d)(5)(D)(iii) of the Social Security Act). 

17 ‘‘(T) An entity that is classified as a rural 

18 referral center under section 1886(d)(5)(C) of 

19 the Social Security Act.’’. 

20 (b) PROHIBITION ON GROUP PURCHASING ARRANGE21 MENTS.—Section 340B(a) (42 U.S.C. 256b(a)) is amend22 ed— 

23 (1) in paragraph (4)(L)— 

24 (A) by adding ‘‘and’’ at the end of clause 

25 (i); 


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1 (B) by striking ‘‘; and’’ at the end of 

2 clause (ii) and inserting a period; and 

3 (C) by striking clause (iii); 

4 (2) in paragraph (5), by redesignating subpara5 graphs (C) and (D) as subparagraphs (D) and (E), 

6 respectively, and by inserting after subparagraph 

7 (B) the following: 

8 ‘‘(C) PROHIBITING USE OF GROUP PUR9 CHASING ARRANGEMENTS.— 

10 ‘‘(i) A hospital described in subpara11 graph (L), (M), (N), (R), (S), or (T) of 

12 paragraph (4) shall not obtain covered out13 patient drugs through a group purchasing 

14 organization or other group purchasing ar15 rangement, except as permitted or pro16 vided pursuant to clause (ii). 

17 ‘‘(ii) The Secretary shall establish rea18 sonable exceptions to the requirement of 

19 clause (i)— 

20 ‘‘(I) with respect to a covered 

21 outpatient drug that is unavailable to 

22 be purchased through the program 

23 under this section due to a drug 

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1 compliance, or any other reason be2 yond the hospital’s control; 

3 ‘‘(II) to facilitate generic substi4 tution when a generic covered out5 patient drug is available at a lower 

6 price; and 

7 ‘‘(III) to reduce in other ways 

8 the administrative burdens of man9 aging both inventories of drugs ob10 tained under this section and not 

11 under this section, if such exception 

12 does not create a duplicate discount 

13 problem in violation of subparagraph 

14 (A) or a diversion problem in violation 

15 of subparagraph (B).’’. 

16 SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT 

17 DRUGS. 

18 (a) IN GENERAL.—Section 340B (42 U.S.C. 256b) 

19 is amended— 

20 (1) in subsection (b)— 

21 (A) by striking ‘‘In this section, the terms’’ 

22 and inserting the following: ‘‘In this section: 

23 ‘‘(1) IN GENERAL.—The terms’’; and 

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

25 paragraph: 


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1 ‘‘(2) COVERED DRUG.—The term ‘covered 

2 drug’— 

3 ‘‘(A) means a covered outpatient drug (as 

4 defined in section 1927(k)(2) of the Social Se5 curity Act); and 

6 ‘‘(B) includes, notwithstanding the section 

7 1927(k)(3)(A) of such Act, a drug used in con8 nection with an inpatient or outpatient service 

9 provided by a hospital described in subpara10 graph (L), (M), (N), (R), (S), or (T) of sub11 section (a)(4) that is enrolled to participate in 

12 the drug discount program under this section.’’; 

13 and 

14 (2) in paragraphs (5), (7), and (9) of sub15 section (a), by striking ‘‘outpatient’’ each place it 

16 appears. 

17 (b) MEDICAID CREDITS ON INPATIENT DRUGS.— 

18 Subsection (c) of section 340B (42 U.S.C. 256b(c)) is 

19 amended to read as follows: 

20 ‘‘(c) MEDICAID CREDITS ON INPATIENT DRUGS.— 

21 ‘‘(1) IN GENERAL.—For the cost reporting pe22 riod covered by the most recently filed Medicare cost 

23 report under title XVIII of the Social Security Act, 

24 a hospital described in subparagraph (L), (M), (N), 

25 (R), (S), or (T) of subsection (a)(4) and enrolled to 


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1 participate in the drug discount program under this 

2 section shall provide to each State under its plan 

3 under title XIX of such Act— 

4 ‘‘(A) a credit on the estimated annual 

5 costs to such hospital of single source and inno6 vator multiple source drugs provided to Med7 icaid beneficiaries for inpatient use; and 

8 ‘‘(B) a credit on the estimated annual 

9 costs to such hospital of noninnovator multiple 

10 source drugs provided to Medicaid beneficiaries 

11 for inpatient use. 

12 ‘‘(2) AMOUNT OF CREDITS.— 

13 ‘‘(A) SINGLE SOURCE AND INNOVATOR

14 MULTIPLE SOURCE DRUGS.—For purposes of 

15 paragraph (1)(A)— 

16 ‘‘(i) the credit under such paragraph 

17 shall be equal to the product of— 

18 ‘‘(I) the annual value of single 

19 source and innovator multiple source 

20 drugs purchased under this section by 

21 the hospital based on the drugs’ aver22 age manufacturer price; 

23 ‘‘(II) the estimated percentage of 

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1 utable to Medicaid beneficiaries for in2 patient use; and 

3 ‘‘(III) the minimum rebate per4 centage described in section 

5 1927(c)(1)(B) of the Social Security 

6 Act; 

7 ‘‘(ii) the reference in clause (i)(I) to 

8 the annual value of single source and inno9 vator multiple source drugs purchased 

10 under this section by the hospital based on 

11 the drugs’ average manufacturer price 

12 shall be equal to the sum of— 

13 ‘‘(I) the annual quantity of each 

14 single source and innovator multiple 

15 source drug purchased during the cost 

16 reporting period, multiplied by 

17 ‘‘(II) the average manufacturer 

18 price for that drug; 

19 ‘‘(iii) the reference in clause (i)(II) to 

20 the estimated percentage of the hospital’s 

21 drug purchases attributable to Medicaid 

22 beneficiaries for inpatient use; shall be 

23 equal to— 

24 ‘‘(I) the Medicaid inpatient drug 

25 charges as reported on the hospital’s 


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1 most recently filed Medicare cost re2 port, divided by 

3 ‘‘(II) total drug charges reported 

4 on the cost report; and 

5 ‘‘(iv) the terms ‘single source drug’ 

6 and ‘innovator multiple source drug’ have 

7 the meanings given such terms in section 

8 1927(k)(7) of the Social Security Act. 

9 ‘‘(B) NONINNOVATOR MULTIPLE SOURCE

10 DRUGS.—For purposes of paragraph (1)(B)— 

11 ‘‘(i) the credit under such paragraph 

12 shall be equal to the product of— 

13 ‘‘(I) the annual value of noninno14 vator multiple source drugs purchased 

15 under this section by the hospital 

16 based on the drugs’ average manufac17 turer price; 

18 ‘‘(II) the estimated percentage of 

19 the hospital’s drug purchases attrib20 utable to Medicaid beneficiaries for in21 patient use; and 

22 ‘‘(III) the applicable percentage 

23 as defined in section 1927(c)(3)(B) of 

24 the Social Security Act; 


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1 ‘‘(ii) the reference in clause (i)(I) to 

2 the annual value of noninnovator multiple 

3 source drugs purchased under this section 

4 by the hospital based on the drugs’ average 

5 manufacturer price shall be equal to the 

6 sum of— 

7 ‘‘(I) the annual quantity of each 

8 noninnovator multiple source drug 

9 purchased during the cost reporting 

10 period, multiplied by 

11 ‘‘(II) the average manufacturer 

12 price for that drug; 

13 ‘‘(iii) the reference in clause (i)(II) to 

14 the estimated percentage of the hospital’s 

15 drug purchases attributable to Medicaid 

16 beneficiaries for inpatient use shall be 

17 equal to— 

18 ‘‘(I) the Medicaid inpatient drug 

19 charges as reported on the hospital’s 

20 most recently filed Medicare cost re21 port, divided by 

22 ‘‘(II) total drug charges reported 

23 on the cost report; and 

24 ‘‘(iv) the term ‘noninnovator multiple 

25 source drug’ has the meaning given such 


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1 term in section 1927(k)(7) of the Social 

2 Security Act. 

3 ‘‘(3) CALCULATION OF CREDITS.— 

4 ‘‘(A) IN GENERAL.—Each State calculates 

5 credits under paragraph (1) and informs hos6 pitals of amount under section 1927(a)(5)(D) 

7 of the Social Security Act. 

8 ‘‘(B) HOSPITAL PROVISION OF INFORMA9 TION.—Not later than 30 days after the date of 

10 the filing of the hospital’s most recently filed 

11 Medicare cost report, the hospital shall provide 

12 the State with the information described in 

13 paragraphs (2)(A)(ii) and (2)(B)(ii). With re14 spect to each drug purchased during the cost 

15 reporting period, the hospital shall provide the 

16 dosage form, strength, package size, date of 

17 purchase and the number of units purchased. 

18 ‘‘(4) PAYMENT DEADLINE.—The credits pro19 vided by a hospital under paragraph (1) shall be 

20 paid within 60 days after receiving the information 

21 specified in paragraph (3)(A). 

22 ‘‘(5) OPT OUT.—A hospital shall not be re23 quired to provide the Medicaid credit required under 

24 paragraph (1) if it can demonstrate to the State 

25 that it will lose reimbursement under the State plan 


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1 resulting from the extension of discounts to inpa2 tient drugs under subsection (b)(2) and that the loss 

3 of reimbursement will exceed the amount of the 

4 credit otherwise owed by the hospital. 

5 ‘‘(6) OFFSET AGAINST MEDICAL ASSISTANCE.— 

6 Amounts received by a State under this subsection 

7 in any quarter shall be considered to be a reduction 

8 in the amount expended under the State plan in the 

9 quarter for medical assistance for purposes of sec10 tion 1903(a)(1) of the Social Security Act.’’. 

11 (c) CONFORMING AMENDMENTS.—Section 1927 of 

12 the Social Security Act (42 U.S.C. 1396r–8) is amended— 

13 (1) in subsection (a)(5)(A), by striking ‘‘covered 

14 outpatient drugs’’ and inserting ‘‘covered drugs (as 

15 defined in section 340B(b)(2) of the Public Health 

16 Service Act)’’; 

17 (2) in subsection (a)(5), by striking subpara18 graph (D) and inserting the following: 

19 ‘‘(D) STATE RESPONSIBILITY FOR CALCU20 LATING HOSPITAL CREDITS.—The State shall 

21 calculate the credits owed by the hospital under 

22 paragraph (1) of section 340B(c) of the Public 

23 Health Service Act and provide the hospital 

24 with both the amounts and an explanation of 

25 how it calculated the credits. In performing the 


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1 calculations specified in paragraphs (2)(A)(ii) 

2 and (2)(B)(ii) of such section, the State shall 

3 use the average manufacturer price applicable 

4 to the calendar quarter in which the drug was 

5 purchased by the hospital.’’; and 

6 (3) in subsection (k)(1)— 

7 (A) in subparagraph (A), by striking ‘‘sub8 paragraph (B)’’ and inserting ‘‘subparagraphs 

9 (B) and (D)’’; and 

10 (B) by adding at the end the following: 

11 ‘‘(D) CALCULATION FOR COVERED

12 DRUGS.—With respect to a covered drug (as de13 fined in section 340B(b)(2) of the Public 

14 Health Service Act), the average manufacturer 

15 price shall be determined in accordance with 

16 subparagraph (A) except that, in the event a 

17 covered drug is not distributed to the retail 

18 pharmacy class of trade, it shall mean the aver19 age price paid to the manufacturer for the drug 

20 in the United States by wholesalers for drugs 

21 distributed to the acute care class of trade, 

22 after deducting customary prompt pay dis23 counts.’’. 


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1 SEC. 2503. EFFECTIVE DATE. 

2 (a) IN GENERAL.—The amendments made by this 

3 subtitle shall take effect on July 1, 2010, and shall apply 

4 to drugs dispensed on or after such date. 

5 (b) EFFECTIVENESS.—The amendments made by 

6 this subtitle shall be effective, and shall be taken into ac7 count in determining whether a manufacturer is deemed 

8 to meet the requirements of section 340B(a) of the Public 

9 Health Service Act (42 U.S.C. 256b(a)) and of section 

10 1927(a)(5) of the Social Security Act (42 U.S.C. 1396r– 

11 8(a)(5)), notwithstanding any other provision of law. 

12 Subtitle B—School-Based Health 

13 Clinics 

14 SEC. 2511. SCHOOL-BASED HEALTH CLINICS. 

15 (a) IN GENERAL.—Part Q of title III (42 U.S.C. 

16 280h et seq.) is amended by adding at the end the fol17 lowing: 

18 ‘‘SEC. 399Z–1. SCHOOL-BASED HEALTH CLINICS. 

19 ‘‘(a) PROGRAM.—The Secretary shall establish a 

20 school-based health clinic program consisting of awarding 

21 grants to eligible entities to support the operation of 

22 school-based health clinics (referred to in this section as 

23 ‘SBHCs’). 

24 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

25 this section, an entity shall— 


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1 ‘‘(1) be an SBHC (as defined in subsection 

2 (l)(4)); and 

3 ‘‘(2) submit an application at such time, in 

4 such manner, and containing such information as 

5 the Secretary may require, including at a min6 imum— 

7 ‘‘(A) evidence that the applicant meets all 

8 criteria necessary to be designated as an 

9 SBHC; 

10 ‘‘(B) evidence of local need for the services 

11 to be provided by the SBHC; 

12 ‘‘(C) an assurance that— 

13 ‘‘(i) SBHC services will be provided in 

14 accordance with Federal, State, and local 

15 laws governing— 

16 ‘‘(I) obtaining parental or guard17 ian consent; and 

18 ‘‘(II) patient privacy and student 

19 records, including section 264 of the 

20 Health Insurance Portability and Ac21 countability Act of 1996 and section 

22 444 of the General Education Provi23 sions Act; 

24 ‘‘(ii) the SBHC has established and 

25 maintains collaborative relationships with 


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1 other health care providers in the 

2 catchment area of the SBHC; 

3 ‘‘(iii) the SBHC will provide on-site 

4 access during the academic day when 

5 school is in session and has an established 

6 network of support and access to services 

7 with backup health providers when the 

8 school or SBHC is closed; 

9 ‘‘(iv) the SBHC will be integrated into 

10 the school environment and will coordinate 

11 health services with appropriate school per12 sonnel and other community providers co13 located at the school; and 

14 ‘‘(v) the SBHC sponsoring facility as15 sumes all responsibility for the SBHC ad16 ministration, operations, and oversight; 

17 and 

18 ‘‘(D) such other information as the Sec19 retary may require. 

20 ‘‘(c) USE OF FUNDS.—Funds awarded under a grant 

21 under this section may be used for— 

22 ‘‘(1) providing training related to the provision 

23 of comprehensive primary health services and addi24 tional health services; 


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1 ‘‘(2) the management and operation of SBHC 

2 programs; and 

3 ‘‘(3) the payment of salaries for health profes4 sionals and other appropriate SBHC personnel. 

5 ‘‘(d) CONSIDERATION OF NEED.—In determining the 

6 amount of a grant under this section, the Secretary shall 

7 take into consideration— 

8 ‘‘(1) the financial need of the SBHC; 

9 ‘‘(2) State, local, or other sources of funding 

10 provided to the SBHC; and 

11 ‘‘(3) other factors as determined appropriate by 

12 the Secretary. 

13 ‘‘(e) PREFERENCES.—In awarding grants under this 

14 section, the Secretary shall give preference to SBHCs that 

15 have a demonstrated record of service to the following: 

16 ‘‘(1) A high percentage of medically under17 served children and adolescents. 

18 ‘‘(2) Communities or populations in which chil19 dren and adolescents have difficulty accessing health 

20 and mental health services. 

21 ‘‘(3) Communities with high percentages of chil22 dren and adolescents who are uninsured, under23 insured, or eligible for medical assistance under Fed24 eral or State health benefits programs (including ti25 tles XIX and XXI of the Social Security Act). 


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1 ‘‘(f) MATCHING REQUIREMENT.—The Secretary may 

2 award a grant to an SBHC only if the SBHC agrees to 

3 provide, from non-Federal sources, an amount equal to 20 

4 percent of the amount of the grant (which may be pro5 vided in cash or in kind) to carry out the activities sup6 ported by the grant. 

7 ‘‘(g) SUPPLEMENT, NOT SUPPLANT.—The Secretary 

8 may award a grant to an SBHC under this section only 

9 if the SBHC demonstrates to the satisfaction of the Sec10 retary that funds received through the grant will be ex11 pended only to supplement, and not supplant, non-Federal 

12 and Federal funds otherwise available to the SBHC for 

13 operation of the SBHC (including each activity described 

14 in paragraph (1) or (2) of subsection (c)). 

15 ‘‘(h) PAYOR OF LAST RESORT.—The Secretary may 

16 award a grant to an SBHC under this section only if the 

17 SBHC demonstrates to the satisfaction of the Secretary 

18 that funds received through the grant will not be expended 

19 for any activity to the extent that payment has been made, 

20 or can reasonably be expected to be made— 

21 ‘‘(1) under any insurance policy; 

22 ‘‘(2) under any Federal or State health benefits 

23 program (including titles XIX and XXI of the Social 

24 Security Act); or 


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1 ‘‘(3) by an entity which provides health services 

2 on a prepaid basis. 

3 ‘‘(i) REGULATIONS REGARDING REIMBURSEMENT

4 FOR HEALTH SERVICES.—The Secretary shall issue regu5 lations regarding the reimbursement for health services 

6 provided by SBHCs to individuals eligible to receive such 

7 services through the program under this section, including 

8 reimbursement under any insurance policy or any Federal 

9 or State health benefits program (including titles XIX and 

10 XXI of the Social Security Act). 

11 ‘‘(j) TECHNICAL ASSISTANCE.—The Secretary shall 

12 provide (either directly or by grant or contract) technical 

13 and other assistance to SBHCs to assist such SBHCs to 

14 meet the requirements of this section. Such assistance 

15 may include fiscal and program management assistance, 

16 training in fiscal and program management, operational 

17 and administrative support, and the provision of informa18 tion to the SBHCs of the variety of resources available 

19 under this title and how those resources can be best used 

20 to meet the health needs of the communities served by 

21 the SBHCs. 

22 ‘‘(k) EVALUATION; REPORT.—The Secretary shall— 

23 ‘‘(1) develop and implement a plan for evalu24 ating SBHCs and monitoring quality performances 

25 under the awards made under this section; and 


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1 ‘‘(2) submit to the Congress on an annual basis 

2 a report on the program under this section. 

3 ‘‘(l) DEFINITIONS.—In this section: 

4 ‘‘(1) COMPREHENSIVE PRIMARY HEALTH SERV5 ICES.—The term ‘comprehensive primary health 

6 services’ means the core services offered by SBHCs, 

7 which shall include the following: 

8 ‘‘(A) PHYSICAL.—Comprehensive health 

9 assessments, diagnosis, and treatment of minor, 

10 acute, and chronic medical conditions and refer11 rals to, and follow-up for, specialty care. 

12 ‘‘(B) MENTAL HEALTH.—Mental health 

13 assessments, crisis intervention, counseling, 

14 treatment, and referral to a continuum of serv15 ices including emergency psychiatric care, com16 munity support programs, inpatient care, and 

17 outpatient programs. 

18 ‘‘(C) OPTIONAL SERVICES.—Additional 

19 services, which may include oral health, social, 

20 and age-appropriate health education services, 

21 including nutritional counseling. 

22 ‘‘(2) MEDICALLY UNDERSERVED CHILDREN

23 AND ADOLESCENTS.—The term ‘medically under24 served children and adolescents’ means a population 

25 of children and adolescents who are residents of an 


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1 area designated by the Secretary as an area with a 

2 shortage of personal health services and health in3 frastructure for such children and adolescents. 

4 ‘‘(3) SCHOOL-BASED HEALTH CLINIC.—The 

5 term ‘school-based health clinic’ means a health clin6 ic that— 

7 ‘‘(A) is located in, or is adjacent to, a 

8 school facility of a local educational agency; 

9 ‘‘(B) is organized through school, commu10 nity, and health provider relationships; 

11 ‘‘(C) is administered by a sponsoring facil12 ity; and 

13 ‘‘(D) provides, at a minimum, comprehen14 sive primary health services during school hours 

15 to children and adolescents by health profes16 sionals in accordance with State and local laws 

17 and regulations, established standards, and 

18 community practice. 

19 ‘‘(4) SPONSORING FACILITY.—The term ‘spon20 soring facility’ is— 

21 ‘‘(A) a hospital; 

22 ‘‘(B) a public health department; 

23 ‘‘(C) a community health center; 

24 ‘‘(D) a nonprofit health care agency; 

25 ‘‘(E) a local educational agency; or 


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1 ‘‘(F) a program administered by the In2 dian Health Service or the Bureau of Indian 

3 Affairs or operated by an Indian tribe or a trib4 al organization under the Indian Self-Deter5 mination and Education Assistance Act, a Na6 tive Hawaiian entity, or an urban Indian pro7 gram under title V of the Indian Health Care 

8 Improvement Act. 

9 ‘‘(m) AUTHORIZATION OF APPROPRIATIONS.—For 

10 purposes of carrying out this section, there are authorized 

11 to be appropriated $50,000,000 for fiscal year 2010 and 

12 such sums as may be necessary for each of the fiscal years 

13 2011 through 2014.’’. 

14 (b) EFFECTIVE DATE.—The Secretary of Health and 

15 Human Services shall begin awarding grants under section 

16 399Z–1 of the Public Health Service Act, as added by sub17 section (b), not later than July 1, 2010, without regard 

18 to whether or not final regulations have been issued under 

19 section 399Z–1(h) of such Act. 

20 Subtitle C—National Medical 

21 Device Registry 

22 SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY. 

23 (a) REGISTRY.— 


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1 (1) IN GENERAL.—Section 519 of the Federal 

2 Food, Drug, and Cosmetic Act (21 U.S.C. 360i) is 

3 amended— 

4 (A) by redesignating subsection (g) as sub5 section (h); and 

6 (B) by inserting after subsection (f) the 

7 following: 

8 ‘‘National Medical Device Registry 

9 ‘‘(g)(1) The Secretary shall establish a national med10 ical device registry (in this subsection referred to as the 

11 ‘registry’) to facilitate analysis of postmarket safety and 

12 outcomes data on each device that— 

13 ‘‘(A) is or has been used in or on a patient; and 

14 ‘‘(B) is— 

15 ‘‘(i) a class III device; or 

16 ‘‘(ii) a class II device that is implantable, 

17 life-supporting, or life-sustaining. 

18 ‘‘(2) In developing the registry, the Secretary shall, 

19 in consultation with the Commissioner of Food and Drugs, 

20 the Administrator of the Centers for Medicare & Medicaid 

21 Services, the head of the Office of the National Coordi22 nator for Health Information Technology, and the Sec23 retary of Veterans Affairs, determine the best methods 

24 for— 


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1 ‘‘(A) including in the registry, in a manner con2 sistent with subsection (f), appropriate information 

3 to identify each device described in paragraph (1) by 

4 type, model, and serial number or other unique iden5 tifier; 

6 ‘‘(B) validating methods for analyzing patient 

7 safety and outcomes data from multiple sources and 

8 for linking such data with the information included 

9 in the registry as described in subparagraph (A), in10 cluding, to the extent feasible, use of— 

11 ‘‘(i) data provided to the Secretary under 

12 other provisions of this chapter; and 

13 ‘‘(ii) information from public and private 

14 sources identified under paragraph (3); 

15 ‘‘(C) integrating the activities described in this 

16 subsection with— 

17 ‘‘(i) activities under paragraph (3) of sec18 tion 505(k) (relating to active postmarket risk 

19 identification); 

20 ‘‘(ii) activities under paragraph (4) of sec21 tion 505(k) (relating to advanced analysis of 

22 drug safety data); and 

23 ‘‘(iii) other postmarket device surveillance 

24 activities of the Secretary authorized by this 

25 chapter; and 


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1 ‘‘(D) providing public access to the data and 

2 analysis collected or developed through the registry 

3 in a manner and form that protects patient privacy 

4 and proprietary information and is comprehensive, 

5 useful, and not misleading to patients, physicians, 

6 and scientists. 

7 ‘‘(3)(A) To facilitate analyses of postmarket safety 

8 and patient outcomes for devices described in paragraph 

9 (1), the Secretary shall, in collaboration with public, aca10 demic, and private entities, develop methods to— 

11 ‘‘(i) obtain access to disparate sources of 

12 patient safety and outcomes data, including— 

13 ‘‘(I) Federal health-related electronic 

14 data (such as data from the Medicare pro15 gram under title XVIII of the Social Secu16 rity Act or from the health systems of the 

17 Department of Veterans Affairs); 

18 ‘‘(II) private sector health-related 

19 electronic data (such as pharmaceutical 

20 purchase data and health insurance claims 

21 data); and 

22 ‘‘(III) other data as the Secretary 

23 deems necessary to permit postmarket as24 sessment of device safety and effectiveness; 

25 and 


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1 ‘‘(ii) link data obtained under clause (i) 

2 with information in the registry. 

3 ‘‘(B) In this paragraph, the term ‘data’ refers to in4 formation respecting a device described in paragraph (1), 

5 including claims data, patient survey data, standardized 

6 analytic files that allow for the pooling and analysis of 

7 data from disparate data environments, electronic health 

8 records, and any other data deemed appropriate by the 

9 Secretary. 

10 ‘‘(4) Not later than 36 months after the date of the 

11 enactment of this subsection, the Secretary shall promul12 gate regulations for establishment and operation of the 

13 registry under paragraph (1). Such regulations— 

14 ‘‘(A)(i) in the case of devices that are described 

15 in paragraph (1) and sold on or after the date of the 

16 enactment of this subsection, shall require manufac17 turers of such devices to submit information to the 

18 registry, including, for each such device, the type, 

19 model, and serial number or, if required under sub20 section (f), other unique device identifier; and 

21 ‘‘(ii) in the case of devices that are described in 

22 paragraph (1) and sold before such date, may re23 quire manufacturers of such devices to submit such 

24 information to the registry, if deemed necessary by 

25 the Secretary to protect the public health; 


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1 ‘‘(B) shall establish procedures— 

2 ‘‘(i) to permit linkage of information sub3 mitted pursuant to subparagraph (A) with pa4 tient safety and outcomes data obtained under 

5 paragraph (3); and 

6 ‘‘(ii) to permit analyses of linked data; 

7 ‘‘(C) may require device manufacturers to sub8 mit such other information as is necessary to facili9 tate postmarket assessments of device safety and ef10 fectiveness and notification of device risks; 

11 ‘‘(D) shall establish requirements for regular 

12 and timely reports to the Secretary, which shall be 

13 included in the registry, concerning adverse event 

14 trends, adverse event patterns, incidence and preva15 lence of adverse events, and other information the 

16 Secretary determines appropriate, which may include 

17 data on comparative safety and outcomes trends; 

18 and 

19 ‘‘(E) shall establish procedures to permit public 

20 access to the information in the registry in a manner 

21 and form that protects patient privacy and propri22 etary information and is comprehensive, useful, and 

23 not misleading to patients, physicians, and sci24 entists. 


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1 ‘‘(5) To carry out this subsection, there are author2 ized to be appropriated such sums as may be necessary 

3 for fiscal years 2010 and 2011.’’. 

4 (2) EFFECTIVE DATE.—The Secretary of 

5 Health and Human Services shall establish and 

6 begin implementation of the registry under section 

7 519(g) of the Federal Food, Drug, and Cosmetic 

8 Act, as added by paragraph (1), by not later than 

9 the date that is 36 months after the date of the en10 actment of this Act, without regard to whether or 

11 not final regulations to establish and operate the 

12 registry have been promulgated by such date. 

13 (3) CONFORMING AMENDMENT.—Section 

14 303(f)(1)(B)(ii) of the Federal Food, Drug, and 

15 Cosmetic Act (21 U.S.C. 333(f)(1)(B)(ii)) is amend16 ed by striking ‘‘519(g)’’ and inserting ‘‘519(h)’’. 

17 (b) ELECTRONIC EXCHANGE AND USE IN CERTIFIED

18 ELECTRONIC HEALTH RECORDS OF UNIQUE DEVICE

19 IDENTIFIERS.— 

20 (1) RECOMMENDATIONS.—The HIT Policy 

21 Committee established under section 3002 of the 

22 Public Health Service Act (42 U.S.C. 300jj–12) 

23 shall recommend to the head of the Office of the Na24 tional Coordinator for Health Information Tech25 nology standards, implementation specifications, and 


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1 certification criteria for the electronic exchange and 

2 use in certified electronic health records of a unique 

3 device identifier for each device described in section 

4 519(g)(1) of the Federal Food, Drug, and Cosmetic 

5 Act, as added by subsection (a). 

6 (2) STANDARDS, IMPLEMENTATION CRITERIA, 

7 AND CERTIFICATION CRITERIA.—The Secretary of 

8 the Health Human Services, acting through the 

9 head of the Office of the National Coordinator for 

10 Health Information Technology, shall adopt stand11 ards, implementation specifications, and certification 

12 criteria for the electronic exchange and use in cer13 tified electronic health records of a unique device 

14 identifier for each device described in paragraph (1), 

15 if such an identifier is required by section 519(f) of 

16 the Federal Food, Drug, and Cosmetic Act (21 

17 U.S.C. 360i(f)) for the device. 

18 Subtitle D—Grants for Comprehen19 sive Programs To Provide Edu20 cation to Nurses and Create a 

21 Pipeline to Nursing 

22 SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM. 

23 (a) PURPOSES.—It is the purpose of this section to 

24 authorize grants to— 


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1 (1) address the projected shortage of nurses by 

2 funding comprehensive programs to create a career 

3 ladder to nursing (including Certified Nurse Assist4 ants, Licensed Practical Nurses, Licensed Vocational 

5 Nurses, and Registered Nurses) for incumbent ancil6 lary health care workers; 

7 (2) increase the capacity for educating nurses 

8 by increasing both nurse faculty and clinical oppor9 tunities through collaborative programs between 

10 staff nurse organizations, health care providers, and 

11 accredited schools of nursing; and 

12 (3) provide training programs through edu13 cation and training organizations jointly adminis14 tered by health care providers and health care labor 

15 organizations or other organizations representing 

16 staff nurses and frontline health care workers, work17 ing in collaboration with accredited schools of nurs18 ing and academic institutions. 

19 (b) GRANTS.—Not later than 6 months after the date 

20 of the enactment of this Act, the Secretary of Labor (re21 ferred to in this section as the ‘‘Secretary’’) shall establish 

22 a partnership grant program to award grants to eligible 

23 entities to carry out comprehensive programs to provide 

24 education to nurses and create a pipeline to nursing for 

25 incumbent ancillary health care workers who wish to adVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01021 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vance their careers, and to otherwise carry out the pur2 poses of this section. 

3 (c) ELIGIBILITY.—To be eligible for a grant under 

4 this section, an entity shall be— 

5 (1) a health care entity that is jointly adminis6 tered by a health care employer and a labor union 

7 representing the health care employees of the em8 ployer and that carries out activities using labor 

9 management training funds as provided for under 

10 section 302(c)(6) of the Labor Management Rela11 tions Act, 1947 (29 U.S.C. 186(c)(6)); 

12 (2) an entity that operates a training program 

13 that is jointly administered by— 

14 (A) one or more health care providers or 

15 facilities, or a trade association of health care 

16 providers; and 

17 (B) one or more organizations which rep18 resent the interests of direct care health care 

19 workers or staff nurses and in which the direct 

20 care health care workers or staff nurses have 

21 direct input as to the leadership of the organi22 zation; 

23 (3) a State training partnership program that 

24 consists of nonprofit organizations that include equal 

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1 vate employers, and labor organizations including 

2 joint labor-management training programs, and 

3 which may include representatives from local govern4 ments, worker investment agency one-stop career 

5 centers, community-based organizations, community 

6 colleges, and accredited schools of nursing; or 

7 (4) a school of nursing (as defined in section 

8 801 of the Public Health Service Act (42 U.S.C. 

9 296)). 

10 (d) ADDITIONAL REQUIREMENTS FOR HEALTH CARE

11 EMPLOYER DESCRIBED IN SUBSECTION (c).—To be eligi12 ble for a grant under this section, a health care employer 

13 described in subsection (c) shall demonstrate that it— 

14 (1) has an established program within their fa15 cility to encourage the retention of existing nurses; 

16 (2) provides wages and benefits to its nurses 

17 that are competitive for its market or that have been 

18 collectively bargained with a labor organization; and 

19 (3) supports programs funded under this sec20 tion through 1 or more of the following: 

21 (A) The provision of paid leave time and 

22 continued health coverage to incumbent health 

23 care workers to allow their participation in 

24 nursing career ladder programs, including cer25 tified nurse assistants, licensed practical nurses, 


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1 licensed vocational nurses, and registered 

2 nurses. 

3 (B) Contributions to a joint labor-manage4 ment training fund which administers the pro5 gram involved. 

6 (C) The provision of paid release time, in7 centive compensation, or continued health cov8 erage to staff nurses who desire to work full- or 

9 part-time in a faculty position. 

10 (D) The provision of paid release time for 

11 staff nurses to enable them to obtain a bachelor 

12 of science in nursing degree, other advanced 

13 nursing degrees, specialty training, or certifi14 cation program. 

15 (E) The payment of tuition assistance 

16 which is managed by a joint labor-management 

17 training fund or other jointly administered pro18 gram. 

19 (e) OTHER REQUIREMENTS.— 

20 (1) MATCHING REQUIREMENT.— 

21 (A) IN GENERAL.—The Secretary may not 

22 make a grant under this section unless the ap23 plicant involved agrees, with respect to the costs 

24 to be incurred by the applicant in carrying out 

25 the program under the grant, to make available 


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1 non-Federal contributions (in cash or in kind 

2 under subparagraph (B)) toward such costs in 

3 an amount equal to not less than $1 for each 

4 $1 of Federal funds provided in the grant. Such 

5 contributions may be made directly or through 

6 donations from public or private entities, or 

7 may be provided through the cash equivalent of 

8 paid release time provided to incumbent worker 

9 students. 

10 (B) DETERMINATION OF AMOUNT OF NON11 FEDERAL CONTRIBUTION.—Non-Federal con12 tributions required in subparagraph (A) may be 

13 in cash or in kind (including paid release time), 

14 fairly evaluated, including equipment or services 

15 (and excluding indirect or overhead costs). 

16 Amounts provided by the Federal Government, 

17 or services assisted or subsidized to any signifi18 cant extent by the Federal Government, may 

19 not be included in determining the amount of 

20 such non-Federal contributions. 

21 (2) REQUIRED COLLABORATION.—Entities car22 rying out or overseeing programs carried out with 

23 assistance provided under this section shall dem24 onstrate collaboration with accredited schools of 

25 nursing which may include community colleges and 


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1 other academic institutions providing associate, 

2 bachelor’s, or advanced nursing degree programs or 

3 specialty training or certification programs. 

4 (f) USE OF FUNDS.—Amounts awarded to an entity 

5 under a grant under this section shall be used for the fol6 lowing: 

7 (1) To carry out programs that provide edu8 cation and training to establish nursing career lad9 ders to educate incumbent health care workers to be10 come nurses (including certified nurse assistants, li11 censed practical nurses, licensed vocational nurses, 

12 and registered nurses). Such programs shall include 

13 one or more of the following: 

14 (A) Preparing incumbent workers to return 

15 to the classroom through English -as-a-second 

16 language education, GED education, pre-college 

17 counseling, college preparation classes, and sup18 port with entry level college classes that are a 

19 prerequisite to nursing. 

20 (B) Providing tuition assistance with pref21 erence for dedicated cohort classes in commu22 nity colleges, universities, accredited schools of 

23 nursing with supportive services including tu24 toring and counseling. 


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1 (C) Providing assistance in preparing for 

2 and meeting all nursing licensure tests and re3 quirements. 

4 (D) Carrying out orientation and 

5 mentorship programs that assist newly grad6 uated nurses in adjusting to working at the 

7 bedside to ensure their retention 

8 postgraduation, and ongoing programs to sup9 port nurse retention. 

10 (E) Providing stipends for release time and 

11 continued health care coverage to enable incum12 bent health care workers to participate in these 

13 programs. 

14 (2) To carry out programs that assist nurses in 

15 obtaining advanced degrees and completing specialty 

16 training or certification programs and to establish 

17 incentives for nurses to assume nurse faculty posi18 tions on a part-time or full-time basis. Such pro19 grams shall include one or more of the following: 

20 (A) Increasing the pool of nurses with ad21 vanced degrees who are interested in teaching 

22 by funding programs that enable incumbent 

23 nurses to return to school. 

24 (B) Establishing incentives for advanced 

25 degree bedside nurses who wish to teach in 


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1 nursing programs so they can obtain a leave 

2 from their bedside position to assume a full- or 

3 part-time position as adjunct or full-time fac4 ulty without the loss of salary or benefits. 

5 (C) Collaboration with accredited schools 

6 of nursing which may include community col7 leges and other academic institutions providing 

8 associate, bachelor’s, or advanced nursing de9 gree programs, or specialty training or certifi10 cation programs, for nurses to carry out innova11 tive nursing programs which meet the needs of 

12 bedside nursing and health care providers. 

13 (g) PREFERENCE.—In awarding grants under this 

14 section the Secretary shall give preference to programs 

15 that— 

16 (1) provide for improving nurse retention; 

17 (2) provide for improving the diversity of the 

18 new nurse graduates to reflect changes in the demo19 graphics of the patient population; 

20 (3) provide for improving the quality of nursing 

21 education to improve patient care and safety; 

22 (4) have demonstrated success in upgrading in23 cumbent health care workers to become nurses or 

24 which have established effective programs or pilots 

25 to increase nurse faculty; or 


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1 (5) are modeled after or affiliated with such 

2 programs described in paragraph (4). 

3 (h) EVALUATION.— 

4 (1) PROGRAM EVALUATIONS.—An entity that 

5 receives a grant under this section shall annually 

6 evaluate, and submit to the Secretary a report on, 

7 the activities carried out under the grant and the 

8 outcomes of such activities. Such outcomes may in9 clude— 

10 (A) an increased number of incumbent 

11 workers entering an accredited school of nurs12 ing and in the pipeline for nursing programs; 

13 (B) an increasing number of graduating 

14 nurses and improved nurse graduation and li15 censure rates; 

16 (C) improved nurse retention; 

17 (D) an increase in the number of staff 

18 nurses at the health care facility involved; 

19 (E) an increase in the number of nurses 

20 with advanced degrees in nursing; 

21 (F) an increase in the number of nurse 

22 faculty; 

23 (G) improved measures of patient quality 

24 (which may include staffing ratios of nurses, 


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1 patient satisfaction rates, patient safety meas2 ures); and 

3 (H) an increase in the diversity of new 

4 nurse graduates relative to the patient popu5 lation. 

6 (2) GENERAL REPORT.—Not later than 2 years 

7 after the date of the enactment of this Act, and an8 nually thereafter, the Secretary of Labor shall, using 

9 data and information from the reports received 

10 under paragraph (1), submit to the Congress a re11 port concerning the overall effectiveness of the grant 

12 program carried out under this section. 

13 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

14 are authorized to be appropriated to carry out this section 

15 such sums as may be necessary. 

16 Subtitle E—States Failing To Ad17 here to Certain Employment Ob18 ligations 

19 SEC. 2541. LIMITATION ON FEDERAL FUNDS. 

20 A State is eligible for Federal funds under the provi21 sions of the Public Health Service Act (42 U.S.C. 201 et 

22 seq.) only if the State— 

23 (1) agrees to be subject in its capacity as an 

24 employer to each obligation under subdivision A of 

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1 division applicable to persons in their capacity as an 

2 employer; and 

3 (2) assures that all political subdivisions in the 

4 State will do the same. 

5 DIVISION II—COMMITTEE ON 

6 EDUCATION AND LABOR: 

7 HEALTH CARE REFORM 

8 SECTION 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TI9 TLES, AND SUBTITLES. 

10 (a) TABLE OF SUBDIVISIONS, TITLES, AND SUB11 TITLES.—This division is divided into subdivisions, titles, 

12 and subtitles as follows: 

SUBDIVISION A—AFFORDABLE HEALTH CARE CHOICES

TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED 

HEALTH BENEFITS PLANS 

Subtitle A—General Standards 

Subtitle B—Standards Guaranteeing Access to Affordable Coverage 

Subtitle C—Standards Guaranteeing Access to Essential Benefits 

Subtitle D—Additional Consumer Protections 

Subtitle E—Governance 

Subtitle F—Relation to Other Requirements; Miscellaneous 

Subtitle G—Early Investments 

TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED 

PROVISIONS 

Subtitle A—Health Insurance Exchange 

Subtitle B—Public Health Insurance Option 

Subtitle C—Individual Affordability Credits 

Subtitle D—State Innovation. 

TITLE III—SHARED RESPONSIBILITY 


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Subtitle A—Individual Responsibility 

Subtitle B—Employer Responsibility 

TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 

Subtitle A—Shared Responsibility 

Subtitle B—Credit for Small Business Employee Health Coverage Expenses 

Subtitle C—Disclosures To Carry Out Health Insurance Exchange Subsidies 

Subtitle D—Other Revenue Provisions 

SUBDIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS

TITLE I—IMPROVING HEALTH CARE VALUE 

Subtitle A—Provisions Related to Medicare Part A 

Subtitle B—Provisions Related to Part B 

Subtitle C—Provisions Related to Medicare Parts A and B 

Subtitle D—Medicare Advantage Reforms 

Subtitle E—Improvements to Medicare Part D 

Subtitle F—Medicare Rural Access Protections 

TITLE II—MEDICARE BENEFICIARY IMPROVEMENTS 

Subtitle A—Improving and Simplifying Financial Assistance for Low Income 

Medicare Beneficiaries 

Subtitle B—Reducing Health Disparities 

Subtitle C—Miscellaneous Improvements 

TITLE III—PROMOTING PRIMARY CARE, MENTAL HEALTH 

SERVICES, AND COORDINATED CARE 

TITLE IV—QUALITY 

Subtitle A—Comparative Effectiveness Research 

Subtitle B—Nursing Home Transparency 

Subtitle C—Quality Measurements 

Subtitle D—Physician Payments Sunshine Provision 

Subtitle E—Public Reporting on Health Care-Associated Infections 

TITLE V—MEDICARE GRADUATE MEDICAL EDUCATION 

TITLE VI—PROGRAM INTEGRITY 

Subtitle A—Increased Funding To Fight Waste, Fraud, and Abuse 


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Subtitle B—Enhanced Penalties for Fraud and Abuse 

Subtitle C—Enhanced Program and Provider Protections 

Subtitle D—Access to Information Needed To Prevent Fraud, Waste, and 

Abuse 

TITLE VII—MEDICAID AND CHIP 

Subtitle A—Medicaid and Health Reform 

Subtitle B—Prevention 

Subtitle C—Access 

Subtitle D—Coverage 

Subtitle E—Financing 

Subtitle F—Waste, Fraud, and Abuse 

Subtitle G—Puerto Rico and the Territories 

Subtitle H—Miscellaneous 

TITLE VIII—REVENUE-RELATED PROVISIONS 

TITLE IX—MISCELLANEOUS PROVISIONS 

SUBDIVISION C—PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

TITLE I—COMMUNITY HEALTH CENTERS 

TITLE II—WORKFORCE 

Subtitle A—Primary Care Workforce 

Subtitle B—Nursing Workforce 

Subtitle C—Public Health Workforce 

Subtitle D—Adapting Workforce to Evolving Health System Needs 

TITLE III—PREVENTION AND WELLNESS 

TITLE IV—QUALITY AND SURVEILLANCE 

TITLE V—OTHER PROVISIONS 

Subtitle A—Drug Discount for Rural and Other Hospitals 

Subtitle B—School-Based Health Clinics 

Subtitle C—National Medical Device Registry 

Subtitle D—Grants for Comprehensive Programs to Provide Education to 

Nurses and Create a Pipeline to Nursing 

Subtitle E—States Failing To Adhere to Certain Employment Obligations 


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Subtitle F—Standards for Accessibility to Medical Equipment for Individuals 

With Disabilities 

Subtitle G—Other Grant Programs 

Subtitle H—Long-term Care and Family Caregiver Support 

Subtitle I—Online Resources 

1 (b) SHORT TITLE.—This division may be cited as the 

2 ‘‘America’s Affordable Health Choices Act of 2009’’. 

3 SUBDIVISION A—AFFORDABLE 

4 HEALTH CARE CHOICES 

5 SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; 

6 GENERAL DEFINITIONS. 

7 (a) PURPOSE.— 

8 (1) IN GENERAL.—The purpose of this subdivi9 sion is to provide affordable, quality health care for 

10 all Americans and reduce the growth in health care 

11 spending. 

12 (2) BUILDING ON CURRENT SYSTEM.—This 

13 subdivision achieves this purpose by building on 

14 what works in today’s health care system, while re15 pairing the aspects that are broken. 

16 (3) INSURANCE REFORMS.—This subdivision— 

17 (A) enacts strong insurance market re18 forms; 

19 (B) creates a new Health Insurance Ex20 change, with a public health insurance option 

21 alongside private plans; 


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1 (C) includes sliding scale affordability 

2 credits; and 

3 (D) initiates shared responsibility among 

4 workers, employers, and the government; 

5 so that all Americans have coverage of essential 

6 health benefits. 

7 (4) HEALTH DELIVERY REFORM.—This subdivi8 sion institutes health delivery system reforms both to 

9 increase quality and to reduce growth in health 

10 spending so that health care becomes more afford11 able for businesses, families, and government. 

12 (b) TABLE OF CONTENTS OF SUBDIVISION.—The 

13 table of contents of this subdivision is as follows: 

Sec. 100. Purpose; table of contents of subdivision; general definitions. 

TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED 

HEALTH BENEFITS PLANS 

Subtitle A—General Standards 

Sec. 101. Requirements reforming health insurance marketplace. 

Sec. 102. Protecting the choice to keep current coverage. 

Subtitle B—Standards Guaranteeing Access to Affordable Coverage 

Sec. 111. Prohibiting pre-existing condition exclusions. 

Sec. 112. Guaranteed issue and renewal for insured plans. 

Sec. 113. Insurance rating rules. 

Sec. 114. Nondiscrimination in benefits; parity in mental health and substance 

abuse disorder benefits. 

Sec. 115. Ensuring adequacy of provider networks. 

Sec. 116. Ensuring value and lower premiums. 

Sec. 117. Consistency of costs and coverage under qualified health benefits 

plans during plan year. 

Subtitle C—Standards Guaranteeing Access to Essential Benefits 

Sec. 121. Coverage of essential benefits package. 

Sec. 122. Essential benefits package defined. 

Sec. 123. Health Benefits Advisory Committee. 


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Sec. 124. Process for adoption of recommendations; adoption of benefit standards. 

Sec. 125. Prohibition of discrimination in health care services based on religious or spiritual content. 

Subtitle D—Additional Consumer Protections 

Sec. 131. Requiring fair marketing practices by health insurers. 

Sec. 132. Requiring fair grievance and appeals mechanisms. 

Sec. 133. Requiring information transparency and plan disclosure. 

Sec. 134. Application to qualified health benefits plans not offered through the 

Health Insurance Exchange. 

Sec. 135. Timely payment of claims. 

Sec. 136. Standardized rules for coordination and subrogation of benefits. 

Sec. 137. Application of administrative simplification. 

Sec. 138. Records relative to prescription information. 

Subtitle E—Governance 

Sec. 141. Health Choices Administration; Health Choices Commissioner. 

Sec. 142. Duties and authority of Commissioner. 

Sec. 143. Consultation and coordination. 

Sec. 144. Health Insurance Ombudsman. 

Subtitle F—Relation to Other Requirements; Miscellaneous 

Sec. 151. Relation to other requirements. 

Sec. 152. Prohibiting discrimination in health care. 

Sec. 153. Whistleblower protection. 

Sec. 154. Construction regarding collective bargaining. 

Sec. 155. Severability. 

Sec. 156. Rule of construction regarding Hawaii Prepaid Health Care Act. 

Sec. 157. Increasing meaningful use of electronic health records. 

Sec. 158. Private right of contract with health care providers. 

Subtitle G—Early Investments 

Sec. 161. Ensuring value and lower premiums. 

Sec. 162. Ending health insurance rescission abuse. 

Sec. 163. Administrative simplification. 

Sec. 164. Reinsurance program for retirees. 

Sec. 165. Prohibition against post-retirement reductions of retiree health benefits by group health plans. 

Sec. 166. Limitations on preexisting condition exclusions in group health plans 

in advance of applicability of new prohibition of preexisting 

condition exclusions. 

Sec. 167. Extension of COBRA continuation coverage. 

TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED 

PROVISIONS 

Subtitle A—Health Insurance Exchange 

Sec. 201. Establishment of Health Insurance Exchange; outline of duties; definitions. 

Sec. 202. Exchange-eligible individuals and employers. 

Sec. 203. Benefits package levels. 


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Sec. 204. Contracts for the offering of Exchange-participating health benefits 

plans. 

Sec. 205. Outreach and enrollment of Exchange-eligible individuals and employers in Exchange-participating health benefits plan. 

Sec. 206. Other functions. 

Sec. 207. Health Insurance Exchange Trust Fund. 

Sec. 208. Optional operation of State-based health insurance exchanges. 

Sec. 209. Participation of small employer benefit arrangements. 

Subtitle B—Public Health Insurance Option 

Sec. 221. Establishment and administration of a public health insurance option 

as an Exchange-qualified health benefits plan. 

Sec. 222. Premiums and financing. 

Sec. 223. Payment rates for items and services. 

Sec. 224. Modernized payment initiatives and delivery system reform. 

Sec. 225. Provider participation. 

Sec. 226. Application of fraud and abuse provisions. 

Sec. 227. Sense of the House regarding enrollment of Members in the public 

option. 

Subtitle C—Individual Affordability Credits 

Sec. 241. Availability through Health Insurance Exchange. 

Sec. 242. Affordable credit eligible individual. 

Sec. 243. Affordable premium credit. 

Sec. 244. Affordability cost-sharing credit. 

Sec. 245. Income determinations. 

Sec. 246. No Federal payment for undocumented aliens. 

Subtitle D—State Innovation 

Sec. 251. Waiver of ERISA limitation; application instead of state single payer 

system. 

Sec. 252. Requirements. 

Sec. 253. Definitions. 

TITLE III—SHARED RESPONSIBILITY 

Subtitle A—Individual Responsibility 

Sec. 301. Individual responsibility. 

Subtitle B—Employer Responsibility 

PART 1—HEALTH COVERAGE PARTICIPATION REQUIREMENTS

Sec. 311. Health coverage participation requirements. 

Sec. 312. Employer responsibility to contribute towards employee and dependent coverage. 

Sec. 313. Employer contributions in lieu of coverage. 

Sec. 314. Authority related to improper steering. 

PART 2—SATISFACTION OF HEALTH COVERAGE PARTICIPATION

REQUIREMENTS

Sec. 321. Satisfaction of health coverage participation requirements under the 

Employee Retirement Income Security Act of 1974. 


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Sec. 322. Satisfaction of health coverage participation requirements under the 

Internal Revenue Code of 1986. 

Sec. 323. Satisfaction of health coverage participation requirements under the 

Public Health Service Act. 

Sec. 324. Additional rules relating to health coverage participation requirements. 

TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 

Subtitle A—Shared Responsibility 

PART 1—INDIVIDUAL RESPONSIBILITY

Sec. 401. Tax on individuals without acceptable health care coverage. 

PART 2—EMPLOYER RESPONSIBILITY

Sec. 411. Election to satisfy health coverage participation requirements. 

Sec. 412. Responsibilities of nonelecting employers. 

Subtitle B—Credit for Small Business Employee Health Coverage Expenses 

Sec. 421. Credit for small business employee health coverage expenses. 

Subtitle C—Disclosures To Carry Out Health Insurance Exchange Subsidies 

Sec. 431. Disclosures to carry out health insurance exchange subsidies. 

Subtitle D—Other Revenue Provisions 

PART 1—GENERAL PROVISIONS

Sec. 441. Surcharge on high income individuals. 

Sec. 442. Delay in application of worldwide allocation of interest. 

PART 2—PREVENTION OF TAX AVOIDANCE

Sec. 451. Limitation on treaty benefits for certain deductible payments. 

Sec. 452. Codification of economic substance doctrine. 

Sec. 453. Penalties for underpayments. 

1 (c) GENERAL DEFINITIONS.—Except as otherwise 

2 provided, in this subdivision: 

3 (1) ACCEPTABLE COVERAGE.—The term ‘‘ac4 ceptable coverage’’ has the meaning given such term 

5 in section 202(d)(2). 

6 (2) BASIC PLAN.—The term ‘‘basic plan’’ has 

7 the meaning given such term in section 203(c). 


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1 (3) COMMISSIONER.—The term ‘‘Commis2 sioner’’ means the Health Choices Commissioner es3 tablished under section 141. 

4 (4) COST-SHARING.—The term ‘‘cost-sharing’’ 

5 includes deductibles, coinsurance, copayments, and 

6 similar charges but does not include premiums or 

7 any network payment differential for covered serv8 ices or spending for non-covered services. 

9 (5) DEPENDENT.—The term ‘‘dependent’’ has 

10 the meaning given such term by the Commissioner 

11 and includes a spouse. 

12 (6) EMPLOYMENT-BASED HEALTH PLAN.—The 

13 term ‘‘employment-based health plan’’— 

14 (A) means a group health plan (as defined 

15 in section 733(a)(1) of the Employee Retire16 ment Income Security Act of 1974); 

17 (B) includes such a plan that is the fol18 lowing: 

19 (i) FEDERAL, STATE, AND TRIBAL

20 GOVERNMENTAL PLANS.—A governmental 

21 plan (as defined in section 3(32) of the 

22 Employee Retirement Income Security Act 

23 of 1974), including a health benefits plan 

24 offered under chapter 89 of title 5, United 

25 States Code; or 


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1 (ii) CHURCH PLANS.—A church plan 

2 (as defined in section 3(33) of the Em3 ployee Retirement Income Security Act of 

4 1974); and 

5 (C) excludes coverage described in section 

6 202(d)(2)(E) (relating to TRICARE). 

7 (7) ENHANCED PLAN.—The term ‘‘enhanced 

8 plan’’ has the meaning given such term in section 

9 203(c). 

10 (8) ESSENTIAL BENEFITS PACKAGE.—The term 

11 ‘‘essential benefits package’’ is defined in section 

12 122(a). 

13 (9) FAMILY.—The term ‘‘family’’ means an in14 dividual and includes the individual’s dependents. 

15 (10) FEDERAL POVERTY LEVEL; FPL.—The 

16 terms ‘‘Federal poverty level’’ and ‘‘FPL’’ have the 

17 meaning given the term ‘‘poverty line’’ in section 

18 673(2) of the Community Services Block Grant Act 

19 (42 U.S.C. 9902(2)), including any revision required 

20 by such section. 

21 (11) HEALTH BENEFITS PLAN.—The terms 

22 ‘‘health benefits plan’’ means health insurance cov23 erage and an employment-based health plan and in24 cludes the public health insurance option. 


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1 (12) HEALTH INSURANCE COVERAGE; HEALTH

2 INSURANCE ISSUER.—The terms ‘‘health insurance 

3 coverage’’ and ‘‘health insurance issuer’’ have the 

4 meanings given such terms in section 2791 of the 

5 Public Health Service Act. 

6 (13) HEALTH INSURANCE EXCHANGE.—The 

7 term ‘‘Health Insurance Exchange’’ means the 

8 Health Insurance Exchange established under sec9 tion 201. 

10 (14) MEDICAID.—The term ‘‘Medicaid’’ means 

11 a State plan under title XIX of the Social Security 

12 Act (whether or not the plan is operating under a 

13 waiver under section 1115 of such Act). 

14 (15) MEDICARE.—The term ‘‘Medicare’’ means 

15 the health insurance programs under title XVIII of 

16 the Social Security Act. 

17 (16) PLAN SPONSOR.—The term ‘‘plan spon18 sor’’ has the meaning given such term in section 

19 3(16)(B) of the Employee Retirement Income Secu20 rity Act of 1974. 

21 (17) PLAN YEAR.—The term ‘‘plan year’’ 

22 means— 

23 (A) with respect to an employment-based 

24 health plan, a plan year as specified under such 

25 plan; or 


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1 (B) with respect to a health benefits plan 

2 other than an employment-based health plan, a 

3 12-month period as specified by the Commis4 sioner. 

5 (18) PREMIUM PLAN; PREMIUM-PLUS PLAN.— 

6 The terms ‘‘premium plan’’ and ‘‘premium-plus 

7 plan’’ have the meanings given such terms in section 

8 203(c). 

9 (19) QHBP OFFERING ENTITY.—The terms 

10 ‘‘QHBP offering entity’’ means, with respect to a 

11 health benefits plan that is— 

12 (A) a group health plan (as defined, sub13 ject to subsection (d), in section 733(a)(1) of 

14 the Employee Retirement Income Security Act 

15 of 1974), the plan sponsor in relation to such 

16 group health plan, except that, in the case of a 

17 plan maintained jointly by 1 or more employers 

18 and 1 or more employee organizations and with 

19 respect to which an employer is the primary 

20 source of financing, such term means such em21 ployer; 

22 (B) health insurance coverage, the health 

23 insurance issuer offering the coverage; 

24 (C) the public health insurance option, the 

25 Secretary of Health and Human Services; 


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1 (D) a non-Federal governmental plan (as 

2 defined in section 2791(d) of the Public Health 

3 Service Act), the State or political subdivision 

4 of a State (or agency or instrumentality of such 

5 State or subdivision) which establishes or main6 tains such plan; or 

7 (E) a Federal governmental plan (as de8 fined in section 2791(d) of the Public Health 

9 Service Act), the appropriate Federal official. 

10 (20) QUALIFIED HEALTH BENEFITS PLAN.— 

11 The term ‘‘qualified health benefits plan’’ means a 

12 health benefits plan that meets the requirements for 

13 such a plan under title I and includes the public 

14 health insurance option. 

15 (21) PUBLIC HEALTH INSURANCE OPTION.— 

16 The term ‘‘public health insurance option’’ means 

17 the public health insurance option as provided under 

18 subtitle B of title II. 

19 (22) SERVICE AREA; PREMIUM RATING AREA.— 

20 The terms ‘‘service area’’ and ‘‘premium rating 

21 area’’ mean with respect to health insurance cov22 erage— 

23 (A) offered other than through the Health 

24 Insurance Exchange, such an area as estab25 lished by the QHBP offering entity of such covVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01043 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erage in accordance with applicable State law; 

2 and 

3 (B) offered through the Health Insurance 

4 Exchange, such an area as established by such 

5 entity in accordance with applicable State law 

6 and applicable rules of the Commissioner for 

7 Exchange-participating health benefits plans. 

8 (23) STATE.—The term ‘‘State’’ means the 50 

9 States and the District of Columbia. 

10 (24) STATE MEDICAID AGENCY.—The term 

11 ‘‘State Medicaid agency’’ means, with respect to a 

12 Medicaid plan, the single State agency responsible 

13 for administering such plan under title XIX of the 

14 Social Security Act. 

15 (25) Y1, Y2, ETC..—The terms ‘‘Y1’’ , ‘‘Y2’’, 

16 ‘‘Y3’’, ‘‘Y4’’, ‘‘Y5’’, and similar subsequently num17 bered terms, mean 2013 and subsequent years, re18 spectively. 

19 (26) EMPLOYEE PREMIUM.—The term ‘‘em20 ployee premium’’ does not include a collectively bar21 gained premium in the case of a group health plan 

22 (as defined in section 733(a)(1) of the Employee Re23 tirement Income Security Act of 1974) that is a 

24 multiemployer plan (as defined in section 3(37) of 

25 such Act). 


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1 TITLE I—PROTECTIONS AND 

2 STANDARDS FOR QUALIFIED 

3 HEALTH BENEFITS PLANS 

4 Subtitle A—General Standards 

5 SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR6 ANCE MARKETPLACE. 

7 (a) PURPOSE.—The purpose of this title is to estab8 lish standards to ensure that new health insurance cov9 erage and employment-based health plans that are offered 

10 meet standards guaranteeing access to affordable cov11 erage, essential benefits, and other consumer protections. 

12 (b) REQUIREMENTS FOR QUALIFIED HEALTH BENE13 FITS PLANS.—On or after the first day of Y1, a health 

14 benefits plan shall not be a qualified health benefits plan 

15 under this subdivision unless the plan meets the applicable 

16 requirements of the following subtitles for the type of plan 

17 and plan year involved: 

18 (1) Subtitle B (relating to affordable coverage). 

19 (2) Subtitle C (relating to essential benefits). 

20 (3) Subtitle D (relating to consumer protec21 tion). 

22 (c) TERMINOLOGY.—In this subdivision: 

23 (1) ENROLLMENT IN EMPLOYMENT-BASED

24 HEALTH PLANS.—An individual shall be treated as 

25 being ‘‘enrolled’’ in an employment-based health 


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1 plan if the individual is a participant or beneficiary 

2 (as such terms are defined in section 3(7) and 3(8), 

3 respectively, of the Employee Retirement Income Se4 curity Act of 1974) in such plan. 

5 (2) INDIVIDUAL AND GROUP HEALTH INSUR6 ANCE COVERAGE.—The terms ‘‘individual health in7 surance coverage’’ and ‘‘group health insurance cov8 erage’’ mean health insurance coverage offered in 

9 the individual market or large or small group mar10 ket, respectively, as defined in section 2791 of the 

11 Public Health Service Act. 

12 (d) SENSE OF CONGRESS ON HEALTH CARE NEEDS

13 OF UNITED STATES TERRITORIES.—It is the sense of the 

14 Congress that the reforms made by H.R. 3200, as intro15 duced, must be strengthened to meaningfully address the 

16 health care needs of residents of American Samoa, the 

17 Commonwealth of the Northern Mariana Islands, Guam, 

18 Puerto Rico, and the United States Virgin Islands and 

19 Congress is committed to working with the representatives 

20 of these territories to ensure that residents of these terri21 tories have access to high-quality and affordable health 

22 care in such a way that best serves their unique needs. 


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1 SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT 

2 COVERAGE. 

3 (a) GRANDFATHERED HEALTH INSURANCE COV4 ERAGE DEFINED.—Subject to the succeeding provisions of 

5 this section, for purposes of establishing acceptable cov6 erage under this subdivision, the term ‘‘grandfathered 

7 health insurance coverage’’ means individual health insur8 ance coverage that is offered and in force and effect before 

9 the first day of Y1 if the following conditions are met: 

10 (1) LIMITATION ON NEW ENROLLMENT.— 

11 (A) IN GENERAL.—Except as provided in 

12 this paragraph, the individual health insurance 

13 issuer offering such coverage does not enroll 

14 any individual in such coverage if the first ef15 fective date of coverage is on or after the first 

16 day of Y1. 

17 (B) DEPENDENT COVERAGE PER18 MITTED.—Subparagraph (A) shall not affect 

19 the subsequent enrollment of a dependent of an 

20 individual who is covered as of such first day. 

21 (2) LIMITATION ON CHANGES IN TERMS OR

22 CONDITIONS.—Subject to paragraph (3) and except 

23 as required by law, the issuer does not change any 

24 of its terms or conditions, including benefits and 

25 cost-sharing, from those in effect as of the day be26 fore the first day of Y1. 


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1 (3) RESTRICTIONS ON PREMIUM INCREASES.— 

2 The issuer cannot vary the percentage increase in 

3 the premium for a risk group of enrollees in specific 

4 grandfathered health insurance coverage without 

5 changing the premium for all enrollees in the same 

6 risk group at the same rate, as specified by the 

7 Commissioner. 

8 (b) GRACE PERIOD FOR CURRENT EMPLOYMENT9 BASED HEALTH PLANS.— 

10 (1) GRACE PERIOD.— 

11 (A) IN GENERAL.—The Commissioner 

12 shall establish a grace period whereby, for plan 

13 years beginning after the end of the 5-year pe14 riod beginning with Y1, an employment-based 

15 health plan in operation as of the day before 

16 the first day of Y1 must meet the same require17 ments as apply to a qualified health benefits 

18 plan under section 101, including the essential 

19 benefit package requirement under section 121. 

20 (B) EXCEPTION FOR LIMITED BENEFITS

21 PLANS.—Subparagraph (A) shall not apply to 

22 an employment-based health plan in which the 

23 coverage consists only of one or more of the fol24 lowing: 


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1 (i) Any coverage described in section 

2 3001(a)(1)(B)(ii)(IV) of division B of the 

3 American Recovery and Reinvestment Act 

4 of 2009 (PL 111–5). 

5 (ii) Excepted benefits (as defined in 

6 section 733(c) of the Employee Retirement 

7 Income Security Act of 1974), including 

8 coverage under a specified disease or ill9 ness policy described in paragraph (3)(A) 

10 of such section. 

11 (iii) Such other limited benefits as the 

12 Commissioner may specify. 

13 In no case shall an employment-based health 

14 plan in which the coverage consists only of one 

15 or more of the coverage or benefits described in 

16 clauses (i) through (iii) be treated as acceptable 

17 coverage under this subdivision 

18 (2) TRANSITIONAL TREATMENT AS ACCEPT19 ABLE COVERAGE.—During the grace period specified 

20 in paragraph (1)(A), an employment-based health 

21 plan that is described in such paragraph shall be 

22 treated as acceptable coverage under this subdivi23 sion. 

24 (3) EXCEPTION FOR CONSUMER-DIRECTED

25 HEALTH PLANS AND ARRANGEMENTS.—In the case 


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1 of a group health plan which consists of a consumer2 directed health plan or arrangement (including a 

3 high deductible health plan, within the meaning of 

4 section 223(c)(2) of the Internal Revenue Code of 

5 1986), such group health plan shall be treated as ac6 ceptable coverage under a current group health plan 

7 for purposes of this subdivision. 

8 (c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE

9 COVERAGE.— 

10 (1) IN GENERAL.—Individual health insurance 

11 coverage that is not grandfathered health insurance 

12 coverage under subsection (a) may only be offered 

13 on or after the first day of Y1 as an Exchange-par14 ticipating health benefits plan. 

15 (2) SEPARATE, EXCEPTED COVERAGE PER16 MITTED.—Excepted benefits (as defined in section 

17 2791(c) of the Public Health Service Act) are not 

18 included within the definition of health insurance 

19 coverage. Nothing in paragraph (1) shall prevent the 

20 offering, other than through the Health Insurance 

21 Exchange, of excepted benefits so long as it is of22 fered and priced separately from health insurance 

23 coverage. 


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1 Subtitle B—Standards Guaran2 teeing Access to Affordable Cov3 erage 

4 SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLU5 SIONS. 

6 A qualified health benefits plan may not impose any 

7 pre-existing condition exclusion (as defined in section 

8 2701(b)(1)(A) of the Public Health Service Act) or other9 wise impose any limit or condition on the coverage under 

10 the plan with respect to an individual or dependent based 

11 on any health status-related factors (as defined in section 

12 2791(d)(9) of the Public Health Service Act) in relation 

13 to the individual or dependent. 

14 SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN15 SURED PLANS. 

16 The requirements of sections 2711 (other than sub17 sections (c) and (e)) and 2712 (other than paragraphs (3), 

18 and (6) of subsection (b) and subsection (e)) of the Public 

19 Health Service Act, relating to guaranteed availability and 

20 renewability of health insurance coverage, shall apply to 

21 individuals and employers in all individual and group 

22 health insurance coverage, whether offered to individuals 

23 or employers through the Health Insurance Exchange, 

24 through any employment-based health plan, or otherwise, 

25 in the same manner as such sections apply to employers 


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1 and health insurance coverage offered in the small group 

2 market, except that such section 2712(b)(1) shall apply 

3 only if, before nonrenewal or discontinuation of coverage, 

4 the issuer has provided the enrollee with notice of non5 payment of premiums and there is a grace period during 

6 which the enrollees has an opportunity to correct such 

7 nonpayment. Rescissions of such coverage shall be prohib8 ited except in cases of fraud as defined in sections 

9 2712(b)(2) of such Act. 

10 SEC. 113. INSURANCE RATING RULES. 

11 (a) IN GENERAL.—The premium rate charged for an 

12 insured qualified health benefits plan may not vary except 

13 as follows: 

14 (1) LIMITED AGE VARIATION PERMITTED.—By 

15 age (within such age categories as the Commissioner 

16 shall specify) so long as the ratio of the highest such 

17 premium to the lowest such premium does not ex18 ceed the ratio of 2 to 1. 

19 (2) BY AREA.—By premium rating area (as 

20 permitted by State insurance regulators or, in the 

21 case of Exchange-participating health benefits plans, 

22 as specified by the Commissioner in consultation 

23 with such regulators). 

24 (3) BY FAMILY ENROLLMENT.—By family en25 rollment (such as variations within categories and 


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1 compositions of families) so long as the ratio of the 

2 premium for family enrollment (or enrollments) to 

3 the premium for individual enrollment is uniform, as 

4 specified under State law and consistent with rules 

5 of the Commissioner. 

6 (b) STUDY AND REPORTS.— 

7 (1) STUDY.—The Commissioner, in coordina8 tion with the Secretary of Health and Human Serv9 ices and the Secretary of Labor, shall conduct a 

10 study of the large group insured and self-insured 

11 employer health care markets. Such study shall ex12 amine the following: 

13 (A) The types of employers by key charac14 teristics, including size, that purchase insured 

15 products versus those that self-insure. 

16 (B) The similarities and differences be17 tween typical insured and self-insured health 

18 plans. 

19 (C) The financial solvency and capital re20 serve levels of employers that self-insure by em21 ployer size. 

22 (D) The risk of self-insured employers not 

23 being able to pay obligations or otherwise be24 coming financially insolvent. 


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1 (E) The extent to which rating rules are 

2 likely to cause adverse selection in the large 

3 group market or to encourage small and mid 

4 size employers to self-insure 

5 (2) REPORTS.—Not later than 18 months after 

6 the date of the enactment of this Act, the Commis7 sioner shall submit to Congress and the applicable 

8 agencies a report on the study conducted under 

9 paragraph (1). Such report shall include any rec10 ommendations the Commissioner deems appropriate 

11 to ensure that the law does not provide incentives 

12 for small and mid-size employers to self-insure or 

13 create adverse selection in the risk pools of large 

14 group insurers and self-insured employers. Not later 

15 than 18 months after the first day of Y1, the Com16 missioner shall submit to Congress and the applica17 ble agencies an updated report on such study, in18 cluding updates on such recommendations. 

19 SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN 

20 MENTAL HEALTH AND SUBSTANCE ABUSE 

21 DISORDER BENEFITS. 

22 (a) NONDISCRIMINATION IN BENEFITS.—A qualified 

23 health benefits plan shall comply with standards estab24 lished by the Commissioner to prohibit discrimination in 

25 health benefits or benefit structures for qualified health 


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1 benefits plans, building from sections 702 of Employee 

2 Retirement Income Security Act of 1974, 2702 of the 

3 Public Health Service Act, and section 9802 of the Inter4 nal Revenue Code of 1986. 

5 (b) PARITY IN MENTAL HEALTH AND SUBSTANCE

6 ABUSE DISORDER BENEFITS.—To the extent such provi7 sions are not superceded by or inconsistent with subtitle 

8 C, the provisions of section 2705 (other than subsections 

9 (a)(1), (a)(2), and (c)) of section 2705 of the Public 

10 Health Service Act shall apply to a qualified health bene11 fits plan, regardless of whether it is offered in the indi12 vidual or group market, in the same manner as such provi13 sions apply to health insurance coverage offered in the 

14 large group market. 

15 SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS. 

16 (a) IN GENERAL.—A qualified health benefits plan 

17 that uses a provider network for items and services shall 

18 meet such standards respecting provider networks as the 

19 Commissioner may establish to assure the adequacy of 

20 such networks in ensuring enrollee access to such items 

21 and services and transparency in the cost-sharing differen22 tials between in-network coverage and out-of-network cov23 erage. 

24 (b) INTERNET ACCESS TO INFORMATION.—A quali25 fied health benefits plan that uses a provider network shall 


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1 provide a current listing of all providers in its network 

2 on its website and such data shall be available on the 

3 Health Insurance Exchange website as a ‘click through’ 

4 from the basic information on that plan. The Commis5 sioner shall also establish an on-line system whereby an 

6 individual may select by name any medical provider (as 

7 defined by the Commissioner) and be informed of the plan 

8 or plans with which that provider is contracting. 

9 (c) PROVIDER NETWORK DEFINED.—In this subdivi10 sion, the term ‘‘provider network’’ means the providers 

11 with respect to which covered benefits, treatments, and 

12 services are available under a health benefits plan. 

13 SEC. 116. ENSURING VALUE AND LOWER PREMIUMS. 

14 The QHBP offering entity shall provide that for any 

15 plan year in which a qualified health benefits plan that 

16 the entity offers has a medical loss ratio (expressed as a 

17 percentage) that is less than a percentage (not less than 

18 85 percent) specified by the Commissioner, the QHBP of19 fering entity offering such plan shall provide for rebates 

20 to enrollees of payment sufficient to meet such loss ratio. 

21 The Commissioner shall establish a uniform definition of 

22 medical loss ratio and methodology for determining how 

23 to calculate the medical loss ratio. Such methodology shall 

24 be designed to take into account the special circumstances 

25 of smaller and newer plans. 


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1 SEC. 117. CONSISTENCY OF COSTS AND COVERAGE UNDER 

2 QUALIFIED HEALTH BENEFITS PLANS DUR3 ING PLAN YEAR. 

4 In the case of health insurance coverage offered 

5 under a qualified health benefits plan, the coverage and 

6 cost of coverage may not be changed during the course 

7 of a plan year except to increase coverage to the enrollee 

8 or to lower costs to the enrollee. 

9 Subtitle C—Standards Guaran10 teeing Access to Essential Bene11 fits 

12 SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE. 

13 (a) IN GENERAL.—A qualified health benefits plan 

14 shall provide coverage that at least meets the benefit 

15 standards adopted under section 124 for the essential ben16 efits package described in section 122 for the plan year 

17 involved. 

18 (b) CHOICE OF COVERAGE.— 

19 (1) NON-EXCHANGE-PARTICIPATING HEALTH

20 BENEFITS PLANS.—In the case of a qualified health 

21 benefits plan that is not an Exchange-participating 

22 health benefits plan, such plan may offer such cov23 erage in addition to the essential benefits package as 

24 the QHBP offering entity may specify. 

25 (2) EXCHANGE-PARTICIPATING HEALTH BENE26 FITS PLANS.—In the case of an Exchange-particiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01057 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 pating health benefits plan, such plan is required 

2 under section 203 to provide specified levels of bene3 fits and, in the case of a plan offering a premium4 plus level of benefits, provide additional benefits. 

5 (3) CONTINUATION OF OFFERING OF SEPARATE

6 EXCEPTED BENEFITS COVERAGE.—Nothing in this 

7 subdivision shall be construed as affecting the offer8 ing of health benefits in the form of excepted bene9 fits (described in section 102(b)(1)(B)(ii)) if such 

10 benefits are offered under a separate policy, con11 tract, or certificate of insurance. 

12 (c) NO RESTRICTIONS ON COVERAGE UNRELATED

13 TO CLINICAL APPROPRIATENESS.—A qualified health ben14 efits plan may not impose any restriction (other than cost15 sharing) unrelated to clinical appropriateness on the cov16 erage of the health care items and services. 

17 SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED. 

18 (a) IN GENERAL.—In this subdivision, the term ‘‘es19 sential benefits package’’ means health benefits coverage, 

20 consistent with standards adopted under section 124 to 

21 ensure the provision of quality health care and financial 

22 security, that— 

23 (1) provides payment for the items and services 

24 described in subsection (b) in accordance with genVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01058 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erally accepted standards of medical or other appro2 priate clinical or professional practice; 

3 (2) limits cost-sharing for such covered health 

4 care items and services in accordance with such ben5 efit standards, consistent with subsection (c); 

6 (3) does not impose any annual or lifetime limit 

7 on the coverage of covered health care items and 

8 services; 

9 (4) complies with section 115(a) (relating to 

10 network adequacy); and 

11 (5) is equivalent, as certified by Office of the 

12 Actuary of the Centers for Medicare & Medicaid 

13 Services, to the average prevailing employer-spon14 sored coverage. 

15 (b) MINIMUM SERVICES TO BE COVERED.—The 

16 items and services described in this subsection are the fol17 lowing: 

18 (1) Hospitalization. 

19 (2) Outpatient hospital and outpatient clinic 

20 services, including emergency department services. 

21 (3) Professional services of physicians and other 

22 health professionals. 

23 (4) Such services, equipment, and supplies inci24 dent to the services of a physician’s or a health pro25 fessional’s delivery of care in institutional settings, 


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1 physician offices, patients’ homes or place of resi2 dence, or other settings, as appropriate. 

3 (5) Prescription drugs. 

4 (6) Rehabilitative and habilitative services. 

5 (7) Mental health and substance use disorder 

6 services. 

7 (8) Preventive services, including those services 

8 recommended with a grade of A or B by the Task 

9 Force on Clinical Preventive Services and including 

10 mental health and substance abuse services rec11 ommended by the Task Force on Clinical Preventive 

12 Services and those mental health and substance 

13 abuse services with compelling research or evidence, 

14 including Screening, Brief Intervention and Referral 

15 to Treatment (SBIRT), and those vaccines rec16 ommended for use by the Director of the Centers for 

17 Disease Control and Prevention. 

18 (9) Maternity care. 

19 (10) Well baby and well child care and early 

20 and periodic screening, diagnostic, and treatment 

21 services (as defined in section 1905(r) of the Social 

22 Security Act) at least for children under 21 years of 

23 age. 

24 (11) Durable medical equipment, prosthetics, 

25 orthotics and related supplies. 


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1 (c) REQUIREMENTS RELATING TO COST-SHARING

2 AND MINIMUM ACTUARIAL VALUE.— 

3 (1) NO COST-SHARING FOR PREVENTIVE SERV4 ICES.—There shall be no cost-sharing under the es5 sential benefits package for preventive items and 

6 services (as specified under the benefit standards), 

7 including well baby and well child care. 

8 (2) ANNUAL LIMITATION.— 

9 (A) ANNUAL LIMITATION.—The cost-shar10 ing incurred under the essential benefits pack11 age with respect to an individual (or family) for 

12 a year does not exceed the applicable level spec13 ified in subparagraph (B). 

14 (B) APPLICABLE LEVEL.—The applicable 

15 level specified in this subparagraph for Y1 is 

16 $5,000 for an individual and $10,000 for a 

17 family. Such levels shall be increased (rounded 

18 to the nearest $100) for each subsequent year 

19 by the annual percentage increase in the Con20 sumer Price Index (United States city average) 

21 applicable to such year. 

22 (C) USE OF COPAYMENTS.—In establishing 

23 cost-sharing levels for basic, enhanced, and pre24 mium plans under this subsection, the SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01061 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary shall, to the maximum extent possible, 

2 use only copayments and not coinsurance. 

3 (3) MINIMUM ACTUARIAL VALUE.— 

4 (A) IN GENERAL.—The cost-sharing under 

5 the essential benefits package shall be designed 

6 to provide a level of coverage that is designed 

7 to provide benefits that are actuarially equiva8 lent to approximately 70 percent of the full ac9 tuarial value of the benefits provided under the 

10 reference benefits package described in sub11 paragraph (B). 

12 (B) REFERENCE BENEFITS PACKAGE DE13 SCRIBED.—The reference benefits package de14 scribed in this subparagraph is the essential 

15 benefits package if there were no cost-sharing 

16 imposed. 

17 SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE. 

18 (a) ESTABLISHMENT.— 

19 (1) IN GENERAL.—There is established a pri20 vate-public advisory committee which shall be a 

21 panel of medical and other experts to be known as 

22 the Health Benefits Advisory Committee to rec23 ommend covered benefits and essential, enhanced, 

24 and premium plans. 


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1 (2) CHAIR.—The Surgeon General shall be a 

2 member and the chair of the Health Benefits Advi3 sory Committee. 

4 (3) MEMBERSHIP.—The Health Benefits Advi5 sory Committee shall be composed of the following 

6 members, in addition to the Surgeon General: 

7 (A) 9 members who are not Federal em8 ployees or officers and who are appointed by 

9 the President. 

10 (B) 9 members who are not Federal em11 ployees or officers and who are appointed by 

12 the Comptroller General of the United States in 

13 a manner similar to the manner in which the 

14 Comptroller General appoints members to the 

15 Medicare Payment Advisory Commission under 

16 section 1805(c) of the Social Security Act. 

17 (C) Such even number of members (not to 

18 exceed 8) who are Federal employees and offi19 cers, as the President may appoint. 

20 The membership of the Committee shall include one 

21 or more experts in scientific evidence and clinical 

22 practice of integrative health care services. Such ini23 tial appointments shall be made not later than 60 

24 days after the date of the enactment of this Act. 


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1 (4) TERMS.—Each member of the Health Bene2 fits Advisory Committee shall serve a 3-year term on 

3 the Committee, except that the terms of the initial 

4 members shall be adjusted in order to provide for a 

5 staggered term of appointment for all such mem6 bers. 

7 (5) PARTICIPATION.—The membership of the 

8 Health Benefits Advisory Committee shall at least 

9 reflect providers, employers, labor, health insurance 

10 issuers, experts in health care financing and deliv11 ery, experts in racial and ethnic disparities, experts 

12 in care for those with disabilities, representatives of 

13 relevant governmental agencies. and at least one 

14 practicing physician or other health professional and 

15 an expert on children’s health and shall represent a 

16 balance among various sectors of the health care 

17 system so that no single sector unduly influences the 

18 recommendations of such Committee. The member19 ship of the Committee shall also include educated 

20 patients, consumer advocates, or both, who shall in21 clude persons who represent individuals affected by 

22 a specific disease or medical condition, are knowl23 edgeable about the health care system, and have re24 ceived training regarding health, medical, and sci25 entific matters. 


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1 (b) DUTIES.— 

2 (1) RECOMMENDATIONS ON BENEFIT STAND3 ARDS.—The Health Benefits Advisory Committee 

4 shall recommend to the Secretary of Health and 

5 Human Services (in this subtitle referred to as the 

6 ‘‘Secretary’’) benefit standards (as defined in para7 graph (4)), and periodic updates to such standards. 

8 In developing such recommendations, the Committee 

9 shall— 

10 (A) take into account innovation in health 

11 care, 

12 (B) consider how such standards could re13 duce health disparities, 

14 (C) take into account integrative health 

15 care services, and 

16 (D) take into account typical multiem17 ployer plan benefit structures and the impact of 

18 the essential benefit package on such plans. 

19 (2) DEADLINE.—The Health Benefits Advisory 

20 Committee shall recommend initial benefit standards 

21 to the Secretary not later than 1 year after the date 

22 of the enactment of this Act. 

23 (3) STATE INPUT.—The Health Benefits Advi24 sory Committee shall examine the health coverage 

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1 ommendations under this subsection and may incor2 porate such coverage and benefits as the Committee 

3 determines to be appropriate and consistent with 

4 this division. The Health Benefits Advisory Com5 mittee shall also seek input from the States and con6 sider recommendations on how to ensure that the 

7 quality of health coverage does not decline in any 

8 State. 

9 (4) PUBLIC INPUT.—The Health Benefits Advi10 sory Committee shall allow for public input as a part 

11 of developing recommendations under this sub12 section. 

13 (5) BENEFIT STANDARDS DEFINED.—In this 

14 subtitle, the term ‘‘benefit standards’’ means stand15 ards respecting— 

16 (A) the essential benefits package de17 scribed in section 122, including categories of 

18 covered treatments, items and services within 

19 benefit classes, and cost-sharing; and 

20 (B) the cost-sharing levels for enhanced 

21 plans and premium plans (as provided under 

22 section 203(c)) consistent with paragraph (5). 

23 (6) LEVELS OF COST-SHARING FOR ENHANCED

24 AND PREMIUM PLANS.— 


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1 (A) ENHANCED PLAN.—The level of cost2 sharing for enhanced plans shall be designed so 

3 that such plans have benefits that are actuari4 ally equivalent to approximately 85 percent of 

5 the actuarial value of the benefits provided 

6 under the reference benefits package described 

7 in section 122(c)(3)(B). 

8 (B) PREMIUM PLAN.—The level of cost9 sharing for premium plans shall be designed so 

10 that such plans have benefits that are actuari11 ally equivalent to approximately 95 percent of 

12 the actuarial value of the benefits provided 

13 under the reference benefits package described 

14 in section 122(c)(3)(B). 

15 (7) RECOMMENDATIONS OF INTEGRATIVE

16 HEALTH CARE SERVICES TASK FORCE.— 

17 (A) INCLUSION IN COMMITTEE’S REC18 OMMENDATIONS.—The Health Benefits Advi19 sory Committee shall include in its rec20 ommendations under paragraph (1) the rec21 ommendations made by the Integrative Health 

22 Care Services Task Force established under 

23 subparagraph (B). 

24 (B) ESTABLISHMENT OF TASK FORCE.— 

25 The Health Benefits Advisory Committee shall 


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1 establish an Integrative Health Care Services 

2 Task Force. Such Task Force shall consist of 

3 5 experts with expertise in research in, and 

4 practice of, integrative health care. Such ex5 perts shall be appointed by the Committee from 

6 among experts nominated by the Secretary, in 

7 consultation with the National Center for Com8 plementary and Alternative Medicine at the Na9 tional Institutes of Health. The duty of the 

10 Task Force shall be to make recommendations 

11 to the Committee on evidence-based, clinically 

12 effective, and safe integrative care services. 

13 (c) OPERATIONS.— 

14 (1) PER DIEM PAY.—Each member of the 

15 Health Benefits Advisory Committee shall receive 

16 travel expenses, including per diem in accordance 

17 with applicable provisions under subchapter I of 

18 chapter 57 of title 5, United States Code, and shall 

19 otherwise serve without additional pay. 

20 (2) MEMBERS NOT TREATED AS FEDERAL EM21 PLOYEES.—Members of the Health Benefits Advi22 sory Committee shall not be considered employees of 

23 the Federal government solely by reason of any serv24 ice on the Committee. 


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1 (3) APPLICATION OF FACA.—The Federal Advi2 sory Committee Act (5 U.S.C. App.), other than sec3 tion 14, shall apply to the Health Benefits Advisory 

4 Committee. 

5 (d) PUBLICATION.—The Secretary shall provide for 

6 publication in the Federal Register and the posting on the 

7 Internet website of the Department of Health and Human 

8 Services of all recommendations made by the Health Ben9 efits Advisory Committee under this section. 

10 SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDA11 TIONS; ADOPTION OF BENEFIT STANDARDS. 

12 (a) PROCESS FOR ADOPTION OF RECOMMENDA13 TIONS.— 

14 (1) REVIEW OF RECOMMENDED STANDARDS.— 

15 Not later than 45 days after the date of receipt of 

16 benefit standards recommended under section 123 

17 (including such standards as modified under para18 graph (2)(B)), the Secretary shall review such 

19 standards and shall determine whether to propose 

20 adoption of such standards as a package. 

21 (2) DETERMINATION TO ADOPT STANDARDS.— 

22 If the Secretary determines— 

23 (A) to propose adoption of benefit stand24 ards so recommended as a package, the Sec25 retary shall, by regulation under section 553 of 


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1 title 5, United States Code, propose adoption 

2 such standards; or 

3 (B) not to propose adoption of such stand4 ards as a package, the Secretary shall notify 

5 the Health Benefits Advisory Committee in 

6 writing of such determination and the reasons 

7 for not proposing the adoption of such rec8 ommendation and provide the Committee with a 

9 further opportunity to modify its previous rec10 ommendations and submit new recommenda11 tions to the Secretary on a timely basis. 

12 (3) CONTINGENCY.—If, because of the applica13 tion of paragraph (2)(B), the Secretary would other14 wise be unable to propose initial adoption of such 

15 recommended standards by the deadline specified in 

16 subsection (b)(1), the Secretary shall, by regulation 

17 under section 553 of title 5, United States Code, 

18 propose adoption of initial benefit standards by such 

19 deadline. 

20 (4) PUBLICATION.—The Secretary shall provide 

21 for publication in the Federal Register of all deter22 minations made by the Secretary under this sub23 section. 

24 (b) ADOPTION OF STANDARDS.— 


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1 (1) INITIAL STANDARDS.—Not later than 18 

2 months after the date of the enactment of this Act, 

3 the Secretary shall, through the rulemaking process 

4 consistent with subsection (a), adopt an initial set of 

5 benefit standards. 

6 (2) PERIODIC UPDATING STANDARDS.—Under 

7 subsection (a), the Secretary shall provide for the 

8 periodic updating of the benefit standards previously 

9 adopted under this section. 

10 (3) REQUIREMENT.—The Secretary may not 

11 adopt any benefit standards for an essential benefits 

12 package or for level of cost-sharing that are incon13 sistent with the requirements for such a package or 

14 level under sections 122 and 123(b)(5). 

15 SEC. 125. PROHIBITION OF DISCRIMINATION IN HEALTH 

16 CARE SERVICES BASED ON RELIGIOUS OR 

17 SPIRITUAL CONTENT. 

18 Neither the Commissioner nor any health insurance 

19 issuer offering health insurance coverage through the Ex20 change shall discriminate in approving or covering a 

21 health care service on the basis of its religious or spiritual 

22 content if expenditures for such a health care service are 

23 allowable as a deduction under 213(d) of the Internal Rev24 enue Code of 1986, as in effect on January 1, 2009. 


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1 Subtitle D—Additional Consumer 

2 Protections 

3 SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY 

4 HEALTH INSURERS. 

5 The Commissioner shall establish uniform marketing 

6 standards that all insured QHBP offering entities shall 

7 meet. 

8 SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS 

9 MECHANISMS. 

10 (a) IN GENERAL.—A QHBP offering entity shall pro11 vide for timely grievance and appeals mechanisms that the 

12 Commissioner shall establish. 

13 (b) INTERNAL CLAIMS AND APPEALS PROCESS.— 

14 Under a qualified health benefits plan the QHBP offering 

15 entity shall provide an internal claims and appeals process 

16 that initially incorporates the claims and appeals proce17 dures (including urgent claims) set forth at section 

18 2560.503–1 of title 29, Code of Federal Regulations, as 

19 published on November 21, 2000 (65 Fed. Reg. 70246) 

20 and shall update such process in accordance with any 

21 standards that the Commissioner may establish. 

22 (c) EXTERNAL REVIEW PROCESS.— 

23 (1) IN GENERAL.—The Commissioner shall es24 tablish an external review process (including proce25 dures for expedited reviews of urgent claims) that 


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1 provides for an impartial, independent, and de novo 

2 review of denied claims under this subdivision. 

3 (2) REQUIRING FAIR GRIEVANCE AND APPEALS

4 MECHANISMS.—A determination made, with respect 

5 to a qualified health benefits plan offered by a 

6 QHBP offering entity, under the external review 

7 process established under this subsection shall be 

8 binding on the plan and the entity. 

9 (d) CONSTRUCTION.—Nothing in this section shall be 

10 construed as affecting the availability of judicial review 

11 under State law for adverse decisions under subsection (b) 

12 or (c), subject to section 151. 

13 SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND 

14 PLAN DISCLOSURE. 

15 (a) ACCURATE AND TIMELY DISCLOSURE.— 

16 (1) IN GENERAL.—A qualified health benefits 

17 plan shall comply with standards established by the 

18 Commissioner for the accurate and timely disclosure 

19 of plan documents, plan terms and conditions, 

20 claims payment policies and practices, periodic fi21 nancial disclosure, data on enrollment, data on 

22 disenrollment, data on the number of claims denials, 

23 data on rating practices, information on cost-sharing 

24 and payments with respect to any out-of-network 

25 coverage, and other information as determined apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01073 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 propriate by the Commissioner. The Commissioner 

2 shall require that such disclosure be provided in 

3 plain language. 

4 (2) PLAIN LANGUAGE.—In this subsection, the 

5 term ‘‘plain language’’ means language that the in6 tended audience, including individuals with limited 

7 English proficiency, can readily understand and use 

8 because that language is clean, concise, well-orga9 nized, and follows other best practices of plain lan10 guage writing. 

11 (3) GUIDANCE.—The Commissioner shall de12 velop and issue guidance on best practices of plain 

13 language writing. 

14 (b) CONTRACTING REIMBURSEMENT.—A qualified 

15 health benefits plan shall comply with standards estab16 lished by the Commissioner to ensure transparency to each 

17 health care provider relating to reimbursement arrange18 ments between such plan and such provider. 

19 (c) ADVANCE NOTICE OF PLAN CHANGES.—A 

20 change in a qualified health benefits plan shall not be 

21 made without such reasonable and timely advance notice 

22 to enrollees of such change. 

23 (d) IDENTIFICATION OF PROVIDERS TRAINED AND

24 ACCREDITED IN INTEGRATIVE MEDICINE.—A qualified 

25 health benefit plan shall include in the disclosure required 


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1 under subsection (a) identification to enrollees of any pro2 viders of services under the plan that are trained and ac3 credited in integrative health medicine. 

4 SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS 

5 PLANS NOT OFFERED THROUGH THE 

6 HEALTH INSURANCE EXCHANGE. 

7 The requirements of the previous provisions of this 

8 subtitle shall apply to qualified health benefits plans that 

9 are not being offered through the Health Insurance Ex10 change only to the extent specified by the Commissioner. 

11 SEC. 135. TIMELY PAYMENT OF CLAIMS. 

12 A QHBP offering entity shall comply with the re13 quirements of section 1857(f) of the Social Security Act 

14 with respect to a qualified health benefits plan it offers 

15 in the same manner an Medicare Advantage organization 

16 is required to comply with such requirements with respect 

17 to a Medicare Advantage plan it offers under part C of 

18 Medicare. 

19 SEC. 136. STANDARDIZED RULES FOR COORDINATION AND 

20 SUBROGATION OF BENEFITS. 

21 The Commissioner shall establish standards for the 

22 coordination and subrogation of benefits and reimburse23 ment of payments in cases involving individuals and mul24 tiple plan coverage. 


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1 SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICA2 TION. 

3 A QHBP offering entity is required to comply with 

4 standards for electronic financial and administrative 

5 transactions under section 1173A of the Social Security 

6 Act, added by section 163(a). 

7 SEC. 138. RECORDS RELATIVE TO PRESCRIPTION INFORMA8 TION. 

9 (a) IN GENERAL.—A qualified health benefits plan 

10 shall ensure that its records relative to prescription infor11 mation containing patient identifiable and prescriber-iden12 tifiable data are maintained in accordance with this sec13 tion.’’ 

14 (b) REQUIREMENTS.— 

15 (1) IN GENERAL.—Records described in sub16 section (a) may not be licensed, transferred, used, or 

17 sold by any pharmacy benefits manager, insurance 

18 company, electronic transmission intermediary, re19 tail, mail order, or Internet pharmacy or other simi20 lar entity, for any commercial purpose, except for 

21 the limited purposes of— 

22 (A) pharmacy reimbursement; 

23 (B) formulary compliance; 

24 (C) care management; 


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1 (D) utilization review by a health care pro2 vider, the patient’s insurance provider or the 

3 agent of either; 

4 (E) health care research; or 

5 (F) as otherwise provided by law. 

6 (2) COMMERCIAL PURPOSE.—For purposes of 

7 paragraph (1), the term ‘‘commercial purpose’’ in8 cludes, but is not limited to, advertising, marketing, 

9 promotion, or any activity that could be used to in10 fluence sales or market share of a pharmaceutical 

11 product, influence or evaluate the prescribing behav12 ior of an individual health care professional, or 

13 evaluate the effectiveness of a professional pharma14 ceutical detailing sales force. 

15 (c) CONSTRUCTION.— 

16 (1) PERMITTED PRACTICES.—Nothing in this 

17 section shall prohibit— 

18 (A) the dispensing of prescription medica19 tions to a patient or to the patient’s authorized 

20 representative; 

21 (B) the transmission of prescription infor22 mation between an authorized prescriber and a 

23 licensed pharmacy; 

24 (C) the transfer of prescription informa25 tion between licensed pharmacies; 


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1 (D) the transfer of prescription records 

2 that may occur in the event a pharmacy owner3 ship is changed or transferred; 

4 (E) care management educational commu5 nications provided to a patient about the pa6 tient’s health condition, adherence to a pre7 scribed course of therapy, or other information 

8 about the drug being dispensed, treatment op9 tions, or clinical trials. 

10 (2) DE-IDENTIFIED DATA.—Nothing in this 

11 section shall prohibit the collection, use, transfer, or 

12 sale of patient and prescriber de-identified data by 

13 zip code, geographic region, or medical specialty for 

14 commercial purposes. 

15 Subtitle E—Governance 

16 SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH 

17 CHOICES COMMISSIONER. 

18 (a) IN GENERAL.—There is hereby established, as an 

19 independent agency in the executive branch of the Govern20 ment, a Health Choices Administration (in this subdivision 

21 referred to as the ‘‘Administration’’). 

22 (b) COMMISSIONER.— 

23 (1) IN GENERAL.—The Administration shall be 

24 headed by a Health Choices Commissioner (in this 

25 subdivision referred to as the ‘‘Commissioner’’) who 


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1 shall be appointed by the President, by and with the 

2 advice and consent of the Senate. 

3 (2) COMPENSATION; ETC.—The provisions of 

4 paragraphs (2), (5) and (7) of subsection (a) (relat5 ing to compensation, terms, general powers, rule6 making, and delegation) of section 702 of the Social 

7 Security Act (42 U.S.C. 902) shall apply to the 

8 Commissioner and the Administration in the same 

9 manner as such provisions apply to the Commis10 sioner of Social Security and the Social Security Ad11 ministration. 

12 SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER. 

13 (a) DUTIES.—The Commissioner is responsible for 

14 carrying out the following functions under this subdivi15 sion: 

16 (1) QUALIFIED PLAN STANDARDS.—The estab17 lishment of qualified health benefits plan standards 

18 under this title, including the enforcement of such 

19 standards in coordination with State insurance regu20 lators and the Secretaries of Labor and the Treas21 ury. 

22 (2) HEALTH INSURANCE EXCHANGE.—The es23 tablishment and operation of a Health Insurance 

24 Exchange under subtitle A of title II. 


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1 (3) INDIVIDUAL AFFORDABILITY CREDITS.— 

2 The administration of individual affordability credits 

3 under subtitle C of title II, including determination 

4 of eligibility for such credits. 

5 (4) ADDITIONAL FUNCTIONS.—Such additional 

6 functions as may be specified in this subdivision. 

7 (b) PROMOTING ACCOUNTABILITY.— 

8 (1) IN GENERAL.—The Commissioner shall un9 dertake activities in accordance with this subtitle to 

10 promote accountability of QHBP offering entities in 

11 meeting Federal health insurance requirements, re12 gardless of whether such accountability is with re13 spect to qualified health benefits plans offered 

14 through the Health Insurance Exchange or outside 

15 of such Exchange. 

16 (2) COMPLIANCE EXAMINATION AND AUDITS.— 

17 (A) IN GENERAL.—The commissioner 

18 shall, in coordination with States, conduct au19 dits of qualified health benefits plan compliance 

20 with Federal requirements. Such audits may 

21 include random compliance audits and targeted 

22 audits in response to complaints or other sus23 pected non-compliance. 

24 (B) RECOUPMENT OF COSTS IN CONNEC25 TION WITH EXAMINATION AND AUDITS.—The 


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1 Commissioner is authorized to recoup from 

2 qualified health benefits plans reimbursement 

3 for the costs of such examinations and audit of 

4 such QHBP offering entities. 

5 (c) DATA COLLECTION.—The Commissioner shall 

6 collect data for purposes of carrying out the Commis7 sioner’s duties, including for purposes of promoting qual8 ity and value, protecting consumers, and addressing dis9 parities in health and health care and may share such data 

10 with the Secretary of Health and Human Services. 

11 (d) SANCTIONS AUTHORITY.— 

12 (1) IN GENERAL.—In the case that the Com13 missioner determines that a QHBP offering entity 

14 violates a requirement of this title, the Commis15 sioner may, in coordination with State insurance 

16 regulators and the Secretary of Labor, provide, in 

17 addition to any other remedies authorized by law, 

18 for any of the remedies described in paragraph (2). 

19 (2) REMEDIES.—The remedies described in this 

20 paragraph, with respect to a qualified health benefits 

21 plan offered by a QHBP offering entity, are— 

22 (A) civil money penalties of not more than 

23 the amount that would be applicable under 

24 similar circumstances for similar violations 


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1 under section 1857(g) of the Social Security 

2 Act; 

3 (B) suspension of enrollment of individuals 

4 under such plan after the date the Commis5 sioner notifies the entity of a determination 

6 under paragraph (1) and until the Commis7 sioner is satisfied that the basis for such deter8 mination has been corrected and is not likely to 

9 recur; 

10 (C) in the case of an Exchange-partici11 pating health benefits plan, suspension of pay12 ment to the entity under the Health Insurance 

13 Exchange for individuals enrolled in such plan 

14 after the date the Commissioner notifies the en15 tity of a determination under paragraph (1) 

16 and until the Secretary is satisfied that the 

17 basis for such determination has been corrected 

18 and is not likely to recur; or 

19 (D) working with State insurance regu20 lators to terminate plans for repeated failure by 

21 the offering entity to meet the requirements of 

22 this title. 

23 (e) STANDARD DEFINITIONS OF INSURANCE AND

24 MEDICAL TERMS.—The Commissioner shall provide for 

25 the development of standards for the definitions of terms 


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1 used in health insurance coverage, including insurance-re2 lated terms. 

3 (f) EFFICIENCY IN ADMINISTRATION.—The Commis4 sioner shall issue regulations for the effective and efficient 

5 administration of the Health Insurance Exchange and af6 fordability credits under subtitle C, including, with respect 

7 to the determination of eligibility for affordability credits, 

8 the use of personnel who are employed in accordance with 

9 the requirements of title 5, United States Code, to carry 

10 out the duties of the Commissioner or, in the case of sec11 tions 208 and 241(b)(2), the use of State personnel who 

12 are employed in accordance with standards prescribed by 

13 the Office of Personnel Management pursuant to section 

14 208 of the Intergovernmental Personnel Act of 1970 (42 

15 U.S.C. 4728). 

16 SEC. 143. CONSULTATION AND COORDINATION. 

17 (a) CONSULTATION.—In carrying out the Commis18 sioner’s duties under this subdivision, the Commissioner, 

19 as appropriate, shall consult with at least with the fol20 lowing: 

21 (1) The National Association of Insurance 

22 Commissioners, State attorneys general, and State 

23 insurance regulators, including concerning the 

24 standards for insured qualified health benefits plans 

25 under this title and enforcement of such standards. 


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1 (2) Appropriate State agencies, specifically con2 cerning the administration of individual affordability 

3 credits under subtitle C of title II and the offering 

4 of Exchange-participating health benefits plans, to 

5 Medicaid eligible individuals under subtitle A of such 

6 title. 

7 (3) Other appropriate Federal agencies. 

8 (4) Indian tribes and tribal organizations. 

9 (5) The National Association of Insurance 

10 Commissioners for purposes of using model guide11 lines established by such association for purposes of 

12 subtitles B and D. 

13 (b) COORDINATION.— 

14 (1) IN GENERAL.—In carrying out the func15 tions of the Commissioner, including with respect to 

16 the enforcement of the provisions of this subdivision, 

17 the Commissioner shall work in coordination with 

18 existing Federal and State entities to the maximum 

19 extent feasible consistent with this subdivision and 

20 in a manner that prevents conflicts of interest in du21 ties and ensures effective enforcement. 

22 (2) UNIFORM STANDARDS.—The Commissioner, 

23 in coordination with such entities, shall seek to 

24 achieve uniform standards that adequately protect 


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1 consumers in a manner that does not unreasonably 

2 affect employers and insurers. 

3 SEC. 144. HEALTH INSURANCE OMBUDSMAN. 

4 (a) IN GENERAL.—The Commissioner shall appoint 

5 within the Health Choices Administration a Qualified 

6 Health Benefits Plan Ombudsman who shall have exper7 tise and experience in the fields of health care and edu8 cation of (and assistance to) individuals. 

9 (b) DUTIES.—The Qualified Health Benefits Plan 

10 Ombudsman shall, in a linguistically appropriate man11 ner— 

12 (1) receive complaints, grievances, and requests 

13 for information submitted by individuals; 

14 (2) provide assistance with respect to com15 plaints, grievances, and requests referred to in para16 graph (1), including— 

17 (A) helping individuals determine the rel18 evant information needed to seek an appeal of 

19 a decision or determination; 

20 (B) assistance to such individuals with any 

21 problems arising from disenrollment from such 

22 a plan; 

23 (C) assistance to such individuals in choos24 ing a qualified health benefits plan in which to 

25 enroll; and 


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1 (D) assistance to such individuals in pre2 senting information under subtitle C (relating 

3 to affordability credits); 

4 (3) consult with educated patients and con5 sumer advocates (described in section 123(a)(5)); 

6 and 

7 (4) submit annual reports to Congress and the 

8 Commissioner that describe the activities of the Om9 budsman and that include such recommendations for 

10 improvement in the administration of this subdivi11 sion as the Ombudsman determines appropriate. The 

12 Ombudsman shall not serve as an advocate for any 

13 increases in payments or new coverage of services, 

14 but may identify issues and problems in payment or 

15 coverage policies. 

16 Subtitle F—Relation to Other 

17 Requirements; Miscellaneous 

18 SEC. 151. RELATION TO OTHER REQUIREMENTS. 

19 (a) COVERAGE NOT OFFERED THROUGH EX20 CHANGE.— 

21 (1) IN GENERAL.—In the case of health insur22 ance coverage not offered through the Health Insur23 ance Exchange (whether or not offered in connection 

24 with an employment-based health plan), and in the 

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1 ments of this title do not supercede any require2 ments applicable under titles XXII and XXVII of 

3 the Public Health Service Act, parts 6 and 7 of sub4 title B of title I of the Employee Retirement Income 

5 Security Act of 1974, or State law, except insofar as 

6 such requirements prevent the application of a re7 quirement of this subdivision, as determined by the 

8 Commissioner. 

9 (2) CONSTRUCTION.—Nothing in paragraph (1) 

10 shall be construed as affecting the application of sec11 tion 514 of the Employee Retirement Income Secu12 rity Act of 1974. 

13 (b) COVERAGE OFFERED THROUGH EXCHANGE.— 

14 (1) IN GENERAL.—In the case of health insur15 ance coverage offered through the Health Insurance 

16 Exchange— 

17 (A) the requirements of this title do not 

18 supercede any requirements (including require19 ments relating to genetic information non20 discrimination and mental health) applicable 

21 under title XXVII of the Public Health Service 

22 Act or under State law, except insofar as such 

23 requirements prevent the application of a re24 quirement of this subdivision, as determined by 

25 the Commissioner; and 


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1 (B) individual rights and remedies under 

2 State laws shall apply. 

3 (2) CONSTRUCTION.—In the case of coverage 

4 described in paragraph (1), nothing in such para5 graph shall be construed as preventing the applica6 tion of rights and remedies under State laws with 

7 respect to any requirement referred to in paragraph 

8 (1)(A). 

9 SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE. 

10 (a) IN GENERAL.—Except as otherwise explicitly per11 mitted by this division and by subsequent regulations con12 sistent with this division, all health care and related serv13 ices (including insurance coverage and public health activi14 ties) covered by this division shall be provided without re15 gard to personal characteristics extraneous to the provi16 sion of high quality health care or related services. 

17 (b) IMPLEMENTATION.—To implement the require18 ment set forth in subsection (a), the Secretary of Health 

19 and Human Services shall, not later than 18 months after 

20 the date of the enactment of this Act, promulgate such 

21 regulations as are necessary or appropriate to insure that 

22 all health care and related services (including insurance 

23 coverage and public health activities) covered by this divi24 sion are provided (whether directly or through contractual, 

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1 sonal characteristics extraneous to the provision of high 

2 quality health care or related services. 

3 SEC. 153. WHISTLEBLOWER PROTECTION. 

4 (a) RETALIATION PROHIBITED.—No employer may 

5 discharge any employee or otherwise discriminate against 

6 any employee with respect to his compensation, terms, 

7 conditions, or other privileges of employment because the 

8 employee (or any person acting pursuant to a request of 

9 the employee)— 

10 (1) provided, caused to be provided, or is about 

11 to provide or cause to be provided to the employer, 

12 the Federal Government, or the attorney general of 

13 a State information relating to any violation of, or 

14 any act or omission the employee reasonably believes 

15 to be a violation of any provision of this division or 

16 any order, rule, or regulation promulgated under 

17 this division; 

18 (2) testified or is about to testify in a pro19 ceeding concerning such violation; 

20 (3) assisted or participated or is about to assist 

21 or participate in such a proceeding; or 

22 (4) objected to, or refused to participate in, any 

23 activity, policy, practice, or assigned task that the 

24 employee (or other such person) reasonably believed 

25 to be in violation of any provision of this division or 


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1 any order, rule, or regulation promulgated under 

2 this division. 

3 (b) ENFORCEMENT ACTION.—An employee covered 

4 by this section who alleges discrimination by an employer 

5 in violation of subsection (a) may bring an action governed 

6 by the rules, procedures, legal burdens of proof, and rem7 edies set forth in section 40(b) of the Consumer Product 

8 Safety Act (15 U.S.C. 2087(b)). 

9 (c) EMPLOYER DEFINED.—As used in this section, 

10 the term ‘‘employer’’ means any person (including one or 

11 more individuals, partnerships, associations, corporations, 

12 trusts, professional membership organization including a 

13 certification, disciplinary, or other professional body, unin14 corporated organizations, nongovernmental organizations, 

15 or trustees) engaged in profit or nonprofit business or in16 dustry whose activities are governed by this division, and 

17 any agent, contractor, subcontractor, grantee, or consult18 ant of such person. 

19 (d) RULE OF CONSTRUCTION.—The rule of construc20 tion set forth in section 20109(h) of title 49, United 

21 States Code, shall also apply to this section. 

22 SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BAR23 GAINING. 

24 Nothing in this subdivision shall be construed to alter 

25 or supercede any statutory or other obligation to engage 


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1 in collective bargaining over the terms and conditions of 

2 employment related to health care. 

3 SEC. 155. SEVERABILITY. 

4 If any provision of this division, or any application 

5 of such provision to any person or circumstance, is held 

6 to be unconstitutional, the remainder of the provisions of 

7 this division and the application of the provision to any 

8 other person or circumstance shall not be affected. 

9 SEC. 156. RULE OF CONSTRUCTION REGARDING HAWAII 

10 PREPAID HEALTH CARE ACT. 

11 (a) IN GENERAL.—Subject to this section— 

12 (1) nothing in this subdivision (or an amend13 ment made by this subdivision) shall be construed to 

14 modify or limit the application of the exemption for 

15 the Hawaii Prepaid Health Care Act (Haw. Rev. 

16 Stat. §§ 393-1 et seq.) as provided for under section 

17 514(b)(5) of the Employee Retirement Income Secu18 rity Act of 1974 (29 U.S.C. 1144(b)(5)), and such 

19 exemption shall also apply with respect to the provi20 sions of this subdivision, and 

21 (2) for purposes of this subdivision (and the 

22 amendments made by this subdivision), coverage 

23 provided pursuant to the Hawaii Prepaid Health 

24 Care Act shall be treated as a qualified health bene25 fits plan providing acceptable coverage so long as 


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1 the Secretary of Labor determines that such cov2 erage for employees (taking into account the benefits 

3 and the cost to employees for such benefits) is sub4 stantially equivalent to or greater than the coverage 

5 provided for employees pursuant to the essential 

6 benefits package. 

7 (b) COORDINATION WITH STATE LAW OF HAWAII.— 

8 The Commissioner shall, based on ongoing consultation 

9 with the appropriate officials of the State of Hawaii, make 

10 adjustments to rules and regulations of the Commissioner 

11 under this subdivision as may be necessary, as determined 

12 by the Commissioner, to most effectively coordinate the 

13 provisions of this subdivision with the provisions of the 

14 Hawaii Prepaid Health Care Act, taking into account any 

15 changes made from time to time to the Hawaii Prepaid 

16 Health Care Act and related laws of such State. 

17 SEC. 157. INCREASING MEANINGFUL USE OF ELECTRONIC 

18 HEALTH RECORDS. 

19 (a) STUDY.—The Commissioner shall conduct a 

20 study on methods that QHBP offering entities can use 

21 to encourage increased meaningful use of electronic health 

22 records by health care providers, including— 

23 (1) qualified health benefits plans offering high24 er reimbursement rates for such meaningful use; and 


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1 (2) promoting the use by health care providers 

2 of low-cost available electronic health record soft3 ware packages, such as software made available to 

4 health care providers by the Veterans Administra5 tion. 

6 (b) REPORT.—Not later than 2 years after the date 

7 of the enactment of this Act, the Commissioner shall sub8 mit to the Congress a report containing— 

9 (1) the results of the study under subsection 

10 (a); and 

11 (2) recommendations concerning whether quali12 fied health benefits plans should increase reimburse13 ment rates to health care providers to increase 

14 meaningful use of electronic health records by such 

15 providers. 

16 (c) REQUIREMENTS.— 

17 (1) IN GENERAL.—Not later than one year 

18 after the date the report is submitted to the Con19 gress under subsection (b), if, under subsection 

20 (b)(2), the Commissioner recommends increased re21 imbursement rates, the Commissioner shall require 

22 that qualified health benefits plans increase reim23 bursement rates for health care providers that show 

24 meaningful use of electronic health records. 


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1 (2) COST LIMITATION.—An increase in rates 

2 under paragraph (1) shall not result in any increase 

3 in affordability premium or cost-sharing credits 

4 under subtitle C of title II of this subdivision. 

5 SEC. 158. PRIVATE RIGHT OF CONTRACT WITH HEALTH 

6 CARE PROVIDERS. 

7 Nothing in this division shall be construed to preclude 

8 any participant or beneficiary in a group health plan from 

9 entering into any contract or arrangement for health care 

10 with any health care provider. 

11 Subtitle G—Early Investments 

12 SEC. 161. ENSURING VALUE AND LOWER PREMIUMS. 

13 (a) GROUP HEALTH INSURANCE COVERAGE.—Title 

14 XXVII of the Public Health Service Act is amended by 

15 inserting after section 2713 the following new section: 

16 ‘‘SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS. 

17 ‘‘(a) IN GENERAL.—Each health insurance issuer 

18 that offers health insurance coverage in the small or large 

19 group market shall provide that for any plan year in which 

20 the coverage has a medical loss ratio below a level specified 

21 by the Secretary, the issuer shall provide in a manner 

22 specified by the Secretary for rebates to enrollees of pay23 ment sufficient to meet such loss ratio. Such methodology 

24 shall be set at the highest level medical loss ratio possible 

25 that is designed to ensure adequate participation by 


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1 issuers, competition in the health insurance market, and 

2 value for consumers so that their premiums are used for 

3 services. 

4 ‘‘(b) UNIFORM DEFINITIONS.—The Secretary shall 

5 establish a uniform definition of medical loss ratio and 

6 methodology for determining how to calculate the medical 

7 loss ratio. Such methodology shall be designed to take into 

8 account the special circumstances of smaller plans, dif9 ferent types of plans, and newer plans.’’. 

10 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 

11 Such title is further amended by inserting after section 

12 2753 the following new section: 

13 ‘‘SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS. 

14 ‘‘The provisions of section 2714 shall apply to health 

15 insurance coverage offered in the individual market in the 

16 same manner as such provisions apply to health insurance 

17 coverage offered in the small or large group market.’’. 

18 (c) IMMEDIATE IMPLEMENTATION.—The amend19 ments made by this section shall apply in the group and 

20 individual market for plan years beginning on or after 

21 January 1, 2011. 

22 SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE. 

23 (a) CLARIFICATION REGARDING APPLICATION OF

24 GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH


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1 INSURANCE COVERAGE.—Section 2742 of the Public 

2 Health Service Act (42 U.S.C. 300gg–42) is amended— 

3 (1) in its heading, by inserting ‘‘AND CON4 TINUATION IN FORCE, INCLUDING PROHIBI5 TION OF RESCISSION,’’ after ‘‘GUARANTEED RE6 NEWABILITY’’; and 

7 (2) in subsection (a), by inserting ‘‘, including 

8 without rescission,’’ after ‘‘continue in force’’. 

9 (b) SECRETARIAL GUIDANCE REGARDING RESCIS10 SIONS.—Section 2742 of such Act (42 U.S.C. 300gg–42) 

11 is amended by adding at the end the following: 

12 ‘‘(f) RESCISSION.—A health insurance issuer may re13 scind health insurance coverage only upon clear and con14 vincing evidence of fraud described in subsection (b)(2). 

15 The Secretary, no later than July 1, 2010, shall issue 

16 guidance implementing this requirement, including proce17 dures for independent, external third party review.’’. 

18 (c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL

19 THIRD PARTY REVIEW IN CERTAIN CASES.—Subpart 1 

20 of part B of title XXVII of such Act (42 U.S.C. 300gg– 

21 41 et seq.) is amended by adding at the end the following: 


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1 ‘‘SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL 

2 THIRD PARTY REVIEW IN CASES OF RESCIS3 SION. 

4 ‘‘(a) NOTICE AND REVIEW RIGHT.—If a health in5 surance issuer determines to rescind health insurance cov6 erage for an individual in the individual market, before 

7 such rescission may take effect the issuer shall provide the 

8 individual with notice of such proposed rescission and an 

9 opportunity for a review of such determination by an inde10 pendent, external third party under procedures specified 

11 by the Secretary under section 2742(f). 

12 ‘‘(b) INDEPENDENT DETERMINATION.—If the indi13 vidual requests such review by an independent, external 

14 third party of a rescission of health insurance coverage, 

15 the coverage shall remain in effect until such third party 

16 determines that the coverage may be rescinded under the 

17 guidance issued by the Secretary under section 2742(f).’’. 

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

19 this section shall apply on and after October 1, 2010, with 

20 respect to health insurance coverage issued before, on, or 

21 after such date. 

22 SEC. 163. ADMINISTRATIVE SIMPLIFICATION. 

23 (a) STANDARDIZING ELECTRONIC ADMINISTRATIVE

24 TRANSACTIONS.— 

25 (1) IN GENERAL.—Part C of title XI of the So26 cial Security Act (42 U.S.C. 1320d et seq.) is 


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1 amended by inserting after section 1173 the fol2 lowing new section: 

3 ‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 

4 TRANSACTIONS. 

5 ‘‘(a) STANDARDS FOR FINANCIAL AND ADMINISTRA6 TIVE TRANSACTIONS.— 

7 ‘‘(1) IN GENERAL.—The Secretary shall adopt 

8 and regularly update standards consistent with the 

9 goals described in paragraph (2). 

10 ‘‘(2) GOALS FOR FINANCIAL AND ADMINISTRA11 TIVE TRANSACTIONS.—The goals for standards 

12 under paragraph (1) are that such standards shall— 

13 ‘‘(A) be unique with no conflicting or re14 dundant standards; 

15 ‘‘(B) be authoritative, permitting no addi16 tions or constraints for electronic transactions, 

17 including companion guides; 

18 ‘‘(C) be comprehensive, efficient and ro19 bust, requiring minimal augmentation by paper 

20 transactions or clarification by further commu21 nications; 

22 ‘‘(D) enable the real-time (or near real23 time) determination of an individual’s financial 

24 responsibility at the point of service and, to the 

25 extent possible, prior to service, including 


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1 whether the individual is eligible for a specific 

2 service with a specific physician at a specific fa3 cility, which may include utilization of a ma4 chine-readable health plan beneficiary identi5 fication card; 

6 ‘‘(E) enable, where feasible, near real-time 

7 adjudication of claims; 

8 ‘‘(F) provide for timely acknowledgment, 

9 response, and status reporting applicable to any 

10 electronic transaction deemed appropriate by 

11 the Secretary; 

12 ‘‘(G) describe all data elements (such as 

13 reason and remark codes) in unambiguous 

14 terms, not permit optional fields, require that 

15 data elements be either required or conditioned 

16 upon set values in other fields, and prohibit ad17 ditional conditions; and 

18 ‘‘(H) harmonize all common data elements 

19 across administrative and clinical transaction 

20 standards. 

21 ‘‘(3) TIME FOR ADOPTION.—Not later than 2 

22 years after the date of implementation of the X12 

23 Version 5010 transaction standards implemented 

24 under this part, the Secretary shall adopt standards 

25 under this section. 


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1 ‘‘(4) REQUIREMENTS FOR SPECIFIC STAND2 ARDS.—The standards under this section shall be 

3 developed, adopted and enforced so as to— 

4 ‘‘(A) clarify, refine, complete, and expand, 

5 as needed, the standards required under section 

6 1173; 

7 ‘‘(B) require paper versions of standard8 ized transactions to comply with the same 

9 standards as to data content such that a fully 

10 compliant, equivalent electronic transaction can 

11 be populated from the data from a paper 

12 version; 

13 ‘‘(C) enable electronic funds transfers, in 

14 order to allow automated reconciliation with the 

15 related health care payment and remittance ad16 vice; 

17 ‘‘(D) require timely and transparent claim 

18 and denial management processes, including 

19 tracking, adjudication, and appeal processing; 

20 ‘‘(E) require the use of a standard elec21 tronic transaction with which health care pro22 viders may quickly and efficiently enroll with a 

23 health plan to conduct the other electronic 

24 transactions provided for in this part; and 


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1 ‘‘(F) provide for other requirements relat2 ing to administrative simplification as identified 

3 by the Secretary, in consultation with stake4 holders. 

5 ‘‘(5) BUILDING ON EXISTING STANDARDS.—In 

6 developing the standards under this section, the Sec7 retary shall build upon existing and planned stand8 ards. 

9 ‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 

10 Not later than 6 months after the date of the enact11 ment of this section, the Secretary shall submit to 

12 the appropriate committees of Congress a plan for 

13 the implementation and enforcement, by not later 

14 than 5 years after such date of enactment, of the 

15 standards under this section. Such plan shall in16 clude— 

17 ‘‘(A) a process and timeframe with mile18 stones for developing the complete set of stand19 ards; 

20 ‘‘(B) an expedited upgrade program for 

21 continually developing and approving additions 

22 and modifications to the standards as often as 

23 annually to improve their quality and extend 

24 their functionality to meet evolving require25 ments in health care; 


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1 ‘‘(C) programs to provide incentives for, 

2 and ease the burden of, implementation for cer3 tain health care providers, with special consid4 eration given to such providers serving rural or 

5 underserved areas and ensure coordination with 

6 standards, implementation specifications, and 

7 certification criteria being adopted under the 

8 HITECH Act; 

9 ‘‘(D) programs to provide incentives for, 

10 and ease the burden of, health care providers 

11 who volunteer to participate in the process of 

12 setting standards for electronic transactions; 

13 ‘‘(E) an estimate of total funds needed to 

14 ensure timely completion of the implementation 

15 plan; and 

16 ‘‘(F) an enforcement process that includes 

17 timely investigation of complaints, random au18 dits to ensure compliance, civil monetary and 

19 programmatic penalties for non-compliance con20 sistent with existing laws and regulations, and 

21 a fair and reasonable appeals process building 

22 off of enforcement provisions under this part. 

23 ‘‘(b) LIMITATIONS ON USE OF DATA.—Nothing in 

24 this section shall be construed to permit the use of inforVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01102 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mation collected under this section in a manner that would 

2 adversely affect any individual. 

3 ‘‘(c) PROTECTION OF DATA.—The Secretary shall en4 sure (through the promulgation of regulations or other5 wise) that all data collected pursuant to subsection (a) 

6 are— 

7 ‘‘(1) used and disclosed in a manner that meets 

8 the HIPAA privacy and security law (as defined in 

9 section 3009(a)(2) of the Public Health Service 

10 Act), including any privacy or security standard 

11 adopted under section 3004 of such Act; and 

12 ‘‘(2) protected from all inappropriate internal 

13 use by any entity that collects, stores, or receives the 

14 data, including use of such data in determinations of 

15 eligibility (or continued eligibility) in health plans, 

16 and from other inappropriate uses, as defined by the 

17 Secretary.’’. 

18 (2) DEFINITIONS.—Section 1171 of such Act 

19 (42 U.S.C. 1320d) is amended— 

20 (A) in paragraph (7), by striking ‘‘with 

21 reference to’’ and all that follows and inserting 

22 ‘‘with reference to a transaction or data ele23 ment of health information in section 1173 

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1 mats, codes, and code sets adopted or estab2 lished by the Secretary for the electronic ex3 change and use of information’’; and 

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

5 paragraph: 

6 ‘‘(9) OPERATING RULES.—The term ‘operating 

7 rules’ means business rules for using and processing 

8 transactions. Operating rules should address the fol9 lowing: 

10 ‘‘(A) Requirements for data content using 

11 available and established national standards. 

12 ‘‘(B) Infrastructure requirements that es13 tablish best practices for streamlining data flow 

14 to yield timely execution of transactions. 

15 ‘‘(C) Policies defining the transaction re16 lated rights and responsibilities for entities that 

17 are transmitting or receiving data.’’. 

18 (3) CONFORMING AMENDMENT.—Section 

19 1179(a) of such Act (42 U.S.C. 1320d–8(a)) is 

20 amended, in the matter before paragraph (1)— 

21 (A) by inserting ‘‘on behalf of an indi22 vidual’’ after ‘‘1978)’’; and 

23 (B) by inserting ‘‘on behalf of an indi24 vidual’’ after ‘‘for a financial institution.’’ 


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1 (b) STANDARDS FOR CLAIMS ATTACHMENTS AND

2 COORDINATION OF BENEFITS .— 

3 (1) STANDARD FOR HEALTH CLAIMS ATTACH4 MENTS.—Not later than 1 year after the date of the 

5 enactment of this Act, the Secretary of Health and 

6 Human Services shall promulgate a final rule to es7 tablish a standard for health claims attachment 

8 transaction described in section 1173(a)(2)(B) of the 

9 Social Security Act (42 U.S.C. 1320d–2(a)(2)(B)) 

10 and coordination of benefits. 

11 (2) REVISION IN PROCESSING PAYMENT TRANS12 ACTIONS BY FINANCIAL INSTITUTIONS.— 

13 (A) IN GENERAL.—Section 1179 of the So14 cial Security Act (42 U.S.C. 1320d–8) is 

15 amended, in the matter before paragraph (1)— 

16 (i) by striking ‘‘or is engaged’’ and in17 serting ‘‘and is engaged’’; and 

18 (ii) by inserting ‘‘(other than as a 

19 business associate for a covered entity)’’ 

20 after ‘‘for a financial institution’’. 

21 (B) EFFECTIVE DATE.—The amendments 

22 made by paragraph (1) shall apply to trans23 actions occurring on or after such date (not 

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1 ment of this Act) as the Secretary of Health 

2 and Human Services shall specify. 

3 SEC. 164. REINSURANCE PROGRAM FOR RETIREES. 

4 (a) ESTABLISHMENT.— 

5 (1) IN GENERAL.—Not later than 90 days after 

6 the date of the enactment of this Act, the Secretary 

7 of Health and Human Services shall establish a tem8 porary reinsurance program (in this section referred 

9 to as the ‘‘reinsurance program’’) to provide reim10 bursement to assist participating employment-based 

11 plans with the cost of providing health benefits to 

12 retirees and to eligible spouses, surviving spouses 

13 and dependents of such retirees. 

14 (2) DEFINITIONS.—For purposes of this sec15 tion: 

16 (A) The term ‘‘eligible employment-based 

17 plan’’ means a group health benefits plan 

18 that— 

19 (i) is maintained by one or more em20 ployers, former employers or employee as21 sociations, or a voluntary employees’ bene22 ficiary association, or a committee or board 

23 of individuals appointed to administer such 

24 plan, and 


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1 (ii) provides health benefits to retir2 ees. 

3 (B) The term ‘‘health benefits’’ means 

4 medical, surgical, hospital, prescription drug, 

5 and such other benefits as shall be determined 

6 by the Secretary, whether self-funded or deliv7 ered through the purchase of insurance or oth8 erwise. 

9 (C) The term ‘‘participating employment10 based plan’’ means an eligible employment11 based plan that is participating in the reinsur12 ance program. 

13 (D) The term ‘‘retiree’’ means, with re14 spect to a participating employment-benefit 

15 plan, an individual who— 

16 (i) is 55 years of age or older; 

17 (ii) is not eligible for coverage under 

18 title XVIII of the Social Security Act; and 

19 (iii) is not an active employee of an 

20 employer maintaining the plan or of any 

21 employer that makes or has made substan22 tial contributions to fund such plan. 

23 (E) The term ‘‘Secretary’’ means Sec24 retary of Health and Human Services. 


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1 (b) PARTICIPATION.—To be eligible to participate in 

2 the reinsurance program, an eligible employment-based 

3 plan shall submit to the Secretary an application for par4 ticipation in the program, at such time, in such manner, 

5 and containing such information as the Secretary shall re6 quire. 

7 (c) PAYMENT.— 

8 (1) SUBMISSION OF CLAIMS.— 

9 (A) IN GENERAL.—Under the reinsurance 

10 program, a participating employment-based 

11 plan shall submit claims for reimbursement to 

12 the Secretary which shall contain documenta13 tion of the actual costs of the items and serv14 ices for which each claim is being submitted. 

15 (B) BASIS FOR CLAIMS.—Each claim sub16 mitted under subparagraph (A) shall be based 

17 on the actual amount expended by the partici18 pating employment-based plan involved within 

19 the plan year for the appropriate employment 

20 based health benefits provided to a retiree or to 

21 the spouse, surviving spouse, or dependent of a 

22 retiree. In determining the amount of any claim 

23 for purposes of this subsection, the partici24 pating employment-based plan shall take into 

25 account any negotiated price concessions (such 


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1 as discounts, direct or indirect subsidies, re2 bates, and direct or indirect remunerations) ob3 tained by such plan with respect to such health 

4 benefits. For purposes of calculating the 

5 amount of any claim, the costs paid by the re6 tiree or by the spouse, surviving spouse, or de7 pendent of the retiree in the form of 

8 deductibles, co-payments, and co-insurance shall 

9 be included along with the amounts paid by the 

10 participating employment-based plan. 

11 (2) PROGRAM PAYMENTS AND LIMIT.—If the 

12 Secretary determines that a participating employ13 ment-based plan has submitted a valid claim under 

14 paragraph (1), the Secretary shall reimburse such 

15 plan for 80 percent of that portion of the costs at16 tributable to such claim that exceeds $15,000, but is 

17 less than $90,000. Such amounts shall be adjusted 

18 each year based on the percentage increase in the 

19 medical care component of the Consumer Price 

20 Index (rounded to the nearest multiple of $1,000) 

21 for the year involved. 

22 (3) USE OF PAYMENTS.—Amounts paid to a 

23 participating employment-based plan under this sub24 section shall be used to lower the costs borne di25 rectly by the participants and beneficiaries for health 


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1 benefits provided under such plan in the form of 

2 premiums, co-payments, deductibles, co-insurance, or 

3 other out-of-pocket costs. Such payments shall not 

4 be used to reduce the costs of an employer maintain5 ing the participating employment-based plan. The 

6 Secretary shall develop a mechanism to monitor the 

7 appropriate use of such payments by such plans. 

8 (4) APPEALS AND PROGRAM PROTECTIONS.— 

9 The Secretary shall establish— 

10 (A) an appeals process to permit partici11 pating employment-based plans to appeal a de12 termination of the Secretary with respect to 

13 claims submitted under this section; and 

14 (B) procedures to protect against fraud, 

15 waste, and abuse under the program. 

16 (5) AUDITS.—The Secretary shall conduct an17 nual audits of claims data submitted by partici18 pating employment-based plans under this section to 

19 ensure that they are in compliance with the require20 ments of this section. 

21 (d) RETIREE RESERVE TRUST FUND.— 

22 (1) ESTABLISHMENT.— 

23 (A) IN GENERAL.—There is established in 

24 the Treasury of the United States a trust fund 

25 to be known as the ‘‘Retiree Reserve Trust 


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1 Fund’’ (referred to in this section as the ‘‘Trust 

2 Fund’’), that shall consist of such amounts as 

3 may be appropriated or credited to the Trust 

4 Fund as provided for in this subsection to en5 able the Secretary to carry out the reinsurance 

6 program. Such amounts shall remain available 

7 until expended. 

8 (B) FUNDING.—There are hereby appro9 priated to the Trust Fund, out of any moneys 

10 in the Treasury not otherwise appropriated, an 

11 amount requested by the Secretary as necessary 

12 to carry out this section, except that the total 

13 of all such amounts requested shall not exceed 

14 $10,000,000,000. 

15 (C) APPROPRIATIONS FROM THE TRUST

16 FUND.— 

17 (i) IN GENERAL.—Amounts in the 

18 Trust Fund are appropriated to provide 

19 funding to carry out the reinsurance pro20 gram and shall be used to carry out such 

21 program. 

22 (ii) BUDGETARY IMPLICATIONS.— 

23 Amounts appropriated under clause (i), 

24 and outlays flowing from such appropria25 tions, shall not be taken into account for 


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1 purposes of any budget enforcement proce2 dures including allocations under section 

3 302(a) and (b) of the Balanced Budget 

4 and Emergency Deficit Control Act and 

5 budget resolutions for fiscal years during 

6 which appropriations are made from the 

7 Trust Fund. 

8 (iii) LIMITATION TO AVAILABLE

9 FUNDS.—The Secretary has the authority 

10 to stop taking applications for participa11 tion in the program or take such other 

12 steps in reducing expenditures under the 

13 reinsurance program in order to ensure 

14 that expenditures under the reinsurance 

15 program do not exceed the funds available 

16 under this subsection. 

17 SEC. 165. PROHIBITION AGAINST POST-RETIREMENT RE18 DUCTIONS OF RETIREE HEALTH BENEFITS 

19 BY GROUP HEALTH PLANS. 

20 (a) IN GENERAL.—Part 7 of subtitle B of title I of 

21 the Employee Retirement Income Security Act of 1974 is 

22 amended by inserting after section 714 the following new 

23 section: 


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1 ‘‘SEC. 715. PROTECTION AGAINST POST-RETIREMENT RE2 DUCTION OF RETIREE HEALTH BENEFITS. 

3 ‘‘(a) IN GENERAL.—Every group health plan shall 

4 contain a provision which expressly bars the plan, or any 

5 fiduciary of the plan, from reducing the benefits provided 

6 under the plan to a retired participant, or beneficiary of 

7 such participant, if such reduction affects the benefits pro8 vided to the participant or beneficiary as of the date the 

9 participant retired for purposes of the plan and such re10 duction occurs after the participant’s retirement unless 

11 such reduction is also made with respect to active partici12 pants. 

13 ‘‘(b) NO REDUCTION.—Notwithstanding that a group 

14 health plan described in subsection (a) may contain a pro15 vision reserving the general power to amend or terminate 

16 the plan or a provision specifically authorizing the plan 

17 to make post-retirement reductions in retiree health bene18 fits, it shall be prohibited for any group health plan, 

19 whether through amendment or otherwise, to reduce the 

20 benefits provided to a retired participant or his or her ben21 eficiary under the terms of the plan if such reduction of 

22 benefits occurs after the date the participant retired for 

23 purposes of the plan and reduces benefits that were pro24 vided to the participant, or his or her beneficiary, as of 

25 the date the participant retired unless such reduction is 

26 also made with respect to active participants.’’. 


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1 (b) CONFORMING AMENDMENT.—The table of con2 tents in section 1 of such Act is amended by inserting 

3 after the item relating to section 714 the following new 

4 item: 

‘‘Sec. 715. Protection against post-retirement reduction of retiree health benefits.’’. 

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

6 this section shall take effect on the date of the enactment 

7 of this Act. 

8 SEC. 166. LIMITATIONS ON PREEXISTING CONDITION EX9 CLUSIONS IN GROUP HEALTH PLANS IN AD10 VANCE OF APPLICABILITY OF NEW PROHIBI11 TION OF PREEXISTING CONDITION EXCLU12 SIONS. 

13 (a) AMENDMENTS TO THE EMPLOYEE RETIREMENT

14 INCOME SECURITY ACT OF 1974.— 

15 (1) REDUCTION IN LOOK-BACK PERIOD.—Sec16 tion 701(a)(1) of the Employee Retirement Income 

17 Security Act of 1974 (29 U.S.C. 1181(a)(1)) is 

18 amended by striking ‘‘6-month period’’ and inserting 

19 ‘‘30-day period’’. 

20 (2) REDUCTION IN PERMITTED PREEXISTING

21 CONDITION LIMITATION PERIOD.—Section 701(a)(2) 

22 of such Act (29 U.S.C. 1181(a)(2)) is amended by 

23 striking ‘‘12 months’’ and inserting ‘‘3 months’’, 


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1 and by striking ‘‘18 months’’ and inserting ‘‘9 

2 months’’. 

3 (3) INAPPLICABILITY OF INTERIM LIMITATIONS

4 UPON APPLICABILITY OF TOTAL PROHIBITION OF

5 EXCLUSION.—Section 701 of such Act shall cease to 

6 be effective in the case of any group health plan as 

7 of the date on which such plan becomes subject to 

8 the requirements of section 111 of this division (re9 lating to prohibiting preexisting condition exclu10 sions). 

11 (b) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided in sub13 paragraph (B), the amendments made by para14 graphs (1) and (2) of subsection (a) shall apply with 

15 respect to group health plans for plan years begin16 ning after the end of the 6th calendar month fol17 lowing the date of the enactment of this Act. 

18 (2) SPECIAL RULE FOR COLLECTIVE BAR19 GAINING AGREEMENTS.—In the case of a group 

20 health plan maintained pursuant to one or more col21 lective bargaining agreements between employee rep22 resentatives and one or more employers ratified be23 fore the date of the enactment of this Act, the 

24 amendments made by paragraphs (1) and (2) of 


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1 subsection (a) shall not apply to plan years begin2 ning before the earlier of— 

3 (A) the date on which the last of the col4 lective bargaining agreements relating to the 

5 plan terminates (determined without regard to 

6 any extension thereof agreed to after the date 

7 of the enactment of this Act), or 

8 (B) 3 years after the date of the enact9 ment of this Act. 

10 For purposes of subparagraph (A), any plan amend11 ment made pursuant to a collective bargaining 

12 agreement relating to the plan which amends the 

13 plan solely to conform to any requirement added by 

14 the amendments made by paragraphs (1) and (2) of 

15 subsection (a) shall not be treated as a termination 

16 of such collective bargaining agreement. 

17 SEC. 167. EXTENSION OF COBRA CONTINUATION COV18 ERAGE. 

19 (a) EXTENSION OF CURRENT PERIODS OF CONTINU20 ATION COVERAGE.— 

21 (1) IN GENERAL.—In the case of any individual 

22 who is, under a COBRA continuation coverage pro23 vision, covered under COBRA continuation coverage 

24 on or after the date of the enactment of this Act, 

25 the required period of any such coverage which has 


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1 not subsequently terminated under the terms of such 

2 provision for any reason other than the expiration of 

3 a period of a specified number of months shall, not4 withstanding such provision and subject to sub5 section (b), extend to the earlier of the date on 

6 which such individual becomes eligible for coverage 

7 under an employment-based health plan or the date 

8 on which such individual becomes eligible for health 

9 insurance coverage through the Health Insurance 

10 Exchange (or a State-based Health Insurance Ex11 change operating in a State or group of States). 

12 (2) NOTICE.—As soon as practicable after the 

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

14 Labor, in consultation with the Secretary of the 

15 Treasury and the Secretary of Health and Human 

16 Services, shall, in consultation with administrators 

17 of the group health plans (or other entities) that 

18 provide or administer the COBRA continuation cov19 erage involved, provide rules setting forth the form 

20 and manner in which prompt notice to individuals of 

21 the continued availability of COBRA continuation 

22 coverage to such individuals under paragraph (1). 

23 (b) CONTINUED EFFECT OF OTHER TERMINATING

24 EVENTS.—Notwithstanding subsection (a), any required 

25 period of COBRA continuation coverage which is extended 


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1 under such subsection shall terminate upon the occur2 rence, prior to the date of termination otherwise provided 

3 in such subsection, of any terminating event specified in 

4 the applicable continuation coverage provision other than 

5 the expiration of a period of a specified number of months. 

6 (c) ACCESS TO STATE HEALTH BENEFITS RISK

7 POOLS.—This section shall supersede any provision of the 

8 law of a State or political subdivision thereof to the extent 

9 that such provision has the effect of limiting or precluding 

10 access by a qualified beneficiary whose COBRA continu11 ation coverage has been extended under this section to a 

12 State health benefits risk pool recognized by the Commis13 sioner for purposes of this section solely by reason of the 

14 extension of such coverage beyond the date on which such 

15 coverage otherwise would have expired. 

16 (d) DEFINITIONS.—For purposes of this section— 

17 (1) COBRA CONTINUATION COVERAGE.—The 

18 term ‘‘COBRA continuation coverage’’ means con19 tinuation coverage provided pursuant to part 6 of 

20 subtitle B of title I of the Employee Retirement In21 come Security Act of 1974 (other than under section 

22 609), title XXII of the Public Health Service Act, 

23 section 4980B of the Internal Revenue Code of 1986 

24 (other than subsection (f)(1) of such section insofar 

25 as it relates to pediatric vaccines), or section 905a 


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1 of title 5, United States Code, or under a State pro2 gram that provides comparable continuation cov3 erage. Such term does not include coverage under a 

4 health flexible spending arrangement under a cafe5 teria plan within the meaning of section 125 of the 

6 Internal Revenue Code of 1986. 

7 (2) COBRA CONTINUATION PROVISION.—The 

8 term ‘‘COBRA continuation provision’’ means the 

9 provisions of law described in paragraph (1). 

10 TITLE II—HEALTH INSURANCE 

11 EXCHANGE AND RELATED 

12 PROVISIONS 

13 Subtitle A—Health Insurance 

14 Exchange 

15 SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EX16 CHANGE; OUTLINE OF DUTIES; DEFINITIONS. 

17 (a) ESTABLISHMENT.—There is established within 

18 the Health Choices Administration and under the direc19 tion of the Commissioner a Health Insurance Exchange 

20 in order to facilitate access of individuals and employers, 

21 through a transparent process, to a variety of choices of 

22 affordable, quality health insurance coverage, including a 

23 public health insurance option. 

24 (b) OUTLINE OF DUTIES OF COMMISSIONER.—In ac25 cordance with this subtitle and in coordination with approVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01119 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 priate Federal and State officials as provided under sec2 tion 143(b), the Commissioner shall— 

3 (1) under section 204 establish standards for, 

4 accept bids from, and negotiate and enter into con5 tracts with, QHBP offering entities for the offering 

6 of health benefits plans through the Health Insur7 ance Exchange, with different levels of benefits re8 quired under section 203, and including with respect 

9 to oversight and enforcement; 

10 (2) under section 205 facilitate outreach and 

11 enrollment in such plans of Exchange-eligible indi12 viduals and employers described in section 202; and 

13 (3) conduct such activities related to the Health 

14 Insurance Exchange as required, including establish15 ment of a risk pooling mechanism under section 206 

16 and consumer protections under subtitle D of title I. 

17 (c) EXCHANGE-PARTICIPATING HEALTH BENEFITS

18 PLAN DEFINED.—In this subdivision, the term ‘‘Ex19 change-participating health benefits plan’’ means a quali20 fied health benefits plan that is offered through the Health 

21 Insurance Exchange. 

22 SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOY23 ERS. 

24 (a) ACCESS TO COVERAGE.—In accordance with this 

25 section, all individuals are eligible to obtain coverage 


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1 through enrollment in an Exchange-participating health 

2 benefits plan offered through the Health Insurance Ex3 change unless such individuals are enrolled in another 

4 qualified health benefits plan or other acceptable coverage. 

5 (b) DEFINITIONS.—In this subdivision: 

6 (1) EXCHANGE-ELIGIBLE INDIVIDUAL.—The 

7 term ‘‘Exchange-eligible individual’’ means an indi8 vidual who is eligible under this section to be en9 rolled through the Health Insurance Exchange in an 

10 Exchange-participating health benefits plan and, 

11 with respect to family coverage, includes dependents 

12 of such individual. 

13 (2) EXCHANGE-ELIGIBLE EMPLOYER.—The 

14 term ‘‘Exchange-eligible employer’’ means an em15 ployer that is eligible under this section to enroll 

16 through the Health Insurance Exchange employees 

17 of the employer (and their dependents) in Exchange18 eligible health benefits plans. 

19 (3) EMPLOYMENT-RELATED DEFINITIONS.— 

20 The terms ‘‘employer’’, ‘‘employee’’, ‘‘full-time em21 ployee’’, and ‘‘part-time employee’’ have the mean22 ings given such terms by the Commissioner for pur23 poses of this subdivision. 

24 (c) TRANSITION.—Individuals and employers shall 

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1 ance Exchange in accordance with the following transition 

2 schedule: 

3 (1) FIRST YEAR.—In Y1 (as defined in section 

4 100(c))— 

5 (A) individuals described in subsection 

6 (d)(1), including individuals described in para7 graphs (3), (4), and (5) of subsection (d); and 

8 (B) smallest employers described in sub9 section (e)(1). 

10 (2) SECOND YEAR.—In Y2— 

11 (A) individuals and employers described in 

12 paragraph (1); and 

13 (B) smaller employers described in sub14 section (e)(2). 

15 (3) THIRD YEAR.—In Y3— 

16 (A) individuals and employers described in 

17 paragraph (2); 

18 (B) larger employers described in sub19 section (e)(3); and 

20 (C) largest employers as permitted by the 

21 Commissioner under subsection (e)(4). 

22 (4) FOURTH AND SUBSEQUENT YEARS.—In Y4 

23 and subsequent years— 

24 (A) individuals and employers described in 

25 paragraph (3); and 


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1 (B) largest employers as permitted by the 

2 Commissioner under subsection (e)(4). 

3 (d) INDIVIDUALS.— 

4 (1) INDIVIDUAL DESCRIBED.—Subject to the 

5 succeeding provisions of this subsection, an indi6 vidual described in this paragraph is an individual 

7 who— 

8 (A) is not enrolled in coverage described in 

9 subparagraphs (C) through (F) of paragraph 

10 (2); and 

11 (B) is not enrolled in coverage as a full12 time employee (or as a dependent of such an 

13 employee) under a group health plan if the cov14 erage and an employer contribution under the 

15 plan meet the requirements of section 312. 

16 For purposes of subparagraph (B), in the case of an 

17 individual who is self-employed, who has at least 1 

18 employee, and who meets the requirements of section 

19 312, such individual shall be deemed a full-time em20 ployee described in such subparagraph. 

21 (2) ACCEPTABLE COVERAGE.—For purposes of 

22 this subdivision, the term ‘‘acceptable coverage’’ 

23 means any of the following: 


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1 (A) QUALIFIED HEALTH BENEFITS PLAN

2 COVERAGE.—Coverage under a qualified health 

3 benefits plan. 

4 (B) GRANDFATHERED HEALTH INSURANCE

5 COVERAGE; COVERAGE UNDER CURRENT GROUP

6 HEALTH PLAN.—Coverage under a grand7 fathered health insurance coverage (as defined 

8 in subsection (a) of section 102) or under a 

9 current group health plan (described in sub10 section (b) of such section). 

11 (C) MEDICARE.—Coverage under part A of 

12 title XVIII of the Social Security Act. 

13 (D) MEDICAID.—Coverage for medical as14 sistance under title XIX of the Social Security 

15 Act, excluding such coverage that is only avail16 able because of the application of subsection 

17 (u), (z), or (aa) of section 1902 of such Act 

18 (E) MEMBERS OF THE ARMED FORCES

19 AND DEPENDENTS (INCLUDING TRICARE).— 

20 Coverage under chapter 55 of title 10, United 

21 States Code, including similar coverage fur22 nished under section 1781 of title 38 of such 

23 Code. 

24 (F) VA.—Coverage under the veteran’s 

25 health care program under chapter 17 of title 


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1 38, United States Code, but only if the cov2 erage for the individual involved is determined 

3 by the Commissioner in coordination with the 

4 Secretary of Treasury to be not less than a level 

5 specified by the Commissioner and Secretary of 

6 Veteran’s Affairs, in coordination with the Sec7 retary of Treasury, based on the individual’s 

8 priority for services as provided under section 

9 1705(a) of such title. 

10 (G) OTHER COVERAGE.—Such other health 

11 benefits coverage, such as a State health bene12 fits risk pool, as the Commissioner, in coordina13 tion with the Secretary of the Treasury, recog14 nizes for purposes of this paragraph. 

15 The Commissioner shall make determinations under 

16 this paragraph in coordination with the Secretary of 

17 the Treasury. 

18 (3) TREATMENT OF CERTAIN NON-TRADI19 TIONAL MEDICAID ELIGIBLE INDIVIDUALS.—An indi20 vidual who is a non-traditional Medicaid eligible in21 dividual (as defined in section 205(e)(4)(C)) in a 

22 State may be an Exchange-eligible individual if the 

23 individual was enrolled in a qualified health benefits 

24 plan, grandfathered health insurance coverage, or 

25 current group health plan during the 6 months beVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01125 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 fore the individual became a non-traditional Med2 icaid eligible individual. During the period in which 

3 such an individual has chosen to enroll in an Ex4 change-participating health benefits plan, the indi5 vidual is not also eligible for medical assistance 

6 under Medicaid. 

7 (4) CONTINUING ELIGIBILITY PERMITTED.— 

8 (A) IN GENERAL.—Except as provided in 

9 subparagraph (B), once an individual qualifies 

10 as an Exchange-eligible individual under this 

11 subsection (including as an employee or depend12 ent of an employee of an Exchange-eligible em13 ployer) and enrolls under an Exchange-partici14 pating health benefits plan through the Health 

15 Insurance Exchange, the individual shall con16 tinue to be treated as an Exchange-eligible indi17 vidual until the individual is no longer enrolled 

18 with an Exchange-participating health benefits 

19 plan. 

20 (B) EXCEPTIONS.— 

21 (i) IN GENERAL.—Subparagraph (A) 

22 shall not apply to an individual once the 

23 individual becomes eligible for coverage— 

24 (I) under part A of the Medicare 

25 program; 


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1 (II) under the Medicaid program 

2 as a Medicaid eligible individual, ex3 cept as permitted under paragraph 

4 (3) or clause (ii); or 

5 (III) in such other circumstances 

6 as the Commissioner may provide. 

7 (ii) TRANSITION PERIOD.—In the case 

8 described in clause (i)(II), the Commis9 sioner shall permit the individual to con10 tinue treatment under subparagraph (A) 

11 until such limited time as the Commis12 sioner determines it is administratively fea13 sible, consistent with minimizing disruption 

14 in the individual’s access to health care. 

15 (5) ADVERSELY AFFECTED RETIREE HEALTH

16 BENEFITS GROUP PARTICIPANTS AND BENE17 FICIARIES.— 

18 (A) IN GENERAL.—Beginning in Y1, an in19 dividual who is a participant or beneficiary in 

20 an adversely affected retiree health benefits 

21 group who does not have coverage described in 

22 paragraph (2)(C) is an Exchange eligible indi23 vidual, whether or not such an individual has 

24 other acceptable coverage. 


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1 (B) ADVERSELY AFFECTED RETIREE

2 HEALTH BENEFIT GROUP DEFINED.—In this 

3 paragraph, the term ‘‘adversely affected retiree 

4 health benefits group’’ means the retired par5 ticipants and their beneficiaries of a group 

6 health plan that cancelled or substantially re7 duced the amount, type, level, or form of health 

8 benefit or option provided prior January 1, 

9 2008. 

10 (e) EMPLOYERS.— 

11 (1) SMALLEST EMPLOYERS.—Subject to para12 graph (5), smallest employers described in this para13 graph are employers with 15 or fewer employees. 

14 (2) SMALLER EMPLOYERS.—Subject to para15 graph (5), smaller employers described in this para16 graph are employers that are not smallest employers 

17 described in paragraph (1) and that have 25 or 

18 fewer employees. 

19 (3) LARGER EMPLOYERS.—Subject to para20 graph (5), larger employers described in this para21 graph are employers that are not smallest employers 

22 described in paragraph (1) or smaller employers de23 scribed in paragraph (2) and that have 50 or fewer 

24 employees. 

25 (4) LARGEST EMPLOYERS.— 


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1 (A) IN GENERAL.—Beginning with Y3, the 

2 Commissioner may permit employers not de3 scribed in paragraphs (1) (2), or (3) to be Ex4 change-eligible employers. 

5 (B) PHASE-IN.—In applying subparagraph 

6 (A), the Commissioner may phase-in the appli7 cation of such subparagraph based on the num8 ber of full-time employees of an employer and 

9 such other considerations as the Commissioner 

10 deems appropriate. 

11 (5) CONTINUING ELIGIBILITY.—Once an em12 ployer is permitted to be an Exchange-eligible em13 ployer under this subsection and enrolls employees 

14 through the Health Insurance Exchange, the em15 ployer shall continue to be treated as an Exchange16 eligible employer for each subsequent plan year re17 gardless of the number of employees involved unless 

18 and until the employer meets the requirement of sec19 tion 311(a) through paragraph (1) of such section 

20 by offering a group health plan and not through of21 fering Exchange-participating health benefits plan. 

22 (6) EMPLOYER PARTICIPATION AND CONTRIBU23 TIONS.— 

24 (A) SATISFACTION OF EMPLOYER RESPON25 SIBILITY.—For any year in which an employer 


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1 is an Exchange-eligible employer, such employer 

2 may meet the requirements of section 312 with 

3 respect to employees of such employer by offer4 ing such employees the option of enrolling with 

5 Exchange-participating health benefits plans 

6 through the Health Insurance Exchange con7 sistent with the provisions of subtitle B of title 

8 III. 

9 (B) EMPLOYEE CHOICE.—Any employee 

10 offered Exchange-participating health benefits 

11 plans by the employer of such employee under 

12 subparagraph (A) may choose coverage under 

13 any such plan. That choice includes, with re14 spect to family coverage, coverage of the de15 pendents of such employee. 

16 (7) AFFILIATED GROUPS.—Any employer which 

17 is part of a group of employers who are treated as 

18 a single employer under subsection (b), (c), (m), or 

19 (o) of section 414 of the Internal Revenue Code of 

20 1986 shall be treated, for purposes of this subtitle, 

21 as a single employer. 

22 (8) OTHER COUNTING RULES.—The Commis23 sioner shall establish rules relating to how employees 

24 are counted for purposes of carrying out this sub25 section. 


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1 (9) TREATMENT OF MULTIEMPLOYER PLANS.— 

2 The plan sponsor of a group health plan (as defined 

3 in section 733(a) of the Employee Retirement In4 come Security Act of 1974) that is multiemployer 

5 plan (as defined in section 3(37) of such Act) may 

6 obtain health insurance coverage with respect to par7 ticipants in the plan through the Exchange to the 

8 same extent as an employer not described in para9 graph (1) or (2) is permitted by the Commissioner 

10 to obtain health insurance coverage through the Ex11 change as an Exchange-eligible employer 

12 (f) SPECIAL SITUATION AUTHORITY.—The Commis13 sioner shall have the authority to establish such rules as 

14 may be necessary to deal with special situations with re15 gard to uninsured individuals and employers participating 

16 as Exchange-eligible individuals and employers, such as 

17 transition periods for individuals and employers who gain, 

18 or lose, Exchange-eligible participation status, and to es19 tablish grace periods for premium payment. 

20 (g) SURVEYS OF INDIVIDUALS AND EMPLOYERS.— 

21 The Commissioner shall provide for periodic surveys of 

22 Exchange-eligible individuals and employers concerning 

23 satisfaction of such individuals and employers with the 

24 Health Insurance Exchange and Exchange-participating 

25 health benefits plans. 


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1 (h) EXCHANGE ACCESS STUDY.— 

2 (1) IN GENERAL.—The Commissioner shall con3 duct a study of access to the Health Insurance Ex4 change for individuals and for employers, including 

5 individuals and employers who are not eligible and 

6 enrolled in Exchange-participating health benefits 

7 plans. The goal of the study is to determine if there 

8 are significant groups and types of individuals and 

9 employers who are not Exchange eligible individuals 

10 or employers, but who would have improved benefits 

11 and affordability if made eligible for coverage in the 

12 Exchange. 

13 (2) ITEMS INCLUDED IN STUDY.—Such study 

14 also shall examine— 

15 (A) the terms, conditions, and affordability 

16 of group health coverage offered by employers 

17 and QHBP offering entities outside of the Ex18 change compared to Exchange-participating 

19 health benefits plans; and 

20 (B) the affordability-test standard for ac21 cess of certain employed individuals to coverage 

22 in the Health Insurance Exchange. 

23 (3) REPORT.—Not later than January 1 of Y3, 

24 in Y6, and thereafter, the Commissioner shall sub25 mit to Congress on the study conducted under this 


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1 subsection and shall include in such report rec2 ommendations regarding changes in standards for 

3 Exchange eligibility for individuals and employers. 

4 SEC. 203. BENEFITS PACKAGE LEVELS. 

5 (a) IN GENERAL.—The Commissioner shall specify 

6 the benefits to be made available under Exchange-partici7 pating health benefits plans during each plan year, con8 sistent with subtitle C of title I and this section. 

9 (b) LIMITATION ON HEALTH BENEFITS PLANS OF10 FERED BY OFFERING ENTITIES.—The Commissioner may 

11 not enter into a contract with a QHBP offering entity 

12 under section 204(c) for the offering of an Exchange-par13 ticipating health benefits plan in a service area unless the 

14 following requirements are met: 

15 (1) REQUIRED OFFERING OF BASIC PLAN.—The 

16 entity offers only one basic plan for such service 

17 area. 

18 (2) OPTIONAL OFFERING OF ENHANCED

19 PLAN.—If and only if the entity offers a basic plan 

20 for such service area, the entity may offer one en21 hanced plan for such area. 

22 (3) OPTIONAL OFFERING OF PREMIUM PLAN.— 

23 If and only if the entity offers an enhanced plan for 

24 such service area, the entity may offer one premium 

25 plan for such area. 


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1 (4) OPTIONAL OFFERING OF PREMIUM-PLUS

2 PLANS.—If and only if the entity offers a premium 

3 plan for such service area, the entity may offer one 

4 or more premium-plus plans for such area. 

5 All such plans may be offered under a single contract with 

6 the Commissioner. 

7 (c) SPECIFICATION OF BENEFIT LEVELS FOR

8 PLANS.— 

9 (1) IN GENERAL.—The Commissioner shall es10 tablish the following standards consistent with this 

11 subsection and title I: 

12 (A) BASIC, ENHANCED, AND PREMIUM

13 PLANS.—Standards for 3 levels of Exchange14 participating health benefits plans: basic, en15 hanced, and premium (in this subdivision re16 ferred to as a ‘‘basic plan’’, ‘‘enhanced plan’’, 

17 and ‘‘premium plan’’, respectively). 

18 (B) PREMIUM-PLUS PLAN BENEFITS.— 

19 Standards for additional benefits that may be 

20 offered, consistent with this subsection and sub21 title C of title I, under a premium plan (such 

22 a plan with additional benefits referred to in 

23 this subdivision as a ‘‘premium-plus plan’’) . 

24 (2) BASIC PLAN.— 


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1 (A) IN GENERAL.—A basic plan shall offer 

2 the essential benefits package required under 

3 title I for a qualified health benefits plan. 

4 (B) TIERED COST-SHARING FOR AFFORD5 ABLE CREDIT ELIGIBLE INDIVIDUALS.—In the 

6 case of an affordable credit eligible individual 

7 (as defined in section 242(a)(1)) enrolled in an 

8 Exchange-participating health benefits plan, the 

9 benefits under a basic plan are modified to pro10 vide for the reduced cost-sharing for the income 

11 tier applicable to the individual under section 

12 244(c). 

13 (3) ENHANCED PLAN.—A enhanced plan shall 

14 offer, in addition to the level of benefits under the 

15 basic plan, a lower level of cost-sharing as provided 

16 under title I consistent with section 123(b)(5)(A). 

17 (4) PREMIUM PLAN.—A premium plan shall 

18 offer, in addition to the level of benefits under the 

19 basic plan, a lower level of cost-sharing as provided 

20 under title I consistent with section 123(b)(5)(B). 

21 (5) PREMIUM-PLUS PLAN.—A premium-plus 

22 plan is a premium plan that also provides additional 

23 benefits, such as adult oral health and vision care, 

24 approved by the Commissioner. The portion of the 


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1 premium that is attributable to such additional ben2 efits shall be separately specified. 

3 (6) RANGE OF PERMISSIBLE VARIATION IN

4 COST-SHARING.—The Commissioner shall establish a 

5 permissible range of variation of cost-sharing for 

6 each basic, enhanced, and premium plan, except with 

7 respect to any benefit for which there is no cost8 sharing permitted under the essential benefits pack9 age. Such variation shall permit a variation of not 

10 more than plus (or minus) 10 percent in cost-shar11 ing with respect to each benefit category specified 

12 under section 122. 

13 (d) TREATMENT OF STATE BENEFIT MANDATES.— 

14 Insofar as a State requires a health insurance issuer offer15 ing health insurance coverage to include benefits beyond 

16 the essential benefits package, such requirement shall con17 tinue to apply to an Exchange-participating health bene18 fits plan, if the State has entered into an arrangement 

19 satisfactory to the Commissioner to reimburse the Com20 missioner for the amount of any net increase in afford21 ability premium credits under subtitle C as a result of an 

22 increase in premium in basic plans as a result of applica23 tion of such requirement. 


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1 SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE2 PARTICIPATING HEALTH BENEFITS PLANS. 

3 (a) CONTRACTING DUTIES.—In carrying out section 

4 201(b)(1) and consistent with this subtitle: 

5 (1) OFFERING ENTITY AND PLAN STAND6 ARDS.—The Commissioner shall— 

7 (A) establish standards necessary to imple8 ment the requirements of this title and title I 

9 for— 

10 (i) QHBP offering entities for the of11 fering of an Exchange-participating health 

12 benefits plan; and 

13 (ii) for Exchange-participating health 

14 benefits plans; and 

15 (B) certify QHBP offering entities and 

16 qualified health benefits plans as meeting such 

17 standards and requirements of this title and 

18 title I for purposes of this subtitle. 

19 (2) SOLICITING AND NEGOTIATING BIDS; CON20 TRACTS.—The Commissioner shall— 

21 (A) solicit bids from QHBP offering enti22 ties for the offering of Exchange-participating 

23 health benefits plans; 

24 (B) based upon a review of such bids, ne25 gotiate with such entities for the offering of 

26 such plans; and 


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1 (C) enter into contracts with such entities 

2 for the offering of such plans through the 

3 Health Insurance Exchange under terms (con4 sistent with this title) negotiated between the 

5 Commissioner and such entities. 

6 (3) FAR NOT APPLICABLE.—The provisions of 

7 the Federal Acquisition Regulation shall not apply to 

8 contracts between the Commissioner and QHBP of9 fering entities for the offering of Exchange-partici10 pating health benefits plans under this title. 

11 (b) STANDARDS FOR QHBP OFFERING ENTITIES TO

12 OFFER EXCHANGE-PARTICIPATING HEALTH BENEFITS

13 PLANS.—The standards established under subsection 

14 (a)(1)(A) shall require that, in order for a QHBP offering 

15 entity to offer an Exchange-participating health benefits 

16 plan, the entity must meet the following requirements: 

17 (1) LICENSED.—The entity shall be licensed to 

18 offer health insurance coverage under State law for 

19 each State in which it is offering such coverage. 

20 (2) DATA REPORTING.—The entity shall pro21 vide for the reporting of such information as the 

22 Commissioner may specify, including information 

23 necessary to administer the risk pooling mechanism 

24 described in section 206(b) and information to ad25 dress disparities in health and health care. 


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1 (3) IMPLEMENTING AFFORDABILITY CRED2 ITS.—The entity shall provide for implementation of 

3 the affordability credits provided for enrollees under 

4 subtitle C, including the reduction in cost-sharing 

5 under section 244(c). 

6 (4) ENROLLMENT.—The entity shall accept all 

7 enrollments under this subtitle, subject to such ex8 ceptions (such as capacity limitations) in accordance 

9 with the requirements under title I for a qualified 

10 health benefits plan. The entity shall notify the 

11 Commissioner if the entity projects or anticipates 

12 reaching such a capacity limitation that would result 

13 in a limitation in enrollment. 

14 (5) RISK POOLING PARTICIPATION.—The entity 

15 shall participate in such risk pooling mechanism as 

16 the Commissioner establishes under section 206(b). 

17 (6) ESSENTIAL COMMUNITY PROVIDERS.—With 

18 respect to the basic plan offered by the entity, the 

19 entity shall contract for outpatient services with cov20 ered entities (as defined in section 340B(a)(4) of the 

21 Public Health Service Act, as in effect as of July 1, 

22 2009). The Commissioner shall specify the extent to 

23 which and manner in which the previous sentence 

24 shall apply in the case of a basic plan with respect 

25 to which the Commissioner determines provides subVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01139 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 stantially all benefits through a health maintenance 

2 organization, as defined in section 2791(b)(3) of the 

3 Public Health Service Act. 

4 (7) CULTURALLY AND LINGUISTICALLY APPRO5 PRIATE SERVICES AND COMMUNICATIONS.—The en6 tity shall provide for culturally and linguistically ap7 propriate communication and health services. 

8 (8) ADDITIONAL REQUIREMENTS.—The entity 

9 shall comply with other applicable requirements of 

10 this title, as specified by the Commissioner, which 

11 shall include standards regarding billing and collec12 tion practices for premiums and related grace peri13 ods and which may include standards to ensure that 

14 the entity does not use coercive practices to force 

15 providers not to contract with other entities offering 

16 coverage through the Health Insurance Exchange. 

17 (c) CONTRACTS.— 

18 (1) BID APPLICATION.—To be eligible to enter 

19 into a contract under this section, a QHBP offering 

20 entity shall submit to the Commissioner a bid at 

21 such time, in such manner, and containing such in22 formation as the Commissioner may require. 

23 (2) TERM.—Each contract with a QHBP offer24 ing entity under this section shall be for a term of 

25 not less than one year, but may be made automatiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01140 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cally renewable from term to term in the absence of 

2 notice of termination by either party. 

3 (3) ENFORCEMENT OF NETWORK ADEQUACY.— 

4 In the case of a health benefits plan of a QHBP of5 fering entity that uses a provider network, the con6 tract under this section with the entity shall provide 

7 that if— 

8 (A) the Commissioner determines that 

9 such provider network does not meet such 

10 standards as the Commissioner shall establish 

11 under section 115; and 

12 (B) an individual enrolled in such plan re13 ceives an item or service from a provider that 

14 is not within such network; 

15 then any cost-sharing for such item or service shall 

16 be equal to the amount of such cost-sharing that 

17 would be imposed if such item or service was fur18 nished by a provider within such network. 

19 (4) OVERSIGHT AND ENFORCEMENT RESPON20 SIBILITIES.—The Commissioner shall establish proc21 esses, in coordination with State insurance regu22 lators, to oversee, monitor, and enforce applicable re23 quirements of this title with respect to QHBP offer24 ing entities offering Exchange-participating health 

25 benefits plans and such plans, including the marVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01141 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 keting of such plans. Such processes shall include 

2 the following: 

3 (A) GRIEVANCE AND COMPLAINT MECHA4 NISMS.—The Commissioner shall establish, in 

5 coordination with State insurance regulators, a 

6 process under which Exchange-eligible individ7 uals and employers may file complaints con8 cerning violations of such standards. 

9 (B) ENFORCEMENT.—In carrying out au10 thorities under this subdivision relating to the 

11 Health Insurance Exchange, the Commissioner 

12 may impose one or more of the intermediate 

13 sanctions described in section 142(c). 

14 (C) TERMINATION.— 

15 (i) IN GENERAL.—The Commissioner 

16 may terminate a contract with a QHBP of17 fering entity under this section for the of18 fering of an Exchange-participating health 

19 benefits plan if such entity fails to comply 

20 with the applicable requirements of this 

21 title. Any determination by the Commis22 sioner to terminate a contract shall be 

23 made in accordance with formal investiga24 tion and compliance procedures established 

25 by the Commissioner under which— 


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1 (I) the Commissioner provides 

2 the entity with the reasonable oppor3 tunity to develop and implement a 

4 corrective action plan to correct the 

5 deficiencies that were the basis of the 

6 Commissioner’s determination; and 

7 (II) the Commissioner provides 

8 the entity with reasonable notice and 

9 opportunity for hearing (including the 

10 right to appeal an initial decision) be11 fore terminating the contract. 

12 (ii) EXCEPTION FOR IMMINENT AND

13 SERIOUS RISK TO HEALTH.—Clause (i) 

14 shall not apply if the Commissioner deter15 mines that a delay in termination, result16 ing from compliance with the procedures 

17 specified in such clause prior to termi18 nation, would pose an imminent and seri19 ous risk to the health of individuals en20 rolled under the qualified health benefits 

21 plan of the QHBP offering entity. 

22 (D) CONSTRUCTION.—Nothing in this sub23 section shall be construed as preventing the ap24 plication of other sanctions under subtitle E of 


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1 title I with respect to an entity for a violation 

2 of such a requirement. 

3 SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-EL4 IGIBLE INDIVIDUALS AND EMPLOYERS IN EX5 CHANGE-PARTICIPATING HEALTH BENEFITS 

6 PLAN. 

7 (a) IN GENERAL.— 

8 (1) OUTREACH.—The Commissioner shall con9 duct outreach activities consistent with subsection 

10 (c), including through use of appropriate entities as 

11 described in paragraph (4) of such subsection, to in12 form and educate individuals and employers about 

13 the Health Insurance Exchange and Exchange-par14 ticipating health benefits plan options. Such out15 reach shall include outreach specific to vulnerable 

16 populations, such as children, individuals with dis17 abilities, individuals with mental illness, and individ18 uals with other cognitive impairments. 

19 (2) ELIGIBILITY.—The Commissioner shall 

20 make timely determinations of whether individuals 

21 and employers are Exchange-eligible individuals and 

22 employers (as defined in section 202). 

23 (3) ENROLLMENT.—The Commissioner shall es24 tablish and carry out an enrollment process for Ex25 change-eligible individuals and employers, including 


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1 at community locations, in accordance with sub2 section (b). 

3 (b) ENROLLMENT PROCESS.— 

4 (1) IN GENERAL.—The Commissioner shall es5 tablish a process consistent with this title for enroll6 ments in Exchange-participating health benefits 

7 plans. Such process shall provide for enrollment 

8 through means such as the mail, by telephone, elec9 tronically, and in person. 

10 (2) ENROLLMENT PERIODS.— 

11 (A) OPEN ENROLLMENT PERIOD.—The 

12 Commissioner shall establish an annual open 

13 enrollment period during which an Exchange-el14 igible individual or employer may elect to enroll 

15 in an Exchange-participating health benefits 

16 plan for the following plan year and an enroll17 ment period for affordability credits under sub18 title C. Such periods shall be during September 

19 through November of each year, or such other 

20 time that would maximize timeliness of income 

21 verification for purposes of such subtitle. The 

22 open enrollment period shall not be less than 30 

23 days. 

24 (B) SPECIAL ENROLLMENT.—The Com25 missioner shall also provide for special enrollVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01145 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ment periods to take into account special cir2 cumstances of individuals and employers, such 

3 as an individual who— 

4 (i) loses acceptable coverage; 

5 (ii) experiences a change in marital or 

6 other dependent status; 

7 (iii) moves outside the service area of 

8 the Exchange-participating health benefits 

9 plan in which the individual is enrolled; or 

10 (iv) experiences a significant change 

11 in income. 

12 (C) ENROLLMENT INFORMATION.—The 

13 Commissioner shall provide for the broad dis14 semination of information to prospective enroll15 ees on the enrollment process, including before 

16 each open enrollment period. In carrying out 

17 the previous sentence, the Commissioner may 

18 work with other appropriate entities to facilitate 

19 such provision of information. 

20 (3) AUTOMATIC ENROLLMENT FOR NON-MED21 ICAID ELIGIBLE INDIVIDUALS.— 

22 (A) IN GENERAL.—The Commissioner 

23 shall provide for a process under which individ24 uals who are Exchange-eligible individuals de25 scribed in subparagraph (B) are automatically 


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1 enrolled under an appropriate Exchange-partici2 pating health benefits plan. Such process may 

3 involve a random assignment or some other 

4 form of assignment that takes into account the 

5 health care providers used by the individual in6 volved or such other relevant factors as the 

7 Commissioner may specify. 

8 (B) SUBSIDIZED INDIVIDUALS DE9 SCRIBED.—An individual described in this sub10 paragraph is an Exchange-eligible individual 

11 who is either of the following: 

12 (i) AFFORDABILITY CREDIT ELIGIBLE

13 INDIVIDUALS.—The individual— 

14 (I) has applied for, and been de15 termined eligible for, affordability 

16 credits under subtitle C; 

17 (II) has not opted out from re18 ceiving such affordability credit; and 

19 (III) does not otherwise enroll in 

20 another Exchange-participating health 

21 benefits plan. 

22 (ii) INDIVIDUALS ENROLLED IN A

23 TERMINATED PLAN.—The individual is en24 rolled in an Exchange-participating health 

25 benefits plan that is terminated (during or 


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1 at the end of a plan year) and who does 

2 not otherwise enroll in another Exchange3 participating health benefits plan. 

4 (4) DIRECT PAYMENT OF PREMIUMS TO

5 PLANS.—Under the enrollment process, individuals 

6 enrolled in an Exchange-participating health benefits 

7 plan shall pay such plans directly, and not through 

8 the Commissioner or the Health Insurance Ex9 change. 

10 (c) COVERAGE INFORMATION AND ASSISTANCE.— 

11 (1) COVERAGE INFORMATION.—The Commis12 sioner shall provide for the broad dissemination of 

13 information on Exchange-participating health bene14 fits plans offered under this title. Such information 

15 shall be provided in a comparative manner, and shall 

16 include information on benefits, premiums, cost17 sharing, quality, provider networks, and consumer 

18 satisfaction. 

19 (2) CONSUMER ASSISTANCE WITH CHOICE.—To 

20 provide assistance to Exchange-eligible individuals 

21 and employers, the Commissioner shall— 

22 (A) provide for the operation of a toll-free 

23 telephone hotline to respond to requests for as24 sistance and maintain an Internet website 

25 through which individuals may obtain informaVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01148 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion on coverage under Exchange-participating 

2 health benefits plans and file complaints; 

3 (B) develop and disseminate information to 

4 Exchange-eligible enrollees on their rights and 

5 responsibilities; 

6 (C) assist Exchange-eligible individuals in 

7 selecting Exchange-participating health benefits 

8 plans and obtaining benefits through such 

9 plans; and 

10 (D) ensure that the Internet website de11 scribed in subparagraph (A) and the informa12 tion described in subparagraph (B) is developed 

13 using plain language (as defined in section 

14 133(a)(2)). 

15 (3) USE OF OTHER ENTITIES.—In carrying out 

16 this subsection, the Commissioner may work with 

17 other appropriate entities to facilitate the dissemina18 tion of information under this subsection and to pro19 vide assistance as described in paragraph (2). 

20 (d) SPECIAL DUTIES RELATED TO MEDICAID AND

21 CHIP.— 

22 (1) COVERAGE FOR CERTAIN NEWBORNS.— 

23 (A) IN GENERAL.—In the case of a child 

24 born in the United States who at the time of 

25 birth is not otherwise covered under acceptable 


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1 coverage, for the period of time beginning on 

2 the date of birth and ending on the date the 

3 child otherwise is covered under acceptable cov4 erage (or, if earlier, the end of the month in 

5 which the 60-day period, beginning on the date 

6 of birth, ends), the child shall be deemed— 

7 (i) to be a non-traditional Medicaid el8 igible individual (as defined in subsection 

9 (e)(5)) for purposes of this subdivision and 

10 Medicaid; and 

11 (ii) to have elected to enroll in Med12 icaid through the application of paragraph 

13 (3). 

14 (B) EXTENDED TREATMENT AS TRADI15 TIONAL MEDICAID ELIGIBLE INDIVIDUAL.—In 

16 the case of a child described in subparagraph 

17 (A) who at the end of the period referred to in 

18 such subparagraph is not otherwise covered 

19 under acceptable coverage, the child shall be 

20 deemed (until such time as the child obtains 

21 such coverage or the State otherwise makes a 

22 determination of the child’s eligibility for med23 ical assistance under its Medicaid plan pursuant 

24 to section 1943(c)(1) of the Social Security 

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1 vidual described in section 1902(l)(1)(B) of 

2 such Act. 

3 (2) CHIP TRANSITION.—A child who, as of the 

4 day before the first day of Y1, is eligible for child 

5 health assistance under title XXI of the Social Secu6 rity Act (including a child receiving coverage under 

7 an arrangement described in section 2101(a)(2) of 

8 such Act) is deemed as of such first day to be an 

9 Exchange-eligible individual unless the individual is 

10 a traditional Medicaid eligible individual as of such 

11 day. 

12 (3) AUTOMATIC ENROLLMENT OF MEDICAID EL13 IGIBLE INDIVIDUALS INTO MEDICAID.—The Com14 missioner shall provide for a process under which an 

15 individual who is described in section 202(d)(3) and 

16 has not elected to enroll in an Exchange-partici17 pating health benefits plan is automatically enrolled 

18 under Medicaid. 

19 (4) NOTIFICATIONS.—The Commissioner shall 

20 notify each State in Y1 and for purposes of section 

21 1902(gg)(1) of the Social Security Act (as added by 

22 section 1703(a)) whether the Health Insurance Ex23 change can support enrollment of children described 

24 in paragraph (2) in such State in such year. 


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1 (e) MEDICAID COVERAGE FOR MEDICAID ELIGIBLE

2 INDIVIDUALS.— 

3 (1) IN GENERAL.— 

4 (A) CHOICE FOR LIMITED EXCHANGE-ELI5 GIBLE INDIVIDUALS.—As part of the enrollment 

6 process under subsection (b), the Commissioner 

7 shall provide the option, in the case of an Ex8 change-eligible individual described in section 

9 202(d)(3), for the individual to elect to enroll 

10 under Medicaid instead of under an Exchange11 participating health benefits plan. Such an indi12 vidual may change such election during an en13 rollment period under subsection (b)(2). 

14 (B) MEDICAID ENROLLMENT OBLIGA15 TION.—An Exchange eligible individual may 

16 apply, in the manner described in section 

17 241(b)(1), for a determination of whether the 

18 individual is a Medicaid-eligible individual. If 

19 the individual is determined to be so eligible, 

20 the Commissioner, through the Medicaid memo21 randum of understanding, shall provide for the 

22 enrollment of the individual under the State 

23 Medicaid plan in accordance with the Medicaid 

24 memorandum of understanding under para25 graph (4). In the case of such an enrollment, 


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1 the State shall provide for the same periodic re2 determination of eligibility under Medicaid as 

3 would otherwise apply if the individual had di4 rectly applied for medical assistance to the 

5 State Medicaid agency. 

6 (2) NON-TRADITIONAL MEDICAID ELIGIBLE IN7 DIVIDUALS.—In the case of a non-traditional Med8 icaid eligible individual described in section 

9 202(d)(3) who elects to enroll under Medicaid under 

10 paragraph (1)(A), the Commissioner shall provide 

11 for the enrollment of the individual under the State 

12 Medicaid plan in accordance with the Medicaid 

13 memorandum of understanding under paragraph 

14 (4). 

15 (3) COORDINATED ENROLLMENT WITH STATE

16 THROUGH MEMORANDUM OF UNDERSTANDING.— 

17 The Commissioner, in consultation with the Sec18 retary of Health and Human Services, shall enter 

19 into a memorandum of understanding with each 

20 State (each in this subdivision referred to as a 

21 ‘‘Medicaid memorandum of understanding’’) with re22 spect to coordinating enrollment of individuals in 

23 Exchange-participating health benefits plans and 

24 under the State’s Medicaid program consistent with 

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1 mentation of the provisions of this subdivision with 

2 respect to the Medicaid program. Such memo3 randum shall permit the exchange of information 

4 consistent with the limitations described in section 

5 1902(a)(7) of the Social Security Act. Nothing in 

6 this section shall be construed as permitting such 

7 memorandum to modify or vitiate any requirement 

8 of a State Medicaid plan. 

9 (4) MEDICAID ELIGIBLE INDIVIDUALS.—For 

10 purposes of this subdivision: 

11 (A) MEDICAID ELIGIBLE INDIVIDUAL.— 

12 The term ‘‘Medicaid eligible individual’’ means 

13 an individual who is eligible for medical assist14 ance under Medicaid. 

15 (B) TRADITIONAL MEDICAID ELIGIBLE IN16 DIVIDUAL.—The term ‘‘traditional Medicaid eli17 gible individual’’ means a Medicaid eligible indi18 vidual other than an individual who is— 

19 (i) a Medicaid eligible individual by 

20 reason of the application of subclause 

21 (VIII) of section 1902(a)(10)(A)(i) of the 

22 Social Security Act; or 

23 (ii) a childless adult not described in 

24 section 1902(a)(10)(A) or (C) of such Act 


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1 (as in effect as of the day before the date 

2 of the enactment of this Act). 

3 (C) NON-TRADITIONAL MEDICAID ELIGI4 BLE INDIVIDUAL.—The term ‘‘non-traditional 

5 Medicaid eligible individual’’ means a Medicaid 

6 eligible individual who is not a traditional Med7 icaid eligible individual. 

8 (f) EFFECTIVE CULTURALLY AND LINGUISTICALLY

9 APPROPRIATE COMMUNICATION.—In carrying out this 

10 section, the Commissioner shall establish effective methods 

11 for communicating in plain language and a culturally and 

12 linguistically appropriate manner. 

13 SEC. 206. OTHER FUNCTIONS. 

14 (a) COORDINATION OF AFFORDABILITY CREDITS.— 

15 The Commissioner shall coordinate the distribution of af16 fordability premium and cost-sharing credits under sub17 title C to QHBP offering entities offering Exchange-par18 ticipating health benefits plans. 

19 (b) COORDINATION OF RISK POOLING.—The Com20 missioner shall establish a mechanism whereby there is an 

21 adjustment made of the premium amounts payable among 

22 QHBP offering entities offering Exchange-participating 

23 health benefits plans of premiums collected for such plans 

24 that takes into account (in a manner specified by the Com25 missioner) the differences in the risk characteristics of inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01155 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 dividuals and employers enrolled under the different Ex2 change-participating health benefits plans offered by such 

3 entities so as to minimize the impact of adverse selection 

4 of enrollees among the plans offered by such entities. 

5 (c) SPECIAL INSPECTOR GENERAL FOR THE HEALTH

6 INSURANCE EXCHANGE.— 

7 (1) ESTABLISHMENT; APPOINTMENT.—There is 

8 hereby established the Office of the Special Inspec9 tor General for the Health Insurance Exchange, to 

10 be headed by a Special Inspector General for the 

11 Health Insurance Exchange (in this subsection re12 ferred to as the ‘‘Special Inspector General’’) to be 

13 appointed by the President, by and with the advice 

14 and consent of the Senate. The nomination of an in15 dividual as Special Inspector General shall be made 

16 as soon as practicable after the establishment of the 

17 program under this subtitle. 

18 (2) DUTIES.—The Special Inspector General 

19 shall— 

20 (A) conduct, supervise, and coordinate au21 dits, evaluations and investigations of the 

22 Health Insurance Exchange to protect the in23 tegrity of the Health Insurance Exchange, as 

24 well as the health and welfare of participants in 

25 the Exchange; 


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1 (B) report both to the Commissioner and 

2 to the Congress regarding program and man3 agement problems and recommendations to cor4 rect them; 

5 (C) have other duties (described in para6 graphs (2) and (3) of section 121 of division A 

7 of Public Law 110–343) in relation to the du8 ties described in the previous subparagraphs; 

9 and 

10 (D) have the authorities provided in sec11 tion 6 of the Inspector General Act of 1978 in 

12 carrying out duties under this paragraph. 

13 (3) APPLICATION OF OTHER SPECIAL INSPEC14 TOR GENERAL PROVISIONS.—The provisions of sub15 sections (b) (other than paragraphs (1) and (3)), (d) 

16 (other than paragraph (1)), and (e) of section 121 

17 of division A of the Emergency Economic Stabiliza18 tion Act of 2009 (Public Law 110–343) shall apply 

19 to the Special Inspector General under this sub20 section in the same manner as such provisions apply 

21 to the Special Inspector General under such section. 

22 (4) REPORTS.—Not later than one year after 

23 the confirmation of the Special Inspector General, 

24 and annually thereafter, the Special Inspector Gen25 eral shall submit to the appropriate committees of 


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1 Congress a report summarizing the activities of the 

2 Special Inspector General during the one year period 

3 ending on the date such report is submitted. 

4 (5) TERMINATION.—The Office of the Special 

5 Inspector General shall terminate five years after 

6 the date of the enactment of this Act. 

7 (d) ASSISTANCE FOR SMALL EMPLOYERS.— 

8 (1) IN GENERAL.—The Commissioner, in con9 sultation with the Small Business Administration, 

10 shall establish and carry out a program to provide 

11 to small employers counseling and technical assist12 ance with respect to the provision of health insur13 ance to employees of such employers through the 

14 Health Insurance Exchange. 

15 (2) DUTIES.—The program established under 

16 paragraph (1) shall include the following services: 

17 (A) Educational activities to increase 

18 awareness of the Health Insurance Exchange 

19 and available small employer health plan op20 tions. 

21 (B) Distribution of information to small 

22 employers with respect to the enrollment and 

23 selection process for health plans available 

24 under the Health Insurance Exchange, includ25 ing standardized comparative information on 


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1 the health plans available under the Health In2 surance Exchange. 

3 (C) Distribution of information to small 

4 employers with respect to available affordability 

5 credits or other financial assistance. 

6 (D) Referrals to appropriate entities of 

7 complaints and questions relating to the Health 

8 Insurance Exchange. 

9 (E) Enrollment and plan selection assist10 ance for employers with respect to the Health 

11 Insurance Exchange. 

12 (F) Responses to questions relating to the 

13 Health Insurance Exchange and the program 

14 established under paragraph (1). 

15 (3) AUTHORITY TO PROVIDE SERVICES DI16 RECTLY OR BY CONTRACT.—The Commissioner may 

17 provide services under paragraph (2) directly or by 

18 contract with nonprofit entities that the Commis19 sioner determines capable of carrying out such serv20 ices. 

21 (4) SMALL EMPLOYER DEFINED.—In this sub22 section, the term ‘‘small employer’’ means an em23 ployer with less than 100 employees. 


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1 SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND. 

2 (a) ESTABLISHMENT OF HEALTH INSURANCE EX3 CHANGE TRUST FUND.—There is created within the 

4 Treasury of the United States a trust fund to be known 

5 as the ‘‘Health Insurance Exchange Trust Fund’’ (in this 

6 section referred to as the ‘‘Trust Fund’’), consisting of 

7 such amounts as may be appropriated or credited to the 

8 Trust Fund under this section or any other provision of 

9 law. 

10 (b) PAYMENTS FROM TRUST FUND.—The Commis11 sioner shall pay from time to time from the Trust Fund 

12 such amounts as the Commissioner determines are nec13 essary to make payments to operate the Health Insurance 

14 Exchange, including payments under subtitle C (relating 

15 to affordability credits). 

16 (c) TRANSFERS TO TRUST FUND.— 

17 (1) DEDICATED PAYMENTS.—There is hereby 

18 appropriated to the Trust Fund amounts equivalent 

19 to the following: 

20 (A) TAXES ON INDIVIDUALS NOT OBTAIN21 ING ACCEPTABLE COVERAGE.—The amounts re22 ceived in the Treasury under section 59B of the 

23 Internal Revenue Code of 1986 (relating to re24 quirement of health insurance coverage for indi25 viduals). 


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1 (B) EMPLOYMENT TAXES ON EMPLOYERS

2 NOT PROVIDING ACCEPTABLE COVERAGE.—The 

3 amounts received in the Treasury under section 

4 3111(c) of the Internal Revenue Code of 1986 

5 (relating to employers electing to not provide 

6 health benefits). 

7 (C) EXCISE TAX ON FAILURES TO MEET

8 CERTAIN HEALTH COVERAGE REQUIRE9 MENTS.—The amounts received in the Treasury 

10 under section 4980H(b) (relating to excise tax 

11 with respect to failure to meet health coverage 

12 participation requirements). 

13 (2) APPROPRIATIONS TO COVER GOVERNMENT

14 CONTRIBUTIONS.—There are hereby appropriated, 

15 out of any moneys in the Treasury not otherwise ap16 propriated, to the Trust Fund, an amount equivalent 

17 to the amount of payments made from the Trust 

18 Fund under subsection (b) plus such amounts as are 

19 necessary reduced by the amounts deposited under 

20 paragraph (1). 

21 (d) APPLICATION OF CERTAIN RULES.—Rules simi22 lar to the rules of subchapter B of chapter 98 of the Inter23 nal Revenue Code of 1986 shall apply with respect to the 

24 Trust Fund. 


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1 SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH 

2 INSURANCE EXCHANGES. 

3 (a) IN GENERAL.—If— 

4 (1) a State (or group of States, subject to the 

5 approval of the Commissioner) applies to the Com6 missioner for approval of a State-based Health In7 surance Exchange to operate in the State (or group 

8 of States); and 

9 (2) the Commissioner approves such State10 based Health Insurance Exchange, 

11 then, subject to subsections (c) and (d), the State-based 

12 Health Insurance Exchange shall operate, instead of the 

13 Health Insurance Exchange, with respect to such State 

14 (or group of States). The Commissioner shall approve a 

15 State-based Health Insurance Exchange if it meets the re16 quirements for approval under subsection (b). 

17 (b) REQUIREMENTS FOR APPROVAL.—The Commis18 sioner may not approve a State-based Health Insurance 

19 Exchange under this section unless the following require20 ments are met: 

21 (1) The State-based Health Insurance Ex22 change must demonstrate the capacity to and pro23 vide assurances satisfactory to the Commissioner 

24 that the State-based Health Insurance Exchange will 

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1 surance Exchange in the State (or States) involved, 

2 including— 

3 (A) negotiating and contracting with 

4 QHBP offering entities for the offering of Ex5 change-participating health benefits plan, which 

6 satisfy the standards and requirements of this 

7 title and title I; 

8 (B) enrolling Exchange-eligible individuals 

9 and employers in such State in such plans; 

10 (C) the establishment of sufficient local of11 fices to meet the needs of Exchange-eligible in12 dividuals and employers; 

13 (D) administering affordability credits 

14 under subtitle B using the same methodologies 

15 (and at least the same income verification 

16 methods) as would otherwise apply under such 

17 subtitle and at a cost to the Federal Govern18 ment which does exceed the cost to the Federal 

19 Government if this section did not apply; and 

20 (E) enforcement activities consistent with 

21 federal requirements. 

22 (2) There is no more than one Health Insur23 ance Exchange operating with respect to any one 

24 State. 


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1 (3) The State provides assurances satisfactory 

2 to the Commissioner that approval of such an Ex3 change will not result in any net increase in expendi4 tures to the Federal Government. 

5 (4) The State provides for reporting of such in6 formation as the Commissioner determines and as7 surances satisfactory to the Commissioner that it 

8 will vigorously enforce violations of applicable re9 quirements. 

10 (5) Such other requirements as the Commis11 sioner may specify. 

12 (c) CEASING OPERATION.— 

13 (1) IN GENERAL.—A State-based Health Insur14 ance Exchange may, at the option of each State in15 volved, and only after providing timely and reason16 able notice to the Commissioner, cease operation as 

17 such an Exchange, in which case the Health Insur18 ance Exchange shall operate, instead of such State19 based Health Insurance Exchange, with respect to 

20 such State (or States). 

21 (2) TERMINATION; HEALTH INSURANCE EX22 CHANGE RESUMPTION OF FUNCTIONS.—The Com23 missioner may terminate the approval (for some or 

24 all functions) of a State-based Health Insurance Ex25 change under this section if the Commissioner deterVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01164 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mines that such Exchange no longer meets the re2 quirements of subsection (b) or is no longer capable 

3 of carrying out such functions in accordance with 

4 the requirements of this subtitle. In lieu of termi5 nating such approval, the Commissioner may tempo6 rarily assume some or all functions of the State7 based Health Insurance Exchange until such time as 

8 the Commissioner determines the State-based 

9 Health Insurance Exchange meets such require10 ments of subsection (b) and is capable of carrying 

11 out such functions in accordance with the require12 ments of this subtitle. 

13 (3) EFFECTIVENESS.—The ceasing or termi14 nation of a State-based Health Insurance Exchange 

15 under this subsection shall be effective in such time 

16 and manner as the Commissioner shall specify. 

17 (d) RETENTION OF AUTHORITY.— 

18 (1) AUTHORITY RETAINED.—Enforcement au19 thorities of the Commissioner shall be retained by 

20 the Commissioner. 

21 (2) DISCRETION TO RETAIN ADDITIONAL AU22 THORITY.—The Commissioner may specify functions 

23 of the Health Insurance Exchange that— 


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1 (A) may not be performed by a State2 based Health Insurance Exchange under this 

3 section; or 

4 (B) may be performed by the Commis5 sioner and by such a State-based Health Insur6 ance Exchange. 

7 (e) REFERENCES.—In the case of a State-based 

8 Health Insurance Exchange, except as the Commissioner 

9 may otherwise specify under subsection (d), any references 

10 in this subtitle to the Health Insurance Exchange or to 

11 the Commissioner in the area in which the State-based 

12 Health Insurance Exchange operates shall be deemed a 

13 reference to the State-based Health Insurance Exchange 

14 and the head of such Exchange, respectively. 

15 (f) FUNDING.—In the case of a State-based Health 

16 Insurance Exchange, there shall be assistance provided for 

17 the operation of such Exchange in the form of a matching 

18 grant with a State share of expenditures required. 

19 SEC. 209. PARTICIPATION OF SMALL EMPLOYER BENEFIT 

20 ARRANGEMENTS. 

21 (a) IN GENERAL.—The Commissioner may enter into 

22 contracts with small employer benefit arrangements to 

23 provide consumer information, outreach, and assistance in 

24 the enrollment of small employers (and their employees) 


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1 who are members of such an arrangement under Exchange 

2 participating health benefits plans. 

3 (b) SMALL EMPLOYER BENEFIT ARRANGEMENT DE4 FINED.—In this section, the term ‘‘small employer benefit 

5 arrangement’’ means a not-for-profit agricultural or other 

6 cooperative that— 

7 (1) consists solely of its members and is oper8 ated for the primary purpose of providing affordable 

9 employee benefits to its members; 

10 (2) only has as members small employers in the 

11 same industry or line of business; 

12 (3) has no member that has more than a 5 per13 cent voting interest in the cooperative; and 

14 (4) is governed by a board of directors elected 

15 by its members. 

16 Subtitle B—Public Health 

17 Insurance Option 

18 SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A 

19 PUBLIC HEALTH INSURANCE OPTION AS AN 

20 EXCHANGE-QUALIFIED HEALTH BENEFITS 

21 PLAN. 

22 (a) ESTABLISHMENT.—For years beginning with Y1, 

23 the Secretary of Health and Human Services (in this sub24 title referred to as the ‘‘Secretary’’) shall provide for the 

25 offering of an Exchange-participating health benefits plan 


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1 (in this subdivision referred to as the ‘‘public health insur2 ance option’’) that ensures choice, competition, and sta3 bility of affordable, high quality coverage throughout the 

4 United States in accordance with this subtitle. In design5 ing the option, the Secretary’s primary responsibility is 

6 to create a low-cost plan without compromising quality or 

7 access to care. 

8 (b) OFFERING AS AN EXCHANGE-PARTICIPATING

9 HEALTH BENEFITS PLAN.— 

10 (1) EXCLUSIVE TO THE EXCHANGE.—The pub11 lic health insurance option shall only be made avail12 able through the Health Insurance Exchange. 

13 (2) ENSURING A LEVEL PLAYING FIELD.—Con14 sistent with this subtitle, the public health insurance 

15 option shall comply with requirements that are ap16 plicable under this title to an Exchange-participating 

17 health benefits plan, including requirements related 

18 to benefits, benefit levels, provider networks, notices, 

19 consumer protections, and cost sharing. 

20 (3) PROVISION OF BENEFIT LEVELS.—The pub21 lic health insurance option— 

22 (A) shall offer basic, enhanced, and pre23 mium plans; and 

24 (B) may offer premium-plus plans. 


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1 (c) ADMINISTRATIVE CONTRACTING.—The Secretary 

2 may enter into contracts for the purpose of performing 

3 administrative functions (including functions described in 

4 subsection (a)(4) of section 1874A of the Social Security 

5 Act) with respect to the public health insurance option in 

6 the same manner as the Secretary may enter into con7 tracts under subsection (a)(1) of such section. The Sec8 retary has the same authority with respect to the public 

9 health insurance option as the Secretary has under sub10 sections (a)(1) and (b) of section 1874A of the Social Se11 curity Act with respect to title XVIII of such Act. Con12 tracts under this subsection shall not involve the transfer 

13 of insurance risk to such entity. 

14 (d) OMBUDSMAN.—The Secretary shall establish an 

15 office of the ombudsman for the public health insurance 

16 option which shall have duties with respect to the public 

17 health insurance option similar to the duties of the Medi18 care Beneficiary Ombudsman under section 1808(c)(2) of 

19 the Social Security Act. 

20 (e) DATA COLLECTION.—The Secretary shall collect 

21 such data as may be required to establish premiums and 

22 payment rates for the public health insurance option and 

23 for other purposes under this subtitle, including to im24 prove quality and to reduce disparities in health and 

25 health care based on race, ethnicity, primary language, 


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1 sex, sexual orientation, gender identity, disability, socio2 economic status, rural, urban, or other geographic setting, 

3 and any other population or subpopulation as determined 

4 appropriate by the Secretary, but only if the data collec5 tion is conducted on a voluntary basis and consistent with 

6 the standards, including privacy protections, established 

7 pursuant to section 1709 of the Public Health Service Act. 

8 (f) TREATMENT OF PUBLIC HEALTH INSURANCE OP9 TION.—With respect to the public health insurance option, 

10 the Secretary shall be treated as a QHBP offering entity 

11 offering an Exchange-participating health benefits plan. 

12 (g) ACCESS TO FEDERAL COURTS.—The provisions 

13 of Medicare (and related provisions of title II of the Social 

14 Security Act) relating to access of Medicare beneficiaries 

15 to Federal courts for the enforcement of rights under 

16 Medicare, including with respect to amounts in con17 troversy, shall apply to the public health insurance option 

18 and individuals enrolled under such option under this title 

19 in the same manner as such provisions apply to Medicare 

20 and Medicare beneficiaries. 

21 SEC. 222. PREMIUMS AND FINANCING. 

22 (a) ESTABLISHMENT OF PREMIUMS.— 

23 (1) IN GENERAL.—The Secretary shall establish 

24 geographically-adjusted premium rates for the public 

25 health insurance option in a manner— 


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1 (A) that complies with the premium rules 

2 established by the Commissioner under section 

3 113 for Exchange-participating health benefit 

4 plans; and 

5 (B) at a level sufficient to fully finance the 

6 costs of— 

7 (i) health benefits provided by the 

8 public health insurance option; and 

9 (ii) administrative costs related to op10 erating the public health insurance option. 

11 (2) CONTINGENCY MARGIN.—In establishing 

12 premium rates under paragraph (1), the Secretary 

13 shall include an appropriate amount for a contin14 gency margin. 

15 (b) ACCOUNT.— 

16 (1) ESTABLISHMENT.—There is established in 

17 the Treasury of the United States an Account for 

18 the receipts and disbursements attributable to the 

19 operation of the public health insurance option, in20 cluding the start-up funding under paragraph (2). 

21 Section 1854(g) of the Social Security Act shall 

22 apply to receipts described in the previous sentence 

23 in the same manner as such section applies to pay24 ments or premiums described in such section. 

25 (2) START-UP FUNDING.— 


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1 (A) IN GENERAL.—In order to provide for 

2 the establishment of the public health insurance 

3 option there is hereby appropriated to the Sec4 retary, out of any funds in the Treasury not 

5 otherwise appropriated, $2,000,000,000. In 

6 order to provide for initial claims reserves be7 fore the collection of premiums, there is hereby 

8 appropriated to the Secretary, out of any funds 

9 in the Treasury not otherwise appropriated, 

10 such sums as necessary to cover 90 days worth 

11 of claims reserves based on projected enroll12 ment. 

13 (B) AMORTIZATION OF START-UP FUND14 ING.—The Secretary shall provide for the re15 payment of the startup funding provided under 

16 subparagraph (A) to the Treasury in an amor17 tized manner over the 10-year period beginning 

18 with Y1. 

19 (C) LIMITATION ON FUNDING.—Nothing in 

20 this section shall be construed as authorizing 

21 any additional appropriations to the Account, 

22 other than such amounts as are otherwise pro23 vided with respect to other Exchange-partici24 pating health benefits plans. 


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1 SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES. 

2 (a) RATES ESTABLISHED BY SECRETARY.— 

3 (1) IN GENERAL.—The Secretary shall establish 

4 payment rates for the public health insurance option 

5 for services and health care providers consistent with 

6 this section and may change such payment rates in 

7 accordance with section 224. 

8 (2) INITIAL PAYMENT RULES.— 

9 (A) IN GENERAL.—Except as provided in 

10 subparagraph (B) and subsection (b)(1), during 

11 Y1, Y2, and Y3, the Secretary shall base the 

12 payment rates under this section for services 

13 and providers described in paragraph (1) on the 

14 payment rates for similar services and providers 

15 under parts A and B of Medicare. 

16 (B) EXCEPTIONS.— 

17 (i) PRACTITIONERS’ SERVICES.—Pay18 ment rates for practitioners’ services other19 wise established under the fee schedule 

20 under section 1848 of the Social Security 

21 Act shall be applied without regard to the 

22 provisions under subsection (f) of such sec23 tion and the update under subsection 

24 (d)(4) under such section for a year as ap25 plied under this paragraph shall be not less 

26 than 1 percent. 


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1 (ii) ADJUSTMENTS.—The Secretary 

2 may determine the extent to which Medi3 care adjustments applicable to base pay4 ment rates under parts A and B of Medi5 care shall apply under this subtitle. 

6 (3) FOR NEW SERVICES.—The Secretary shall 

7 modify payment rates described in paragraph (2) in 

8 order to accommodate payments for services, such as 

9 well-child visits, that are not otherwise covered 

10 under Medicare. 

11 (4) PRESCRIPTION DRUGS.—Payment rates 

12 under this section for prescription drugs that are not 

13 paid for under part A or part B of Medicare shall 

14 be at rates negotiated by the Secretary. 

15 (b) INCENTIVES FOR PARTICIPATING PROVIDERS.— 

16 (1) INITIAL INCENTIVE PERIOD.— 

17 (A) IN GENERAL.—The Secretary shall 

18 provide, in the case of services described in sub19 paragraph (B) furnished during Y1, Y2, and 

20 Y3, for payment rates that are 5 percent great21 er than the rates established under subsection 

22 (a). 

23 (B) SERVICES DESCRIBED.—The services 

24 described in this subparagraph are items and 

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1 surance option by a physician or other health 

2 care practitioner who participates in both Medi3 care and the public health insurance option. 

4 (C) SPECIAL RULES.—A pediatrician and 

5 any other health care practitioner who is a type 

6 of practitioner that does not typically partici7 pate in Medicare (as determined by the Sec8 retary) shall also be eligible for the increased 

9 payment rates under subparagraph (A). 

10 (2) SUBSEQUENT PERIODS.—Beginning with 

11 Y4 and for subsequent years, the Secretary shall 

12 continue to use an administrative process to set such 

13 rates in order to promote payment accuracy, to en14 sure adequate beneficiary access to providers, and to 

15 promote affordability and the efficient delivery of 

16 medical care consistent with section 221(a). Such 

17 rates shall not be set at levels expected to increase 

18 overall medical costs under the option beyond what 

19 would be expected if the process under subsection 

20 (a)(2) and paragraph (1) of this subsection were 

21 continued. 

22 (3) ESTABLISHMENT OF A PROVIDER NET23 WORK.—Health care providers participating under 

24 Medicare are participating providers in the public 


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1 health insurance option unless they opt out in a 

2 process established by the Secretary. 

3 (c) ADMINISTRATIVE PROCESS FOR SETTING

4 RATES.—Chapter 5 of title 5, United States Code shall 

5 apply to the process for the initial establishment of pay6 ment rates under this section but not to the specific meth7 odology for establishing such rates or the calculation of 

8 such rates. 

9 (d) CONSTRUCTION.—Nothing in this subtitle shall 

10 be construed as limiting the Secretary’s authority to cor11 rect for payments that are excessive or deficient, taking 

12 into account the provisions of section 221(a) and the 

13 amounts paid for similar health care providers and serv14 ices under other Exchange-participating health benefits 

15 plans. 

16 (e) CONSTRUCTION.—Nothing in this subtitle shall be 

17 construed as affecting the authority of the Secretary to 

18 establish payment rates, including payments to provide for 

19 the more efficient delivery of services, such as the initia20 tives provided for under section 224. 

21 (f) LIMITATIONS ON REVIEW.—There shall be no ad22 ministrative or judicial review of a payment rate or meth23 odology established under this section or under section 

24 224. 


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1 SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIV2 ERY SYSTEM REFORM. 

3 (a) IN GENERAL.—For plan years beginning with Y1, 

4 the Secretary may utilize innovative payment mechanisms 

5 and policies to determine payments for items and services 

6 under the public health insurance option. The payment 

7 mechanisms and policies under this section may include 

8 patient-centered medical home and other care manage9 ment payments, accountable care organizations, value10 based purchasing, bundling of services, differential pay11 ment rates, performance or utilization based payments, 

12 partial capitation, and direct contracting with providers. 

13 (b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 

14 The Secretary shall design and implement the payment 

15 mechanisms and policies under this section in a manner 

16 that— 

17 (1) seeks to— 

18 (A) improve health outcomes; 

19 (B) reduce health disparities (including ra20 cial, ethnic, and other disparities); 

21 (C) provide efficient and affordable care; 

22 (D) address geographic variation in the 

23 provision of health services; or 

24 (E) prevent or manage chronic illness; and 

25 (2) promotes care that is integrated, patient26 centered, quality, and efficient. 


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1 (c) ENCOURAGING THE USE OF HIGH VALUE SERV2 ICES.—To the extent allowed by the benefit standards ap3 plied to all Exchange-participating health benefits plans, 

4 the public health insurance option may modify cost shar5 ing and payment rates to encourage the use of services 

6 that promote health and value. 

7 (d) NON-UNIFORMITY PERMITTED.—Nothing in this 

8 subtitle shall prevent the Secretary from varying payments 

9 based on different payment structure models (such as ac10 countable care organizations and medical homes) under 

11 the public health insurance option for different geographic 

12 areas. 

13 SEC. 225. PROVIDER PARTICIPATION. 

14 (a) IN GENERAL.—The Secretary shall establish con15 ditions of participation for health care providers under the 

16 public health insurance option. 

17 (b) LICENSURE OR CERTIFICATION.—The Secretary 

18 shall not allow a health care provider to participate in the 

19 public health insurance option unless such provider is ap20 propriately licensed, certified, or otherwise permitted to 

21 practice under State law. 

22 (c) PAYMENT TERMS FOR PROVIDERS.— 

23 (1) PHYSICIANS.—The Secretary shall provide 

24 for the annual participation of physicians under the 

25 public health insurance option, for which payment 


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1 may be made for services furnished during the year, 

2 in one of 2 classes: 

3 (A) PREFERRED PHYSICIANS.—Those phy4 sicians who agree to accept the payment rate 

5 established under section 223 (without regard 

6 to cost-sharing) as the payment in full. 

7 (B) PARTICIPATING, NON-PREFERRED

8 PHYSICIANS.—Those physicians who agree not 

9 to impose charges (in relation to the payment 

10 rate described in section 223 for such physi11 cians) that exceed the ratio permitted under 

12 section 1848(g)(2)(C) of the Social Security 

13 Act. 

14 (2) OTHER PROVIDERS.—The Secretary shall 

15 provide for the participation (on an annual or other 

16 basis specified by the Secretary) of health care pro17 viders (other than physicians) under the public 

18 health insurance option under which payment shall 

19 only be available if the provider agrees to accept the 

20 payment rate established under section 223 (without 

21 regard to cost-sharing) as the payment in full. 

22 (d) EXCLUSION OF CERTAIN PROVIDERS.—The Sec23 retary shall exclude from participation under the public 

24 health insurance option a health care provider that is ex25 cluded from participation in a Federal health care proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01179 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gram (as defined in section 1128B(f) of the Social Secu2 rity Act). 

3 SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVI4 SIONS. 

5 Provisions of law (other than criminal law provisions) 

6 identified by the Secretary by regulation, in consultation 

7 with the Inspector General of the Department of Health 

8 and Human Services, that impose sanctions with respect 

9 to waste, fraud, and abuse under Medicare, such as the 

10 False Claims Act (31 U.S.C. 3729 et seq.), shall also 

11 apply to the public health insurance option. 

12 SEC. 227. SENSE OF THE HOUSE REGARDING ENROLLMENT 

13 OF MEMBERS IN THE PUBLIC OPTION. 

14 It is the sense of the House of Representatives that 

15 Members who vote in favor of the establishment of a pub16 lic, Federal Government run health insurance option, and 

17 senior members of the President’s administration, are 

18 urged to forgo their right to participate in the Federal 

19 Employees Health Benefits Program (FEHBP) and agree 

20 to enroll under that public option. 


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1 Subtitle C—Individual 

2 Affordability Credits 

3 SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX4 CHANGE. 

5 (a) IN GENERAL.—Subject to the succeeding provi6 sions of this subtitle, in the case of an affordable credit 

7 eligible individual enrolled in an Exchange-participating 

8 health benefits plan— 

9 (1) the individual shall be eligible for, in accord10 ance with this subtitle, affordability credits con11 sisting of— 

12 (A) an affordability premium credit under 

13 section 243 to be applied against the premium 

14 for the Exchange-participating health benefits 

15 plan in which the individual is enrolled; and 

16 (B) an affordability cost-sharing credit 

17 under section 244 to be applied as a reduction 

18 of the cost-sharing otherwise applicable to such 

19 plan; and 

20 (2) the Commissioner shall pay the QHBP of21 fering entity that offers such plan from the Health 

22 Insurance Exchange Trust Fund the aggregate 

23 amount of affordability credits for all affordable 

24 credit eligible individuals enrolled in such plan. 

25 (b) APPLICATION.— 


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1 (1) IN GENERAL.—An Exchange eligible indi2 vidual may apply to the Commissioner through the 

3 Health Insurance Exchange or through another enti4 ty under an arrangement made with the Commis5 sioner, in a form and manner specified by the Com6 missioner. The Commissioner through the Health 

7 Insurance Exchange or through another public enti8 ty under an arrangement made with the Commis9 sioner shall make a determination as to eligibility of 

10 an individual for affordability credits under this sub11 title. The Commissioner shall establish a process 

12 whereby, on the basis of information otherwise avail13 able, individuals may be deemed to be affordable 

14 credit eligible individuals. In carrying this subtitle, 

15 the Commissioner shall establish effective methods 

16 that ensure that individuals with limited English 

17 proficiency are able to apply for affordability credits. 

18 (2) USE OF STATE MEDICAID AGENCIES.—If 

19 the Commissioner determines that a State Medicaid 

20 agency has the capacity to make a determination of 

21 eligibility for affordability credits under this subtitle 

22 and under the same standards as used by the Com23 missioner, under the Medicaid memorandum of un24 derstanding (as defined in section 205(c)(4))— 


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1 (A) the State Medicaid agency is author2 ized to conduct such determinations for any Ex3 change-eligible individual who requests such a 

4 determination; and 

5 (B) the Commissioner shall reimburse the 

6 State Medicaid agency for the costs of con7 ducting such determinations. 

8 (3) MEDICAID SCREEN AND ENROLL OBLIGA9 TION.—In the case of an application made under 

10 paragraph (1), there shall be a determination of 

11 whether the individual is a Medicaid-eligible indi12 vidual. If the individual is determined to be so eligi13 ble, the Commissioner, through the Medicaid memo14 randum of understanding, shall provide for the en15 rollment of the individual under the State Medicaid 

16 plan in accordance with the Medicaid memorandum 

17 of understanding. In the case of such an enrollment, 

18 the State shall provide for the same periodic redeter19 mination of eligibility under Medicaid as would oth20 erwise apply if the individual had directly applied for 

21 medical assistance to the State Medicaid agency. 

22 (c) USE OF AFFORDABILITY CREDITS.— 

23 (1) IN GENERAL.—In Y1 and Y2 an affordable 

24 credit eligible individual may use an affordability 

25 credit only with respect to a basic plan. 


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1 (2) FLEXIBILITY IN PLAN ENROLLMENT AU2 THORIZED.—Beginning with Y3, the Commissioner 

3 shall establish a process to allow an affordability 

4 credit to be used for enrollees in enhanced or pre5 mium plans. In the case of an affordable credit eligi6 ble individual who enrolls in an enhanced or pre7 mium plan, the individual shall be responsible for 

8 any difference between the premium for such plan 

9 and the affordable credit amount otherwise applica10 ble if the individual had enrolled in a basic plan. 

11 (d) ACCESS TO DATA.—In carrying out this subtitle, 

12 the Commissioner shall request from the Secretary of the 

13 Treasury consistent with section 6103 of the Internal Rev14 enue Code of 1986 such information as may be required 

15 to carry out this subtitle. 

16 (e) NO CASH REBATES.—In no case shall an afford17 able credit eligible individual receive any cash payment as 

18 a result of the application of this subtitle. 

19 SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. 

20 (a) DEFINITION.— 

21 (1) IN GENERAL.—For purposes of this subdivi22 sion, the term ‘‘affordable credit eligible individual’’ 

23 means, subject to subsection (b), an individual who 

24 is lawfully present in a State in the United States 

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1 paragraph (excluding subparagraphs (K), (T), (U), 

2 and (V)) of section 101(a)(15) of the Immigration 

3 and Nationality Act)— 

4 (A) who is enrolled under an Exchange5 participating health benefits plan and is not en6 rolled under such plan as an employee (or de7 pendent of an employee) through an employer 

8 qualified health benefits plan that meets the re9 quirements of section 312; 

10 (B) with family income below 400 percent 

11 of the Federal poverty level for a family of the 

12 size involved; and 

13 (C) who is not a Medicaid eligible indi14 vidual, other than an individual described in 

15 section 202(d)(3) or an individual during a 

16 transition period under section 202(d)(4)(B)(ii). 

17 (2) TREATMENT OF FAMILY.—Except as the 

18 Commissioner may otherwise provide, members of 

19 the same family who are affordable credit eligible in20 dividuals shall be treated as a single affordable cred21 it individual eligible for the applicable credit for such 

22 a family under this subtitle. 

23 (b) LIMITATIONS ON EMPLOYEE AND DEPENDENT

24 DISQUALIFICATION.— 


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

2 the term ‘‘affordable credit eligible individual’’ does 

3 not include a full-time employee of an employer if 

4 the employer offers the employee coverage (for the 

5 employee and dependents) as a full-time employee 

6 under a group health plan if the coverage and em7 ployer contribution under the plan meet the require8 ments of section 312. 

9 (2) EXCEPTIONS.— 

10 (A) FOR CERTAIN FAMILY CIR11 CUMSTANCES.—The Commissioner shall estab12 lish such exceptions and special rules in the 

13 case described in paragraph (1) as may be ap14 propriate in the case of a divorced or separated 

15 individual or such a dependent of an employee 

16 who would otherwise be an affordable credit eli17 gible individual. 

18 (B) FOR UNAFFORDABLE EMPLOYER COV19 ERAGE.—For years beginning with Y2, in the 

20 case of full-time employees for which the cost of 

21 the employee premium (plus, to the extent spec22 ified by the Commissioner, out-of-pocket cost23 sharing for such year or the preceding year) for 

24 coverage under a group health plan would ex25 ceed 11 percent of current family income (deVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01186 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 termined by the Commissioner on the basis of 

2 verifiable documentation and without regard to 

3 section 245), paragraph (1) shall not apply. 

4 (c) INCOME DEFINED.— 

5 (1) IN GENERAL.—In this title, the term ‘‘in6 come’’ means modified adjusted gross income (as de7 fined in section 59B of the Internal Revenue Code 

8 of 1986). 

9 (2) STUDY OF INCOME DISREGARDS.—The 

10 Commissioner shall conduct a study that examines 

11 the application of income disregards for purposes of 

12 this subtitle. Not later than the first day of Y2, the 

13 Commissioner shall submit to Congress a report on 

14 such study and shall include such recommendations 

15 as the Commissioner determines appropriate. 

16 (d) CLARIFICATION OF TREATMENT OF AFFORD17 ABILITY CREDITS.—Affordability credits under this sub18 title shall not be treated, for purposes of title IV of the 

19 Personal Responsibility and Work Opportunity Reconcili20 ation Act of 1996, to be a benefit provided under section 

21 403 of such title. 

22 SEC. 243. AFFORDABLE PREMIUM CREDIT. 

23 (a) IN GENERAL.—The affordability premium credit 

24 under this section for an affordable credit eligible indi25 vidual enrolled in an Exchange-participating health beneVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01187 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 fits plan is in an amount equal to the amount (if any) 

2 by which the premium for the plan (or, if less, the ref3 erence premium amount specified in subsection (c)), ex4 ceeds the affordable premium amount specified in sub5 section (b) for the individual. 

6 (b) AFFORDABLE PREMIUM AMOUNT.— 

7 (1) IN GENERAL.—The affordable premium 

8 amount specified in this subsection for an individual 

9 for monthly premium in a plan year shall be equal 

to 1 10 ⁄12 of the product of— 

11 (A) the premium percentage limit specified 

12 in paragraph (2) for the individual based upon 

13 the individual’s family income for the plan year; 

14 and 

15 (B) the individual’s family income for such 

16 plan year. 

17 (2) PREMIUM PERCENTAGE LIMITS BASED ON

18 TABLE.—The Commissioner shall establish premium 

19 percentage limits so that for individuals whose fam20 ily income is within an income tier specified in the 

21 table in subsection (d) such percentage limits shall 

22 increase, on a sliding scale in a linear manner, from 

23 the initial premium percentage to the final premium 

24 percentage specified in such table for such income 

25 tier. 


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1 (c) REFERENCE PREMIUM AMOUNT.—The reference 

2 premium amount specified in this subsection for a plan 

3 year for an individual in a premium rating area is equal 

4 to the average premium for the 3 basic plans in the area 

5 for the plan year with the lowest premium levels. In com6 puting such amount the Commissioner may exclude plans 

7 with extremely limited enrollments. 

8 (d) TABLE OF PREMIUM PERCENTAGE LIMITS AND

9 ACTUARIAL VALUE PERCENTAGES BASED ON INCOME

10 TIER.— 

11 (1) IN GENERAL.—For purposes of this sub12 title, the table specified in this subsection is as fol13 lows: 

In the case of family income (expressed as a 

percent of FPL) within 

the following income 

tier: 

The initial premium percentage is— The final premium percentage is— The actuarial 

value percentage is— 

133% through 150% 1.5% 3% 97% 

150% through 200% 3% 5% 93% 

200% through 250% 5% 7% 85% 

250% through 300% 7% 9% 78% 

300% through 350% 9% 10% 72% 

350% through 400% 10% 11% 70% 

14 (2) SPECIAL RULES.—For purposes of applying 

15 the table under paragraph (1)— 

16 (A) FOR LOWEST LEVEL OF INCOME.—In 

17 the case of an individual with income that does 

18 not exceed 133 percent of FPL, the individual 

19 shall be considered to have income that is 133% 

20 of FPL. 


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1 (B) APPLICATION OF HIGHER ACTUARIAL

2 VALUE PERCENTAGE AT TIER TRANSITION

3 POINTS.—If two actuarial value percentages 

4 may be determined with respect to an indi5 vidual, the actuarial value percentage shall be 

6 the higher of such percentages. 

7 SEC. 244. AFFORDABILITY COST-SHARING CREDIT. 

8 (a) IN GENERAL.—The affordability cost-sharing 

9 credit under this section for an affordable credit eligible 

10 individual enrolled in an Exchange-participating health 

11 benefits plan is in the form of the cost-sharing reduction 

12 described in subsection (b) provided under this section for 

13 the income tier in which the individual is classified based 

14 on the individual’s family income. 

15 (b) COST-SHARING REDUCTIONS.—The Commis16 sioner shall specify a reduction in cost-sharing amounts 

17 and the annual limitation on cost-sharing specified in sec18 tion 122(c)(2)(B) under a basic plan for each income tier 

19 specified in the table under section 243(d), with respect 

20 to a year, in a manner so that, as estimated by the Com21 missioner, the actuarial value of the coverage with such 

22 reduced cost-sharing amounts (and the reduced annual 

23 cost-sharing limit) is equal to the actuarial value percent24 age (specified in the table under section 243(d) for the 


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1 income tier involved) of the full actuarial value if there 

2 were no cost-sharing imposed under the plan. 

3 (c) DETERMINATION AND PAYMENT OF COST-SHAR4 ING AFFORDABILITY CREDIT.—In the case of an afford5 able credit eligible individual in a tier enrolled in an Ex6 change-participating health benefits plan offered by a 

7 QHBP offering entity, the Commissioner shall provide for 

8 payment to the offering entity of an amount equivalent 

9 to the increased actuarial value of the benefits under the 

10 plan provided under section 203(c)(2)(B) resulting from 

11 the reduction in cost-sharing described in subsection (b). 

12 SEC. 245. INCOME DETERMINATIONS. 

13 (a) IN GENERAL.—In applying this subtitle for an 

14 affordability credit for an individual for a plan year, the 

15 individual’s income shall be the income (as defined in sec16 tion 242(c)) for the individual for the most recent taxable 

17 year (as determined in accordance with rules of the Com18 missioner). The Federal poverty level applied shall be such 

19 level in effect as of the date of the application. 

20 (b) PROGRAM INTEGRITY; INCOME VERIFICATION

21 PROCEDURES.— 

22 (1) PROGRAM INTEGRITY.—The Commissioner 

23 shall take such steps as may be appropriate to en24 sure the accuracy of determinations and redeter25 minations under this subtitle. 


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1 (2) INCOME VERIFICATION.— 

2 (A) IN GENERAL.—Upon an initial applica3 tion of an individual for an affordability credit 

4 under this subtitle (or in applying section 

5 242(b)) or upon an application for a change in 

6 the affordability credit based upon a significant 

7 change in family income described in subpara8 graph (A)— 

9 (i) the Commissioner shall request 

10 from the Secretary of the Treasury the dis11 closure to the Commissioner of such infor12 mation as may be permitted to verify the 

13 information contained in such application; 

14 and 

15 (ii) the Commissioner shall use the in16 formation so disclosed to verify such infor17 mation. 

18 (B) ALTERNATIVE PROCEDURES.—The 

19 Commissioner shall establish procedures for the 

20 verification of income for purposes of this sub21 title if no income tax return is available for the 

22 most recent completed tax year. 

23 (c) SPECIAL RULES.— 

24 (1) CHANGES IN INCOME AS A PERCENT OF

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1 pressed as a percentage of the Federal poverty level 

2 for a family of the size involved) for a plan year is 

3 expected (in a manner specified by the Commis4 sioner) to be significantly different from the income 

5 (as so expressed) used under subsection (a), the 

6 Commissioner shall establish rules requiring an indi7 vidual to report, consistent with the mechanism es8 tablished under paragraph (2), significant changes 

9 in such income (including a significant change in 

10 family composition) to the Commissioner and requir11 ing the substitution of such income for the income 

12 otherwise applicable. 

13 (2) REPORTING OF SIGNIFICANT CHANGES IN

14 INCOME.—The Commissioner shall establish rules 

15 under which an individual determined to be an af16 fordable credit eligible individual would be required 

17 to inform the Commissioner when there is a signifi18 cant change in the family income of the individual 

19 (expressed as a percentage of the FPL for a family 

20 of the size involved) and of the information regard21 ing such change. Such mechanism shall provide for 

22 guidelines that specify the circumstances that qual23 ify as a significant change, the verifiable information 

24 required to document such a change, and the process 

25 for submission of such information. If the CommisVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01193 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sioner receives new information from an individual 

2 regarding the family income of the individual, the 

3 Commissioner shall provide for a redetermination of 

4 the individual’s eligibility to be an affordable credit 

5 eligible individual. 

6 (3) TRANSITION FOR CHIP.—In the case of a 

7 child described in section 202(d)(2), the Commis8 sioner shall establish rules under which the family 

9 income of the child is deemed to be no greater than 

10 the family income of the child as most recently de11 termined before Y1 by the State under title XXI of 

12 the Social Security Act. 

13 (4) STUDY OF GEOGRAPHIC VARIATION IN AP14 PLICATION OF FPL.—The Commissioner shall exam15 ine the feasibility and implication of adjusting the 

16 application of the Federal poverty level under this 

17 subtitle for different geographic areas so as to re18 flect the variations in cost-of-living among different 

19 areas within the United States. If the Commissioner 

20 determines that an adjustment is feasible, the study 

21 should include a methodology to make such an ad22 justment. Not later than the first day of Y2, the 

23 Commissioner shall submit to Congress a report on 

24 such study and shall include such recommendations 

25 as the Commissioner determines appropriate. 


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1 (d) PENALTIES FOR MISREPRESENTATION.—In the 

2 case of an individual intentionally misrepresents family in3 come or the individual fails (without regard to intent) to 

4 disclose to the Commissioner a significant change in fam5 ily income under subsection (c) in a manner that results 

6 in the individual becoming an affordable credit eligible in7 dividual when the individual is not or in the amount of 

8 the affordability credit exceeding the correct amount— 

9 (1) the individual is liable for repayment of the 

10 amount of the improper affordability credit; ;and 

11 (2) in the case of such an intentional misrepre12 sentation or other egregious circumstances specified 

13 by the Commissioner, the Commissioner may impose 

14 an additional penalty. 

15 SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED 

16 ALIENS. 

17 Nothing in this subtitle shall allow Federal payments 

18 for affordability credits on behalf of individuals who are 

19 not lawfully present in the United States. 

20 Subtitle D—State Innovation 

21 SEC. 251. WAIVER OF ERISA LIMITATION; APPLICATION IN22 STEAD OF STATE SINGLE PAYER SYSTEM. 

23 (a) IN GENERAL.—A State may request from the 

24 Secretary, and the Secretary must grant except under ex25 traordinary circumstances, a waiver of application of secVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01195 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion 514 of the Employee Retirement Income Security Act 

2 of 1974 with respect to a state single payer system en3 acted into law by such State that would be structured and 

4 operate in a manner consistent with this subtitle. The Sec5 retary shall provide for the revocation of any waiver grant6 ed under this section upon a determination made by the 

7 Secretary that the requirements of the preceding sentence 

8 are no longer being met. 

9 (b) EFFECT OF WAIVER.—During any period for 

10 which a waiver under subsection (a) is in effect— 

11 (1) the provisions of section 514 of the Em12 ployee Retirement Income Security Act of 1974 shall 

13 not apply with respect to the State single payer sys14 tem; and 

15 (2) the State single payer system shall operate 

16 in the State instead of the public health insurance 

17 option or the National Health Exchange. 

18 (c) CONSTRUCTION.—Nothing in this subtitle shall be 

19 construed to limit or otherwise affect the transfer and allo20 cation under this division of funds to States with single 

21 payer systems. 

22 SEC. 252. REQUIREMENTS. 

23 A State single payer system shall— 


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1 (1) ) provide benefits that meet or exceed the 

2 standards of coverage and quality of care set forth 

3 in this division; and 

4 (2) ensure that the cost to the Federal Govern5 ment resulting from the waiver granted under sec6 tion 261 is neither substantially greater nor substan7 tially less than would have been the case in the ab8 sence of such waiver, except that: 

9 (A) the State may seek and benefit from 

10 planning and start-up funds with respect to the 

11 system; and 

12 (B) nothing in this paragraph shall be con13 strued to preclude allowance for normal vari14 ations in population demographics, health sta15 tus, and other factors exogenous to the health 

16 care system that may affect differences in costs. 

17 SEC. 253. DEFINITIONS. 

18 (a) STATE SINGLE PAYER SYSTEM.—The term 

19 ‘‘State single payer system’’ means, in connection with a 

20 State, a non-profit program of the State for providing 

21 health care— 

22 (1) in which a single agency of the State is re23 sponsible for financing health care benefits for all 

24 residents of the State and for the administration or 

25 supervision of the administration of the program; 


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1 (2) under which private insurance duplicating 

2 the benefits provided in the single payer program is 

3 prohibited; 

4 (3) which provides comprehensive health bene5 fits to all residents of the State, and provides meas6 ures to assure free choice of providers for covered 

7 services, to promote quality, and to help resolve com8 plaints and disputes between consumers and pro9 viders; and 

10 (4) under which participation by health mainte11 nance organizations is limited to non-profit health 

12 maintenance organizations that own their own deliv13 ery facilities and employ physicians on salary, and 

14 funding is limited to services that the health mainte15 nance organizations actually deliver; and 

16 (5) which may be maintained by such State to17 gether one or more other States in a geographic re18 gion. 

19 (b) SECRETARY.—The term ‘‘Secretary’’ means the 

20 Secretary of Labor, acting in consultation with the Sec21 retary of Health and Human Services. 


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1 TITLE III—SHARED 

2 RESPONSIBILITY 

3 Subtitle A—Individual 

4 Responsibility 

5 SEC. 301. INDIVIDUAL RESPONSIBILITY. 

6 For an individual’s responsibility to obtain acceptable 

7 coverage, see section 59B of the Internal Revenue Code 

8 of 1986 (as added by section 401 of this division). 

9 Subtitle B—Employer 

10 Responsibility 

11 PART 1—HEALTH COVERAGE PARTICIPATION 

12 REQUIREMENTS 

13 SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE14 MENTS. 

15 (a) IN GENERAL.—An employer meets the require16 ments of this section if such employer does all of the fol17 lowing: 

18 (1) OFFER OF COVERAGE.—The employer of19 fers each employee individual and family coverage 

20 under a qualified health benefits plan (or under a 

21 current employment-based health plan (within the 

22 meaning of section 102(b))) in accordance with sec23 tion 312. 

24 (2) CONTRIBUTION TOWARDS COVERAGE.—If 

25 an employee accepts such offer of coverage, the emVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01199 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ployer makes timely contributions towards such cov2 erage in accordance with section 312. 

3 (3) CONTRIBUTION IN LIEU OF COVERAGE.— 

4 Beginning with Y2, if an employee declines such 

5 offer but otherwise obtains coverage in an Exchange6 participating health benefits plan (other than by rea7 son of being covered by family coverage as a spouse 

8 or dependent of the primary insured), the employer 

9 shall make a timely contribution to the Health In10 surance Exchange with respect to each such em11 ployee in accordance with section 313. 

12 (b) HARDSHIP EXEMPTION.—Notwithstanding any 

13 other provision of this part, an employer may, in a form 

14 and manner which shall be prescribed by the Secretary, 

15 apply to the Secretary for a waiver from the health cov16 erage participation requirements of this part for any 2- 

17 year period. The Secretary shall grant the waiver within 

18 30 days after submission of the application if the applica19 tion reasonably demonstrates to the Secretary that meet20 ing the requirements of this part would result in job losses 

21 that would negatively impact the employer or the commu22 nity in which the employer is located. 


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1 SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TO2 WARDS EMPLOYEE AND DEPENDENT COV3 ERAGE. 

4 (a) IN GENERAL.—An employer meets the require5 ments of this section with respect to an employee if the 

6 following requirements are met: 

7 (1) OFFERING OF COVERAGE.—The employer 

8 offers the coverage described in section 311(1) either 

9 through an Exchange-participating health benefits 

10 plan or other than through such a plan. 

11 (2) EMPLOYER REQUIRED CONTRIBUTION.— 

12 The employer timely pays to the issuer of such cov13 erage an amount not less than the employer required 

14 contribution specified in subsection (b) for such cov15 erage. 

16 (3) PROVISION OF INFORMATION.—The em17 ployer provides the Health Choices Commissioner, 

18 the Secretary of Labor, the Secretary of Health and 

19 Human Services, and the Secretary of the Treasury, 

20 as applicable, with such information as the Commis21 sioner may require to ascertain compliance with the 

22 requirements of this section. 

23 (4) AUTOENROLLMENT OF EMPLOYEES.—The 

24 employer provides for autoenrollment of the em25 ployee in accordance with subsection (c). 


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1 (b) REDUCTION OF EMPLOYEE PREMIUMS THROUGH

2 MINIMUM EMPLOYER CONTRIBUTION.— 

3 (1) FULL-TIME EMPLOYEES.—The minimum 

4 employer contribution described in this subsection 

5 for coverage of a full-time employee (and, if any, the 

6 employee’s spouse and qualifying children (as de7 fined in section 152(c) of the Internal Revenue Code 

8 of 1986) under a qualified health benefits plan (or 

9 current employment-based health plan) is equal to— 

10 (A) in case of individual coverage, not less 

11 than 72.5 percent of the applicable premium 

12 (as defined in section 4980B(f)(4) of such 

13 Code, subject to paragraph (2)) of the lowest 

14 cost plan offered by the employer that is a 

15 qualified health benefits plan (or is such cur16 rent employment-based health plan); and 

17 (B) in the case of family coverage which 

18 includes coverage of such spouse and children, 

19 not less 65 percent of such applicable premium 

20 of such lowest cost plan. 

21 (2) APPLICABLE PREMIUM FOR EXCHANGE COV22 ERAGE.—In this subtitle, the amount of the applica23 ble premium of the lowest cost plan with respect to 

24 coverage of an employee under an Exchange-partici25 pating health benefits plan is the reference premium 


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1 amount under section 243(c) for individual coverage 

2 (or, if elected, family coverage) for the premium rat3 ing area in which the individual or family resides. 

4 (3) MINIMUM EMPLOYER CONTRIBUTION FOR

5 EMPLOYEES OTHER THAN FULL-TIME EMPLOY6 EES.—In the case of coverage for an employee who 

7 is not a full-time employee, the amount of the min8 imum employer contribution under this subsection 

9 shall be a proportion (as determined in accordance 

10 with rules of the Health Choices Commissioner, the 

11 Secretary of Labor, the Secretary of Health and 

12 Human Services, and the Secretary of the Treasury, 

13 as applicable) of the minimum employer contribution 

14 under this subsection with respect to a full-time em15 ployee that reflects the proportion of— 

16 (A) the average weekly hours of employ17 ment of the employee by the employer, to 

18 (B) the minimum weekly hours specified 

19 by the Commissioner for an employee to be a 

20 full-time employee. 

21 (4) SALARY REDUCTIONS NOT TREATED AS EM22 PLOYER CONTRIBUTIONS.—For purposes of this sec23 tion, any contribution on behalf of an employee with 

24 respect to which there is a corresponding reduction 


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1 in the compensation of the employee shall not be 

2 treated as an amount paid by the employer. 

3 (c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPON4 SORED HEALTH BENEFITS.— 

5 (1) IN GENERAL.—The requirement of this sub6 section with respect to an employer and an employee 

7 is that the employer automatically enrolls such em8 ployee into the employment-based health benefits 

9 plan for individual coverage under the plan option 

10 with the lowest applicable employee premium. 

11 (2) OPT-OUT.—In no case may an employer 

12 automatically enroll an employee in a plan under 

13 paragraph (1) if such employee makes an affirmative 

14 election to opt out of such plan or to elect coverage 

15 under an employment-based health benefits plan of16 fered by such employer. An employer shall provide 

17 an employee with a 30-day period to make such an 

18 affirmative election before the employer may auto19 matically enroll the employee in such a plan. 

20 (3) NOTICE REQUIREMENTS.— 

21 (A) IN GENERAL.—Each employer de22 scribed in paragraph (1) who automatically en23 rolls an employee into a plan as described in 

24 such paragraph shall provide the employees, 

25 within a reasonable period before the beginning 


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1 of each plan year (or, in the case of new em2 ployees, within a reasonable period before the 

3 end of the enrollment period for such a new em4 ployee), written notice of the employees’ rights 

5 and obligations relating to the automatic enroll6 ment requirement under such paragraph. Such 

7 notice must be comprehensive and understood 

8 by the average employee to whom the automatic 

9 enrollment requirement applies. 

10 (B) INCLUSION OF SPECIFIC INFORMA11 TION.—The written notice under subparagraph 

12 (A) must explain an employee’s right to opt out 

13 of being automatically enrolled in a plan and in 

14 the case that more than one level of benefits or 

15 employee premium level is offered by the em16 ployer involved, the notice must explain which 

17 level of benefits and employee premium level the 

18 employee will be automatically enrolled in the 

19 absence of an affirmative election by the em20 ployee. 

21 SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV22 ERAGE. 

23 (a) IN GENERAL.—A contribution is made in accord24 ance with this section with respect to an employee if such 

25 contribution is equal to an amount equal to 8 percent of 


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1 the average wages paid by the employer during the period 

2 of enrollment (determined by taking into account all em3 ployees of the employer and in such manner as the Com4 missioner provides, including rules providing for the ap5 propriate aggregation of related employers). Any such con6 tribution— 

7 (1) shall be paid to the Health Choices Com8 missioner for deposit into the Health Insurance Ex9 change Trust Fund, and 

10 (2) shall not be applied against the premium of 

11 the employee under the Exchange-participating 

12 health benefits plan in which the employee is en13 rolled. 

14 (b) SPECIAL RULES FOR SMALL EMPLOYERS.— 

15 (1) IN GENERAL.—In the case of any employer 

16 who is a small employer for any calendar year, sub17 section (a) shall be applied by substituting the appli18 cable percentage determined in accordance with the 

19 following table for ‘‘8 percent’’: 

If the annual payroll of such employer for 

the preceding calendar year: 

The applicable 

percentage is: 

Does not exceed $250,000 ..................................... 0 percent 

Exceeds $250,000, but does not exceed $300,000 2 percent 

Exceeds $300,000, but does not exceed $350,000 4 percent 

Exceeds $350,000, but does not exceed $400,000 6 percent 

20 (2) SMALL EMPLOYER.—For purposes of this 

21 subsection, the term ‘‘small employer’’ means any 

22 employer for any calendar year if the annual payroll 


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1 of such employer for the preceding calendar year 

2 does not exceed $400,000. 

3 (3) ANNUAL PAYROLL.—For purposes of this 

4 paragraph, the term ‘‘annual payroll’’ means, with 

5 respect to any employer for any calendar year, the 

6 aggregate wages paid by the employer during such 

7 calendar year. 

8 (4) AGGREGATION RULES.—Related employers 

9 and predecessors shall be treated as a single em10 ployer for purposes of this subsection. 

11 SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING. 

12 The Health Choices Commissioner (in coordination 

13 with the Secretary of Labor, the Secretary of Health and 

14 Human Services, and the Secretary of the Treasury) shall 

15 have authority to set standards for determining whether 

16 employers or insurers are undertaking any actions to af17 fect the risk pool within the Health Insurance Exchange 

18 by inducing individuals to decline coverage under a quali19 fied health benefits plan (or current employment-based 

20 health plan (within the meaning of section 102(b)) offered 

21 by the employer and instead to enroll in an Exchange-par22 ticipating health benefits plan. An employer violating such 

23 standards shall be treated as not meeting the require24 ments of this section. 


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1 PART 2—SATISFACTION OF HEALTH COVERAGE 

2 PARTICIPATION REQUIREMENTS 

3 SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICI4 PATION REQUIREMENTS UNDER THE EM5 PLOYEE RETIREMENT INCOME SECURITY 

6 ACT OF 1974. 

7 (a) IN GENERAL.—Subtitle B of title I of the Em8 ployee Retirement Income Security Act of 1974 is amend9 ed by adding at the end the following new part: 

10 ‘‘PART 8—NATIONAL HEALTH COVERAGE 

11 PARTICIPATION REQUIREMENTS 

12 ‘‘SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NA13 TIONAL HEALTH COVERAGE PARTICIPATION 

14 REQUIREMENTS. 

15 ‘‘(a) IN GENERAL.—An employer may make an elec16 tion with the Secretary to be subject to the health coverage 

17 participation requirements. 

18 ‘‘(b) TIME AND MANNER.—An election under sub19 section (a) may be made at such time and in such form 

20 and manner as the Secretary may prescribe. 

21 ‘‘SEC. 802. TREATMENT OF COVERAGE RESULTING FROM 

22 ELECTION. 

23 ‘‘(a) IN GENERAL.—If an employer makes an election 

24 to the Secretary under section 801— 

25 ‘‘(1) such election shall be treated as the estab26 lishment and maintenance of a group health plan (as 


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1 defined in section 733(a)) for purposes of this title, 

2 subject to section 151 of the America’s Affordable 

3 Health Choices Act of 2009, and 

4 ‘‘(2) the health coverage participation require5 ments shall be deemed to be included as terms and 

6 conditions of such plan. 

7 ‘‘(b) PERIODIC INVESTIGATIONS TO DISCOVER NON8 COMPLIANCE.—The Secretary shall regularly audit a rep9 resentative sampling of employers and group health plans 

10 and conduct investigations and other activities under sec11 tion 504 with respect to such sampling of plans so as to 

12 discover noncompliance with the health coverage participa13 tion requirements in connection with such plans. The Sec14 retary shall communicate findings of noncompliance made 

15 by the Secretary under this subsection to the Secretary 

16 of the Treasury and the Health Choices Commissioner. 

17 The Secretary shall take such timely enforcement action 

18 as appropriate to achieve compliance. 

19 ‘‘(c) RECORDKEEPING.—To facilitate the audits de20 scribed in subsection (b), the Secretary shall promulgate 

21 recordkeeping requirements for employers to account for 

22 both employees of the employer and individuals whom the 

23 employer has not treated as employees of the employer but 

24 with whom the employer, in the course of the trade or 


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1 business in which the employer is engaged, has engaged 

2 for the performance of labor or services. 

3 ‘‘SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIRE4 MENTS. 

5 ‘‘For purposes of this part, the term ‘health coverage 

6 participation requirements’ means the requirements of 

7 part 1 of subtitle B of title III of subdivision A of Amer8 ica’s Affordable Health Choices Act of 2009 (as in effect 

9 on the date of the enactment of such Act). 

10 ‘‘SEC. 804. RULES FOR APPLYING REQUIREMENTS. 

11 ‘‘(a) AFFILIATED GROUPS.—In the case of any em12 ployer which is part of a group of employers who are treat13 ed as a single employer under subsection (b), (c), (m), or 

14 (o) of section 414 of the Internal Revenue Code of 1986, 

15 the election under section 801 shall be made by such em16 ployer as the Secretary may provide. Any such election, 

17 once made, shall apply to all members of such group. 

18 ‘‘(b) SEPARATE ELECTIONS.—Under regulations pre19 scribed by the Secretary, separate elections may be made 

20 under section 801 with respect to— 

21 ‘‘(1) separate lines of business, and 

22 ‘‘(2) full-time employees and employees who are 

23 not full-time employees. 


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1 ‘‘SEC. 805. TERMINATION OF ELECTION IN CASES OF SUB2 STANTIAL NONCOMPLIANCE. 

3 ‘‘The Secretary may terminate the election of any em4 ployer under section 801 if the Secretary (in coordination 

5 with the Health Choices Commissioner) determines that 

6 such employer is in substantial noncompliance with the 

7 health coverage participation requirements and shall refer 

8 any such determination to the Secretary of the Treasury 

9 as appropriate. 

10 ‘‘SEC. 806. REGULATIONS. 

11 ‘‘The Secretary may promulgate such regulations as 

12 may be necessary or appropriate to carry out the provi13 sions of this part, in accordance with section 324(a) of 

14 the America’s Affordable Health Choices Act of 2009. The 

15 Secretary may promulgate any interim final rules as the 

16 Secretary determines are appropriate to carry out this 

17 part.’’. 

18 (b) ENFORCEMENT OF HEALTH COVERAGE PARTICI19 PATION REQUIREMENTS.—Section 502 of such Act (29 

20 U.S.C. 1132) is amended— 

21 (1) in subsection (a)(6), by striking ‘‘para22 graph’’ and all that follows through ‘‘subsection (c)’’ 

23 and inserting ‘‘paragraph (2), (4), (5), (6), (7), (8), 

24 (9), (10), or (11) of subsection (c)’’; and 

25 (2) in subsection (c), by redesignating the sec26 ond paragraph (10) as paragraph (12) and by inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01211 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 serting after the first paragraph (10) the following 

2 new paragraph: 

3 ‘‘(11) HEALTH COVERAGE PARTICIPATION RE4 QUIREMENTS.— 

5 ‘‘(A) CIVIL PENALTIES.—In the case of 

6 any employer who fails (during any period with 

7 respect to which an election under section 

8 801(a) is in effect) to satisfy the health cov9 erage participation requirements with respect to 

10 any employee, the Secretary may assess a civil 

11 penalty against the employer of $100 for each 

12 day in the period beginning on the date such 

13 failure first occurs and ending on the date such 

14 failure is corrected. 

15 ‘‘(B) HEALTH COVERAGE PARTICIPATION

16 REQUIREMENTS.—For purposes of this para17 graph, the term ‘health coverage participation 

18 requirements’ has the meaning provided in sec19 tion 803. 

20 ‘‘(C) LIMITATIONS ON AMOUNT OF PEN21 ALTY.— 

22 ‘‘(i) PENALTY NOT TO APPLY WHERE

23 FAILURE NOT DISCOVERED EXERCISING

24 REASONABLE DILIGENCE.—No penalty 

25 shall be assessed under subparagraph (A) 


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1 with respect to any failure during any pe2 riod for which it is established to the satis3 faction of the Secretary that the employer 

4 did not know, or exercising reasonable dili5 gence would not have known, that such 

6 failure existed. 

7 ‘‘(ii) PENALTY NOT TO APPLY TO

8 FAILURES CORRECTED WITHIN 30 DAYS.— 

9 No penalty shall be assessed under sub10 paragraph (A) with respect to any failure 

11 if— 

12 ‘‘(I) such failure was due to rea13 sonable cause and not to willful ne14 glect, and 

15 ‘‘(II) such failure is corrected 

16 during the 30-day period beginning on 

17 the 1st date that the employer knew, 

18 or exercising reasonable diligence 

19 would have known, that such failure 

20 existed. 

21 ‘‘(iii) OVERALL LIMITATION FOR UN22 INTENTIONAL FAILURES.—In the case of 

23 failures which are due to reasonable cause 

24 and not to willful neglect, the penalty as25 sessed under subparagraph (A) for failures 


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1 during any 1-year period shall not exceed 

2 the amount equal to the lesser of— 

3 ‘‘(I) 10 percent of the aggregate 

4 amount paid or incurred by the em5 ployer (or predecessor employer) dur6 ing the preceding 1-year period for 

7 group health plans, or 

8 ‘‘(II) $500,000. 

9 ‘‘(D) ADVANCE NOTIFICATION OF FAILURE

10 PRIOR TO ASSESSMENT.—Before a reasonable 

11 time prior to the assessment of any penalty 

12 under this paragraph with respect to any failure 

13 by an employer, the Secretary shall inform the 

14 employer in writing of such failure and shall 

15 provide the employer information regarding ef16 forts and procedures which may be undertaken 

17 by the employer to correct such failure. 

18 ‘‘(E) COORDINATION WITH EXCISE TAX.— 

19 Under regulations prescribed in accordance 

20 with section 324 of the America’s Affordable 

21 Health Choices Act of 2009, the Secretary and 

22 the Secretary of the Treasury shall coordinate 

23 the assessment of penalties under this section 

24 in connection with failures to satisfy health cov25 erage participation requirements with the impoVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01214 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sition of excise taxes on such failures under sec2 tion 4980H(b) of the Internal Revenue Code of 

3 1986 so as to avoid duplication of penalties 

4 with respect to such failures. 

5 ‘‘(F) DEPOSIT OF PENALTY COLLECTED.— 

6 Any amount of penalty collected under this 

7 paragraph shall be deposited as miscellaneous 

8 receipts in the Treasury of the United States.’’. 

9 (c) CLERICAL AMENDMENTS.—The table of contents 

10 in section 1 of such Act is amended by inserting after the 

11 item relating to section 734 the following new items: 

‘‘PART 8—NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS

‘‘Sec. ?801.?Election of employer to be subject to national health coverage participation requirements. 

‘‘Sec. ?802.?Treatment of coverage resulting from election. 

‘‘Sec. ?803.?Health coverage participation requirements. 

‘‘Sec. ?804.?Rules for applying requirements. 

‘‘Sec. ?805.?Termination of election in cases of substantial noncompliance. 

‘‘Sec. ?806.?Regulations. ’’. 

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

13 this section shall apply to periods beginning after Decem14 ber 31, 2012. 

15 SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICI16 PATION REQUIREMENTS UNDER THE INTER17 NAL REVENUE CODE OF 1986. 

18 (a) FAILURE TO ELECT, OR SUBSTANTIALLY COM19 PLY WITH, HEALTH COVERAGE PARTICIPATION RE20 QUIREMENTS.—For employment tax on employers who fail 

21 to elect, or substantially comply with, the health coverage 


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1 participation requirements described in part 1, see section 

2 3111(c) of the Internal Revenue Code of 1986 (as added 

3 by section 412 of this division). 

4 (b) OTHER FAILURES.—For excise tax on other fail5 ures of electing employers to comply with such require6 ments, see section 4980H of the Internal Revenue Code 

7 of 1986 (as added by section 411 of this division). 

8 SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICI9 PATION REQUIREMENTS UNDER THE PUBLIC 

10 HEALTH SERVICE ACT. 

11 (a) IN GENERAL.—Part C of title XXVII of the Pub12 lic Health Service Act is amended by adding at the end 

13 the following new section: 

14 ‘‘SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION 

15 REQUIREMENTS. 

16 ‘‘(a) ELECTION OF EMPLOYER TO BE SUBJECT TO

17 NATIONAL HEALTH COVERAGE PARTICIPATION REQUIRE18 MENTS.— 

19 ‘‘(1) IN GENERAL.—An employer may make an 

20 election with the Secretary to be subject to the 

21 health coverage participation requirements. 

22 ‘‘(2) TIME AND MANNER.—An election under 

23 paragraph (1) may be made at such time and in 

24 such form and manner as the Secretary may pre25 scribe. 


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1 ‘‘(b) TREATMENT OF COVERAGE RESULTING FROM

2 ELECTION.— 

3 ‘‘(1) IN GENERAL.—If an employer makes an 

4 election to the Secretary under subsection (a)— 

5 ‘‘(A) such election shall be treated as the 

6 establishment and maintenance of a group 

7 health plan for purposes of this title, subject to 

8 section 151 of the America’s Affordable Health 

9 Choices Act of 2009, and 

10 ‘‘(B) the health coverage participation re11 quirements shall be deemed to be included as 

12 terms and conditions of such plan. 

13 ‘‘(2) PERIODIC INVESTIGATIONS TO DETERMINE

14 COMPLIANCE WITH HEALTH COVERAGE PARTICIPA15 TION REQUIREMENTS.—The Secretary shall regu16 larly audit a representative sampling of employers 

17 and conduct investigations and other activities with 

18 respect to such sampling of employers so as to dis19 cover noncompliance with the health coverage par20 ticipation requirements in connection with such em21 ployers (during any period with respect to which an 

22 election under subsection (a) is in effect). The Sec23 retary shall communicate findings of noncompliance 

24 made by the Secretary under this subsection to the 

25 Secretary of the Treasury and the Health Choices 


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1 Commissioner. The Secretary shall take such timely 

2 enforcement action as appropriate to achieve compli3 ance. 

4 ‘‘(c) HEALTH COVERAGE PARTICIPATION REQUIRE5 MENTS.—For purposes of this section, the term ‘health 

6 coverage participation requirements’ means the require7 ments of part 1 of subtitle B of title III of subdivision 

8 A of the America’s Affordable Health Choices Act of 2009 

9 (as in effect on the date of the enactment of this section). 

10 ‘‘(d) SEPARATE ELECTIONS.—Under regulations pre11 scribed by the Secretary, separate elections may be made 

12 under subsection (a) with respect to full-time employees 

13 and employees who are not full-time employees. 

14 ‘‘(e) TERMINATION OF ELECTION IN CASES OF SUB15 STANTIAL NONCOMPLIANCE.—The Secretary may termi16 nate the election of any employer under subsection (a) if 

17 the Secretary (in coordination with the Health Choices 

18 Commissioner) determines that such employer is in sub19 stantial noncompliance with the health coverage participa20 tion requirements and shall refer any such determination 

21 to the Secretary of the Treasury as appropriate. 

22 ‘‘(f) ENFORCEMENT OF HEALTH COVERAGE PAR23 TICIPATION REQUIREMENTS.— 

24 ‘‘(1) CIVIL PENALTIES.—In the case of any em25 ployer who fails (during any period with respect to 


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1 which the election under subsection (a) is in effect) 

2 to satisfy the health coverage participation require3 ments with respect to any employee, the Secretary 

4 may assess a civil penalty against the employer of 

5 $100 for each day in the period beginning on the 

6 date such failure first occurs and ending on the date 

7 such failure is corrected. 

8 ‘‘(2) LIMITATIONS ON AMOUNT OF PENALTY.— 

9 ‘‘(A) PENALTY NOT TO APPLY WHERE

10 FAILURE NOT DISCOVERED EXERCISING REA11 SONABLE DILIGENCE.—No penalty shall be as12 sessed under paragraph (1) with respect to any 

13 failure during any period for which it is estab14 lished to the satisfaction of the Secretary that 

15 the employer did not know, or exercising rea16 sonable diligence would not have known, that 

17 such failure existed. 

18 ‘‘(B) PENALTY NOT TO APPLY TO FAIL19 URES CORRECTED WITHIN 30 DAYS.—No pen20 alty shall be assessed under paragraph (1) with 

21 respect to any failure if— 

22 ‘‘(i) such failure was due to reason23 able cause and not to willful neglect, and 

24 ‘‘(ii) such failure is corrected during 

25 the 30-day period beginning on the 1st 


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1 date that the employer knew, or exercising 

2 reasonable diligence would have known, 

3 that such failure existed. 

4 ‘‘(C) OVERALL LIMITATION FOR UNINTEN5 TIONAL FAILURES.—In the case of failures 

6 which are due to reasonable cause and not to 

7 willful neglect, the penalty assessed under para8 graph (1) for failures during any 1-year period 

9 shall not exceed the amount equal to the lesser 

10 of— 

11 ‘‘(i) 10 percent of the aggregate 

12 amount paid or incurred by the employer 

13 (or predecessor employer) during the pre14 ceding taxable year for group health plans, 

15 or 

16 ‘‘(ii) $500,000. 

17 ‘‘(3) ADVANCE NOTIFICATION OF FAILURE

18 PRIOR TO ASSESSMENT.—Before a reasonable time 

19 prior to the assessment of any penalty under para20 graph (1) with respect to any failure by an em21 ployer, the Secretary shall inform the employer in 

22 writing of such failure and shall provide the em23 ployer information regarding efforts and procedures 

24 which may be undertaken by the employer to correct 

25 such failure. 


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1 ‘‘(4) ACTIONS TO ENFORCE ASSESSMENTS.— 

2 The Secretary may bring a civil action in any Dis3 trict Court of the United States to collect any civil 

4 penalty under this subsection. 

5 ‘‘(5) COORDINATION WITH EXCISE TAX.— 

6 Under regulations prescribed in accordance with sec7 tion 324 of the America’s Affordable Health Choices 

8 Act of 2009, the Secretary and the Secretary of the 

9 Treasury shall coordinate the assessment of pen10 alties under paragraph (1) in connection with fail11 ures to satisfy health coverage participation require12 ments with the imposition of excise taxes on such 

13 failures under section 4980H(b) of the Internal Rev14 enue Code of 1986 so as to avoid duplication of pen15 alties with respect to such failures. 

16 ‘‘(6) DEPOSIT OF PENALTY COLLECTED.—Any 

17 amount of penalty collected under this subsection 

18 shall be deposited as miscellaneous receipts in the 

19 Treasury of the United States. 

20 ‘‘(g) REGULATIONS.—The Secretary may promulgate 

21 such regulations as may be necessary or appropriate to 

22 carry out the provisions of this section, in accordance with 

23 section 324(a) of the America’s Affordable Health Choices 

24 Act of 2009. The Secretary may promulgate any interim 


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1 final rules as the Secretary determines are appropriate to 

2 carry out this section.’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 subsection (a) shall apply to periods beginning after De5 cember 31, 2012. 

6 SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COV7 ERAGE PARTICIPATION REQUIREMENTS. 

8 (a) ASSURING COORDINATION.—The officers con9 sisting of the Secretary of Labor, the Secretary of the 

10 Treasury, the Secretary of Health and Human Services, 

11 and the Health Choices Commissioner shall ensure, 

12 through the execution of an interagency memorandum of 

13 understanding among such officers, that— 

14 (1) regulations, rulings, and interpretations 

15 issued by such officers relating to the same matter 

16 over which two or more of such officers have respon17 sibility under subpart B of part 6 of subtitle B of 

18 title I of the Employee Retirement Income Security 

19 Act of 1974, section 4980H of the Internal Revenue 

20 Code of 1986, and section 2793 of the Public Health 

21 Service Act are administered so as to have the same 

22 effect at all times; and 

23 (2) coordination of policies relating to enforcing 

24 the same requirements through such officers in 

25 order to have a coordinated enforcement strategy 


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1 that avoids duplication of enforcement efforts and 

2 assigns priorities in enforcement. 

3 (b) MULTIEMPLOYER PLANS.—In the case of a group 

4 health plan that is a multiemployer plan (as defined in 

5 section 3(37) of the Employee Retirement Income Secu6 rity Act of 1974), the regulations prescribed in accordance 

7 with subsection (a) by the officers referred to in subsection 

8 (a) shall provide for the application of the health coverage 

9 participation requirements to the plan sponsor and con10 tributing sponsors of such plan. 

11 TITLE IV—AMENDMENTS TO IN12 TERNAL REVENUE CODE OF 

13 1986 

14 Subtitle A—Shared Responsibility 

15 PART 1—INDIVIDUAL RESPONSIBILITY 

16 SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE 

17 HEALTH CARE COVERAGE. 

18 (a) IN GENERAL.—Subchapter A of chapter 1 of the 

19 Internal Revenue Code of 1986 is amended by adding at 

20 the end the following new part: 

21 ‘‘PART VIII—HEALTH CARE RELATED TAXES 

‘‘SUBPART A. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE

COVERAGE. 

22 ‘‘Subpart A—Tax on Individuals Without Acceptable 

23 Health Care Coverage 

‘‘Sec. ?59B.?Tax on individuals without acceptable health care coverage. 


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1 ‘‘SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE 

2 HEALTH CARE COVERAGE. 

3 ‘‘(a) TAX IMPOSED.—In the case of any individual 

4 who does not meet the requirements of subsection (d) at 

5 any time during the taxable year, there is hereby imposed 

6 a tax equal to 2.5 percent of the excess of— 

7 ‘‘(1) the taxpayer’s modified adjusted gross in8 come for the taxable year, over 

9 ‘‘(2) the amount of gross income specified in 

10 section 6012(a)(1) with respect to the taxpayer. 

11 ‘‘(b) LIMITATIONS.— 

12 ‘‘(1) TAX LIMITED TO AVERAGE PREMIUM.— 

13 ‘‘(A) IN GENERAL.—The tax imposed 

14 under subsection (a) with respect to any tax15 payer for any taxable year shall not exceed the 

16 applicable national average premium for such 

17 taxable year. 

18 ‘‘(B) APPLICABLE NATIONAL AVERAGE

19 PREMIUM.— 

20 ‘‘(i) IN GENERAL.—For purposes of 

21 subparagraph (A), the ‘applicable national 

22 average premium’ means, with respect to 

23 any taxable year, the average premium (as 

24 determined by the Secretary, in coordina25 tion with the Health Choices Commis26 sioner) for self-only coverage under a basic 


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1 plan which is offered in a Health Insur2 ance Exchange for the calendar year in 

3 which such taxable year begins. 

4 ‘‘(ii) FAILURE TO PROVIDE COVERAGE

5 FOR MORE THAN ONE INDIVIDUAL.—In the 

6 case of any taxpayer who fails to meet the 

7 requirements of subsection (e) with respect 

8 to more than one individual during the tax9 able year, clause (i) shall be applied by 

10 substituting ‘family coverage’ for ‘self-only 

11 coverage’. 

12 ‘‘(2) PRORATION FOR PART YEAR FAILURES.— 

13 The tax imposed under subsection (a) with respect 

14 to any taxpayer for any taxable year shall not exceed 

15 the amount which bears the same ratio to the 

16 amount of tax so imposed (determined without re17 gard to this paragraph and after application of para18 graph (1)) as— 

19 ‘‘(A) the aggregate periods during such 

20 taxable year for which such individual failed to 

21 meet the requirements of subsection (d), bears 

22 to 

23 ‘‘(B) the entire taxable year. 

24 ‘‘(c) EXCEPTIONS.— 


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1 ‘‘(1) DEPENDENTS.—Subsection (a) shall not 

2 apply to any individual for any taxable year if a de3 duction is allowable under section 151 with respect 

4 to such individual to another taxpayer for any tax5 able year beginning in the same calendar year as 

6 such taxable year. 

7 ‘‘(2) NONRESIDENT ALIENS.—Subsection (a) 

8 shall not apply to any individual who is a non9 resident alien. 

10 ‘‘(3) INDIVIDUALS RESIDING OUTSIDE UNITED

11 STATES.—Any qualified individual (as defined in 

12 section 911(d)) (and any qualifying child residing 

13 with such individual) shall be treated for purposes of 

14 this section as covered by acceptable coverage during 

15 the period described in subparagraph (A) or (B) of 

16 section 911(d)(1), whichever is applicable. 

17 ‘‘(4) INDIVIDUALS RESIDING IN POSSESSIONS

18 OF THE UNITED STATES.—Any individual who is a 

19 bona fide resident of any possession of the United 

20 States (as determined under section 937(a)) for any 

21 taxable year (and any qualifying child residing with 

22 such individual) shall be treated for purposes of this 

23 section as covered by acceptable coverage during 

24 such taxable year. 

25 ‘‘(5) RELIGIOUS CONSCIENCE EXEMPTION.— 


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1 ‘‘(A) IN GENERAL.—Subsection (a) shall 

2 not apply to any individual (and any qualifying 

3 child residing with such individual) for any pe4 riod if such individual has in effect an exemp5 tion which certifies that such individual is a 

6 member of a recognized religious sect or divi7 sion thereof described in section 1402(g)(1) and 

8 an adherent of established tenets or teachings 

9 of such sect or division as described in such sec10 tion. 

11 ‘‘(B) EXEMPTION.—An application for the 

12 exemption described in subparagraph (A) shall 

13 be filed with the Secretary at such time and in 

14 such form and manner as the Secretary may 

15 prescribe. Any such exemption granted by the 

16 Secretary shall be effective for such period as 

17 the Secretary determines appropriate. 

18 ‘‘(d) ACCEPTABLE COVERAGE REQUIREMENT.— 

19 ‘‘(1) IN GENERAL.—The requirements of this 

20 subsection are met with respect to any individual for 

21 any period if such individual (and each qualifying 

22 child of such individual) is covered by acceptable 

23 coverage at all times during such period. 


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1 ‘‘(2) ACCEPTABLE COVERAGE.—For purposes 

2 of this section, the term ‘acceptable coverage’ means 

3 any of the following: 

4 ‘‘(A) QUALIFIED HEALTH BENEFITS PLAN

5 COVERAGE.—Coverage under a qualified health 

6 benefits plan (as defined in section 100(c) of 

7 the America’s Affordable Health Choices Act of 

8 2009). 

9 ‘‘(B) GRANDFATHERED HEALTH INSUR10 ANCE COVERAGE; COVERAGE UNDER GRAND11 FATHERED EMPLOYMENT-BASED HEALTH

12 PLAN.—Coverage under a grandfathered health 

13 insurance coverage (as defined in subsection (a) 

14 of section 102 of the America’s Affordable 

15 Health Choices Act of 2009) or under a current 

16 employment-based health plan (within the 

17 meaning of subsection (b) of such section). 

18 ‘‘(C) MEDICARE.—Coverage under part A 

19 of title XVIII of the Social Security Act. 

20 ‘‘(D) MEDICAID.—Coverage for medical as21 sistance under title XIX of the Social Security 

22 Act. 

23 ‘‘(E) MEMBERS OF THE ARMED FORCES

24 AND DEPENDENTS (INCLUDING TRICARE).— 

25 Coverage under chapter 55 of title 10, United 


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1 States Code, including similar coverage fur2 nished under section 1781 of title 38 of such 

3 Code. 

4 ‘‘(F) VA.—Coverage under the veteran’s 

5 health care program under chapter 17 of title 

6 38, United States Code, but only if the cov7 erage for the individual involved is determined 

8 by the Secretary in coordination with the 

9 Health Choices Commissioner to be not less 

10 than the level specified by the Secretary of the 

11 Treasury, in coordination with the Secretary of 

12 Veteran’s Affairs and the Health Choices Com13 missioner, based on the individual’s priority for 

14 services as provided under section 1705(a) of 

15 such title. 

16 ‘‘(G) OTHER COVERAGE.—Such other 

17 health benefits coverage as the Secretary, in co18 ordination with the Health Choices Commis19 sioner, recognizes for purposes of this sub20 section. 

21 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 

22 ‘‘(1) QUALIFYING CHILD.—For purposes of this 

23 section, the term ‘qualifying child’ has the meaning 

24 given such term by section 152(c). 


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1 ‘‘(2) BASIC PLAN.—For purposes of this sec2 tion, the term ‘basic plan’ has the meaning given 

3 such term under section 100(c) of the America’s Af4 fordable Health Choices Act of 2009. 

5 ‘‘(3) HEALTH INSURANCE EXCHANGE.—For 

6 purposes of this section, the term ‘Health Insurance 

7 Exchange’ has the meaning given such term under 

8 section 100(c) of the America’s Affordable Health 

9 Choices Act of 2009, including any State-based 

10 health insurance exchange approved for operation 

11 under section 208 of such Act. 

12 ‘‘(4) FAMILY COVERAGE.—For purposes of this 

13 section, the term ‘family coverage’ means any cov14 erage other than self-only coverage. 

15 ‘‘(5) MODIFIED ADJUSTED GROSS INCOME.— 

16 For purposes of this section, the term ‘modified ad17 justed gross income’ means adjusted gross income— 

18 ‘‘(A) determined without regard to section 

19 911, and 

20 ‘‘(B) increased by the amount of interest 

21 received or accrued by the taxpayer during the 

22 taxable year which is exempt from tax. 

23 ‘‘(6) NOT TREATED AS TAX IMPOSED BY THIS

24 CHAPTER FOR CERTAIN PURPOSES.—The tax im25 posed under this section shall not be treated as tax 


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1 imposed by this chapter for purposes of determining 

2 the amount of any credit under this chapter or for 

3 purposes of section 55. 

4 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

5 such regulations or other guidance as may be necessary 

6 or appropriate to carry out the purposes of this section, 

7 including regulations or other guidance (developed in co8 ordination with the Health Choices Commissioner) which 

9 provide— 

10 ‘‘(1) exemption from the tax imposed under 

11 subsection (a) in cases of de minimis lapses of ac12 ceptable coverage, and 

13 ‘‘(2) a process for applying for a waiver of the 

14 application of subsection (a) in cases of hardship.’’. 

15 (b) INFORMATION REPORTING.— 

16 (1) IN GENERAL.—Subpart B of part III of 

17 subchapter A of chapter 61 of such Code is amended 

18 by inserting after section 6050W the following new 

19 section: 

20 ‘‘SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE 

21 COVERAGE. 

22 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

23 who provides acceptable coverage (as defined in section 

24 59B(d)) to any individual during any calendar year shall, 

25 at such time as the Secretary may prescribe, make the 


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1 return described in subsection (b) with respect to such in2 dividual. 

3 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

4 is described in this subsection if such return— 

5 ‘‘(1) is in such form as the Secretary may pre6 scribe, and 

7 ‘‘(2) contains— 

8 ‘‘(A) the name, address, and TIN of the 

9 primary insured and the name of each other in10 dividual obtaining coverage under the policy, 

11 ‘‘(B) the period for which each such indi12 vidual was provided with the coverage referred 

13 to in subsection (a), and 

14 ‘‘(C) such other information as the Sec15 retary may require. 

16 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID17 UALS WITH RESPECT TO WHOM INFORMATION IS RE18 QUIRED.—Every person required to make a return under 

19 subsection (a) shall furnish to each primary insured whose 

20 name is required to be set forth in such return a written 

21 statement showing— 

22 ‘‘(1) the name and address of the person re23 quired to make such return and the phone number 

24 of the information contact for such person, and 


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1 ‘‘(2) the information required to be shown on 

2 the return with respect to such individual. 

3 The written statement required under the preceding sen4 tence shall be furnished on or before January 31 of the 

5 year following the calendar year for which the return 

6 under subsection (a) is required to be made. 

7 ‘‘(d) COVERAGE PROVIDED BY GOVERNMENTAL

8 UNITS.—In the case of coverage provided by any govern9 mental unit or any agency or instrumentality thereof, the 

10 officer or employee who enters into the agreement to pro11 vide such coverage (or the person appropriately designated 

12 for purposes of this section) shall make the returns and 

13 statements required by this section.’’. 

14 (2) PENALTY FOR FAILURE TO FILE.— 

15 (A) RETURN.—Subparagraph (B) of sec16 tion 6724(d)(1) of such Code is amended by 

17 striking ‘‘or’’ at the end of clause (xxii), by 

18 striking ‘‘and’’ at the end of clause (xxiii) and 

19 inserting ‘‘or’’, and by adding at the end the 

20 following new clause: 

21 ‘‘(xxiv) section 6050X (relating to re22 turns relating to health insurance cov23 erage), and’’. 

24 (B) STATEMENT.—Paragraph (2) of sec25 tion 6724(d) of such Code is amended by strikVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01233 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ing ‘‘or’’ at the end of subparagraph (EE), by 

2 striking the period at the end of subparagraph 

3 (FF) and inserting ‘‘, or’’, and by inserting 

4 after subparagraph (FF) the following new sub5 paragraph: 

6 ‘‘(GG) section 6050X (relating to returns 

7 relating to health insurance coverage).’’. 

8 (c) RETURN REQUIREMENT.—Subsection (a) of sec9 tion 6012 of such Code is amended by inserting after 

10 paragraph (9) the following new paragraph: 

11 ‘‘(10) Every individual to whom section 59B(a) 

12 applies and who fails to meet the requirements of 

13 section 59B(d) with respect to such individual or 

14 any qualifying child (as defined in section 152(c)) of 

15 such individual.’’. 

16 (d) CLERICAL AMENDMENTS.— 

17 (1) The table of parts for subchapter A of chap18 ter 1 of the Internal Revenue Code of 1986 is 

19 amended by adding at the end the following new 

20 item: 

‘‘PART VIII. HEALTH CARE RELATED TAXES.’’. 

21 (2) The table of sections for subpart B of part 

22 III of subchapter A of chapter 61 is amended by 

23 adding at the end the following new item: 

‘‘Sec. ?6050X.?Returns relating to health insurance coverage.’’. 


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1 (e) SECTION 15 NOT TO APPLY.—The amendment 

2 made by subsection (a) shall not be treated as a change 

3 in a rate of tax for purposes of section 15 of the Internal 

4 Revenue Code of 1986. 

5 (f) EFFECTIVE DATE.— 

6 (1) IN GENERAL.—The amendments made by 

7 this section shall apply to taxable years beginning 

8 after December 31, 2012. 

9 (2) RETURNS.—The amendments made by sub10 section (b) shall apply to calendar years beginning 

11 after December 31, 2012. 

12 PART 2—EMPLOYER RESPONSIBILITY 

13 SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PAR14 TICIPATION REQUIREMENTS. 

15 (a) IN GENERAL.—Chapter 43 of the Internal Rev16 enue Code of 1986 is amended by adding at the end the 

17 following new section: 

18 ‘‘SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COV19 ERAGE PARTICIPATION REQUIREMENTS. 

20 ‘‘(a) ELECTION OF EMPLOYER RESPONSIBILITY TO

21 PROVIDE HEALTH COVERAGE.— 

22 ‘‘(1) IN GENERAL.—Subsection (b) shall apply 

23 to any employer with respect to whom an election 

24 under paragraph (2) is in effect. 


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1 ‘‘(2) TIME AND MANNER.—An employer may 

2 make an election under this paragraph at such time 

3 and in such form and manner as the Secretary may 

4 prescribe. 

5 ‘‘(3) AFFILIATED GROUPS.—In the case of any 

6 employer which is part of a group of employers who 

7 are treated as a single employer under subsection 

8 (b), (c), (m), or (o) of section 414, the election 

9 under paragraph (2) shall be made by such person 

10 as the Secretary may provide. Any such election, 

11 once made, shall apply to all members of such 

12 group. 

13 ‘‘(4) SEPARATE ELECTIONS.—Under regula14 tions prescribed by the Secretary, separate elections 

15 may be made under paragraph (2) with respect to— 

16 ‘‘(A) separate lines of business, and 

17 ‘‘(B) full-time employees and employees 

18 who are not full-time employees. 

19 ‘‘(5) TERMINATION OF ELECTION IN CASES OF

20 SUBSTANTIAL NONCOMPLIANCE.—The Secretary 

21 may terminate the election of any employer under 

22 paragraph (2) if the Secretary (in coordination with 

23 the Health Choices Commissioner) determines that 

24 such employer is in substantial noncompliance with 

25 the health coverage participation requirements. 


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1 ‘‘(b) EXCISE TAX WITH RESPECT TO FAILURE TO

2 MEET HEALTH COVERAGE PARTICIPATION REQUIRE3 MENTS.— 

4 ‘‘(1) IN GENERAL.—In the case of any employer 

5 who fails (during any period with respect to which 

6 the election under subsection (a) is in effect) to sat7 isfy the health coverage participation requirements 

8 with respect to any employee to whom such election 

9 applies, there is hereby imposed on each such failure 

10 with respect to each such employee a tax of $100 for 

11 each day in the period beginning on the date such 

12 failure first occurs and ending on the date such fail13 ure is corrected. 

14 ‘‘(2) LIMITATIONS ON AMOUNT OF TAX.— 

15 ‘‘(A) TAX NOT TO APPLY WHERE FAILURE

16 NOT DISCOVERED EXERCISING REASONABLE

17 DILIGENCE.—No tax shall be imposed by para18 graph (1) on any failure during any period for 

19 which it is established to the satisfaction of the 

20 Secretary that the employer neither knew, nor 

21 exercising reasonable diligence would have 

22 known, that such failure existed. 

23 ‘‘(B) TAX NOT TO APPLY TO FAILURES

24 CORRECTED WITHIN 30 DAYS.—No tax shall be 

25 imposed by paragraph (1) on any failure if— 


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1 ‘‘(i) such failure was due to reason2 able cause and not to willful neglect, and 

3 ‘‘(ii) such failure is corrected during 

4 the 30-day period beginning on the 1st 

5 date that the employer knew, or exercising 

6 reasonable diligence would have known, 

7 that such failure existed. 

8 ‘‘(C) OVERALL LIMITATION FOR UNINTEN9 TIONAL FAILURES.—In the case of failures 

10 which are due to reasonable cause and not to 

11 willful neglect, the tax imposed by subsection 

12 (a) for failures during the taxable year of the 

13 employer shall not exceed the amount equal to 

14 the lesser of— 

15 ‘‘(i) 10 percent of the aggregate 

16 amount paid or incurred by the employer 

17 (or predecessor employer) during the pre18 ceding taxable year for employment-based 

19 health plans, or 

20 ‘‘(ii) $500,000. 

21 ‘‘(D) COORDINATION WITH OTHER EN22 FORCEMENT PROVISIONS.—The tax imposed 

23 under paragraph (1) with respect to any failure 

24 shall be reduced (but not below zero) by the 

25 amount of any civil penalty collected under secVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01238 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion 502(c)(11) of the Employee Retirement In2 come Security Act of 1974 or section 2793(g) 

3 of the Public Health Service Act with respect to 

4 such failure. 

5 ‘‘(c) HEALTH COVERAGE PARTICIPATION REQUIRE6 MENTS.—For purposes of this section, the term ‘health 

7 coverage participation requirements’ means the require8 ments of part I of subtitle B of title III of the America’s 

9 Affordable Health Choices Act of 2009 (as in effect on 

10 the date of the enactment of this section).’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 for chapter 43 of such Code is amended by adding at the 

13 end the following new item: 

‘‘Sec. ?4980H.?Election to satisfy health coverage participation requirements.’’. 

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

15 this section shall apply to periods beginning after Decem16 ber 31, 2012. 

17 SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOY18 ERS. 

19 (a) IN GENERAL.—Section 3111 of the Internal Rev20 enue Code of 1986 is amended by redesignating subsection 

21 (c) as subsection (d) and by inserting after subsection (b) 

22 the following new subsection: 

23 ‘‘(c) EMPLOYERS ELECTING TO NOT PROVIDE

24 HEALTH BENEFITS.— 


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1 ‘‘(1) IN GENERAL.—In addition to other taxes, 

2 there is hereby imposed on every nonelecting em3 ployer an excise tax, with respect to having individ4 uals in his employ, equal to 8 percent of the wages 

5 (as defined in section 3121(a)) paid by him with re6 spect to employment (as defined in section 3121(b)). 

7 ‘‘(2) SPECIAL RULES FOR SMALL EMPLOY8 ERS.— 

9 ‘‘(A) IN GENERAL.—In the case of any em10 ployer who is small employer for any calendar 

11 year, paragraph (1) shall be applied by sub12 stituting the applicable percentage determined 

13 in accordance with the following table for ‘8 

14 percent’: 

‘‘If the annual payroll of such employer for 

the preceding calendar year: 

The applicable 

percentage is: 

Does not exceed $250,000 ..................................... 0 percent 

Exceeds $250,000, but does not exceed $300,000 2 percent 

Exceeds $300,000, but does not exceed $350,000 4 percent 

Exceeds $350,000, but does not exceed $400,000 6 percent 

15 ‘‘(B) SMALL EMPLOYER.—For purposes of 

16 this paragraph, the term ‘small employer’ 

17 means any employer for any calendar year if 

18 the annual payroll of such employer for the pre19 ceding calendar year does not exceed $400,000. 

20 ‘‘(C) ANNUAL PAYROLL.—For purposes of 

21 this paragraph, the term ‘annual payroll’ 

22 means, with respect to any employer for any 


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1 calendar year, the aggregate wages (as defined 

2 in section 3121(a)) paid by him with respect to 

3 employment (as defined in section 3121(b)) 

4 during such calendar year. 

5 ‘‘(3) NONELECTING EMPLOYER.—For purposes 

6 of paragraph (1), the term ‘nonelecting employer’ 

7 means any employer for any period with respect to 

8 which such employer does not have an election under 

9 section 4980H(a) in effect. 

10 ‘‘(4) SPECIAL RULE FOR SEPARATE ELEC11 TIONS.—In the case of an employer who makes a 

12 separate election described in section 4980H(a)(4) 

13 for any period, paragraph (1) shall be applied for 

14 such period by taking into account only the wages 

15 paid to employees who are not subject to such elec16 tion. 

17 ‘‘(5) AGGREGATION; PREDECESSORS.—For pur18 poses of this subsection— 

19 ‘‘(A) all persons treated as a single em20 ployer under subsection (b), (c), (m), or (o) of 

21 section 414 shall be treated as 1 employer, and 

22 ‘‘(B) any reference to any person shall be 

23 treated as including a reference to any prede24 cessor of such person.’’. 


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1 (b) DEFINITIONS.—Section 3121 of such Code is 

2 amended by adding at the end the following new sub3 section: 

4 ‘‘(aa) SPECIAL RULES FOR TAX ON EMPLOYERS

5 ELECTING NOT TO PROVIDE HEALTH BENEFITS.—For 

6 purposes of section 3111(c)— 

7 ‘‘(1) Paragraphs (1), (5), and (19) of sub8 section (b) shall not apply. 

9 ‘‘(2) Paragraph (7) of subsection (b) shall apply 

10 by treating all services as not covered by the retire11 ment systems referred to in subparagraphs (C) and 

12 (F) thereof. 

13 ‘‘(3) Subsection (e) shall not apply and the 

14 term ‘State’ shall include the District of Columbia.’’. 

15 (c) CONFORMING AMENDMENT.—Subsection (d) of 

16 section 3111 of such Code, as redesignated by this section, 

17 is amended by striking ‘‘this section’’ and inserting ‘‘sub18 sections (a) and (b)’’. 

19 (d) APPLICATION TO RAILROADS.— 

20 (1) IN GENERAL.—Section 3221 of such Code 

21 is amended by redesignating subsection (c) as sub22 section (d) and by inserting after subsection (b) the 

23 following new subsection: 

24 ‘‘(c) EMPLOYERS ELECTING TO NOT PROVIDE

25 HEALTH BENEFITS.— 


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1 ‘‘(1) IN GENERAL.—In addition to other taxes, 

2 there is hereby imposed on every nonelecting em3 ployer an excise tax, with respect to having individ4 uals in his employ, equal to 8 percent of the com5 pensation paid during any calendar year by such em6 ployer for services rendered to such employer. 

7 ‘‘(2) EXCEPTION FOR SMALL EMPLOYERS.— 

8 Rules similar to the rules of section 3111(c)(2) shall 

9 apply for purposes of this subsection. 

10 ‘‘(3) NONELECTING EMPLOYER.—For purposes 

11 of paragraph (1), the term ‘nonelecting employer’ 

12 means any employer for any period with respect to 

13 which such employer does not have an election under 

14 section 4980H(a) in effect. 

15 ‘‘(4) SPECIAL RULE FOR SEPARATE ELEC16 TIONS.—In the case of an employer who makes a 

17 separate election described in section 4980H(a)(4) 

18 for any period, subsection (a) shall be applied for 

19 such period by taking into account only the wages 

20 paid to employees who are not subject to such elec21 tion.’’. 

22 (2) DEFINITIONS.—Subsection (e) of section 

23 3231 of such Code is amended by adding at the end 

24 the following new paragraph: 


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1 ‘‘(13) SPECIAL RULES FOR TAX ON EMPLOYERS

2 ELECTING NOT TO PROVIDE HEALTH BENEFITS.— 

3 For purposes of section 3221(c)— 

4 ‘‘(A) Paragraph (1) shall be applied with5 out regard to the third sentence thereof. 

6 ‘‘(B) Paragraph (2) shall not apply.’’. 

7 (3) CONFORMING AMENDMENT.—Subsection (d) 

8 of section 3221 of such Code, as redesignated by 

9 this section, is amended by striking ‘‘subsections (a) 

10 and (b), see section 3231(e)(2)’’ and inserting ‘‘this 

11 section, see paragraphs (2) and (13)(B) of section 

12 3231(e)’’. 

13 (e) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to periods beginning after Decem15 ber 31, 2012. 

16 Subtitle B—Credit for Small Busi17 ness Employee Health Coverage 

18 Expenses 

19 SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE 

20 HEALTH COVERAGE EXPENSES. 

21 (a) IN GENERAL.—Subpart D of part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code of 

23 1986 (relating to business-related credits) is amended by 

24 adding at the end the following new section: 


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1 ‘‘SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COV2 ERAGE CREDIT. 

3 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

4 the case of a qualified small employer, the small business 

5 employee health coverage credit determined under this sec6 tion for the taxable year is an amount equal to the applica7 ble percentage of the qualified employee health coverage 

8 expenses of such employer for such taxable year. 

9 ‘‘(b) APPLICABLE PERCENTAGE.— 

10 ‘‘(1) IN GENERAL.—For purposes of this sec11 tion, the applicable percentage is 50 percent. 

12 ‘‘(2) PHASEOUT BASED ON AVERAGE COM13 PENSATION OF EMPLOYEES.—In the case of an em14 ployer whose average annual employee compensation 

15 for the taxable year exceeds $20,000, the percentage 

16 specified in paragraph (1) shall be reduced by a 

17 number of percentage points which bears the same 

18 ratio to 50 as such excess bears to $20,000. 

19 ‘‘(c) LIMITATIONS.— 

20 ‘‘(1) PHASEOUT BASED ON EMPLOYER SIZE.— 

21 In the case of an employer who employs more than 

22 10 qualified employees during the taxable year, the 

23 credit determined under subsection (a) shall be re24 duced by an amount which bears the same ratio to 

25 the amount of such credit (determined without reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01245 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gard to this paragraph and after the application of 

2 the other provisions of this section) as— 

3 ‘‘(A) the excess of— 

4 ‘‘(i) the number of qualified employees 

5 employed by the employer during the tax6 able year, over 

7 ‘‘(ii) 10, bears to 

8 ‘‘(B) 15. 

9 ‘‘(2) CREDIT NOT ALLOWED WITH RESPECT TO

10 CERTAIN HIGHLY COMPENSATED EMPLOYEES.—No 

11 credit shall be allowed under subsection (a) with re12 spect to qualified employee health coverage expenses 

13 paid or incurred with respect to any employee for 

14 any taxable year if the aggregate compensation paid 

15 by the employer to such employee during such tax16 able year exceeds $80,000. 

17 ‘‘(d) QUALIFIED EMPLOYEE HEALTH COVERAGE EX18 PENSES.—For purposes of this section— 

19 ‘‘(1) IN GENERAL.—The term ‘qualified em20 ployee health coverage expenses’ means, with respect 

21 to any employer for any taxable year, the aggregate 

22 amount paid or incurred by such employer during 

23 such taxable year for coverage of any qualified em24 ployee of the employer (including any family covVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01246 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erage which covers such employee) under qualified 

2 health coverage. 

3 ‘‘(2) QUALIFIED HEALTH COVERAGE.—The 

4 term ‘qualified health coverage’ means acceptable 

5 coverage (as defined in section 59B(d)) which— 

6 ‘‘(A) is provided pursuant to an election 

7 under section 4980H(a), and 

8 ‘‘(B) satisfies the requirements referred to 

9 in section 4980H(c). 

10 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

11 section— 

12 ‘‘(1) QUALIFIED SMALL EMPLOYER.—For pur13 poses of this section, the term ‘qualified small em14 ployer’ means any employer for any taxable year 

15 if— 

16 ‘‘(A) the number of qualified employees 

17 employed by such employer during the taxable 

18 year does not exceed 25, and 

19 ‘‘(B) the average annual employee com20 pensation of such employer for such taxable 

21 year does not exceed the sum of the dollar 

22 amounts in effect under subsection (b)(2). 

23 ‘‘(2) QUALIFIED EMPLOYEE.—The term ‘quali24 fied employee’ means any employee of an employer 

25 for any taxable year of the employer if such emVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01247 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ployee received at least $5,000 of compensation from 

2 such employer during such taxable year. 

3 ‘‘(3) AVERAGE ANNUAL EMPLOYEE COMPENSA4 TION.—The term ‘average annual employee com5 pensation’ means, with respect to any employer for 

6 any taxable year, the average amount of compensa7 tion paid by such employer to qualified employees of 

8 such employer during such taxable year. 

9 ‘‘(4) COMPENSATION.—The term ‘compensa10 tion’ has the meaning given such term in section 

11 408(p)(6)(A). 

12 ‘‘(5) FAMILY COVERAGE.—The term ‘family 

13 coverage’ means any coverage other than self-only 

14 coverage. 

15 ‘‘(f) SPECIAL RULES.—For purposes of this sec16 tion— 

17 ‘‘(1) SPECIAL RULE FOR PARTNERSHIPS AND

18 SELF-EMPLOYED.—In the case of a partnership (or 

19 a trade or business carried on by an individual) 

20 which has one or more qualified employees (deter21 mined without regard to this paragraph) with re22 spect to whom the election under 4980H(a) applies, 

23 each partner (or, in the case of a trade or business 

24 carried on by an individual, such individual) shall be 

25 treated as an employee. 


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1 ‘‘(2) AGGREGATION RULE.—All persons treated 

2 as a single employer under subsection (b), (c), (m), 

3 or (o) of section 414 shall be treated as 1 employer. 

4 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—Any de5 duction otherwise allowable with respect to amounts 

6 paid or incurred for health insurance coverage to 

7 which subsection (a) applies shall be reduced by the 

8 amount of the credit determined under this section. 

9 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

10 any taxable year beginning after 2013, each of the 

11 dollar amounts in subsections (b)(2), (c)(2), and 

12 (e)(2) shall be increased by an amount equal to— 

13 ‘‘(A) such dollar amount, multiplied by 

14 ‘‘(B) the cost of living adjustment deter15 mined under section 1(f)(3) for the calendar 

16 year in which the taxable year begins deter17 mined by substituting ‘calendar year 2012’ for 

18 ‘calendar year 1992’ in subparagraph (B) 

19 thereof. 

20 If any increase determined under this paragraph is 

21 not a multiple of $50, such increase shall be rounded 

22 to the next lowest multiple of $50.’’. 

23 (b) CREDIT TO BE PART OF GENERAL BUSINESS

24 CREDIT.—Subsection (b) of section 38 of such Code (re25 lating to general business credit) is amended by striking 


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1 ‘‘plus’’ at the end of paragraph (34), by striking the period 

2 at the end of paragraph (35) and inserting ‘‘, plus’’, and 

3 by adding at the end the following new paragraph: 

4 ‘‘(36) in the case of a qualified small employer 

5 (as defined in section 45R(e)), the small business 

6 employee health coverage credit determined under 

7 section 45R(a).’’. 

8 (c) CLERICAL AMENDMENT.—The table of sections 

9 for subpart D of part IV of subchapter A of chapter 1 

10 of such Code is amended by inserting after the item relat11 ing to section 45Q the following new item: 

‘‘Sec. ?45R.?Small business employee health coverage credit.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2012. 

15 Subtitle C—Disclosures To Carry 

16 Out Health Insurance Exchange 

17 Subsidies 

18 SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSUR19 ANCE EXCHANGE SUBSIDIES. 

20 (a) IN GENERAL.—Subsection (l) of section 6103 of 

21 the Internal Revenue Code of 1986 is amended by adding 

22 at the end the following new paragraph: 

23 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

24 TO CARRY OUT HEALTH INSURANCE EXCHANGE SUB25 SIDIES.— 


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1 ‘‘(A) IN GENERAL.—The Secretary, upon 

2 written request from the Health Choices Com3 missioner or the head of a State-based health 

4 insurance exchange approved for operation 

5 under section 208 of the America’s Affordable 

6 Health Choices Act of 2009, shall disclose to of7 ficers and employees of the Health Choices Ad8 ministration or such State-based health insur9 ance exchange, as the case may be, return in10 formation of any taxpayer whose income is rel11 evant in determining any affordability credit de12 scribed in subtitle C of title II of the America’s 

13 Affordable Health Choices Act of 2009. Such 

14 return information shall be limited to— 

15 ‘‘(i) taxpayer identity information 

16 with respect to such taxpayer, 

17 ‘‘(ii) the filing status of such tax18 payer, 

19 ‘‘(iii) the modified adjusted gross in20 come of such taxpayer (as defined in sec21 tion 59B(e)(5)), 

22 ‘‘(iv) the number of dependents of the 

23 taxpayer, 

24 ‘‘(v) such other information as is pre25 scribed by the Secretary by regulation as 


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1 might indicate whether the taxpayer is eli2 gible for such affordability credits (and the 

3 amount thereof), and 

4 ‘‘(vi) the taxable year with respect to 

5 which the preceding information relates or, 

6 if applicable, the fact that such informa7 tion is not available. 

8 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

9 INFORMATION.—Return information disclosed 

10 under subparagraph (A) may be used by offi11 cers and employees of the Health Choices Ad12 ministration or such State-based health insur13 ance exchange, as the case may be, only for the 

14 purposes of, and to the extent necessary in, es15 tablishing and verifying the appropriate amount 

16 of any affordability credit described in subtitle 

17 C of title II of the America’s Affordable Health 

18 Choices Act of 2009 and providing for the re19 payment of any such credit which was in excess 

20 of such appropriate amount.’’. 

21 (b) PROCEDURES AND RECORDKEEPING RELATED

22 TO DISCLOSURES.—Paragraph (4) of section 6103(p) of 

23 such Code is amended— 


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1 (1) by inserting ‘‘, or any entity described in 

2 subsection (l)(21),’’ after ‘‘or (20)’’ in the matter 

3 preceding subparagraph (A), 

4 (2) by inserting ‘‘or any entity described in sub5 section (l)(21),’’ after ‘‘or (o)(1)(A)’’ in subpara6 graph (F)(ii), and 

7 (3) by inserting ‘‘or any entity described in sub8 section (l)(21),’’ after ‘‘or (20)’’ both places it ap9 pears in the matter after subparagraph (F). 

10 (c) UNAUTHORIZED DISCLOSURE OR INSPECTION.— 

11 Paragraph (2) of section 7213(a) of such Code is amended 

12 by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

13 Subtitle D—Other Revenue 

14 Provisions 

15 PART 1—GENERAL PROVISIONS 

16 SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

17 (a) IN GENERAL.—Part VIII of subchapter A of 

18 chapter 1 of the Internal Revenue Code of 1986, as added 

19 by this title, is amended by adding at the end the following 

20 new subpart: 

21 ‘‘Subpart B—Surcharge on High Income Individuals 

‘‘Sec. ?59C.?Surcharge on high income individuals. 

22 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

23 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

24 other than a corporation, there is hereby imposed (in addiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01253 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion to any other tax imposed by this subtitle) a tax equal 

2 to— 

3 ‘‘(1) 1 percent of so much of the modified ad4 justed gross income of the taxpayer as exceeds 

5 $350,000 but does not exceed $500,000, 

6 ‘‘(2) 1.5 percent of so much of the modified ad7 justed gross income of the taxpayer as exceeds 

8 $500,000 but does not exceed $1,000,000, and 

9 ‘‘(3) 5.4 percent of so much of the modified ad10 justed gross income of the taxpayer as exceeds 

11 $1,000,000. 

12 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 

13 In the case of any taxpayer other than a taxpayer making 

14 a joint return under section 6013 or a surviving spouse 

15 (as defined in section 2(a)), subsection (a) shall be applied 

16 by substituting for each of the dollar amounts therein 

17 (after any increase determined under subsection (e)) a dol18 lar amount equal to— 

19 ‘‘(1) 50 percent of the dollar amount so in ef20 fect in the case of a married individual filing a sepa21 rate return, and 

22 ‘‘(2) 80 percent of the dollar amount so in ef23 fect in any other case. 

24 ‘‘(c) ADJUSTMENTS BASED ON FEDERAL HEALTH

25 REFORM SAVINGS.— 


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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), in the case of any taxable year beginning 

3 after December 31, 2012, subsection (a) shall be ap4 plied— 

5 ‘‘(A) by substituting ‘2 percent’ for ‘1 per6 cent’, and 

7 ‘‘(B) by substituting ‘3 percent’ for ‘1.5 

8 percent’. 

9 ‘‘(2) ADJUSTMENTS BASED ON EXCESS FED10 ERAL HEALTH REFORM SAVINGS.— 

11 ‘‘(A) EXCEPTION IF FEDERAL HEALTH RE12 FORM SAVINGS SIGNIFICANTLY EXCEEDS BASE

13 AMOUNT.—If the excess Federal health reform 

14 savings is more than $150,000,000,000 but not 

15 more than $175,000,000,000, paragraph (1) 

16 shall not apply. 

17 ‘‘(B) FURTHER ADJUSTMENT FOR ADDI18 TIONAL FEDERAL HEALTH REFORM SAVINGS.— 

19 If the excess Federal health reform savings is 

20 more than $175,000,000,000, paragraphs (1) 

21 and (2) of subsection (a) (and paragraph (1) of 

22 this subsection) shall not apply to any taxable 

23 year beginning after December 31, 2012. 

24 ‘‘(C) EXCESS FEDERAL HEALTH REFORM

25 SAVINGS.—For purposes of this subsection, the 


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1 term ‘excess Federal health reform savings’ 

2 means the excess of— 

3 ‘‘(i) the Federal health reform sav4 ings, over 

5 ‘‘(ii) $525,000,000,000. 

6 ‘‘(D) FEDERAL HEALTH REFORM SAV7 INGS.—The term ‘Federal health reform sav8 ings’ means the sum of the amounts described 

9 in subparagraphs (A) and (B) of paragraph (3). 

10 ‘‘(3) DETERMINATION OF FEDERAL HEALTH

11 REFORM SAVINGS.—Not later than December 1, 

12 2012, the Director of the Office of Management and 

13 Budget shall— 

14 ‘‘(A) determine, on the basis of the study 

15 conducted under paragraph (4), the aggregate 

16 reductions in Federal expenditures which have 

17 been achieved as a result of the provisions of, 

18 and amendments made by, subdivision B of the 

19 America’s Affordable Health Choices Act of 

20 2009 during the period beginning on October 1, 

21 2009, and ending with the latest date with re22 spect to which the Director has sufficient data 

23 to make such determination, and 

24 ‘‘(B) estimate, on the basis of such study 

25 and the determination under subparagraph (A), 


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1 the aggregate reductions in Federal expendi2 tures which will be achieved as a result of such 

3 provisions and amendments during so much of 

4 the period beginning with fiscal year 2010 and 

5 ending with fiscal year 2019 as is not taken 

6 into account under subparagraph (A). 

7 ‘‘(4) STUDY OF FEDERAL HEALTH REFORM

8 SAVINGS.—The Director of the Office of Manage9 ment and Budget shall conduct a study of the reduc10 tions in Federal expenditures during fiscal years 

11 2010 through 2019 which are attributable to the 

12 provisions of, and amendments made by, subdivision 

13 B of the America’s Affordable Health Choices Act of 

14 2009. The Director shall complete such study not 

15 later than December 1, 2012. 

16 ‘‘(5) REDUCTIONS IN FEDERAL EXPENDITURES

17 DETERMINED WITHOUT REGARD TO PROGRAM IN18 VESTMENTS.—For purposes of paragraphs (3) and 

19 (4), reductions in Federal expenditures shall be de20 termined without regard to section 1121 of the 

21 America’s Affordable Health Choices Act of 2009 

22 and other program investments under subdivision B 

23 thereof. 

24 ‘‘(d) MODIFIED ADJUSTED GROSS INCOME.—For 

25 purposes of this section, the term ‘modified adjusted gross 


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1 income’ means adjusted gross income reduced by any de2 duction allowed for investment interest (as defined in sec3 tion 163(d)). In the case of an estate or trust, adjusted 

4 gross income shall be determined as provided in section 

5 67(e). 

6 ‘‘(e) INFLATION ADJUSTMENTS.— 

7 ‘‘(1) IN GENERAL.—In the case of taxable years 

8 beginning after 2011, the dollar amounts in sub9 section (a) shall be increased by an amount equal 

10 to— 

11 ‘‘(A) such dollar amount, multiplied by 

12 ‘‘(B) the cost-of-living adjustment deter13 mined under section 1(f)(3) for the calendar 

14 year in which the taxable year begins, by sub15 stituting ‘calendar year 2010’ for ‘calendar year 

16 1992’ in subparagraph (B) thereof. 

17 ‘‘(2) ROUNDING.—If any amount as adjusted 

18 under paragraph (1) is not a multiple of $5,000, 

19 such amount shall be rounded to the next lowest 

20 multiple of $5,000. 

21 ‘‘(f) SPECIAL RULES.— 

22 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

23 nonresident alien individual, only amounts taken 

24 into account in connection with the tax imposed 


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1 under section 871(b) shall be taken into account 

2 under this section. 

3 ‘‘(2) CITIZENS AND RESIDENTS LIVING

4 ABROAD.—The dollar amounts in effect under sub5 section (a) (after the application of subsections (b) 

6 and (e)) shall be decreased by the excess of— 

7 ‘‘(A) the amounts excluded from the tax8 payer’s gross income under section 911, over 

9 ‘‘(B) the amounts of any deductions or ex10 clusions disallowed under section 911(d)(6) 

11 with respect to the amounts described in sub12 paragraph (A). 

13 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

14 shall not apply to a trust all the unexpired interests 

15 in which are devoted to one or more of the purposes 

16 described in section 170(c)(2)(B). 

17 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

18 CHAPTER FOR CERTAIN PURPOSES.—The tax im19 posed under this section shall not be treated as tax 

20 imposed by this chapter for purposes of determining 

21 the amount of any credit under this chapter or for 

22 purposes of section 55.’’. 

23 (b) CLERICAL AMENDMENT.—The table of subparts 

24 for part VIII of subchapter A of chapter 1 of such Code, 


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1 as added by this title, is amended by inserting after the 

2 item relating to subpart A the following new item: 

‘‘SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS.’’. 

3 (c) SECTION 15 NOT TO APPLY.—The amendment 

4 made by subsection (a) shall not be treated as a change 

5 in a rate of tax for purposes of section 15 of the Internal 

6 Revenue Code of 1986. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2010. 

10 SEC. 442. DELAY IN APPLICATION OF WORLDWIDE ALLOCA11 TION OF INTEREST. 

12 (a) IN GENERAL.—Paragraphs (5)(D) and (6) of sec13 tion 864(f) of the Internal Revenue Code of 1986 are each 

14 amended by striking ‘‘December 31, 2010’’ and inserting 

15 ‘‘December 31, 2019’’. 

16 (b) TRANSITION.—Subsection (f) of section 864 of 

17 such Code is amended by striking paragraph (7). 

18 PART 2—PREVENTION OF TAX AVOIDANCE 

19 SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN 

20 DEDUCTIBLE PAYMENTS. 

21 (a) IN GENERAL.—Section 894 of the Internal Rev22 enue Code of 1986 (relating to income affected by treaty) 

23 is amended by adding at the end the following new sub24 section: 


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1 ‘‘(d) LIMITATION ON TREATY BENEFITS FOR CER2 TAIN DEDUCTIBLE PAYMENTS.— 

3 ‘‘(1) IN GENERAL.—In the case of any deduct4 ible related-party payment, any withholding tax im5 posed under chapter 3 (and any tax imposed under 

6 subpart A or B of this part) with respect to such 

7 payment may not be reduced under any treaty of the 

8 United States unless any such withholding tax would 

9 be reduced under a treaty of the United States if 

10 such payment were made directly to the foreign par11 ent corporation. 

12 ‘‘(2) DEDUCTIBLE RELATED-PARTY PAY13 MENT.—For purposes of this subsection, the term 

14 ‘deductible related-party payment’ means any pay15 ment made, directly or indirectly, by any person to 

16 any other person if the payment is allowable as a de17 duction under this chapter and both persons are 

18 members of the same foreign controlled group of en19 tities. 

20 ‘‘(3) FOREIGN CONTROLLED GROUP OF ENTI21 TIES.—For purposes of this subsection— 

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

23 controlled group of entities’ means a controlled 

24 group of entities the common parent of which 

25 is a foreign corporation. 


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1 ‘‘(B) CONTROLLED GROUP OF ENTITIES.— 

2 The term ‘controlled group of entities’ means a 

3 controlled group of corporations as defined in 

4 section 1563(a)(1), except that— 

5 ‘‘(i) ‘more than 50 percent’ shall be 

6 substituted for ‘at least 80 percent’ each 

7 place it appears therein, and 

8 ‘‘(ii) the determination shall be made 

9 without regard to subsections (a)(4) and 

10 (b)(2) of section 1563. 

11 A partnership or any other entity (other than a 

12 corporation) shall be treated as a member of a 

13 controlled group of entities if such entity is con14 trolled (within the meaning of section 

15 954(d)(3)) by members of such group (includ16 ing any entity treated as a member of such 

17 group by reason of this sentence). 

18 ‘‘(4) FOREIGN PARENT CORPORATION.—For 

19 purposes of this subsection, the term ‘foreign parent 

20 corporation’ means, with respect to any deductible 

21 related-party payment, the common parent of the 

22 foreign controlled group of entities referred to in 

23 paragraph (3)(A). 

24 ‘‘(5) REGULATIONS.—The Secretary may pre25 scribe such regulations or other guidance as are necVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01262 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 essary or appropriate to carry out the purposes of 

2 this subsection, including regulations or other guid3 ance which provide for— 

4 ‘‘(A) the treatment of two or more persons 

5 as members of a foreign controlled group of en6 tities if such persons would be the common par7 ent of such group if treated as one corporation, 

8 and 

9 ‘‘(B) the treatment of any member of a 

10 foreign controlled group of entities as the com11 mon parent of such group if such treatment is 

12 appropriate taking into account the economic 

13 relationships among such entities.’’. 

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

15 this section shall apply to payments made after the date 

16 of the enactment of this Act. 

17 SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOC18 TRINE. 

19 (a) IN GENERAL.—Section 7701 of the Internal Rev20 enue Code of 1986 is amended by redesignating subsection 

21 (o) as subsection (p) and by inserting after subsection (n) 

22 the following new subsection: 

23 ‘‘(o) CLARIFICATION OF ECONOMIC SUBSTANCE

24 DOCTRINE.— 


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1 ‘‘(1) APPLICATION OF DOCTRINE.—In the case 

2 of any transaction to which the economic substance 

3 doctrine is relevant, such transaction shall be treated 

4 as having economic substance only if— 

5 ‘‘(A) the transaction changes in a mean6 ingful way (apart from Federal income tax ef7 fects) the taxpayer’s economic position, and 

8 ‘‘(B) the taxpayer has a substantial pur9 pose (apart from Federal income tax effects) 

10 for entering into such transaction. 

11 ‘‘(2) SPECIAL RULE WHERE TAXPAYER RELIES

12 ON PROFIT POTENTIAL.— 

13 ‘‘(A) IN GENERAL.—The potential for 

14 profit of a transaction shall be taken into ac15 count in determining whether the requirements 

16 of subparagraphs (A) and (B) of paragraph (1) 

17 are met with respect to the transaction only if 

18 the present value of the reasonably expected 

19 pre-tax profit from the transaction is substan20 tial in relation to the present value of the ex21 pected net tax benefits that would be allowed if 

22 the transaction were respected. 

23 ‘‘(B) TREATMENT OF FEES AND FOREIGN

24 TAXES.—Fees and other transaction expenses 

25 and foreign taxes shall be taken into account as 


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1 expenses in determining pre-tax profit under 

2 subparagraph (A). 

3 ‘‘(3) STATE AND LOCAL TAX BENEFITS.—For 

4 purposes of paragraph (1), any State or local income 

5 tax effect which is related to a Federal income tax 

6 effect shall be treated in the same manner as a Fed7 eral income tax effect. 

8 ‘‘(4) FINANCIAL ACCOUNTING BENEFITS.—For 

9 purposes of paragraph (1)(B), achieving a financial 

10 accounting benefit shall not be taken into account as 

11 a purpose for entering into a transaction if the ori12 gin of such financial accounting benefit is a reduc13 tion of Federal income tax. 

14 ‘‘(5) DEFINITIONS AND SPECIAL RULES.—For 

15 purposes of this subsection— 

16 ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.— 

17 The term ‘economic substance doctrine’ means 

18 the common law doctrine under which tax bene19 fits under subtitle A with respect to a trans20 action are not allowable if the transaction does 

21 not have economic substance or lacks a business 

22 purpose. 

23 ‘‘(B) EXCEPTION FOR PERSONAL TRANS24 ACTIONS OF INDIVIDUALS.—In the case of an 

25 individual, paragraph (1) shall apply only to 


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1 transactions entered into in connection with a 

2 trade or business or an activity engaged in for 

3 the production of income. 

4 ‘‘(C) OTHER COMMON LAW DOCTRINES

5 NOT AFFECTED.—Except as specifically pro6 vided in this subsection, the provisions of this 

7 subsection shall not be construed as altering or 

8 supplanting any other rule of law, and the re9 quirements of this subsection shall be construed 

10 as being in addition to any such other rule of 

11 law. 

12 ‘‘(D) DETERMINATION OF APPLICATION OF

13 DOCTRINE NOT AFFECTED.—The determination 

14 of whether the economic substance doctrine is 

15 relevant to a transaction (or series of trans16 actions) shall be made in the same manner as 

17 if this subsection had never been enacted. 

18 ‘‘(6) REGULATIONS.—The Secretary shall pre19 scribe such regulations as may be necessary or ap20 propriate to carry out the purposes of this sub21 section.’’. 

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

23 this section shall apply to transactions entered into after 

24 the date of the enactment of this Act. 


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1 SEC. 453. PENALTIES FOR UNDERPAYMENTS. 

2 (a) PENALTY FOR UNDERPAYMENTS ATTRIBUTABLE

3 TO TRANSACTIONS LACKING ECONOMIC SUBSTANCE.— 

4 (1) IN GENERAL.—Subsection (b) of section 

5 6662 of the Internal Revenue Code of 1986 is 

6 amended by inserting after paragraph (5) the fol7 lowing new paragraph: 

8 ‘‘(6) Any disallowance of claimed tax benefits 

9 by reason of a transaction lacking economic sub10 stance (within the meaning of section 7701(o)) or 

11 failing to meet the requirements of any similar rule 

12 of law.’’. 

13 (2) INCREASED PENALTY FOR NONDISCLOSED

14 TRANSACTIONS.—Section 6662 of such Code is 

15 amended by adding at the end the following new 

16 subsection: 

17 ‘‘(i) INCREASE IN PENALTY IN CASE OF NONDIS18 CLOSED NONECONOMIC SUBSTANCE TRANSACTIONS.— 

19 ‘‘(1) IN GENERAL.—In the case of any portion 

20 of an underpayment which is attributable to one or 

21 more nondisclosed noneconomic substance trans22 actions, subsection (a) shall be applied with respect 

23 to such portion by substituting ‘40 percent’ for ‘20 

24 percent’. 

25 ‘‘(2) NONDISCLOSED NONECONOMIC SUB26 STANCE TRANSACTIONS.—For purposes of this subVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01267 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 section, the term ‘nondisclosed noneconomic sub2 stance transaction’ means any portion of a trans3 action described in subsection (b)(6) with respect to 

4 which the relevant facts affecting the tax treatment 

5 are not adequately disclosed in the return nor in a 

6 statement attached to the return. 

7 ‘‘(3) SPECIAL RULE FOR AMENDED RE8 TURNS.—Except as provided in regulations, in no 

9 event shall any amendment or supplement to a re10 turn of tax be taken into account for purposes of 

11 this subsection if the amendment or supplement is 

12 filed after the earlier of the date the taxpayer is first 

13 contacted by the Secretary regarding the examina14 tion of the return or such other date as is specified 

15 by the Secretary.’’. 

16 (3) CONFORMING AMENDMENT.—Subparagraph 

17 (B) of section 6662A(e)(2) of such Code is amend18 ed— 

19 (A) by striking ‘‘section 6662(h)’’ and in20 serting ‘‘subsections (h) or (i) of section 6662’’, 

21 and 

22 (B) by striking ‘‘GROSS VALUATION

23 MISSTATEMENT PENALTY’’ in the heading and 

24 inserting ‘‘CERTAIN INCREASED UNDER25 PAYMENT PENALTIES’’. 


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1 (b) REASONABLE CAUSE EXCEPTION NOT APPLICA2 BLE TO NONECONOMIC SUBSTANCE TRANSACTIONS, TAX

3 SHELTERS, AND CERTAIN LARGE OR PUBLICLY TRADED

4 PERSONS.—Subsection (c) of section 6664 of such Code 

5 is amended— 

6 (1) by redesignating paragraphs (2) and (3) as 

7 paragraphs (3) and (4), respectively, 

8 (2) by striking ‘‘paragraph (2)’’ in paragraph 

9 (4), as so redesignated, and inserting ‘‘paragraph 

10 (3)’’, and 

11 (3) by inserting after paragraph (1) the fol12 lowing new paragraph: 

13 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

14 apply to— 

15 ‘‘(A) to any portion of an underpayment 

16 which is attributable to one or more tax shelters 

17 (as defined in section 6662(d)(2)(C)) or trans18 actions described in section 6662(b)(6), and 

19 ‘‘(B) to any taxpayer if such taxpayer is a 

20 specified person (as defined in section 

21 6662(d)(2)(D)(ii)).’’. 

22 (c) APPLICATION OF PENALTY FOR ERRONEOUS

23 CLAIM FOR REFUND OR CREDIT TO NONECONOMIC SUB24 STANCE TRANSACTIONS.—Section 6676 of such Code is 

25 amended by redesignating subsection (c) as subsection (d) 


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1 and inserting after subsection (b) the following new sub2 section: 

3 ‘‘(c) NONECONOMIC SUBSTANCE TRANSACTIONS

4 TREATED AS LACKING REASONABLE BASIS.—For pur5 poses of this section, any excessive amount which is attrib6 utable to any transaction described in section 6662(b)(6) 

7 shall not be treated as having a reasonable basis.’’. 

8 (d) SPECIAL UNDERSTATEMENT REDUCTION RULE

9 FOR CERTAIN LARGE OR PUBLICLY TRADED PERSONS.— 

10 (1) IN GENERAL.—Paragraph (2) of section 

11 6662(d) of such Code is amended by adding at the 

12 end the following new subparagraph: 

13 ‘‘(D) SPECIAL REDUCTION RULE FOR CER14 TAIN LARGE OR PUBLICLY TRADED PERSONS.— 

15 ‘‘(i) IN GENERAL.—In the case of any 

16 specified person— 

17 ‘‘(I) subparagraph (B) shall not 

18 apply, and 

19 ‘‘(II) the amount of the under20 statement under subparagraph (A) 

21 shall be reduced by that portion of the 

22 understatement which is attributable 

23 to any item with respect to which the 

24 taxpayer has a reasonable belief that 

25 the tax treatment of such item by the 


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1 taxpayer is more likely than not the 

2 proper tax treatment of such item. 

3 ‘‘(ii) SPECIFIED PERSON.—For pur4 poses of this subparagraph, the term ‘spec5 ified person’ means— 

6 ‘‘(I) any person required to file 

7 periodic or other reports under section 

8 13 of the Securities Exchange Act of 

9 1934, and 

10 ‘‘(II) any corporation with gross 

11 receipts in excess of $100,000,000 for 

12 the taxable year involved. 

13 All persons treated as a single employer 

14 under section 52(a) shall be treated as one 

15 person for purposes of subclause (II).’’. 

16 (2) CONFORMING AMENDMENT.—Subparagraph 

17 (C) of section 6662(d)(2) of such Code is amended 

18 by striking ‘‘Subparagraph (B)’’ and inserting ‘‘Sub19 paragraphs (B) and (D)(i)(II)’’. 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to transactions entered into after 

22 the date of the enactment of this Act. 


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1 SUBDIVISION B—MEDICARE AND 

2 MEDICAID IMPROVEMENTS 

3 SEC. 1001. TABLE OF CONTENTS OF SUBDIVISION. 

4 The table of contents for this subdivision is as fol5 lows: 

Sec. 1001. Table of contents of subdivision. 

TITLE I—IMPROVING HEALTH CARE VALUE 

Subtitle A—Provisions Related to Medicare Part A 

PART 1—MARKET BASKET UPDATES

Sec. 1101. Skilled nursing facility payment update. 

Sec. 1102. Inpatient rehabilitation facility payment update. 

Sec. 1103. Incorporating productivity improvements into market basket updates 

that do not already incorporate such improvements. 

PART 2—OTHER MEDICARE PART A PROVISIONS

Sec. 1111. Payments to skilled nursing facilities. 

Sec. 1112. Medicare DSH report and payment adjustments in response to coverage expansion. 

Subtitle B—Provisions Related to Part B 

PART 1—PHYSICIANS’ SERVICES

Sec. 1121. Sustainable growth rate reform. 

Sec. 1122. Misvalued codes under the physician fee schedule. 

Sec. 1123. Payments for efficient areas. 

Sec. 1124. Modifications to the Physician Quality Reporting Initiative (PQRI). 

Sec. 1125. Adjustment to Medicare payment localities. 

PART 2—MARKET BASKET UPDATES

Sec. 1131. Incorporating productivity improvements into market basket updates 

that do not already incorporate such improvements. 

PART 3—OTHER PROVISIONS

Sec. 1141. Rental and purchase of power-driven wheelchairs. 

Sec. 1142. Extension of payment rule for brachytherapy. 

Sec. 1143. Home infusion therapy report to congress. 

Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost data and 

other data. 

Sec. 1145. Treatment of certain cancer hospitals. 

Sec. 1146. Medicare Improvement Fund. 

Sec. 1147. Payment for imaging services. 

Sec. 1148. Durable medical equipment program improvements. 

Sec. 1149. MedPAC study and report on bone mass measurement. 


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Subtitle C—Provisions Related to Medicare Parts A and B 

Sec. 1151. Reducing potentially preventable hospital readmissions. 

Sec. 1152. Post acute care services payment reform plan and bundling pilot 

program. 

Sec. 1153. Home health payment update for 2010. 

Sec. 1154. Payment adjustments for home health care. 

Sec. 1155. Incorporating productivity improvements into market basket update 

for home health services. 

Sec. 1156. Limitation on Medicare exceptions to the prohibition on certain physician referrals made to hospitals. 

Sec. 1157. Institute of Medicine study of geographic adjustment factors under 

Medicare. 

Sec. 1158. Revision of Medicare payment systems to address geographic inequities. 

Subtitle D—Medicare Advantage Reforms 

PART 1—PAYMENT AND ADMINISTRATION

Sec. 1161. Phase-in of payment based on fee-for-service costs. 

Sec. 1162. Quality bonus payments. 

Sec. 1163. Extension of Secretarial coding intensity adjustment authority. 

Sec. 1164. Simplification of annual beneficiary election periods. 

Sec. 1165. Extension of reasonable cost contracts. 

Sec. 1166. Limitation of waiver authority for employer group plans. 

Sec. 1167. Improving risk adjustment for payments. 

Sec. 1168. Elimination of MA Regional Plan Stabilization Fund. 

PART 2—BENEFICIARY PROTECTIONS AND ANTI-FRAUD

Sec. 1171. Limitation on cost-sharing for individual health services. 

Sec. 1172. Continuous open enrollment for enrollees in plans with enrollment 

suspension. 

Sec. 1173. Information for beneficiaries on MA plan administrative costs. 

Sec. 1174. Strengthening audit authority. 

Sec. 1175. Authority to deny plan bids. 

PART 3—TREATMENT OF SPECIAL NEEDS PLANS

Sec. 1176. Limitation on enrollment outside open enrollment period of individuals into chronic care specialized MA plans for special needs 

individuals. 

Sec. 1177. Extension of authority of special needs plans to restrict enrollment. 

Subtitle E—Improvements to Medicare Part D 

Sec. 1181. Elimination of coverage gap. 

Sec. 1182. Discounts for certain part D drugs in original coverage gap. 

Sec. 1183. Repeal of provision relating to submission of claims by pharmacies 

located in or contracting with long-term care facilities. 

Sec. 1184. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the 

annual out-of-pocket threshold under part D. 

Sec. 1185. Permitting mid-year changes in enrollment for formulary changes 

that adversely impact an enrollee. 

Subtitle F—Medicare Rural Access Protections 


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Sec. 1191. Telehealth expansion and enhancements. 

Sec. 1192. Extension of outpatient hold harmless provision. 

Sec. 1193. Extension of section 508 hospital reclassifications. 

Sec. 1194. Extension of geographic floor for work. 

Sec. 1195. Extension of payment for technical component of certain physician 

pathology services. 

Sec. 1196. Extension of ambulance add-ons. 

TITLE J—MEDICARE BENEFICIARY IMPROVEMENTS 

Subtitle A—Improving and Simplifying Financial Assistance for Low Income 

Medicare Beneficiaries 

Sec. 1201. Improving assets tests for Medicare Savings Program and low-income subsidy program. 

Sec. 1202. Elimination of part D cost-sharing for certain non-institutionalized 

full-benefit dual eligible individuals. 

Sec. 1203. Eliminating barriers to enrollment. 

Sec. 1204. Enhanced oversight relating to reimbursements for retroactive low 

income subsidy enrollment. 

Sec. 1205. Intelligent assignment in enrollment. 

Sec. 1206. Special enrollment period and automatic enrollment process for certain subsidy eligible individuals. 

Sec. 1207. Application of MA premiums prior to rebate in calculation of low 

income subsidy benchmark. 

Subtitle B—Reducing Health Disparities 

Sec. 1221. Ensuring effective communication in Medicare. 

Sec. 1222. Demonstration to promote access for Medicare beneficiaries with 

limited English proficiency by providing reimbursement for culturally and linguistically appropriate services. 

Sec. 1223. IOM report on impact of language access services. 

Sec. 1224. Definitions. 

Subtitle C—Miscellaneous Improvements 

Sec. 1231. Extension of therapy caps exceptions process. 

Sec. 1232. Extended months of coverage of immunosuppressive drugs for kidney transplant patients and other renal dialysis provisions. 

Sec. 1233. Advance care planning consultation. 

Sec. 1234. Part B special enrollment period and waiver of limited enrollment 

penalty for TRICARE beneficiaries. 

Sec. 1235. Exception for use of more recent tax year in case of gains from sale 

of primary residence in computing part B income-related premium. 

Sec. 1236. Demonstration program on use of patient decisions aids. 

TITLE K—PROMOTING PRIMARY CARE, MENTAL HEALTH 

SERVICES, AND COORDINATED CARE 

Sec. 1301. Accountable Care Organization pilot program. 

Sec. 1302. Medical home pilot program. 

Sec. 1303. Payment incentive for selected primary care services. 

Sec. 1304. Increased reimbursement rate for certified nurse-midwives. 

Sec. 1305. Coverage and waiver of cost-sharing for preventive services. 


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Sec. 1306. Waiver of deductible for colorectal cancer screening tests regardless 

of coding, subsequent diagnosis, or ancillary tissue removal. 

Sec. 1307. Excluding clinical social worker services from coverage under the 

medicare skilled nursing facility prospective payment system 

and consolidated payment. 

Sec. 1308. Coverage of marriage and family therapist services and mental 

health counselor services. 

Sec. 1309. Extension of physician fee schedule mental health add-on. 

Sec. 1310. Expanding access to vaccines. 

TITLE L—QUALITY 

Subtitle A—Comparative Effectiveness Research 

Sec. 1401. Comparative effectiveness research. 

Subtitle B—Nursing Home Transparency 

PART 1—IMPROVING TRANSPARENCY OF INFORMATION ON SKILLED

NURSING FACILITIES AND NURSING FACILITIES

Sec. 1411. Required disclosure of ownership and additional disclosable parties 

information. 

Sec. 1412. Accountability requirements. 

Sec. 1413. Nursing home compare Medicare website. 

Sec. 1414. Reporting of expenditures. 

Sec. 1415. Standardized complaint form. 

Sec. 1416. Ensuring staffing accountability. 

PART 2—TARGETING ENFORCEMENT

Sec. 1421. Civil money penalties. 

Sec. 1422. National independent monitor pilot program. 

Sec. 1423. Notification of facility closure. 

PART 3—IMPROVING STAFF TRAINING

Sec. 1431. Dementia and abuse prevention training. 

Sec. 1432. Study and report on training required for certified nurse aides and 

supervisory staff. 

Subtitle C—Quality Measurements 

Sec. 1441. Establishment of national priorities for quality improvement. 

Sec. 1442. Development of new quality measures; GAO evaluation of data collection process for quality measurement. 

Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of quality 

measures. 

Sec. 1444. Application of quality measures. 

Sec. 1445. Consensus-based entity funding. 

Subtitle D—Physician Payments Sunshine Provision 

Sec. 1451. Reports on financial relationships between manufacturers and distributors of covered drugs, devices, biologicals, or medical supplies under Medicare, Medicaid, or CHIP and physicians and 

other health care entities and between physicians and other 

health care entities. 


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Subtitle E—Public Reporting on Health Care-Associated Infections 

Sec. 1461. Requirement for public reporting by hospitals and ambulatory surgical centers on health care-associated infections. 

TITLE M—MEDICARE GRADUATE MEDICAL EDUCATION 

Sec. 1501. Distribution of unused residency positions. 

Sec. 1502. Increasing training in nonprovider settings. 

Sec. 1503. Rules for counting resident time for didactic and scholarly activities 

and other activities. 

Sec. 1504. Preservation of resident cap positions from closed hospitals. 

Sec. 1505. Improving accountability for approved medical residency training. 

TITLE N—PROGRAM INTEGRITY 

Subtitle A—Increased Funding To Fight Waste, Fraud, and Abuse 

Sec. 1601. Increased funding and flexibility to fight fraud and abuse. 

Subtitle B—Enhanced Penalties for Fraud and Abuse 

Sec. 1611. Enhanced penalties for false statements on provider or supplier enrollment applications. 

Sec. 1612. Enhanced penalties for submission of false statements material to 

a false claim. 

Sec. 1613. Enhanced penalties for delaying inspections. 

Sec. 1614. Enhanced hospice program safeguards. 

Sec. 1615. Enhanced penalties for individuals excluded from program participation. 

Sec. 1616. Enhanced penalties for provision of false information by Medicare 

Advantage and part D plans. 

Sec. 1617. Enhanced penalties for Medicare Advantage and part D marketing 

violations. 

Sec. 1618. Enhanced penalties for obstruction of program audits. 

Sec. 1619. Exclusion of certain individuals and entities from participation in 

Medicare and State health care programs. 

Subtitle C—Enhanced Program and Provider Protections 

Sec. 1631. Enhanced CMS program protection authority. 

Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure requirements relating to previous affiliations. 

Sec. 1633. Required inclusion of payment modifier for certain evaluation and 

management services. 

Sec. 1634. Evaluations and reports required under Medicare Integrity Program. 

Sec. 1635. Require providers and suppliers to adopt programs to reduce waste, 

fraud, and abuse. 

Sec. 1636. Maximum period for submission of Medicare claims reduced to not 

more than 12 months. 

Sec. 1637. Physicians who order durable medical equipment or home health 

services required to be Medicare enrolled physicians or eligible 

professionals. 

Sec. 1638. Requirement for physicians to provide documentation on referrals to 

programs at high risk of waste and abuse. 


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Sec. 1639. Face to face encounter with patient required before physicians may 

certify eligibility for home health services or durable medical 

equipment under Medicare. 

Sec. 1640. Extension of testimonial subpoena authority to program exclusion 

investigations. 

Sec. 1641. Required repayments of Medicare and Medicaid overpayments. 

Sec. 1642. Expanded application of hardship waivers for OIG exclusions to 

beneficiaries of any Federal health care program. 

Sec. 1643. Access to certain information on renal dialysis facilities. 

Sec. 1644. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicare. 

Sec. 1645. Conforming civil monetary penalties to False Claims Act amendments. 

Subtitle D—Access to Information Needed To Prevent Fraud, Waste, and 

Abuse 

Sec. 1651. Access to Information Necessary to Identify Fraud, Waste, and 

Abuse. 

Sec. 1652. Elimination of duplication between the Healthcare Integrity and 

Protection Data Bank and the National Practitioner Data 

Bank. 

Sec. 1653. Compliance with HIPAA privacy and security standards. 

TITLE O—MEDICAID AND CHIP 

Subtitle A—Medicaid and Health Reform 

Sec. 1701. Eligibility for individuals with income below 1331⁄3 percent of the 

Federal poverty level. 

Sec. 1702. Requirements and special rules for certain Medicaid eligible individuals. 

Sec. 1703. CHIP and Medicaid maintenance of effort. 

Sec. 1704. Reduction in Medicaid DSH. 

Sec. 1705. Expanded outstationing. 

Subtitle B—Prevention 

Sec. 1711. Required coverage of preventive services. 

Sec. 1712. Tobacco cessation. 

Sec. 1713. Optional coverage of nurse home visitation services. 

Sec. 1714. State eligibility option for family planning services. 

Subtitle C—Access 

Sec. 1721. Payments to primary care practitioners. 

Sec. 1722. Medical home pilot program. 

Sec. 1723. Translation or interpretation services. 

Sec. 1724. Optional coverage for freestanding birth center services. 

Sec. 1725. Inclusion of public health clinics under the vaccines for children program. 

Subtitle D—Coverage 

Sec. 1731. Optional medicaid coverage of low-income HIV-infected individuals. 

Sec. 1732. Extending transitional Medicaid Assistance (TMA). 

Sec. 1733. Requirement of 12-month continuous coverage under certain CHIP 

programs. 


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Subtitle E—Financing 

Sec. 1741. Payments to pharmacists. 

Sec. 1742. Prescription drug rebates. 

Sec. 1743. Extension of prescription drug discounts to enrollees of medicaid 

managed care organizations. 

Sec. 1744. Payments for graduate medical education. 

Subtitle F—Waste, Fraud, and Abuse 

Sec. 1751. Health-care acquired conditions. 

Sec. 1752. Evaluations and reports required under Medicaid Integrity Program. 

Sec. 1753. Require providers and suppliers to adopt programs to reduce waste, 

fraud, and abuse. 

Sec. 1754. Overpayments. 

Sec. 1755. Managed Care Organizations. 

Sec. 1756. Termination of provider participation under Medicaid and CHIP if 

terminated under Medicare or other State plan or child health 

plan. 

Sec. 1757. Medicaid and CHIP exclusion from participation relating to certain 

ownership, control, and management affiliations. 

Sec. 1758. Requirement to report expanded set of data elements under MMIS 

to detect fraud and abuse. 

Sec. 1759. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicaid. 

Sec. 1760. Denial of payments for litigation-related misconduct. 

Subtitle G—Puerto Rico and the Territories 

Sec. 1771. Puerto Rico and territories. 

Subtitle H—Miscellaneous 

Sec. 1781. Technical corrections. 

Sec. 1782. Extension of QI program. 

TITLE P—REVENUE-RELATED PROVISIONS 

Sec. 1801. Disclosures to facilitate identification of individuals likely to be ineligible for the low-income assistance under the Medicare prescription drug program to assist Social Security Administration’s outreach to eligible individuals. 

Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for 

Trust Fund. 

TITLE Q—MISCELLANEOUS PROVISIONS 

Sec. 1901. Repeal of trigger provision. 

Sec. 1902. Repeal of comparative cost adjustment (CCA) program. 

Sec. 1903. Extension of gainsharing demonstration. 

Sec. 1904. Grants to States for quality home visitation programs for families 

with young children and families expecting children. 

Sec. 1905. Improved coordination and protection for dual eligibles. 


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1 TITLE I—IMPROVING HEALTH 

2 CARE VALUE 

3 Subtitle A—Provisions Related to 

4 Medicare Part A 

5 PART 1—MARKET BASKET UPDATES 

6 SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE. 

7 (a) IN GENERAL.—Section 1888(e)(4)(E)(ii) of the 

8 Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is 

9 amended— 

10 (1) in subclause (III), by striking ‘‘and’’ at the 

11 end; 

12 (2) by redesignating subclause (IV) as sub13 clause (VI); and 

14 (3) by inserting after subclause (III) the fol15 lowing new subclauses: 

16 ‘‘(IV) for each of fiscal years 

17 2004 through 2009, the rate com18 puted for the previous fiscal year in19 creased by the skilled nursing facility 

20 market basket percentage change for 

21 the fiscal year involved; 

22 ‘‘(V) for fiscal year 2010, the 

23 rate computed for the previous fiscal 

24 year; and’’. 


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1 (b) DELAYED EFFECTIVE DATE.—Section 

2 1888(e)(4)(E)(ii)(V) of the Social Security Act, as in3 serted by subsection (a)(3), shall not apply to payment 

4 for days before January 1, 2010. 

5 SEC. 1102. INPATIENT REHABILITATION FACILITY PAY6 MENT UPDATE. 

7 (a) IN GENERAL.—Section 1886(j)(3)(C) of the So8 cial Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended 

9 by striking ‘‘and 2009’’ and inserting ‘‘through 2010’’. 

10 (b) DELAYED EFFECTIVE DATE.—The amendment 

11 made by subsection (a) shall not apply to payment units 

12 occurring before January 1, 2010. 

13 SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVE14 MENTS INTO MARKET BASKET UPDATES 

15 THAT DO NOT ALREADY INCORPORATE SUCH 

16 IMPROVEMENTS. 

17 (a) INPATIENT ACUTE HOSPITALS.—Section 

18 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

19 1395ww(b)(3)(B)) is amended— 

20 (1) in clause (iii)— 

21 (A) by striking ‘‘(iii) For purposes of this 

22 subparagraph,’’ and inserting ‘‘(iii)(I) For pur23 poses of this subparagraph, subject to the pro24 ductivity adjustment described in subclause 

25 (II),’’; and 


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

2 subclause: 

3 ‘‘(II) The productivity adjustment described in this 

4 subclause, with respect to an increase or change for a fis5 cal year or year or cost reporting period, or other annual 

6 period, is a productivity offset equal to the percentage 

7 change in the 10-year moving average of annual economy8 wide private nonfarm business multi-factor productivity 

9 (as recently published before the promulgation of such in10 crease for the year or period involved). Except as other11 wise provided, any reference to the increase described in 

12 this clause shall be a reference to the percentage increase 

13 described in subclause (I) minus the percentage change 

14 under this subclause.’’; 

15 (2) in the first sentence of clause (viii)(I), by 

16 inserting ‘‘(but not below zero)’’ after ‘‘shall be re17 duced’’; and 

18 (3) in the first sentence of clause (ix)(I)— 

19 (A) by inserting ‘‘(determined without re20 gard to clause (iii)(II)’’ after ‘‘clause (i)’’ the 

21 second time it appears; and 

22 (B) by inserting ‘‘(but not below zero)’’ 

23 after ‘‘reduced’’. 

24 (b) SKILLED NURSING FACILITIES.—Section 

25 1888(e)(5)(B) of such Act (42 U.S.C. 1395yy(e)(5)(B)) 


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1 is amended by inserting ‘‘subject to the productivity ad2 justment described in section 1886(b)(3)(B)(iii)(II)’’ after 

3 ‘‘as calculated by the Secretary’’. 

4 (c) LONG-TERM CARE HOSPITALS.—Section 

5 1886(m) of the Social Security Act (42 U.S.C. 

6 1395ww(m)) is amended by adding at the end the fol7 lowing new paragraph: 

8 ‘‘(3) PRODUCTIVITY ADJUSTMENT.—In imple9 menting the system described in paragraph (1) for 

10 discharges occurring during the rate year ending in 

11 2010 or any subsequent rate year for a hospital, to 

12 the extent that an annual percentage increase factor 

13 applies to a base rate for such discharges for the 

14 hospital, such factor shall be subject to the produc15 tivity adjustment described in section 

16 1886(b)(3)(B)(iii)(II).’’. 

17 (d) INPATIENT REHABILITATION FACILITIES.—The 

18 second sentence of section 1886(j)(3)(C) of the Social Se19 curity Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by in20 serting ‘‘(subject to the productivity adjustment described 

21 in section 1886(b)(3)(B)(iii)(II))’’ after ‘‘appropriate per22 centage increase’’. 

23 (e) PSYCHIATRIC HOSPITALS.—Section 1886 of the 

24 Social Security Act (42 U.S.C. 1395ww) is amended by 

25 adding at the end the following new subsection: 


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1 ‘‘(o) PROSPECTIVE PAYMENT FOR PSYCHIATRIC

2 HOSPITALS.— 

3 ‘‘(1) REFERENCE TO ESTABLISHMENT AND IM4 PLEMENTATION OF SYSTEM.—For provisions related 

5 to the establishment and implementation of a pro6 spective payment system for payments under this 

7 title for inpatient hospital services furnished by psy8 chiatric hospitals (as described in clause (i) of sub9 section (d)(1)(B)) and psychiatric units (as de10 scribed in the matter following clause (v) of such 

11 subsection), see section 124 of the Medicare, Med12 icaid, and SCHIP Balanced Budget Refinement Act 

13 of 1999. 

14 ‘‘(2) PRODUCTIVITY ADJUSTMENT.—In imple15 menting the system described in paragraph (1) for 

16 discharges occurring during the rate year ending in 

17 2011 or any subsequent rate year for a psychiatric 

18 hospital or unit described in such paragraph, to the 

19 extent that an annual percentage increase factor ap20 plies to a base rate for such discharges for the hos21 pital or unit, respectively, such factor shall be sub22 ject to the productivity adjustment described in sec23 tion 1886(b)(3)(B)(iii)(II).’’. 

24 (f) HOSPICE CARE.—Subclause (VII) of section 

25 1814(i)(1)(C)(ii) of the Social Security Act (42 U.S.C. 


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1 1395f(i)(1)(C)(ii)) is amended by inserting after ‘‘the 

2 market basket percentage increase’’ the following: ‘‘(which 

3 is subject to the productivity adjustment described in sec4 tion 1886(b)(3)(B)(iii)(II))’’. 

5 (g) EFFECTIVE DATE.—The amendments made by 

6 subsections (a), (b), (d), and (f) shall apply to annual in7 creases effected for fiscal years beginning with fiscal year 

8 2010. 

9 PART 2—OTHER MEDICARE PART A PROVISIONS 

10 SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES. 

11 (a) CHANGE IN RECALIBRATION FACTOR.— 

12 (1) ANALYSIS.—The Secretary of Health and 

13 Human Services shall conduct, using calendar year 

14 2006 claims data, an initial analysis comparing total 

15 payments under title XVIII of the Social Security 

16 Act for skilled nursing facility services under the 

17 RUG–53 and under the RUG–44 classification sys18 tems. 

19 (2) ADJUSTMENT IN RECALIBRATION FAC20 TOR.—Based on the initial analysis under paragraph 

21 (1), the Secretary shall adjust the case mix indexes 

22 under section 1888(e)(4)(G)(i) of the Social Security 

23 Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for fiscal year 

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1 ing facilities issued by such Secretary on May 12, 

2 2009 (74 Federal Register 22214 et seq.). 

3 (b) CHANGE IN PAYMENT FOR NONTHERAPY ANCIL4 LARY (NTA) SERVICES AND THERAPY SERVICES.— 

5 (1) CHANGES UNDER CURRENT SNF CLASSI6 FICATION SYSTEM.— 

7 (A) IN GENERAL.—Subject to subpara8 graph (B), the Secretary of Health and Human 

9 Services shall, under the system for payment of 

10 skilled nursing facility services under section 

11 1888(e) of the Social Security Act (42 U.S.C. 

12 1395yy(e)), increase payment by 10 percent for 

13 non-therapy ancillary services (as specified by 

14 the Secretary in the notice issued on November 

15 27, 1998 (63 Federal Register 65561 et seq.)) 

16 and shall decrease payment for the therapy case 

17 mix component of such rates by 5.5 percent. 

18 (B) EFFECTIVE DATE.—The changes in 

19 payment described in subparagraph (A) shall 

20 apply for days on or after January 1, 2010, 

21 and until the Secretary implements an alter22 native case mix classification system for pay23 ment of skilled nursing facility services under 

24 section 1888(e) of the Social Security Act (42 

25 U.S.C. 1395yy(e)). 


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1 (C) IMPLEMENTATION.—Notwithstanding 

2 any other provision of law, the Secretary may 

3 implement by program instruction or otherwise 

4 the provisions of this paragraph. 

5 (2) CHANGES UNDER A FUTURE SNF CASE MIX

6 CLASSIFICATION SYSTEM.— 

7 (A) ANALYSIS.— 

8 (i) IN GENERAL.—The Secretary of 

9 Health and Human Services shall analyze 

10 payments for non-therapy ancillary services 

11 under a future skilled nursing facility clas12 sification system to ensure the accuracy of 

13 payment for non-therapy ancillary services. 

14 Such analysis shall consider use of appro15 priate indicators which may include age, 

16 physical and mental status, ability to per17 form activities of daily living, prior nursing 

18 home stay, broad RUG category, and a 

19 proxy for length of stay. 

20 (ii) APPLICATION.—Such analysis 

21 shall be conducted in a manner such that 

22 the future skilled nursing facility classifica23 tion system is implemented to apply to 

24 services furnished during a fiscal year be25 ginning with fiscal year 2011. 


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1 (B) CONSULTATION.—In conducting the 

2 analysis under subparagraph (A), the Secretary 

3 shall consult with interested parties, including 

4 the Medicare Payment Advisory Commission 

5 and other interested stakeholders, to identify 

6 appropriate predictors of nontherapy ancillary 

7 costs. 

8 (C) RULEMAKING.—The Secretary shall 

9 include the result of the analysis under sub10 paragraph (A) in the fiscal year 2011 rule11 making cycle for purposes of implementation 

12 beginning for such fiscal year. 

13 (D) IMPLEMENTATION.—Subject to sub14 paragraph (E) and consistent with subpara15 graph (A)(ii), the Secretary shall implement 

16 changes to payments for non-therapy ancillary 

17 services (which may include a separate rate 

18 component for non-therapy ancillary services 

19 and may include use of a model that predicts 

20 payment amounts applicable for non-therapy 

21 ancillary services) under such future skilled 

22 nursing facility services classification system as 

23 the Secretary determines appropriate based on 

24 the analysis conducted pursuant to subpara25 graph (A). 


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1 (E) BUDGET NEUTRALITY.—The Secretary 

2 shall implement changes described in subpara3 graph (D) in a manner such that the estimated 

4 expenditures under such future skilled nursing 

5 facility services classification system for a fiscal 

6 year beginning with fiscal year 2011 with such 

7 changes would be equal to the estimated ex8 penditures that would otherwise occur under 

9 title XVIII of the Social Security Act under 

10 such future skilled nursing facility services clas11 sification system for such year without such 

12 changes. 

13 (c) OUTLIER POLICY FOR NTA AND THERAPY.—Sec14 tion 1888(e) of the Social Security Act (42 U.S.C. 

15 1395yy(e)) is amended by adding at the end the following 

16 new paragraph: 

17 ‘‘(13) OUTLIERS FOR NTA AND THERAPY.— 

18 ‘‘(A) IN GENERAL.—With respect to 

19 outliers because of unusual variations in the 

20 type or amount of medically necessary care, be21 ginning with October 1, 2010, the Secretary— 

22 ‘‘(i) shall provide for an addition or 

23 adjustment to the payment amount other24 wise made under this section with respect 


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1 to non-therapy ancillary services in the 

2 case of such outliers; and 

3 ‘‘(ii) may provide for such an addition 

4 or adjustment to the payment amount oth5 erwise made under this section with re6 spect to therapy services in the case of 

7 such outliers. 

8 ‘‘(B) OUTLIERS BASED ON AGGREGATE

9 COSTS.—Outlier adjustments or additional pay10 ments described in subparagraph (A) shall be 

11 based on aggregate costs during a stay in a 

12 skilled nursing facility and not on the number 

13 of days in such stay. 

14 ‘‘(C) BUDGET NEUTRALITY.—The Sec15 retary shall reduce estimated payments that 

16 would otherwise be made under the prospective 

17 payment system under this subsection with re18 spect to a fiscal year by 2 percent. The total 

19 amount of the additional payments or payment 

20 adjustments for outliers made under this para21 graph with respect to a fiscal year may not ex22 ceed 2 percent of the total payments projected 

23 or estimated to be made based on the prospec24 tive payment system under this subsection for 

25 the fiscal year.’’. 


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1 (d) CONFORMING AMENDMENTS.—Section 

2 1888(e)(8) of such Act (42 U.S.C. 1395yy(e)(8)) is 

3 amended— 

4 (1) in subparagraph (A), by inserting ‘‘and ad5 justment under section 1111(b) of the America’s Af6 fordable Health Choices Act of 2009; 

7 (2) in subparagraph (B), by striking ‘‘and’’; 

8 (3) in subparagraph (C), by striking the period 

9 and inserting ‘‘; and’’; and 

10 (4) by adding at the end the following new sub11 paragraph: 

12 ‘‘(D) the establishment of outliers under 

13 paragraph (13).’’. 

14 SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUST15 MENTS IN RESPONSE TO COVERAGE EXPAN16 SION. 

17 (a) DSH REPORT.— 

18 (1) IN GENERAL.—Not later than January 1, 

19 2016, the Secretary of Health and Human Services 

20 shall submit to Congress a report on Medicare DSH 

21 taking into account the impact of the health care re22 forms carried out under subdivision A in reducing 

23 the number of uninsured individuals. The report 

24 shall include recommendations relating to the fol25 lowing: 


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1 (A) The appropriate amount, targeting, 

2 and distribution of Medicare DSH to com3 pensate for higher Medicare costs associated 

4 with serving low-income beneficiaries (taking 

5 into account variations in the empirical jus6 tification for Medicare DSH attributable to hos7 pital characteristics, including bed size), con8 sistent with the original intent of Medicare 

9 DSH. 

10 (B) The appropriate amount, targeting, 

11 and distribution of Medicare DSH to hospitals 

12 given their continued uncompensated care costs, 

13 to the extent such costs remain. 

14 (2) COORDINATION WITH MEDICAID DSH RE15 PORT.—The Secretary shall coordinate the report 

16 under this subsection with the report on Medicaid 

17 DSH under section 1704(a). 

18 (b) PAYMENT ADJUSTMENTS IN RESPONSE TO COV19 ERAGE EXPANSION.— 

20 (1) IN GENERAL.—If there is a significant de21 crease in the national rate of uninsurance as a result 

22 of this division (as determined under paragraph 

23 (2)(A)), then the Secretary of Health and Human 

24 Services shall, beginning in fiscal year 2017, imple25 ment the following adjustments to Medicare DSH: 


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1 (A) The amount of Medicare DSH shall be 

2 adjusted based on the recommendations of the 

3 report under subsection (a)(1)(A) and shall 

4 take into account variations in the empirical 

5 justification for Medicare DSH attributable to 

6 hospital characteristics, including bed size. 

7 (B) Subject to paragraph (3), increase 

8 Medicare DSH for a hospital by an additional 

9 amount that is based on the amount of uncom10 pensated care provided by the hospital based on 

11 criteria for uncompensated care as determined 

12 by the Secretary, which shall exclude bad debt. 

13 (2) SIGNIFICANT DECREASE IN NATIONAL RATE

14 OF UNINSURANCE AS A RESULT OF THIS DIVISION.— 

15 For purposes of this subsection— 

16 (A) IN GENERAL.—There is a ‘‘significant 

17 decrease in the national rate of uninsurance as 

18 a result of this division’’ if there is a decrease 

19 in the national rate of uninsurance (as defined 

20 in subparagraph (B)) from 2012 to 2014 that 

21 exceeds 8 percentage points. 

22 (B) NATIONAL RATE OF UNINSURANCE

23 DEFINED.—The term ‘‘national rate of 

24 uninsurance’’ means, for a year, such rate for 

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1 mined and published by the Bureau of the Cen2 sus in its Current Population Survey in or 

3 about September of the succeeding year. 

4 (3) UNCOMPENSATED CARE INCREASE.— 

5 (A) COMPUTATION OF DSH SAVINGS.—For 

6 each fiscal year (beginning with fiscal year 

7 2017), the Secretary shall estimate the aggre8 gate reduction in Medicare DSH that will result 

9 from the adjustment under paragraph (1)(A). 

10 (B) STRUCTURE OF PAYMENT IN11 CREASE.—The Secretary shall compute the in12 crease in Medicare DSH under paragraph 

13 (1)(B) for a fiscal year in accordance with a 

14 formula established by the Secretary that pro15 vides that— 

16 (i) the aggregate amount of such in17 crease for the fiscal year does not exceed 

18 50 percent of the aggregate reduction in 

19 Medicare DSH estimated by the Secretary 

20 for such fiscal year; and 

21 (ii) hospitals with higher levels of un22 compensated care receive a greater in23 crease. 

24 (c) MEDICARE DSH.—In this section, the term 

25 ‘‘Medicare DSH’’ means adjustments in payments under 


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1 section 1886(d)(5)(F) of the Social Security Act (42 

2 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital services 

3 furnished by disproportionate share hospitals. 

4 Subtitle B—Provisions Related to 

5 Part B 

6 PART 1—PHYSICIANS’ SERVICES 

7 SEC. 1121. SUSTAINABLE GROWTH RATE REFORM. 

8 (a) TRANSITIONAL UPDATE FOR 2010.—Section 

9 1848(d) of the Social Security Act (42 U.S.C. 1395w– 

10 4(d)) is amended by adding at the end the following new 

11 paragraph: 

12 ‘‘(10) UPDATE FOR 2010.—The update to the 

13 single conversion factor established in paragraph 

14 (1)(C) for 2010 shall be the percentage increase in 

15 the MEI (as defined in section 1842(i)(3)) for that 

16 year.’’. 

17 (b) REBASING SGR USING 2009; LIMITATION ON

18 CUMULATIVE ADJUSTMENT PERIOD.—Section 1848(d)(4) 

19 of such Act (42 U.S.C. 1395w–4(d)(4)) is amended— 

20 (1) in subparagraph (B), by striking ‘‘subpara21 graph (D)’’ and inserting ‘‘subparagraphs (D) and 

22 (G)’’; and 

23 (2) by adding at the end the following new sub24 paragraph: 


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1 ‘‘(G) REBASING USING 2009 FOR FUTURE

2 UPDATE ADJUSTMENTS.—In determining the 

3 update adjustment factor under subparagraph 

4 (B) for 2011 and subsequent years— 

5 ‘‘(i) the allowed expenditures for 2009 

6 shall be equal to the amount of the actual 

7 expenditures for physicians’ services during 

8 2009; and 

9 ‘‘(ii) the reference in subparagraph 

10 (B)(ii)(I) to ‘April 1, 1996’ shall be treat11 ed as a reference to ‘January 1, 2009 (or, 

12 if later, the first day of the fifth year be13 fore the year involved)’.’’. 

14 (c) LIMITATION ON PHYSICIANS’ SERVICES IN15 CLUDED IN TARGET GROWTH RATE COMPUTATION TO

16 SERVICES COVERED UNDER PHYSICIAN FEE SCHED17 ULE.—Effective for services furnished on or after January 

18 1, 2009, section 1848(f)(4)(A) of such Act is amended 

19 striking ‘‘(such as clinical’’ and all that follows through 

20 ‘‘in a physician’s office’’ and inserting ‘‘for which payment 

21 under this part is made under the fee schedule under this 

22 section, for services for practitioners described in section 

23 1842(b)(18)(C) on a basis related to such fee schedule, 

24 or for services described in section 1861(p) (other than 


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1 such services when furnished in the facility of a provider 

2 of services)’’. 

3 (d) ESTABLISHMENT OF SEPARATE TARGET

4 GROWTH RATES FOR CATEGORIES OF SERVICES.— 

5 (1) ESTABLISHMENT OF SERVICE CAT6 EGORIES.—Subsection (j) of section 1848 of the So7 cial Security Act (42 U.S.C. 1395w–4) is amended 

8 by adding at the end the following new paragraph: 

9 ‘‘(5) SERVICE CATEGORIES.—For services fur10 nished on or after January 1, 2009, each of the fol11 lowing categories of physicians’ services (as defined 

12 in paragraph (3)) shall be treated as a separate 

13 ‘service category’: 

14 ‘‘(A) Evaluation and management services 

15 that are procedure codes (for services covered 

16 under this title) for— 

17 ‘‘(i) services in the category des18 ignated Evaluation and Management in the 

19 Health Care Common Procedure Coding 

20 System (established by the Secretary under 

21 subsection (c)(5) as of December 31, 2009, 

22 and as subsequently modified by the Sec23 retary); and 


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1 ‘‘(ii) preventive services (as defined in 

2 section 1861(iii)) for which payment is 

3 made under this section. 

4 ‘‘(B) All other services not described in 

5 subparagraph (A). 

6 Service categories established under this paragraph 

7 shall apply without regard to the specialty of the 

8 physician furnishing the service.’’. 

9 (2) ESTABLISHMENT OF SEPARATE CONVER10 SION FACTORS FOR EACH SERVICE CATEGORY.— 

11 Subsection (d)(1) of section 1848 of the Social Secu12 rity Act (42 U.S.C. 1395w–4) is amended— 

13 (A) in subparagraph (A)— 

14 (i) by designating the sentence begin15 ning ‘‘The conversion factor’’ as clause (i) 

16 with the heading ‘‘APPLICATION OF SIN17 GLE CONVERSION FACTOR.—’’ and with 

18 appropriate indentation; 

19 (ii) by striking ‘‘The conversion fac20 tor’’ and inserting ‘‘Subject to clause (ii), 

21 the conversion factor’’; and 

22 (iii) by adding at the end the fol23 lowing new clause: 


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1 ‘‘(ii) APPLICATION OF MULTIPLE CON2 VERSION FACTORS BEGINNING WITH

3 2011.— 

4 ‘‘(I) IN GENERAL.—In applying 

5 clause (i) for years beginning with 

6 2011, separate conversion factors 

7 shall be established for each service 

8 category of physicians’ services (as de9 fined in subsection (j)(5)) and any 

10 reference in this section to a conver11 sion factor for such years shall be 

12 deemed to be a reference to the con13 version factor for each of such cat14 egories. 

15 ‘‘(II) INITIAL CONVERSION FAC16 TORS.—Such factors for 2011 shall be 

17 based upon the single conversion fac18 tor for the previous year multiplied by 

19 the update established under para20 graph (11) for such category for 

21 2011. 

22 ‘‘(III) UPDATING OF CONVER23 SION FACTORS.—Such factor for a 

24 service category for a subsequent year 

25 shall be based upon the conversion 


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1 factor for such category for the pre2 vious year and adjusted by the update 

3 established for such category under 

4 paragraph (11) for the year in5 volved.’’; and 

6 (B) in subparagraph (D), by striking 

7 ‘‘other physicians’ services’’ and inserting ‘‘for 

8 physicians’ services described in the service cat9 egory described in subsection (j)(5)(B)’’. 

10 (3) ESTABLISHING UPDATES FOR CONVERSION

11 FACTORS FOR SERVICE CATEGORIES.—Section 

12 1848(d) of the Social Security Act (42 U.S.C. 

13 1395w–4(d)), as amended by subsection (a), is 

14 amended— 

15 (A) in paragraph (4)(C)(iii), by striking 

16 ‘‘The allowed’’ and inserting ‘‘Subject to para17 graph (11)(B), the allowed’’; and 

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

19 paragraph: 

20 ‘‘(11) UPDATES FOR SERVICE CATEGORIES BE21 GINNING WITH 2011.— 

22 ‘‘(A) IN GENERAL.—In applying paragraph 

23 (4) for a year beginning with 2011, the fol24 lowing rules apply: 


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1 ‘‘(i) APPLICATION OF SEPARATE UP2 DATE ADJUSTMENTS FOR EACH SERVICE

3 CATEGORY.—Pursuant to paragraph 

4 (1)(A)(ii)(I), the update shall be made to 

5 the conversion factor for each service cat6 egory (as defined in subsection (j)(5)) 

7 based upon an update adjustment factor 

8 for the respective category and year and 

9 the update adjustment factor shall be com10 puted, for a year, separately for each serv11 ice category. 

12 ‘‘(ii) COMPUTATION OF ALLOWED AND

13 ACTUAL EXPENDITURES BASED ON SERV14 ICE CATEGORIES.—In computing the prior 

15 year adjustment component and the cumu16 lative adjustment component under clauses 

17 (i) and (ii) of paragraph (4)(B), the fol18 lowing rules apply: 

19 ‘‘(I) APPLICATION BASED ON

20 SERVICE CATEGORIES.—The allowed 

21 expenditures and actual expenditures 

22 shall be the allowed and actual ex23 penditures for the service category, as 

24 determined under subparagraph (B). 


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1 ‘‘(II) APPLICATION OF CATEGORY

2 SPECIFIC TARGET GROWTH RATE.— 

3 The growth rate applied under clause 

4 (ii)(II) of such paragraph shall be the 

5 target growth rate for the service cat6 egory involved under subsection (f)(5). 

7 ‘‘(B) DETERMINATION OF ALLOWED EX8 PENDITURES.—In applying paragraph (4) for a 

9 year beginning with 2010, notwithstanding sub10 paragraph (C)(iii) of such paragraph, the al11 lowed expenditures for a service category for a 

12 year is an amount computed by the Secretary 

13 as follows: 

14 ‘‘(i) FOR 2010.—For 2010: 

15 ‘‘(I) TOTAL 2009 ACTUAL EX16 PENDITURES FOR ALL SERVICES IN17 CLUDED IN SGR COMPUTATION FOR

18 EACH SERVICE CATEGORY.—Compute 

19 total actual expenditures for physi20 cians’ services (as defined in sub21 section (f)(4)(A)) for 2009 for each 

22 service category. 

23 ‘‘(II) INCREASE BY GROWTH

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1 EGORY.—Compute allowed expendi2 tures for the service category for 2010 

3 by increasing the allowed expenditures 

4 for the service category for 2009 com5 puted under subclause (I) by the tar6 get growth rate for such service cat7 egory under subsection (f) for 2010. 

8 ‘‘(ii) FOR SUBSEQUENT YEARS.—For 

9 a subsequent year, take the amount of al10 lowed expenditures for such category for 

11 the preceding year (under clause (i) or this 

12 clause) and increase it by the target 

13 growth rate determined under subsection 

14 (f) for such category and year.’’. 

15 (4) APPLICATION OF SEPARATE TARGET

16 GROWTH RATES FOR EACH CATEGORY.— 

17 (A) IN GENERAL.—Section 1848(f) of the 

18 Social Security Act (42 U.S.C. 1395w–4(f)) is 

19 amended by adding at the end the following 

20 new paragraph: 

21 ‘‘(5) APPLICATION OF SEPARATE TARGET

22 GROWTH RATES FOR EACH SERVICE CATEGORY BE23 GINNING WITH 2010.—The target growth rate for a 

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1 ice category (as defined in subsection (j)(5)) and 

2 shall be computed using the same method for com3 puting the target growth rate except that the factor 

4 described in paragraph (2)(C) for— 

5 ‘‘(A) the service category described in sub6 section (j)(5)(A) shall be increased by 0.02; and 

7 ‘‘(B) the service category described in sub8 section (j)(5)(B) shall be increased by 0.01.’’. 

9 (B) USE OF TARGET GROWTH RATES.— 

10 Section 1848 of such Act is further amended— 

11 (i) in subsection (d)— 

12 (I) in paragraph (1)(E)(ii), by in13 serting ‘‘or target’’ after ‘‘sustain14 able’’; and 

15 (II) in paragraph (4)(B)(ii)(II), 

16 by inserting ‘‘or target’’ after ‘‘sus17 tainable’’; and 

18 (ii) in the heading of subsection (f), 

19 by inserting ‘‘AND TARGET GROWTH

20 RATE’’ after ‘‘SUSTAINABLE GROWTH

21 RATE’’; 

22 (iii) in subsection (f)(1)— 

23 (I) by striking ‘‘and’’ at the end 

24 of subparagraph (A); 


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1 (II) in subparagraph (B), by in2 serting ‘‘before 2010’’ after ‘‘each 

3 succeeding year’’ and by striking the 

4 period at the end and inserting ‘‘; 

5 and’’; and 

6 (III) by adding at the end the 

7 following new subparagraph: 

8 ‘‘(C) November 1 of each succeeding year 

9 the target growth rate for such succeeding year 

10 and each of the 2 preceding years.’’; and 

11 (iv) in subsection (f)(2), in the matter 

12 before subparagraph (A), by inserting after 

13 ‘‘beginning with 2000’’ the following: ‘‘and 

14 ending with 2009’’. 

15 (e) APPLICATION TO ACCOUNTABLE CARE ORGANI16 ZATION PILOT PROGRAM.—In applying the target growth 

17 rate under subsections (d) and (f) of section 1848 of the 

18 Social Security Act to services furnished by a practitioner 

19 to beneficiaries who are attributable to an accountable 

20 care organization under the pilot program provided under 

21 section 1866D of such Act, the Secretary of Health and 

22 Human Services shall develop, not later than January 1, 

23 2012, for application beginning with 2012, a method 

24 that— 


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1 (1) allows each such organization to have its 

2 own expenditure targets and updates for such practi3 tioners, with respect to beneficiaries who are attrib4 utable to that organization, that are consistent with 

5 the methodologies described in such subsection (f); 

6 and 

7 (2) provides that the target growth rate appli8 cable to other physicians shall not apply to such 

9 physicians to the extent that the physicians’ services 

10 are furnished through the accountable care organiza11 tion. 

12 In applying paragraph (1), the Secretary of Health and 

13 Human Services may apply the difference in the update 

14 under such paragraph on a claim-by-claim or lump sum 

15 basis and such a payment shall be taken into account 

16 under the pilot program. 

17 SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE 

18 SCHEDULE. 

19 (a) IN GENERAL.—Section 1848(c)(2) of the Social 

20 Security Act (42 U.S.C. 1395w–4(c)(2)) is amended by 

21 adding at the end the following new subparagraphs: 

22 ‘‘(K) POTENTIALLY MISVALUED CODES.— 

23 ‘‘(i) IN GENERAL.—The Secretary 

24 shall— 


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1 ‘‘(I) periodically identify services 

2 as being potentially misvalued using 

3 criteria specified in clause (ii); and 

4 ‘‘(II) review and make appro5 priate adjustments to the relative val6 ues established under this paragraph 

7 for services identified as being poten8 tially misvalued under subclause (I). 

9 ‘‘(ii) IDENTIFICATION OF POTEN10 TIALLY MISVALUED CODES.—For purposes 

11 of identifying potentially misvalued services 

12 pursuant to clause (i)(I), the Secretary 

13 shall examine (as the Secretary determines 

14 to be appropriate) codes (and families of 

15 codes as appropriate) for which there has 

16 been the fastest growth; codes (and fami17 lies of codes as appropriate) that have ex18 perienced substantial changes in practice 

19 expenses; codes for new technologies or 

20 services within an appropriate period (such 

21 as three years) after the relative values are 

22 initially established for such codes; mul23 tiple codes that are frequently billed in 

24 conjunction with furnishing a single serv25 ice; codes with low relative values, particuVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01306 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 larly those that are often billed multiple 

2 times for a single treatment; codes which 

3 have not been subject to review since the 

4 implementation of the RBRVS (the so5 called ‘Harvard-valued codes’); and such 

6 other codes determined to be appropriate 

7 by the Secretary. 

8 ‘‘(iii) REVIEW AND ADJUSTMENTS.— 

9 ‘‘(I) The Secretary may use ex10 isting processes to receive rec11 ommendations on the review and ap12 propriate adjustment of potentially 

13 misvalued services described clause 

14 (i)(II). 

15 ‘‘(II) The Secretary may conduct 

16 surveys, other data collection activi17 ties, studies, or other analyses as the 

18 Secretary determines to be appro19 priate to facilitate the review and ap20 propriate adjustment described in 

21 clause (i)(II). 

22 ‘‘(III) The Secretary may use 

23 analytic contractors to identify and 

24 analyze services identified under 

25 clause (i)(I), conduct surveys or colVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01307 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 lect data, and make recommendations 

2 on the review and appropriate adjust3 ment of services described in clause 

4 (i)(II). 

5 ‘‘(IV) The Secretary may coordi6 nate the review and appropriate ad7 justment described in clause (i)(II) 

8 with the periodic review described in 

9 subparagraph (B). 

10 ‘‘(V) As part of the review and 

11 adjustment described in clause (i)(II), 

12 including with respect to codes with 

13 low relative values described in clause 

14 (ii), the Secretary may make appro15 priate coding revisions (including 

16 using existing processes for consider17 ation of coding changes) which may 

18 include consolidation of individual 

19 services into bundled codes for pay20 ment under the fee schedule under 

21 subsection (b). 

22 ‘‘(VI) The provisions of subpara23 graph (B)(ii)(II) shall apply to adjust24 ments to relative value units made 

25 pursuant to this subparagraph in the 


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1 same manner as such provisions apply 

2 to adjustments under subparagraph 

3 (B)(ii)(II). 

4 ‘‘(L) VALIDATING RELATIVE VALUE

5 UNITS.— 

6 ‘‘(i) IN GENERAL.—The Secretary 

7 shall establish a process to validate relative 

8 value units under the fee schedule under 

9 subsection (b). 

10 ‘‘(ii) COMPONENTS AND ELEMENTS

11 OF WORK.—The process described in 

12 clause (i) may include validation of work 

13 elements (such as time, mental effort and 

14 professional judgment, technical skill and 

15 physical effort, and stress due to risk) in16 volved with furnishing a service and may 

17 include validation of the pre, post, and 

18 intra-service components of work. 

19 ‘‘(iii) SCOPE OF CODES.—The valida20 tion of work relative value units shall in21 clude a sampling of codes for services that 

22 is the same as the codes listed under sub23 paragraph (K)(ii). 

24 ‘‘(iv) METHODS.—The Secretary may 

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1 graph using methods described in sub2 clauses (I) through (V) of subparagraph 

3 (K)(iii) as the Secretary determines to be 

4 appropriate. 

5 ‘‘(v) ADJUSTMENTS.—The Secretary 

6 shall make appropriate adjustments to the 

7 work relative value units under the fee 

8 schedule under subsection (b). The provi9 sions of subparagraph (B)(ii)(II) shall 

10 apply to adjustments to relative value units 

11 made pursuant to this subparagraph in the 

12 same manner as such provisions apply to 

13 adjustments under subparagraph 

14 (B)(ii)(II).’’. 

15 (b) IMPLEMENTATION.— 

16 (1) FUNDING.—For purposes of carrying out 

17 the provisions of subparagraphs (K) and (L) of 

18 1848(c)(2) of the Social Security Act, as added by 

19 subsection (a), in addition to funds otherwise avail20 able, out of any funds in the Treasury not otherwise 

21 appropriated, there are appropriated to the Sec22 retary of Health and Human Services for the Center 

23 for Medicare & Medicaid Services Program Manage24 ment Account $20,000,000 for fiscal year 2010 and 

25 each subsequent fiscal year. Amounts appropriated 


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1 under this paragraph for a fiscal year shall be avail2 able until expended. 

3 (2) ADMINISTRATION.— 

4 (A) Chapter 35 of title 44, United States 

5 Code and the provisions of the Federal Advisory 

6 Committee Act (5 U.S.C. App.) shall not apply 

7 to this section or the amendment made by this 

8 section. 

9 (B) Notwithstanding any other provision of 

10 law, the Secretary may implement subpara11 graphs (K) and (L) of 1848(c)(2) of the Social 

12 Security Act, as added by subsection (a), by 

13 program instruction or otherwise. 

14 (C) Section 4505(d) of the Balanced 

15 Budget Act of 1997 is repealed. 

16 (D) Except for provisions related to con17 fidentiality of information, the provisions of the 

18 Federal Acquisition Regulation shall not apply 

19 to this section or the amendment made by this 

20 section. 

21 (3) FOCUSING CMS RESOURCES ON POTEN22 TIALLY OVERVALUED CODES.—Section 1868(a) of 

23 the Social Security Act (42 U.S.C. 1395ee(a)) is re24 pealed. 


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1 SEC. 1123. PAYMENTS FOR EFFICIENT AREAS. 

2 Section 1833 of the Social Security Act (42 U.S.C. 

3 1395l) is amended by adding at the end the following new 

4 subsection: 

5 ‘‘(x) INCENTIVE PAYMENTS FOR EFFICIENT

6 AREAS.— 

7 ‘‘(1) IN GENERAL.—In the case of services fur8 nished under the physician fee schedule under sec9 tion 1848 on or after January 1, 2011, and before 

10 January 1, 2013, by a supplier that is paid under 

11 such fee schedule in an efficient area (as identified 

12 under paragraph (2)), in addition to the amount of 

13 payment that would otherwise be made for such 

14 services under this part, there also shall be paid (on 

15 a monthly or quarterly basis) an amount equal to 5 

16 percent of the payment amount for the services 

17 under this part. 

18 ‘‘(2) IDENTIFICATION OF EFFICIENT AREAS.— 

19 ‘‘(A) IN GENERAL.—Based upon available 

20 data, the Secretary shall identify those counties 

21 or equivalent areas in the United States in the 

22 lowest fifth percentile of utilization based on 

23 per capita spending under this part and part A 

24 for services provided in the most recent year for 

25 which data are available as of the date of the 

26 enactment of this subsection, as standardized to 


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1 eliminate the effect of geographic adjustments 

2 in payment rates. 

3 ‘‘(B) IDENTIFICATION OF COUNTIES

4 WHERE SERVICE IS FURNISHED.—For purposes 

5 of paying the additional amount specified in 

6 paragraph (1), if the Secretary uses the 5-digit 

7 postal ZIP Code where the service is furnished, 

8 the dominant county of the postal ZIP Code (as 

9 determined by the United States Postal Service, 

10 or otherwise) shall be used to determine wheth11 er the postal ZIP Code is in a county described 

12 in subparagraph (A). 

13 ‘‘(C) LIMITATION ON REVIEW.—There 

14 shall be no administrative or judicial review 

15 under section 1869, 1878, or otherwise, respect16 ing— 

17 ‘‘(i) the identification of a county or 

18 other area under subparagraph (A); or 

19 ‘‘(ii) the assignment of a postal ZIP 

20 Code to a county or other area under sub21 paragraph (B). 

22 ‘‘(D) PUBLICATION OF LIST OF COUNTIES; 

23 POSTING ON WEBSITE.—With respect to a year 

24 for which a county or area is identified under 

25 this paragraph, the Secretary shall identify 


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1 such counties or areas as part of the proposed 

2 and final rule to implement the physician fee 

3 schedule under section 1848 for the applicable 

4 year. The Secretary shall post the list of coun5 ties identified under this paragraph on the 

6 Internet website of the Centers for Medicare & 

7 Medicaid Services.’’. 

8 SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY 

9 REPORTING INITIATIVE (PQRI). 

10 (a) FEEDBACK.—Section 1848(m)(5) of the Social 

11 Security Act (42 U.S.C. 1395w–4(m)(5)) is amended by 

12 adding at the end the following new subparagraph: 

13 ‘‘(H) FEEDBACK.—The Secretary shall 

14 provide timely feedback to eligible professionals 

15 on the performance of the eligible professional 

16 with respect to satisfactorily submitting data on 

17 quality measures under this subsection.’’. 

18 (b) APPEALS.—Such section is further amended— 

19 (1) in subparagraph (E), by striking ‘‘There 

20 shall be’’ and inserting ‘‘Subject to subparagraph 

21 (I), there shall be’’; and 

22 (2) by adding at the end the following new sub23 paragraph: 

24 ‘‘(I) INFORMAL APPEALS PROCESS.—Not25 withstanding subparagraph (E), by not later 


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1 than January 1, 2011, the Secretary shall es2 tablish and have in place an informal process 

3 for eligible professionals to appeal the deter4 mination that an eligible professional did not 

5 satisfactorily submit data on quality measures 

6 under this subsection.’’. 

7 (c) INTEGRATION OF PHYSICIAN QUALITY REPORT8 ING AND EHR REPORTING.—Section 1848(m) of such 

9 Act is amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(7) INTEGRATION OF PHYSICIAN QUALITY RE12 PORTING AND EHR REPORTING.—Not later than 

13 January 1, 2012, the Secretary shall develop a plan 

14 to integrate clinical reporting on quality measures 

15 under this subsection with reporting requirements 

16 under subsection (o) relating to the meaningful use 

17 of electronic health records. Such integration shall 

18 consist of the following: 

19 ‘‘(A) The development of measures, the re20 porting of which would both demonstrate— 

21 ‘‘(i) meaningful use of an electronic 

22 health record for purposes of subsection 

23 (o); and 

24 ‘‘(ii) clinical quality of care furnished 

25 to an individual. 


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1 ‘‘(B) The collection of health data to iden2 tify deficiencies in the quality and coordination 

3 of care for individuals eligible for benefits under 

4 this part. 

5 ‘‘(C) Such other activities as specified by 

6 the Secretary.’’. 

7 (d) EXTENSION OF INCENTIVE PAYMENTS.—Section 

8 1848(m)(1) of such Act (42 U.S.C. 1395w–4(m)(1)) is 

9 amended— 

10 (1) in subparagraph (A), by striking ‘‘2010’’ 

11 and inserting ‘‘2012’’; and 

12 (2) in subparagraph (B)(ii), by striking ‘‘2009 

13 and 2010’’ and inserting ‘‘for each of the years 2009 

14 through 2012’’. 

15 SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCAL16 ITIES. 

17 (a) IN GENERAL.—Section 1848(e) of the Social Se18 curity Act (42 U.S.C.1395w–4(e)) is amended by adding 

19 at the end the following new paragraph: 

20 ‘‘(6) TRANSITION TO USE OF MSAS AS FEE

21 SCHEDULE AREAS IN CALIFORNIA.— 

22 ‘‘(A) IN GENERAL.— 

23 ‘‘(i) REVISION.—Subject to clause (ii) 

24 and notwithstanding the previous provi25 sions of this subsection, for services furVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01316 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 nished on or after January 1, 2011, the 

2 Secretary shall revise the fee schedule 

3 areas used for payment under this section 

4 applicable to the State of California using 

5 the Metropolitan Statistical Area (MSA) 

6 iterative Geographic Adjustment Factor 

7 methodology as follows: 

8 ‘‘(I) The Secretary shall con9 figure the physician fee schedule areas 

10 using the Core-Based Statistical 

11 Areas-Metropolitan Statistical Areas 

12 (each in this paragraph referred to as 

13 an ‘MSA’), as defined by the Director 

14 of the Office of Management and 

15 Budget, as the basis for the fee sched16 ule areas. The Secretary shall employ 

17 an iterative process to transition fee 

18 schedule areas. First, the Secretary 

19 shall list all MSAs within the State by 

20 Geographic Adjustment Factor de21 scribed in paragraph (2) (in this para22 graph referred to as a ‘GAF’) in de23 scending order. In the first iteration, 

24 the Secretary shall compare the GAF 

25 of the highest cost MSA in the State 


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1 to the weighted-average GAF of the 

2 group of remaining MSAs in the 

3 State. If the ratio of the GAF of the 

4 highest cost MSA to the weighted-av5 erage GAF of the rest of State is 1.05 

6 or greater then the highest cost MSA 

7 becomes a separate fee schedule area. 

8 ‘‘(II) In the next iteration, the 

9 Secretary shall compare the MSA of 

10 the second-highest GAF to the weight11 ed-average GAF of the group of re12 maining MSAs. If the ratio of the sec13 ond-highest MSA’s GAF to the 

14 weighted-average of the remaining 

15 lower cost MSAs is 1.05 or greater, 

16 the second-highest MSA becomes a 

17 separate fee schedule area. The 

18 iterative process continues until the 

19 ratio of the GAF of the highest-cost 

20 remaining MSA to the weighted-aver21 age of the remaining lower-cost MSAs 

22 is less than 1.05, and the remaining 

23 group of lower cost MSAs form a sin24 gle fee schedule area, If two MSAs 


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1 have identical GAFs, they shall be 

2 combined in the iterative comparison. 

3 ‘‘(ii) TRANSITION.—For services fur4 nished on or after January 1, 2011, and 

5 before January 1, 2016, in the State of 

6 California, after calculating the work, prac7 tice expense, and malpractice geographic 

8 indices described in clauses (i), (ii), and 

9 (iii) of paragraph (1)(A) that would other10 wise apply through application of this 

11 paragraph, the Secretary shall increase any 

12 such index to the county-based fee sched13 ule area value on December 31, 2009, if 

14 such index would otherwise be less than 

15 the value on January 1, 2010. 

16 ‘‘(B) SUBSEQUENT REVISIONS.— 

17 ‘‘(i) PERIODIC REVIEW AND ADJUST18 MENTS IN FEE SCHEDULE AREAS.—Subse19 quent to the process outlined in paragraph 

20 (1)(C), not less often than every three 

21 years, the Secretary shall review and up22 date the California Rest-of-State fee sched23 ule area using MSAs as defined by the Di24 rector of the Office of Management and 


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1 Budget and the iterative methodology de2 scribed in subparagraph (A)(i). 

3 ‘‘(ii) LINK WITH GEOGRAPHIC INDEX

4 DATA REVISION.—The revision described in 

5 clause (i) shall be made effective concur6 rently with the application of the periodic 

7 review of the adjustment factors required 

8 under paragraph (1)(C) for California for 

9 2012 and subsequent periods. Upon re10 quest, the Secretary shall make available 

11 to the public any county-level or MSA de12 rived data used to calculate the geographic 

13 practice cost index. 

14 ‘‘(C) REFERENCES TO FEE SCHEDULE

15 AREAS.—Effective for services furnished on or 

16 after January 1, 2010, for the State of Cali17 fornia, any reference in this section to a fee 

18 schedule area shall be deemed a reference to an 

19 MSA in the State.’’. 

20 (b) CONFORMING AMENDMENT TO DEFINITION OF

21 FEE SCHEDULE AREA.—Section 1848(j)(2) of the Social 

22 Security Act (42 U.S.C. 1395w(j)(2)) is amended by strik23 ing ‘‘The term’’ and inserting ‘‘Except as provided in sub24 section (e)(6)(C), the term’’. 


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1 PART 2—MARKET BASKET UPDATES 

2 SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVE3 MENTS INTO MARKET BASKET UPDATES 

4 THAT DO NOT ALREADY INCORPORATE SUCH 

5 IMPROVEMENTS. 

6 (a) OUTPATIENT HOSPITALS.— 

7 (1) IN GENERAL.—The first sentence of section 

8 1833(t)(3)(C)(iv) of the Social Security Act (42 

9 U.S.C. 1395l(t)(3)(C)(iv)) is amended— 

10 (A) by inserting ‘‘(which is subject to the 

11 productivity adjustment described in subclause 

12 (II) of such section)’’ after 

13 ‘‘1886(b)(3)(B)(iii)’’; and 

14 (B) by inserting ‘‘(but not below 0)’’ after 

15 ‘‘reduced’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by paragraph (1) shall apply to increase factors for 

18 services furnished in years beginning with 2010. 

19 (b) AMBULANCE SERVICES.—Section 1834(l)(3)(B) 

20 of such Act (42 U.S.C. 1395m(l)(3)(B))) is amended by 

21 inserting before the period at the end the following: ‘‘and, 

22 in the case of years beginning with 2010, subject to the 

23 productivity adjustment described in section 

24 1886(b)(3)(B)(iii)(II)’’. 


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1 (c) AMBULATORY SURGICAL CENTER SERVICES.— 

2 Section 1833(i)(2)(D) of such Act (42 U.S.C. 

3 1395l(i)(2)(D)) is amended— 

4 (1) by redesignating clause (v) as clause (vi); 

5 and 

6 (2) by inserting after clause (iv) the following 

7 new clause: 

8 ‘‘(v) In implementing the system described in clause 

9 (i), for services furnished during 2010 or any subsequent 

10 year, to the extent that an annual percentage change fac11 tor applies, such factor shall be subject to the productivity 

12 adjustment described in section 1886(b)(3)(B)(iii)(II).’’. 

13 (d) LABORATORY SERVICES.—Section 1833(h)(2)(A) 

14 of such Act (42 U.S.C. 1395l(h)(2)(A)) is amended— 

15 (1) in clause (i), by striking ‘‘for each of years 

16 2009 through 2013’’ and inserting ‘‘for 2009’’; and 

17 (2) clause (ii)— 

18 (A) by striking ‘‘and’’ at the end of sub19 clause (III); 

20 (B) by striking the period at the end of 

21 subclause (IV) and inserting ‘‘; and’’; and 

22 (C) by adding at the end the following new 

23 subclause: 

24 ‘‘(V) the annual adjustment in the fee schedules 

25 determined under clause (i) for years beginning with 


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1 2010 shall be subject to the productivity adjustment 

2 described in section 1886(b)(3)(B)(iii)(II).’’. 

3 (e) CERTAIN DURABLE MEDICAL EQUIPMENT.—Sec4 tion 1834(a)(14) of such Act (42 U.S.C. 1395m(a)(14)) 

5 is amended— 

6 (1) in subparagraph (K), by inserting before 

7 the semicolon at the end the following: ‘‘, subject to 

8 the productivity adjustment described in section 

9 1886(b)(3)(B)(iii)(II)’’; 

10 (2) in subparagraph (L)(i), by inserting after 

11 ‘‘June 2013,’’ the following: ‘‘subject to the produc12 tivity adjustment described in section 

13 1886(b)(3)(B)(iii)(II),’’; 

14 (3) in subparagraph (L)(ii), by inserting after 

15 ‘‘June 2013’’ the following: ‘‘, subject to the produc16 tivity adjustment described in section 

17 1886(b)(3)(B)(iii)(II)’’; and 

18 (4) in subparagraph (M), by inserting before 

19 the period at the end the following: ‘‘, subject to the 

20 productivity adjustment described in section 

21 1886(b)(3)(B)(iii)(II)’’. 


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1 PART 3—OTHER PROVISIONS 

2 SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN 

3 WHEELCHAIRS. 

4 (a) IN GENERAL.—Section 1834(a)(7)(A)(iii) of the 

5 Social Security Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is 

6 amended— 

7 (1) in the heading, by inserting ‘‘CERTAIN COM8 PLEX REHABILITATIVE’’ after ‘‘OPTION FOR’’; and 

9 (2) by striking ‘‘power-driven wheelchair’’ and 

10 inserting ‘‘complex rehabilitative power-driven wheel11 chair recognized by the Secretary as classified within 

12 group 3 or higher’’. 

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

14 subsection (a) shall take effect on January 1, 2011, and 

15 shall apply to power-driven wheelchairs furnished on or 

16 after such date. Such amendments shall not apply to con17 tracts entered into under section 1847 of the Social Secu18 rity Act (42 U.S.C. 1395w–3) pursuant to a bid submitted 

19 under such section before October 1, 2010, under sub20 section (a)(1)(B)(i)(I) of such section. 

21 SEC. 1142. EXTENSION OF PAYMENT RULE FOR 

22 BRACHYTHERAPY. 

23 Section 1833(t)(16)(C) of the Social Security Act (42 

24 U.S.C. 1395l(t)(16)(C)), as amended by section 142 of the 

25 Medicare Improvements for Patients and Providers Act of 

26 2008 (Public Law 110–275), is amended by striking, the 


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1 first place it appears, ‘‘January 1, 2010’’ and inserting 

2 ‘‘January 1, 2012’’. 

3 SEC. 1143. HOME INFUSION THERAPY REPORT TO CON4 GRESS. 

5 Not later than 12 months after the date of enactment 

6 of this Act, the Medicare Payment Advisory Commission 

7 shall submit to Congress a report on the following: 

8 (1) The scope of coverage for home infusion 

9 therapy in the fee-for-service Medicare program 

10 under title XVIII of the Social Security Act, Medi11 care Advantage under part C of such title, the vet12 eran’s health care program under chapter 17 of title 

13 38, United States Code, and among private payers, 

14 including an analysis of the scope of services pro15 vided by home infusion therapy providers to their 

16 patients in such programs. 

17 (2) The benefits and costs of providing such 

18 coverage under the Medicare program, including a 

19 calculation of the potential savings achieved through 

20 avoided or shortened hospital and nursing home 

21 stays as a result of Medicare coverage of home infu22 sion therapy. 

23 (3) An assessment of sources of data on the 

24 costs of home infusion therapy that might be used 


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1 to construct payment mechanisms in the Medicare 

2 program. 

3 (4) Recommendations, if any, on the structure 

4 of a payment system under the Medicare program 

5 for home infusion therapy, including an analysis of 

6 the payment methodologies used under Medicare Ad7 vantage plans and private health plans for the provi8 sion of home infusion therapy and their applicability 

9 to the Medicare program. 

10 SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS 

11 (ASCS) TO SUBMIT COST DATA AND OTHER 

12 DATA. 

13 (a) COST REPORTING.— 

14 (1) IN GENERAL.—Section 1833(i) of the Social 

15 Security Act (42 U.S.C. 1395l(i)) is amended by 

16 adding at the end the following new paragraph: 

17 ‘‘(8) The Secretary shall require, as a condition of 

18 the agreement described in section 1832(a)(2)(F)(i), the 

19 submission of such cost report as the Secretary may speci20 fy, taking into account the requirements for such reports 

21 under section 1815 in the case of a hospital.’’. 

22 (2) DEVELOPMENT OF COST REPORT.—Not 

23 later than 3 years after the date of the enactment 

24 of this Act, the Secretary of Health and Human 

25 Services shall develop a cost report form for use 


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1 under section 1833(i)(8) of the Social Security Act, 

2 as added by paragraph (1). 

3 (3) AUDIT REQUIREMENT.—The Secretary shall 

4 provide for periodic auditing of cost reports sub5 mitted under section 1833(i)(8) of the Social Secu6 rity Act, as added by paragraph (1). 

7 (4) EFFECTIVE DATE.—The amendment made 

8 by paragraph (1) shall apply to agreements applica9 ble to cost reporting periods beginning 18 months 

10 after the date the Secretary develops the cost report 

11 form under paragraph (2). 

12 (b) ADDITIONAL DATA ON QUALITY.— 

13 (1) IN GENERAL.—Section 1833(i)(7) of such 

14 Act (42 U.S.C. 1395l(i)(7)) is amended— 

15 (A) in subparagraph (B), by inserting 

16 ‘‘subject to subparagraph (C),’’ after ‘‘may oth17 erwise provide,’’; and 

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

19 subparagraph: 

20 ‘‘(C) Under subparagraph (B) the Secretary shall re21 quire the reporting of such additional data relating to 

22 quality of services furnished in an ambulatory surgical fa23 cility, including data on health care associated infections, 

24 as the Secretary may specify.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall to reporting for years begin3 ning with 2012. 

4 SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS. 

5 Section 1833(t) of the Social Security Act (42 U.S.C. 

6 1395l(t)) is amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(18) AUTHORIZATION OF ADJUSTMENT FOR

9 CANCER HOSPITALS.— 

10 ‘‘(A) STUDY.—The Secretary shall conduct 

11 a study to determine if, under the system under 

12 this subsection, costs incurred by hospitals de13 scribed in section 1886(d)(1)(B)(v) with respect 

14 to ambulatory payment classification groups ex15 ceed those costs incurred by other hospitals fur16 nishing services under this subsection (as deter17 mined appropriate by the Secretary). 

18 ‘‘(B) AUTHORIZATION OF ADJUSTMENT.— 

19 Insofar as the Secretary determines under sub20 paragraph (A) that costs incurred by hospitals 

21 described in section 1886(d)(1)(B)(v) exceed 

22 those costs incurred by other hospitals fur23 nishing services under this subsection, the Sec24 retary shall provide for an appropriate adjust25 ment under paragraph (2)(E) to reflect those 


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1 higher costs effective for services furnished on 

2 or after January 1, 2011.’’. 

3 SEC. 1146. MEDICARE IMPROVEMENT FUND. 

4 Section 1898(b)(1)(A) of the Social Security Act (42 

5 U.S.C. 1395iii(b)(1)(A)) is amended to read as follows: 

6 ‘‘(A) the period beginning with fiscal year 

7 2011 and ending with fiscal year 2019, 

8 $8,000,000,000; and’’. 

9 SEC. 1147. PAYMENT FOR IMAGING SERVICES. 

10 (a) ADJUSTMENT IN PRACTICE EXPENSE TO RE11 FLECT HIGHER PRESUMED UTILIZATION.—Section 1848 

12 of the Social Security Act (42 U.S.C. 1395w) is amend13 ed— 

14 (1) in subsection (b)(4)— 

15 (A) in subparagraph (B), by striking ‘‘sub16 paragraph (A)’’ and inserting ‘‘this paragraph’’; 

17 and 

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

19 subparagraph: 

20 ‘‘(C) ADJUSTMENT IN PRACTICE EXPENSE

21 TO REFLECT HIGHER PRESUMED UTILIZA22 TION.—In computing the number of practice 

23 expense relative value units under subsection 

24 (c)(2)(C)(ii) with respect to advanced diagnostic 

25 imaging services (as defined in section 


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1 1834(e)(1)(B)), the Secretary shall adjust such 

2 number of units so it reflects a 75 percent 

3 (rather than 50 percent) presumed rate of utili4 zation of imaging equipment.’’; and 

5 (2) in subsection (c)(2)(B)(v)(II), by inserting 

6 ‘‘AND OTHER PROVISIONS’’ after ‘‘OPD PAYMENT

7 CAP’’. 

8 (b) ADJUSTMENT IN TECHNICAL COMPONENT ‘‘DIS9 COUNT’’ ON SINGLE-SESSION IMAGING TO CONSECUTIVE

10 BODY PARTS.—Section 1848(b)(4) of such Act is further 

11 amended by adding at the end the following new subpara12 graph: 

13 ‘‘(D) ADJUSTMENT IN TECHNICAL COMPO14 NENT DISCOUNT ON SINGLE-SESSION IMAGING

15 INVOLVING CONSECUTIVE BODY PARTS.—The 

16 Secretary shall increase the reduction in ex17 penditures attributable to the multiple proce18 dure payment reduction applicable to the tech19 nical component for imaging under the final 

20 rule published by the Secretary in the Federal 

21 Register on November 21, 2005 (part 405 of 

22 title 42, Code of Federal Regulations) from 25 

23 percent to 50 percent.’’. 

24 (c) EFFECTIVE DATE.—Except as otherwise pro25 vided, this section, and the amendments made by this secVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01330 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion, shall apply to services furnished on or after January 

2 1, 2011. 

3 SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IM4 PROVEMENTS. 

5 (a) WAIVER OF SURETY BOND REQUIREMENT.—Sec6 tion 1834(a)(16) of the Social Security Act (42 U.S.C. 

7 1395m(a)(16)) is amended by adding at the end the fol8 lowing: ‘‘The requirement for a surety bond described in 

9 subparagraph (B) shall not apply in the case of a phar10 macy (i) that has been enrolled under section 1866(j) as 

11 a supplier of durable medical equipment, prosthetics, 

12 orthotics, and supplies and has been issued (which may 

13 include renewal of) a provider number (as described in the 

14 first sentence of this paragraph) for at least 5 years, and 

15 (ii) for which a final adverse action (as defined in section 

16 424.57(a) of title 42, Code of Federal Regulations) has 

17 never been imposed.’’. 

18 (b) ENSURING SUPPLY OF OXYGEN EQUIPMENT.— 

19 (1) IN GENERAL.—Section 1834(a)(5)(F) of the 

20 Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is 

21 amended— 

22 (A) in clause (ii), by striking ‘‘After the’’ 

23 and inserting ‘‘Except as provided in clause 

24 (iii), after the’’; and 


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

2 clause: 

3 ‘‘(iii) CONTINUATION OF SUPPLY.—In 

4 the case of a supplier furnishing such 

5 equipment to an individual under this sub6 section as of the 27th month of the 36 

7 months described in clause (i), the supplier 

8 furnishing such equipment as of such 

9 month shall continue to furnish such 

10 equipment to such individual (either di11 rectly or though arrangements with other 

12 suppliers of such equipment) during any 

13 subsequent period of medical need for the 

14 remainder of the reasonable useful lifetime 

15 of the equipment, as determined by the 

16 Secretary, regardless of the location of the 

17 individual, unless another supplier has ac18 cepted responsibility for continuing to fur19 nish such equipment during the remainder 

20 of such period.’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by paragraph (1) shall take effect as of the date of 

23 the enactment of this Act and shall apply to the fur24 nishing of equipment to individuals for whom the 

25 27th month of a continuous period of use of oxygen 


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1 equipment described in section 1834(a)(5)(F) of the 

2 Social Security Act occurs on or after July 1, 2010. 

3 (c) TREATMENT OF CURRENT ACCREDITATION AP4 PLICATIONS.—Section 1834(a)(20)(F) of such Act (42 

5 U.S.C. 1395m(a)(20)(F)) is amended— 

6 (1) in clause (i)— 

7 (A) by striking ‘‘clause (ii)’’ and inserting 

8 ‘‘clauses (ii) and (iii)’’; and 

9 (B) by striking ‘‘and’’ at the end; 

10 (2) by striking the period at the end of clause 

11 (ii)(II) and by inserting ‘‘; and’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(iii) the requirement for accredita14 tion described in clause (i) shall not apply 

15 for purposes of supplying diabetic testing 

16 supplies, canes, and crutches in the case of 

17 a pharmacy that is enrolled under section 

18 1866(j) as a supplier of durable medical 

19 equipment, prosthetics, orthotics, and sup20 plies. 

21 Any supplier that has submitted an application 

22 for accreditation before August 1, 2009, shall 

23 be deemed as meeting applicable standards and 

24 accreditation requirement under this subpara25 graph until such time as the independent acVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01333 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 creditation organization takes action on the 

2 supplier’s application.’’. 

3 (d) RESTORING 36-MONTH OXYGEN RENTAL PE4 RIOD IN CASE OF SUPPLIER BANKRUPTCY FOR CERTAIN

5 INDIVIDUALS.—Section 1834(a)(5)(F) of such Act (42 

6 U.S.C. 1395m(a)(5)(F)) is amended by adding at the end 

7 the following new clause: 

8 ‘‘(iii) EXCEPTION FOR BANK9 RUPTCY.—If a supplier of oxygen to an in10 dividual is declared bankrupt and its assets 

11 are liquidated and at the time of such dec12 laration and liquidation more than 24 

13 months of rental payments have been 

14 made, the individual may begin under this 

15 subparagraph a new 36-month rental pe16 riod with another supplier of oxygen.’’. 

17 SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS 

18 MEASUREMENT. 

19 (a) IN GENERAL.—The Medicare Payment Advisory 

20 Commission shall conduct a study regarding bone mass 

21 measurement, including computed tomography, duel-en22 ergy x-ray absorptriometry, and vertebral fracture assess23 ment. The study shall focus on the following: 

24 (1) An assessment of the adequacy of Medicare 

25 payment rates for such services, taking into account 


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1 costs of acquiring the necessary equipment, profes2 sional work time, and practice expense costs. 

3 (2) The impact of Medicare payment changes 

4 since 2006 on beneficiary access to bone mass meas5 urement benefits in general and in rural and minor6 ity communities specifically. 

7 (3) A review of the clinically appropriate and 

8 recommended use among Medicare beneficiaries and 

9 how usage rates among such beneficiaries compares 

10 to such recommendations. 

11 (4) In conjunction with the findings under (3), 

12 recommendations, if necessary, regarding methods 

13 for reaching appropriate use of bone mass measure14 ment studies among Medicare beneficiaries. 

15 (b) REPORT.—The Commission shall submit a report 

16 to the Congress, not later than 9 months after the date 

17 of the enactment of this Act, containing a description of 

18 the results of the study conducted under subsection (a) 

19 and the conclusions and recommendations, if any, regard20 ing each of the issues described in paragraphs (1), (2), 

21 (3), and (4) of such subsection. 


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1 Subtitle C—Provisions Related to 

2 Medicare Parts A and B 

3 SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOS4 PITAL READMISSIONS. 

5 (a) HOSPITALS.— 

6 (1) IN GENERAL.—Section 1886 of the Social 

7 Security Act (42 U.S.C. 1395ww), as amended by 

8 section 1103(a), is amended by adding at the end 

9 the following new subsection: 

10 ‘‘(p) ADJUSTMENT TO HOSPITAL PAYMENTS FOR

11 EXCESS READMISSIONS.— 

12 ‘‘(1) IN GENERAL.—With respect to payment 

13 for discharges from an applicable hospital (as de14 fined in paragraph (5)(C)) occurring during a fiscal 

15 year beginning on or after October 1, 2011, in order 

16 to account for excess readmissions in the hospital, 

17 the Secretary shall reduce the payments that would 

18 otherwise be made to such hospital under subsection 

19 (d) (or section 1814(b)(3), as the case may be) for 

20 such a discharge by an amount equal to the product 

21 of— 

22 ‘‘(A) the base operating DRG payment 

23 amount (as defined in paragraph (2)) for the 

24 discharge; and 


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1 ‘‘(B) the adjustment factor (described in 

2 paragraph (3)(A)) for the hospital for the fiscal 

3 year. 

4 ‘‘(2) BASE OPERATING DRG PAYMENT

5 AMOUNT.— 

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

7 subparagraph (B), for purposes of this sub8 section, the term ‘base operating DRG payment 

9 amount’ means, with respect to a hospital for a 

10 fiscal year, the payment amount that would 

11 otherwise be made under subsection (d) for a 

12 discharge if this subsection did not apply, re13 duced by any portion of such amount that is at14 tributable to payments under subparagraphs 

15 (B) and (F) of paragraph (5). 

16 ‘‘(B) ADJUSTMENTS.—For purposes of 

17 subparagraph (A), in the case of a hospital that 

18 is paid under section 1814(b)(3), the term ‘base 

19 operating DRG payment amount’ means the 

20 payment amount under such section. 

21 ‘‘(3) ADJUSTMENT FACTOR.— 

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (1), the adjustment factor under this 

24 paragraph for an applicable hospital for a fiscal 

25 year is equal to the greater of— 


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1 ‘‘(i) the ratio described in subpara2 graph (B) for the hospital for the applica3 ble period (as defined in paragraph (5)(D)) 

4 for such fiscal year; or 

5 ‘‘(ii) the floor adjustment factor speci6 fied in subparagraph (C). 

7 ‘‘(B) RATIO.—The ratio described in this 

8 subparagraph for a hospital for an applicable 

9 period is equal to 1 minus the ratio of— 

10 ‘‘(i) the aggregate payments for ex11 cess readmissions (as defined in paragraph 

12 (4)(A)) with respect to an applicable hos13 pital for the applicable period; and 

14 ‘‘(ii) the aggregate payments for all 

15 discharges (as defined in paragraph 

16 (4)(B)) with respect to such applicable 

17 hospital for such applicable period. 

18 ‘‘(C) FLOOR ADJUSTMENT FACTOR.—For 

19 purposes of subparagraph (A), the floor adjust20 ment factor specified in this subparagraph 

21 for— 

22 ‘‘(i) fiscal year 2012 is 0.99; 

23 ‘‘(ii) fiscal year 2013 is 0.98; 

24 ‘‘(iii) fiscal year 2014 is 0.97; or 

25 ‘‘(iv) a subsequent fiscal year is 0.95. 


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1 ‘‘(4) AGGREGATE PAYMENTS, EXCESS READMIS2 SION RATIO DEFINED.—For purposes of this sub3 section: 

4 ‘‘(A) AGGREGATE PAYMENTS FOR EXCESS

5 READMISSIONS.—The term ‘aggregate payments 

6 for excess readmissions’ means, for a hospital 

7 for a fiscal year, the sum, for applicable condi8 tions (as defined in paragraph (5)(A)), of the 

9 product, for each applicable condition, of— 

10 ‘‘(i) the base operating DRG payment 

11 amount for such hospital for such fiscal 

12 year for such condition; 

13 ‘‘(ii) the number of admissions for 

14 such condition for such hospital for such 

15 fiscal year; and 

16 ‘‘(iii) the excess readmissions ratio (as 

17 defined in subparagraph (C)) for such hos18 pital for the applicable period for such fis19 cal year minus 1. 

20 ‘‘(B) AGGREGATE PAYMENTS FOR ALL DIS21 CHARGES.—The term ‘aggregate payments for 

22 all discharges’ means, for a hospital for a fiscal 

23 year, the sum of the base operating DRG pay24 ment amounts for all discharges for all condi25 tions from such hospital for such fiscal year. 


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1 ‘‘(C) EXCESS READMISSION RATIO.— 

2 ‘‘(i) IN GENERAL.—Subject to clauses 

3 (ii) and (iii), the term ‘excess readmissions 

4 ratio’ means, with respect to an applicable 

5 condition for a hospital for an applicable 

6 period, the ratio (but not less than 1.0) 

7 of— 

8 ‘‘(I) the risk adjusted readmis9 sions based on actual readmissions, as 

10 determined consistent with a readmis11 sion measure methodology that has 

12 been endorsed under paragraph 

13 (5)(A)(ii)(I), for an applicable hospital 

14 for such condition with respect to the 

15 applicable period; to 

16 ‘‘(II) the risk adjusted expected 

17 readmissions (as determined con18 sistent with such a methodology) for 

19 such hospital for such condition with 

20 respect to such applicable period. 

21 ‘‘(ii) EXCLUSION OF CERTAIN RE22 ADMISSIONS.—For purposes of clause (i), 

23 with respect to a hospital, excess readmis24 sions shall not include readmissions for an 

25 applicable condition for which there are 


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1 fewer than a minimum number (as deter2 mined by the Secretary) of discharges for 

3 such applicable condition for the applicable 

4 period and such hospital. 

5 ‘‘(iii) ADJUSTMENT.—In order to pro6 mote a reduction over time in the overall 

7 rate of readmissions for applicable condi8 tions, the Secretary may provide, beginning 

9 with discharges for fiscal year 2014, for 

10 the determination of the excess readmis11 sions ratio under subparagraph (C) to be 

12 based on a ranking of hospitals by read13 mission ratios (from lower to higher read14 mission ratios) normalized to a benchmark 

15 that is lower than the 50th percentile. 

16 ‘‘(5) DEFINITIONS.—For purposes of this sub17 section: 

18 ‘‘(A) APPLICABLE CONDITION.—The term 

19 ‘applicable condition’ means, subject to sub20 paragraph (B), a condition or procedure se21 lected by the Secretary among conditions and 

22 procedures for which— 

23 ‘‘(i) readmissions (as defined in sub24 paragraph (E)) that represent conditions 

25 or procedures that are high volume or high 


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1 expenditures under this title (or other cri2 teria specified by the Secretary); and 

3 ‘‘(ii) measures of such readmissions— 

4 ‘‘(I) have been endorsed by the 

5 entity with a contract under section 

6 1890(a); and 

7 ‘‘(II) such endorsed measures 

8 have appropriate exclusions for re9 admissions that are unrelated to the 

10 prior discharge (such as a planned re11 admission or transfer to another ap12 plicable hospital). 

13 ‘‘(B) EXPANSION OF APPLICABLE CONDI14 TIONS.—Beginning with fiscal year 2013, the 

15 Secretary shall expand the applicable conditions 

16 beyond the 3 conditions for which measures 

17 have been endorsed as described in subpara18 graph (A)(ii)(I) as of the date of the enactment 

19 of this subsection to the additional 4 conditions 

20 that have been so identified by the Medicare 

21 Payment Advisory Commission in its report to 

22 Congress in June 2007 and to other conditions 

23 and procedures which may include an all-condi24 tion measure of readmissions, as determined 

25 appropriate by the Secretary. In expanding 


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1 such applicable conditions, the Secretary shall 

2 seek the endorsement described in subpara3 graph (A)(ii)(I) but may apply such measures 

4 without such an endorsement. 

5 ‘‘(C) APPLICABLE HOSPITAL.—The term 

6 ‘applicable hospital’ means a subsection (d) hos7 pital or a hospital that is paid under section 

8 1814(b)(3). 

9 ‘‘(D) APPLICABLE PERIOD.—The term ‘ap10 plicable period’ means, with respect to a fiscal 

11 year, such period as the Secretary shall specify 

12 for purposes of determining excess readmis13 sions. 

14 ‘‘(E) READMISSION.—The term ‘readmis15 sion’ means, in the case of an individual who is 

16 discharged from an applicable hospital, the ad17 mission of the individual to the same or another 

18 applicable hospital within a time period speci19 fied by the Secretary from the date of such dis20 charge. Insofar as the discharge relates to an 

21 applicable condition for which there is an en22 dorsed measure described in subparagraph 

23 (A)(ii)(I), such time period (such as 30 days) 

24 shall be consistent with the time period speci25 fied for such measure. 


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1 ‘‘(6) LIMITATIONS ON REVIEW.—There shall be 

2 no administrative or judicial review under section 

3 1869, section 1878, or otherwise of— 

4 ‘‘(A) the determination of base operating 

5 DRG payment amounts; 

6 ‘‘(B) the methodology for determining the 

7 adjustment factor under paragraph (3), includ8 ing excess readmissions ratio under paragraph 

9 (4)(C), aggregate payments for excess readmis10 sions under paragraph (4)(A), and aggregate 

11 payments for all discharges under paragraph 

12 (4)(B), and applicable periods and applicable 

13 conditions under paragraph (5); 

14 ‘‘(C) the measures of readmissions as de15 scribed in paragraph (5)(A)(ii); and 

16 ‘‘(D) the determination of a targeted hos17 pital under paragraph (8)(B)(i), the increase in 

18 payment under paragraph (8)(B)(ii), the aggre19 gate cap under paragraph (8)(C)(i), the hos20 pital-specific limit under paragraph (8)(C)(ii), 

21 and the form of payment made by the Secretary 

22 under paragraph (8)(D). 

23 ‘‘(7) MONITORING INAPPROPRIATE CHANGES IN

24 ADMISSIONS PRACTICES.—The Secretary shall mon25 itor the activities of applicable hospitals to determine 


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1 if such hospitals have taken steps to avoid patients 

2 at risk in order to reduce the likelihood of increasing 

3 readmissions for applicable conditions. If the Sec4 retary determines that such a hospital has taken 

5 such a step, after notice to the hospital and oppor6 tunity for the hospital to undertake action to allevi7 ate such steps, the Secretary may impose an appro8 priate sanction. 

9 ‘‘(8) ASSISTANCE TO CERTAIN HOSPITALS.— 

10 ‘‘(A) IN GENERAL.—For purposes of pro11 viding funds to applicable hospitals to take 

12 steps described in subparagraph (E) to address 

13 factors that may impact readmissions of indi14 viduals who are discharged from such a hos15 pital, for fiscal years beginning on or after Oc16 tober 1, 2011, the Secretary shall make a pay17 ment adjustment for a hospital described in 

18 subparagraph (B), with respect to each such 

19 fiscal year, by a percent estimated by the Sec20 retary to be consistent with subparagraph (C). 

21 ‘‘(B) TARGETED HOSPITALS.—Subpara22 graph (A) shall apply to an applicable hospital 

23 that— 

24 ‘‘(i) received (or, in the case of an 

25 1814(b)(3) hospital, otherwise would have 


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1 been eligible to receive) $10,000,000 or 

2 more in disproportionate share payments 

3 using the latest available data as estimated 

4 by the Secretary; and 

5 ‘‘(ii) provides assurances satisfactory 

6 to the Secretary that the increase in pay7 ment under this paragraph shall be used 

8 for purposes described in subparagraph 

9 (E). 

10 ‘‘(C) CAPS.— 

11 ‘‘(i) AGGREGATE CAP.—The aggregate 

12 amount of the payment adjustment under 

13 this paragraph for a fiscal year shall not 

14 exceed 5 percent of the estimated dif15 ference in the spending that would occur 

16 for such fiscal year with and without appli17 cation of the adjustment factor described 

18 in paragraph (3) and applied pursuant to 

19 paragraph (1). 

20 ‘‘(ii) HOSPITAL-SPECIFIC LIMIT.—The 

21 aggregate amount of the payment adjust22 ment for a hospital under this paragraph 

23 shall not exceed the estimated difference in 

24 spending that would occur for such fiscal 

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1 plication of the adjustment factor de2 scribed in paragraph (3) and applied pur3 suant to paragraph (1). 

4 ‘‘(D) FORM OF PAYMENT.—The Secretary 

5 may make the additional payments under this 

6 paragraph on a lump sum basis, a periodic 

7 basis, a claim by claim basis, or otherwise. 

8 ‘‘(E) USE OF ADDITIONAL PAYMENT.— 

9 Funding under this paragraph shall be used by 

10 targeted hospitals for transitional care activities 

11 designed to address the patient noncompliance 

12 issues that result in higher than normal read13 mission rates, such as one or more of the fol14 lowing: 

15 ‘‘(i) Providing care coordination serv16 ices to assist in transitions from the tar17 geted hospital to other settings. 

18 ‘‘(ii) Hiring translators and inter19 preters. 

20 ‘‘(iii) Increasing services offered by 

21 discharge planners. 

22 ‘‘(iv) Ensuring that individuals receive 

23 a summary of care and medication orders 

24 upon discharge. 


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1 ‘‘(v) Developing a quality improve2 ment plan to assess and remedy prevent3 able readmission rates. 

4 ‘‘(vi) Assigning discharged individuals 

5 to a medical home. 

6 ‘‘(vii) Doing other activities as deter7 mined appropriate by the Secretary. 

8 ‘‘(F) GAO REPORT ON USE OF FUNDS.— 

9 Not later than 3 years after the date on which 

10 funds are first made available under this para11 graph, the Comptroller General of the United 

12 States shall submit to Congress a report on the 

13 use of such funds. 

14 ‘‘(G) DISPROPORTIONATE SHARE HOS15 PITAL PAYMENT.—In this paragraph, the term 

16 ‘disproportionate share hospital payment’ 

17 means an additional payment amount under 

18 subsection (d)(5)(F).’’. 

19 (b) APPLICATION TO CRITICAL ACCESS HOS20 PITALS.—Section 1814(l) of the Social Security Act (42 

21 U.S.C. 1395f(l)) is amended— 

22 (1) in paragraph (5)— 

23 (A) by striking ‘‘and’’ at the end of sub24 paragraph (C); 


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1 (B) by striking the period at the end of 

2 subparagraph (D) and inserting ‘‘; and’’; 

3 (C) by inserting at the end the following 

4 new subparagraph: 

5 ‘‘(E) The methodology for determining the ad6 justment factor under paragraph (5), including the 

7 determination of aggregate payments for actual and 

8 expected readmissions, applicable periods, applicable 

9 conditions and measures of readmissions.’’; and 

10 (D) by redesignating such paragraph as 

11 paragraph (6); and 

12 (2) by inserting after paragraph (4) the fol13 lowing new paragraph: 

14 ‘‘(5) The adjustment factor described in section 

15 1886(p)(3) shall apply to payments with respect to a crit16 ical access hospital with respect to a cost reporting period 

17 beginning in fiscal year 2012 and each subsequent fiscal 

18 year (after application of paragraph (4) of this subsection) 

19 in a manner similar to the manner in which such section 

20 applies with respect to a fiscal year to an applicable hos21 pital as described in section 1886(p)(2).’’. 

22 (c) POST ACUTE CARE PROVIDERS.— 

23 (1) INTERIM POLICY.— 

24 (A) IN GENERAL.—With respect to a read25 mission to an applicable hospital or a critical 


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1 access hospital (as described in section 1814(l) 

2 of the Social Security Act) from a post acute 

3 care provider (as defined in paragraph (3)) and 

4 such a readmission is not governed by section 

5 412.531 of title 42, Code of Federal Regula6 tions, if the claim submitted by such a post7 acute care provider under title XVIII of the So8 cial Security Act indicates that the individual 

9 was readmitted to a hospital from such a post10 acute care provider or admitted from home and 

11 under the care of a home health agency within 

12 30 days of an initial discharge from an applica13 ble hospital or critical access hospital, the pay14 ment under such title on such claim shall be the 

15 applicable percent specified in subparagraph 

16 (B) of the payment that would otherwise be 

17 made under the respective payment system 

18 under such title for such post-acute care pro19 vider if this subsection did not apply. 

20 (B) APPLICABLE PERCENT DEFINED.—For 

21 purposes of subparagraph (A), the applicable 

22 percent is— 

23 (i) for fiscal or rate year 2012 is 

24 0.996; 


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1 (ii) for fiscal or rate year 2013 is 

2 0.993; and 

3 (iii) for fiscal or rate year 2014 is 

4 0.99. 

5 (C) EFFECTIVE DATE.—Subparagraph (1) 

6 shall apply to discharges or services furnished 

7 (as the case may be with respect to the applica8 ble post acute care provider) on or after the 

9 first day of the fiscal year or rate year, begin10 ning on or after October 1, 2011, with respect 

11 to the applicable post acute care provider. 

12 (2) DEVELOPMENT AND APPLICATION OF PER13 FORMANCE MEASURES.— 

14 (A) IN GENERAL.—The Secretary of 

15 Health and Human Services shall develop ap16 propriate measures of readmission rates for 

17 post acute care providers. The Secretary shall 

18 seek endorsement of such measures by the enti19 ty with a contract under section 1890(a) of the 

20 Social Security Act but may adopt and apply 

21 such measures under this paragraph without 

22 such an endorsement. The Secretary shall ex23 pand such measures in a manner similar to the 

24 manner in which applicable conditions are ex25 panded under paragraph (5)(B) of section 


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1 1886(p) of the Social Security Act, as added by 

2 subsection (a). 

3 (B) IMPLEMENTATION.—The Secretary 

4 shall apply, on or after October 1, 2014, with 

5 respect to post acute care providers, policies 

6 similar to the policies applied with respect to 

7 applicable hospitals and critical access hospitals 

8 under the amendments made by subsection (a). 

9 The provisions of paragraph (1) shall apply 

10 with respect to any period on or after October 

11 1, 2014, and before such application date de12 scribed in the previous sentence in the same 

13 manner as such provisions apply with respect to 

14 fiscal or rate year 2014. 

15 (C) MONITORING AND PENALTIES.—The 

16 provisions of paragraph (7) of such section 

17 1886(p) shall apply to providers under this 

18 paragraph in the same manner as they apply to 

19 hospitals under such section. 

20 (3) DEFINITIONS.—For purposes of this sub21 section: 

22 (A) POST ACUTE CARE PROVIDER.—The 

23 term ‘‘post acute care provider’’ means— 


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1 (i) a skilled nursing facility (as de2 fined in section 1819(a) of the Social Secu3 rity Act); 

4 (ii) an inpatient rehabilitation facility 

5 (described in section 1886(h)(1)(A) of such 

6 Act); 

7 (iii) a home health agency (as defined 

8 in section 1861(o) of such Act); and 

9 (iv) a long term care hospital (as de10 fined in section 1861(ccc) of such Act). 

11 (B) OTHER TERMS.—The terms ‘‘applica12 ble condition’’, ‘‘applicable hospital’’, and ‘‘re13 admission’’ have the meanings given such terms 

14 in section 1886(p)(5) of the Social Security 

15 Act, as added by subsection (a)(1). 

16 (d) PHYSICIANS.— 

17 (1) STUDY.—The Secretary of Health and 

18 Human Services shall conduct a study to determine 

19 how the readmissions policy described in the pre20 vious subsections could be applied to physicians. 

21 (2) CONSIDERATIONS.—In conducting the 

22 study, the Secretary shall consider approaches such 

23 as— 

24 (A) creating a new code (or codes) and 

25 payment amount (or amounts) under the fee 


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1 schedule in section 1848 of the Social Security 

2 Act (in a budget neutral manner) for services 

3 furnished by an appropriate physician who sees 

4 an individual within the first week after dis5 charge from a hospital or critical access hos6 pital; 

7 (B) developing measures of rates of read8 mission for individuals treated by physicians; 

9 (C) applying a payment reduction for phy10 sicians who treat the patient during the initial 

11 admission that results in a readmission; and 

12 (D) methods for attributing payments or 

13 payment reductions to the appropriate physi14 cian or physicians. 

15 (3) REPORT.—The Secretary shall issue a pub16 lic report on such study not later than the date that 

17 is one year after the date of the enactment of this 

18 Act. 

19 (e) FUNDING.—For purposes of carrying out the pro20 visions of this section, in addition to funds otherwise avail21 able, out of any funds in the Treasury not otherwise ap22 propriated, there are appropriated to the Secretary of 

23 Health and Human Services for the Center for Medicare 

24 & Medicaid Services Program Management Account 

25 $25,000,000 for each fiscal year beginning with 2010. 


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1 Amounts appropriated under this subsection for a fiscal 

2 year shall be available until expended. 

3 SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM 

4 PLAN AND BUNDLING PILOT PROGRAM. 

5 (a) PLAN.— 

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

7 Human Services (in this section referred to as the 

8 ‘‘Secretary’’) shall develop a detailed plan to reform 

9 payment for post acute care (PAC) services under 

10 the Medicare program under title XVIII of the So11 cial Security Act (in this section referred to as the 

12 ‘‘Medicare program)’’. The goals of such payment 

13 reform are to— 

14 (A) improve the coordination, quality, and 

15 efficiency of such services; and 

16 (B) improve outcomes for individuals such 

17 as reducing the need for readmission to hos18 pitals from providers of such services. 

19 (2) BUNDLING POST ACUTE SERVICES.—The 

20 plan described in paragraph (1) shall include de21 tailed specifications for a bundled payment for post 

22 acute services (in this section referred to as the 

23 ‘‘post acute care bundle’’), and may include other 

24 approaches determined appropriate by the Secretary. 


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1 (3) POST ACUTE SERVICES.—For purposes of 

2 this section, the term ‘‘post acute services’’ means 

3 services for which payment may be made under the 

4 Medicare program that are furnished by skilled 

5 nursing facilities, inpatient rehabilitation facilities, 

6 long term care hospitals, hospital based outpatient 

7 rehabilitation facilities and home health agencies to 

8 an individual after discharge of such individual from 

9 a hospital, and such other services determined ap10 propriate by the Secretary. 

11 (b) DETAILS.—The plan described in subsection 

12 (a)(1) shall include consideration of the following issues: 

13 (1) The nature of payments under a post acute 

14 care bundle, including the type of provider or entity 

15 to whom payment should be made, the scope of ac16 tivities and services included in the bundle, whether 

17 payment for physicians’ services should be included 

18 in the bundle, and the period covered by the bundle. 

19 (2) Whether the payment should be consoli20 dated with the payment under the inpatient prospec21 tive system under section 1886 of the Social Secu22 rity Act (in this section referred to as MS–DRGs) 

23 or a separate payment should be established for such 

24 bundle, and if a separate payment is established, 


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1 whether it should be made only upon use of post 

2 acute care services or for every discharge. 

3 (3) Whether the bundle should be applied 

4 across all categories of providers of inpatient serv5 ices (including critical access hospitals) and post 

6 acute care services or whether it should be limited 

7 to certain categories of providers, services, or dis8 charges, such as high volume or high cost MS– 

9 DRGs. 

10 (4) The extent to which payment rates could be 

11 established to achieve offsets for efficiencies that 

12 could be expected to be achieved with a bundle pay13 ment, whether such rates should be established on a 

14 national basis or for different geographic areas, 

15 should vary according to discharge, case mix, 

16 outliers, and geographic differences in wages or 

17 other appropriate adjustments, and how to update 

18 such rates. 

19 (5) The nature of protections needed for indi20 viduals under a system of bundled payments to en21 sure that individuals receive quality care, are fur22 nished the level and amount of services needed as 

23 determined by an appropriate assessment instru24 ment, are offered choice of provider, and the extent 

25 to which transitional care services would improve 


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1 quality of care for individuals and the functioning of 

2 a bundled post-acute system. 

3 (6) The nature of relationships that may be re4 quired between hospitals and providers of post acute 

5 care services to facilitate bundled payments, includ6 ing the application of gainsharing, anti-referral, 

7 anti-kickback, and anti-trust laws. 

8 (7) Quality measures that would be appropriate 

9 for reporting by hospitals and post acute providers 

10 (such as measures that assess changes in functional 

11 status and quality measures appropriate for each 

12 type of post acute services provider including how 

13 the reporting of such quality measures could be co14 ordinated with other reporting of such quality meas15 ures by such providers otherwise required). 

16 (8) How cost-sharing for a post acute care bun17 dle should be treated relative to current rules for 

18 cost-sharing for inpatient hospital, home health, 

19 skilled nursing facility, and other services. 

20 (9) How other programmatic issues should be 

21 treated in a post acute care bundle, including rules 

22 specific to various types of post-acute providers such 

23 as the post-acute transfer policy, three-day hospital 

24 stay to qualify for services furnished by skilled nurs25 ing facilities, and the coordination of payments and 


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1 care under the Medicare program and the Medicaid 

2 program. 

3 (10) Such other issues as the Secretary deems 

4 appropriate. 

5 (c) CONSULTATIONS AND ANALYSIS.— 

6 (1) CONSULTATION WITH STAKEHOLDERS.—In 

7 developing the plan under subsection (a)(1), the Sec8 retary shall consult with relevant stakeholders and 

9 shall consider experience with such research studies 

10 and demonstrations that the Secretary determines 

11 appropriate. 

12 (2) ANALYSIS AND DATA COLLECTION.—In de13 veloping such plan, the Secretary shall— 

14 (A) analyze the issues described in sub15 section (b) and other issues that the Secretary 

16 determines appropriate; 

17 (B) analyze the impacts (including geo18 graphic impacts) of post acute service reform 

19 approaches, including bundling of such services 

20 on individuals, hospitals, post acute care pro21 viders, and physicians; 

22 (C) use existing data (such as data sub23 mitted on claims) and collect such data as the 

24 Secretary determines are appropriate to develop 

25 such plan required in this section; and 


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1 (D) if patient functional status measures 

2 are appropriate for the analysis, to the extent 

3 practical, build upon the CARE tool being de4 veloped pursuant to section 5008 of the Deficit 

5 Reduction Act of 2005. 

6 (d) ADMINISTRATION.— 

7 (1) FUNDING.—For purposes of carrying out 

8 the provisions of this section, in addition to funds 

9 otherwise available, out of any funds in the Treasury 

10 not otherwise appropriated, there are appropriated 

11 to the Secretary for the Center for Medicare & Med12 icaid Services Program Management Account 

13 $15,000,000 for each of the fiscal years 2010 

14 through 2012. Amounts appropriated under this 

15 paragraph for a fiscal year shall be available until 

16 expended. 

17 (2) EXPEDITED DATA COLLECTION.—Chapter 

18 35 of title 44, United States Code shall not apply to 

19 this section. 

20 (e) PUBLIC REPORTS.— 

21 (1) INTERIM REPORTS.—The Secretary shall 

22 issue interim public reports on a periodic basis on 

23 the plan described in subsection (a)(1), the issues 

24 described in subsection (b), and impact analyses as 

25 the Secretary determines appropriate. 


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1 (2) FINAL REPORT.—Not later than the date 

2 that is 3 years after the date of the enactment of 

3 this Act, the Secretary shall issue a final public re4 port on such plan, including analysis of issues de5 scribed in subsection (b) and impact analyses. 

6 (f) CONVERSION OF ACUTE CARE EPISODE DEM7 ONSTRATION TO PILOT PROGRAM AND EXPANSION TO IN8 CLUDE POST ACUTE SERVICES.— 

9 (1) IN GENERAL.—Part E of title XVIII of the 

10 Social Security Act is amended by inserting after 

11 section 1866C the following new section: 

12 ‘‘SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEM13 ONSTRATION TO PILOT PROGRAM AND EX14 PANSION TO INCLUDE POST ACUTE SERV15 ICES. 

16 ‘‘(a) IN GENERAL.—By not later than January 1, 

17 2011, the Secretary shall, for the purpose of promoting 

18 the use of bundled payments to promote efficient and high 

19 quality delivery of care— 

20 ‘‘(1) convert the acute care episode demonstra21 tion program conducted under section 1866C to a 

22 pilot program; and 

23 ‘‘(2) subject to subsection (c), expand such pro24 gram as so converted to include post acute services 

25 and such other services the Secretary determines to 


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1 be appropriate, which may include transitional serv2 ices. 

3 ‘‘(b) SCOPE.—The pilot program under subsection 

4 (a) may include additional geographic areas and additional 

5 conditions which account for significant program spend6 ing, as defined by the Secretary. Nothing in this sub7 section shall be construed as limiting the number of hos8 pital and physician groups or the number of hospital and 

9 post-acute provider groups that may participate in the 

10 pilot program. 

11 ‘‘(c) LIMITATION.—The Secretary shall only expand 

12 the pilot program under subsection (a)(2) if the Secretary 

13 finds that— 

14 ‘‘(1) the demonstration program under section 

15 1866C and pilot program under this section main16 tain or increase the quality of care received by indi17 viduals enrolled under this title; and 

18 ‘‘(2) such demonstration program and pilot pro19 gram reduce program expenditures and, based on 

20 the certification under subsection (d), that the ex21 pansion of such pilot program would result in esti22 mated spending that would be less than what spend23 ing would otherwise be in the absence of this section. 

24 ‘‘(d) CERTIFICATION.—For purposes of subsection 

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1 icaid Services shall certify whether expansion of the pilot 

2 program under this section would result in estimated 

3 spending that would be less than what spending would 

4 otherwise be in the absence of this section. 

5 ‘‘(e) VOLUNTARY PARTICIPATION.—Nothing in this 

6 paragraph shall be construed as requiring the participa7 tion of an entity in the pilot program under this section.’’. 

8 (2) CONFORMING AMENDMENT.—Section 

9 1866C(b) of the Social Security Act (42 U.S.C. 

10 1395cc–3(b)) is amended by striking ‘‘The Sec11 retary’’ and inserting ‘‘Subject to section 1866D, the 

12 Secretary’’. 

13 SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010. 

14 Section 1895(b)(3)(B)(ii) of the Social Security Act 

15 (42 U.S.C. 1395fff(b)(3)(B)(ii)) is amended— 

16 (1) in subclause (IV), by striking ‘‘and’’; 

17 (2) by redesignating subclause (V) as subclause 

18 (VII); and 

19 (3) by inserting after subclause (IV) the fol20 lowing new subclauses: 

21 ‘‘(V) 2007, 2008, and 2009, sub22 ject to clause (v), the home health 

23 market basket percentage increase; 

24 ‘‘(VI) 2010, subject to clause (v), 

25 0 percent; and’’. 


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1 SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH 

2 CARE. 

3 (a) ACCELERATION OF ADJUSTMENT FOR CASE MIX

4 CHANGES.—Section 1895(b)(3)(B) of the Social Security 

5 Act (42 U.S.C. 1395fff(b)(3)(B)) is amended— 

6 (1) in clause (iv), by striking ‘‘Insofar as’’ and 

7 inserting ‘‘Subject to clause (vi), insofar as’’; and 

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

9 clause: 

10 ‘‘(vi) SPECIAL RULE FOR CASE MIX

11 CHANGES FOR 2011.— 

12 ‘‘(I) IN GENERAL.—With respect 

13 to the case mix adjustments estab14 lished in section 484.220(a) of title 

15 42, Code of Federal Regulations, the 

16 Secretary shall apply, in 2010, the ad17 justment established in paragraph (3) 

18 of such section for 2011, in addition 

19 to applying the adjustment established 

20 in paragraph (2) for 2010. 

21 ‘‘(II) CONSTRUCTION.—Nothing 

22 in this clause shall be construed as 

23 limiting the amount of adjustment for 

24 case mix for 2010 or 2011 if more re25 cent data indicate an appropriate ad26 justment that is greater than the 


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1 amount established in the section de2 scribed in subclause (I).’’. 

3 (b) REBASING HOME HEALTH PROSPECTIVE PAY4 MENT AMOUNT.—Section 1895(b)(3)(A) of the Social Se5 curity Act (42 U.S.C. 1395fff(b)(3)(A)) is amended— 

6 (1) in clause (i)— 

7 (A) in subclause (III), by inserting ‘‘and 

8 before 2011’’ after ‘‘after the period described 

9 in subclause (II)’’; and 

10 (B) by inserting after subclause (III) the 

11 following new subclauses: 

12 ‘‘(IV) Subject to clause (iii)(I), 

13 for 2011, such amount (or amounts) 

14 shall be adjusted by a uniform per15 centage determined to be appropriate 

16 by the Secretary based on analysis of 

17 factors such as changes in the average 

18 number and types of visits in an epi19 sode, the change in intensity of visits 

20 in an episode, growth in cost per epi21 sode, and other factors that the Sec22 retary considers to be relevant. 

23 ‘‘(V) Subject to clause (iii)(II), 

24 for a year after 2011, such a amount 

25 (or amounts) shall be equal to the 


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1 amount (or amounts) determined 

2 under this clause for the previous 

3 year, updated under subparagraph 

4 (B).’’; and 

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

6 clause: 

7 ‘‘(iii) SPECIAL RULE IN CASE OF IN8 ABILITY TO EFFECT TIMELY REBASING.— 

9 ‘‘(I) APPLICATION OF PROXY

10 AMOUNT FOR 2011.—If the Secretary 

11 is not able to compute the amount (or 

12 amounts) under clause (i)(IV) so as to 

13 permit, on a timely basis, the applica14 tion of such clause for 2011, the Sec15 retary shall substitute for such 

16 amount (or amounts) 95 percent of 

17 the amount (or amounts) that would 

18 otherwise be specified under clause 

19 (i)(III) if it applied for 2011. 

20 ‘‘(II) ADJUSTMENT FOR SUBSE21 QUENT YEARS BASED ON DATA.—If 

22 the Secretary applies subclause (I), 

23 the Secretary before July 1, 2011, 

24 shall compare the amount (or 

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1 clause with the amount (or amounts) 

2 that should have been applied under 

3 clause (i)(IV). The Secretary shall de4 crease or increase the prospective pay5 ment amount (or amounts) under 

6 clause (i)(V) for 2012 (or, at the Sec7 retary’s discretion, over a period of 

8 several years beginning with 2012) by 

9 the amount (if any) by which the 

10 amount (or amounts) applied under 

11 subclause (I) is greater or less, re12 spectively, than the amount (or 

13 amounts) that should have been ap14 plied under clause (i)(IV).’’. 

15 SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVE16 MENTS INTO MARKET BASKET UPDATE FOR 

17 HOME HEALTH SERVICES. 

18 (a) IN GENERAL.—Section 1895(b)(3)(B) of the So19 cial Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amend20 ed— 

21 (1) in clause (iii), by inserting ‘‘(including being 

22 subject to the productivity adjustment described in 

23 section 1886(b)(3)(B)(iii)(II))’’ after ‘‘in the same 

24 manner’’; and 


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1 (2) in clause (v)(I), by inserting ‘‘(but not 

2 below 0)’’ after ‘‘reduced’’. 

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

4 subsection (a) shall apply to home health market basket 

5 percentage increases for years beginning with 2010. 

6 SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE 

7 PROHIBITION ON CERTAIN PHYSICIAN RE8 FERRALS MADE TO HOSPITALS. 

9 (a) IN GENERAL.—Section 1877 of the Social Secu10 rity Act (42 U.S.C. 1395nn) is amended— 

11 (1) in subsection (d)(2)— 

12 (A) in subparagraph (A), by striking 

13 ‘‘and’’ at the end; 

14 (B) in subparagraph (B), by striking the 

15 period at the end and inserting ‘‘; and’’; and 

16 (C) by adding at the end the following new 

17 subparagraph: 

18 ‘‘(C) in the case where the entity is a hos19 pital, the hospital meets the requirements of 

20 paragraph (3)(D).’’; 

21 (2) in subsection (d)(3)— 

22 (A) in subparagraph (B), by striking 

23 ‘‘and’’ at the end; 

24 (B) in subparagraph (C), by striking the 

25 period at the end and inserting ‘‘; and’’; and 


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1 (C) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(D) the hospital meets the requirements 

4 described in subsection (i)(1).’’; 

5 (3) by amending subsection (f) to read as fol6 lows: 

7 ‘‘(f) REPORTING AND DISCLOSURE REQUIRE8 MENTS.— 

9 ‘‘(1) IN GENERAL.—Each entity providing cov10 ered items or services for which payment may be 

11 made under this title shall provide the Secretary 

12 with the information concerning the entity’s owner13 ship, investment, and compensation arrangements, 

14 including— 

15 ‘‘(A) the covered items and services pro16 vided by the entity, and 

17 ‘‘(B) the names and unique physician iden18 tification numbers of all physicians with an 

19 ownership or investment interest (as described 

20 in subsection (a)(2)(A)), or with a compensa21 tion arrangement (as described in subsection 

22 (a)(2)(B)), in the entity, or whose immediate 

23 relatives have such an ownership or investment 

24 interest or who have such a compensation rela25 tionship with the entity. 


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1 Such information shall be provided in such form, 

2 manner, and at such times as the Secretary shall 

3 specify. The requirement of this subsection shall not 

4 apply to designated health services provided outside 

5 the United States or to entities which the Secretary 

6 determines provide services for which payment may 

7 be made under this title very infrequently. 

8 ‘‘(2) REQUIREMENTS FOR HOSPITALS WITH

9 PHYSICIAN OWNERSHIP OR INVESTMENT.—In the 

10 case of a hospital that meets the requirements de11 scribed in subsection (i)(1), the hospital shall— 

12 ‘‘(A) submit to the Secretary an initial re13 port, and periodic updates at a frequency deter14 mined by the Secretary, containing a detailed 

15 description of the identity of each physician 

16 owner and physician investor and any other 

17 owners or investors of the hospital; 

18 ‘‘(B) require that any referring physician 

19 owner or investor discloses to the individual 

20 being referred, by a time that permits the indi21 vidual to make a meaningful decision regarding 

22 the receipt of services, as determined by the 

23 Secretary, the ownership or investment interest, 

24 as applicable, of such referring physician in the 

25 hospital; and 


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1 ‘‘(C) disclose the fact that the hospital is 

2 partially or wholly owned by one or more physi3 cians or has one or more physician investors— 

4 ‘‘(i) on any public website for the hos5 pital; and 

6 ‘‘(ii) in any public advertising for the 

7 hospital. 

8 The information to be reported or disclosed under 

9 this paragraph shall be provided in such form, man10 ner, and at such times as the Secretary shall specify. 

11 The requirements of this paragraph shall not apply 

12 to designated health services furnished outside the 

13 United States or to entities which the Secretary de14 termines provide services for which payment may be 

15 made under this title very infrequently. 

16 ‘‘(3) PUBLICATION OF INFORMATION.—The 

17 Secretary shall publish, and periodically update, the 

18 information submitted by hospitals under paragraph 

19 (2)(A) on the public Internet website of the Centers 

20 for Medicare & Medicaid Services.’’; 

21 (4) by amending subsection (g)(5) to read as 

22 follows: 

23 ‘‘(5) FAILURE TO REPORT OR DISCLOSE INFOR24 MATION.— 


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1 ‘‘(A) REPORTING.—Any person who is re2 quired, but fails, to meet a reporting require3 ment of paragraphs (1) and (2)(A) of sub4 section (f) is subject to a civil money penalty of 

5 not more than $10,000 for each day for which 

6 reporting is required to have been made. 

7 ‘‘(B) DISCLOSURE.—Any physician who is 

8 required, but fails, to meet a disclosure require9 ment of subsection (f)(2)(B) or a hospital that 

10 is required, but fails, to meet a disclosure re11 quirement of subsection (f)(2)(C) is subject to 

12 a civil money penalty of not more than $10,000 

13 for each case in which disclosure is required to 

14 have been made. 

15 ‘‘(C) APPLICATION.—The provisions of 

16 section 1128A (other than the first sentence of 

17 subsection (a) and other than subsection (b)) 

18 shall apply to a civil money penalty under sub19 paragraphs (A) and (B) in the same manner as 

20 such provisions apply to a penalty or proceeding 

21 under section 1128A(a).’’; and 

22 (5) by adding at the end the following new sub23 section: 


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1 ‘‘(i) REQUIREMENTS TO QUALIFY FOR RURAL PRO2 VIDER AND HOSPITAL OWNERSHIP EXCEPTIONS TO

3 SELF-REFERRAL PROHIBITION.— 

4 ‘‘(1) REQUIREMENTS DESCRIBED.—For pur5 poses of subsection (d)(3)(D), the requirements de6 scribed in this paragraph are as follows: 

7 ‘‘(A) PROVIDER AGREEMENT.—The hos8 pital had— 

9 ‘‘(i) physician ownership or invest10 ment on January 1, 2009; and 

11 ‘‘(ii) a provider agreement under sec12 tion 1866 in effect on such date. 

13 ‘‘(B) PROHIBITION ON PHYSICIAN OWNER14 SHIP OR INVESTMENT.—The percentage of the 

15 total value of the ownership or investment in16 terests held in the hospital, or in an entity 

17 whose assets include the hospital, by physician 

18 owners or investors in the aggregate does not 

19 exceed such percentage as of the date of enact20 ment of this subsection. 

21 ‘‘(C) PROHIBITION ON EXPANSION OF FA22 CILITY CAPACITY.—Except as provided in para23 graph (2), the number of operating rooms, pro24 cedure rooms, or beds of the hospital at any 

25 time on or after the date of the enactment of 


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1 this subsection are no greater than the number 

2 of operating rooms, procedure rooms, or beds, 

3 respectively, as of such date. 

4 ‘‘(D) ENSURING BONA FIDE OWNERSHIP

5 AND INVESTMENT.— 

6 ‘‘(i) Any ownership or investment in7 terests that the hospital offers to a physi8 cian are not offered on more favorable 

9 terms than the terms offered to a person 

10 who is not in a position to refer patients 

11 or otherwise generate business for the hos12 pital. 

13 ‘‘(ii) The hospital (or any investors in 

14 the hospital) does not directly or indirectly 

15 provide loans or financing for any physi16 cian owner or investor in the hospital. 

17 ‘‘(iii) The hospital (or any investors in 

18 the hospital) does not directly or indirectly 

19 guarantee a loan, make a payment toward 

20 a loan, or otherwise subsidize a loan, for 

21 any physician owner or investor or group 

22 of physician owners or investors that is re23 lated to acquiring any ownership or invest24 ment interest in the hospital. 


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1 ‘‘(iv) Ownership or investment returns 

2 are distributed to each owner or investor in 

3 the hospital in an amount that is directly 

4 proportional to the ownership or invest5 ment interest of such owner or investor in 

6 the hospital. 

7 ‘‘(v) The investment interest of the 

8 owner or investor is directly proportional 

9 to the owner’s or investor’s capital con10 tributions made at the time the ownership 

11 or investment interest is obtained. 

12 ‘‘(vi) Physician owners and investors 

13 do not receive, directly or indirectly, any 

14 guaranteed receipt of or right to purchase 

15 other business interests related to the hos16 pital, including the purchase or lease of 

17 any property under the control of other 

18 owners or investors in the hospital or lo19 cated near the premises of the hospital. 

20 ‘‘(vii) The hospital does not offer a 

21 physician owner or investor the oppor22 tunity to purchase or lease any property 

23 under the control of the hospital or any 

24 other owner or investor in the hospital on 

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1 fered to a person that is not a physician 

2 owner or investor. 

3 ‘‘(viii) The hospital does not condition 

4 any physician ownership or investment in5 terests either directly or indirectly on the 

6 physician owner or investor making or in7 fluencing referrals to the hospital or other8 wise generating business for the hospital. 

9 ‘‘(E) PATIENT SAFETY.—In the case of a 

10 hospital that does not offer emergency services, 

11 the hospital has the capacity to— 

12 ‘‘(i) provide assessment and initial 

13 treatment for medical emergencies; and 

14 ‘‘(ii) if the hospital lacks additional 

15 capabilities required to treat the emergency 

16 involved, refer and transfer the patient 

17 with the medical emergency to a hospital 

18 with the required capability. 

19 ‘‘(F) LIMITATION ON APPLICATION TO

20 CERTAIN CONVERTED FACILITIES.—The hos21 pital was not converted from an ambulatory 

22 surgical center to a hospital on or after the date 

23 of enactment of this subsection. 

24 ‘‘(2) EXCEPTION TO PROHIBITION ON EXPAN25 SION OF FACILITY CAPACITY.— 


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1 ‘‘(A) PROCESS.— 

2 ‘‘(i) ESTABLISHMENT.—The Secretary 

3 shall establish and implement a process 

4 under which a hospital may apply for an 

5 exception from the requirement under 

6 paragraph (1)(C). 

7 ‘‘(ii) OPPORTUNITY FOR COMMUNITY

8 INPUT.—The process under clause (i) shall 

9 provide persons and entities in the commu10 nity in which the hospital applying for an 

11 exception is located with the opportunity to 

12 provide input with respect to the applica13 tion. 

14 ‘‘(iii) TIMING FOR IMPLEMENTA15 TION.—The Secretary shall implement the 

16 process under clause (i) on the date that is 

17 one month after the promulgation of regu18 lations described in clause (iv). 

19 ‘‘(iv) REGULATIONS.—Not later than 

20 the first day of the month beginning 18 

21 months after the date of the enactment of 

22 this subsection, the Secretary shall promul23 gate regulations to carry out the process 

24 under clause (i). The Secretary may issue 


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1 such regulations as interim final regula2 tions. 

3 ‘‘(B) FREQUENCY.—The process described 

4 in subparagraph (A) shall permit a hospital to 

5 apply for an exception up to once every 2 years. 

6 ‘‘(C) PERMITTED INCREASE.— 

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

8 (ii) and subparagraph (D), a hospital 

9 granted an exception under the process de10 scribed in subparagraph (A) may increase 

11 the number of operating rooms, procedure 

12 rooms, or beds of the hospital above the 

13 baseline number of operating rooms, proce14 dure rooms, or beds, respectively, of the 

15 hospital (or, if the hospital has been grant16 ed a previous exception under this para17 graph, above the number of operating 

18 rooms, procedure rooms, or beds, respec19 tively, of the hospital after the application 

20 of the most recent increase under such an 

21 exception). 

22 ‘‘(ii) 100 PERCENT INCREASE LIMITA23 TION.—The Secretary shall not permit an 

24 increase in the number of operating rooms, 

25 procedure rooms, or beds of a hospital 


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1 under clause (i) to the extent such increase 

2 would result in the number of operating 

3 rooms, procedure rooms, or beds of the 

4 hospital exceeding 200 percent of the base5 line number of operating rooms, procedure 

6 rooms, or beds of the hospital. 

7 ‘‘(iii) BASELINE NUMBER OF OPER8 ATING ROOMS, PROCEDURE ROOMS, OR

9 BEDS.—In this paragraph, the term ‘base10 line number of operating rooms, procedure 

11 rooms, or beds’ means the number of oper12 ating rooms, procedure rooms, or beds of a 

13 hospital as of the date of enactment of this 

14 subsection. 

15 ‘‘(D) INCREASE LIMITED TO FACILITIES

16 ON THE MAIN CAMPUS OF THE HOSPITAL.— 

17 Any increase in the number of operating rooms, 

18 procedure rooms, or beds of a hospital pursuant 

19 to this paragraph may only occur in facilities on 

20 the main campus of the hospital. 

21 ‘‘(E) CONDITIONS FOR APPROVAL OF AN

22 INCREASE IN FACILITY CAPACITY.—The Sec23 retary may grant an exception under the proc24 ess described in subparagraph (A) only to a 

25 hospital— 


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1 ‘‘(i) that is located in a county in 

2 which the percentage increase in the popu3 lation during the most recent 5-year period 

4 for which data are available is estimated to 

5 be at least 150 percent of the percentage 

6 increase in the population growth of the 

7 State in which the hospital is located dur8 ing that period, as estimated by Bureau of 

9 the Census and available to the Secretary; 

10 ‘‘(ii) whose annual percent of total in11 patient admissions that represent inpatient 

12 admissions under the program under title 

13 XIX is estimated to be equal to or greater 

14 than the average percent with respect to 

15 such admissions for all hospitals located in 

16 the county in which the hospital is located; 

17 ‘‘(iii) that does not discriminate 

18 against beneficiaries of Federal health care 

19 programs and does not permit physicians 

20 practicing at the hospital to discriminate 

21 against such beneficiaries; 

22 ‘‘(iv) that is located in a State in 

23 which the average bed capacity in the 

24 State is estimated to be less than the na25 tional average bed capacity; 


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1 ‘‘(v) that has an average bed occu2 pancy rate that is estimated to be greater 

3 than the average bed occupancy rate in the 

4 State in which the hospital is located; and 

5 ‘‘(vi) that meets other conditions as 

6 determined by the Secretary. 

7 ‘‘(F) PROCEDURE ROOMS.—In this sub8 section, the term ‘procedure rooms’ includes 

9 rooms in which catheterizations, angiographies, 

10 angiograms, and endoscopies are furnished, but 

11 such term shall not include emergency rooms or 

12 departments (except for rooms in which cath13 eterizations, angiographies, angiograms, and 

14 endoscopies are furnished). 

15 ‘‘(G) PUBLICATION OF FINAL DECI16 SIONS.—Not later than 120 days after receiving 

17 a complete application under this paragraph, 

18 the Secretary shall publish on the public Inter19 net website of the Centers for Medicare & Med20 icaid Services the final decision with respect to 

21 such application. 

22 ‘‘(H) LIMITATION ON REVIEW.—There 

23 shall be no administrative or judicial review 

24 under section 1869, section 1878, or otherwise 

25 of the exception process under this paragraph, 


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1 including the establishment of such process, 

2 and any determination made under such proc3 ess. 

4 ‘‘(3) PHYSICIAN OWNER OR INVESTOR DE5 FINED.—For purposes of this subsection and sub6 section (f)(2), the term ‘physician owner or investor’ 

7 means a physician (or an immediate family member 

8 of such physician) with a direct or an indirect own9 ership or investment interest in the hospital. 

10 ‘‘(4) PATIENT SAFETY REQUIREMENT.—In the 

11 case of a hospital to which the requirements of para12 graph (1) apply, insofar as the hospital admits a pa13 tient and does not have any physician available on 

14 the premises 24 hours per day, 7 days per week, be15 fore admitting the patient— 

16 ‘‘(A) the hospital shall disclose such fact to 

17 the patient; and 

18 ‘‘(B) following such disclosure, the hospital 

19 shall receive from the patient a signed acknowl20 edgment that the patient understands such fact. 

21 ‘‘(5) CLARIFICATION.—Nothing in this sub22 section shall be construed as preventing the Sec23 retary from terminating a hospital’s provider agree24 ment if the hospital is not in compliance with regu25 lations pursuant to section 1866.’’. 


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1 (b) VERIFYING COMPLIANCE.—The Secretary of 

2 Health and Human Services shall establish policies and 

3 procedures to verify compliance with the requirements de4 scribed in subsections (i)(1) and (i)(4) of section 1877 of 

5 the Social Security Act, as added by subsection (a)(5). 

6 The Secretary may use unannounced site reviews of hos7 pitals and audits to verify compliance with such require8 ments. 

9 (c) IMPLEMENTATION.— 

10 (1) FUNDING.—For purposes of carrying out 

11 the amendments made by subsection (a) and the 

12 provisions of subsection (b), in addition to funds 

13 otherwise available, out of any funds in the Treasury 

14 not otherwise appropriated there are appropriated to 

15 the Secretary of Health and Human Services for the 

16 Centers for Medicare & Medicaid Services Program 

17 Management Account $5,000,000 for each fiscal 

18 year beginning with fiscal year 2010. Amounts ap19 propriated under this paragraph for a fiscal year 

20 shall be available until expended. 

21 (2) ADMINISTRATION.—Chapter 35 of title 44, 

22 United States Code, shall not apply to the amend23 ments made by subsection (a) and the provisions of 

24 subsection (b). 


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1 SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEO2 GRAPHIC ADJUSTMENT FACTORS UNDER 

3 MEDICARE. 

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

5 Human Services shall enter into a contract with the Insti6 tute of Medicine of the National Academy of Science to 

7 conduct a comprehensive empirical study, and provide rec8 ommendations as appropriate, on the accuracy of the geo9 graphic adjustment factors established under sections 

10 1848(e) and 1886(d)(3)(E) of the Social Security Act (42 

11 U.S.C. 1395w–4(e), 11395ww(d)(3)). 

12 (b) MATTERS INCLUDED.—Such study shall include 

13 an evaluation and assessment of the following with respect 

14 to such adjustment factors: 

15 (1) Empirical validity of the adjustment factors. 

16 (2) Methodology used to determine the adjust17 ment factors. 

18 (3) Measures used for the adjustment factors, 

19 taking into account— 

20 (A) timeliness of data and frequency of re21 visions to such data; 

22 (B) sources of data and the degree to 

23 which such data are representative of costs; and 

24 (C) operational costs of providers who par25 ticipate in Medicare. 


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1 (c) EVALUATION.—Such study shall, within the con2 text of the United States health care marketplace, evalu3 ate and consider the following: 

4 (1) The effect of the adjustment factors on the 

5 level and distribution of the health care workforce 

6 and resources, including— 

7 (A) recruitment and retention that takes 

8 into account workforce mobility between urban 

9 and rural areas; 

10 (B) ability of hospitals and other facilities 

11 to maintain an adequate and skilled workforce; 

12 and 

13 (C) patient access to providers and needed 

14 medical technologies. 

15 (2) The effect of the adjustment factors on pop16 ulation health and quality of care. 

17 (3) The effect of the adjustment factors on the 

18 ability of providers to furnish efficient, high value 

19 care. 

20 (d) REPORT.—The contract under subsection (a) 

21 shall provide for the Institute of Medicine to submit, not 

22 later than one year after the date of the enactment of this 

23 Act, to the Secretary and the Congress a report containing 

24 results and recommendations of the study conducted 

25 under this section. 


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1 (e) FUNDING.—There are authorized to be appro2 priated to carry out this section such sums as may be nec3 essary. 

4 SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO 

5 ADDRESS GEOGRAPHIC INEQUITIES. 

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

7 Human Services, taking into account the recommenda8 tions made in the report under section 1157(d), shall in9 clude in the proposed rules published to implement 

10 changes to payment systems for physicians and hospitals 

11 under sections 1848(e) and 1886(d)(3)(E), respectively, of 

12 the Social Security Act, proposals to revise geographic ad13 justment factors for such payment systems for services 

14 furnished under the Medicare program. Such proposed 

15 rules shall be published in the rulemaking period imme16 diately following submission of the report under section 

17 1157(d). 

18 (b) PAYMENT ADJUSTMENTS.— 

19 (1) FUNDING FOR IMPROVEMENTS.—In making 

20 any changes to the geographic adjustment factors in 

21 accordance with subsection (a), the Secretary shall 

22 use funds made available for such purposes under 

23 subsection (c). 

24 (2) ENSURING FAIRNESS.—In carrying out this 

25 subsection, the Secretary shall not change payment 


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1 rates to be less than they would have been had this 

2 section not been enacted. 

3 (c) FUNDING.—Amounts in the Medicare Improve4 ment Fund under section 1898 of the Social Security Act 

5 (42 U.S.C. 1395iii), as amended by section 1146, shall 

6 be available to the Secretary to make changes to the geo7 graphic adjustments factors established under sections 

8 1848(e) and 1886(d)(3)(E) of the Social Security Act. For 

9 such purpose, such funds shall be available for expenditure 

10 for services furnished before January 1, 2014, and shall 

11 not exceed the total amounts available under such Fund 

12 for such period. No more than one-half of such amounts 

13 shall be available for expenditure for services furnished in 

14 any one payment year. 

15 Subtitle D—Medicare Advantage 

16 Reforms 

17 PART 1—PAYMENT AND ADMINISTRATION 

18 SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR19 SERVICE COSTS. 

20 Section 1853 of the Social Security Act (42 U.S.C. 

21 1395w–23) is amended— 

22 (1) in subsection (j)(1)(A)— 

23 (A) by striking ‘‘beginning with 2007’’ and 

24 inserting ‘‘for 2007, 2008, 2009, and 2010’’; 

25 and 


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1 (B) by inserting after ‘‘(k)(1)’’ the following: ‘‘, or, beginning with 2011, 1 2 ⁄12 of the 

3 blended benchmark amount determined under 

4 subsection (n)(1)’’; and 

5 (2) by adding at the end the following new sub6 section: 

7 ‘‘(n) DETERMINATION OF BLENDED BENCHMARK

8 AMOUNT.— 

9 ‘‘(1) IN GENERAL.—For purposes of subsection 

10 (j), subject to paragraphs (3) and (4), the term 

11 ‘blended benchmark amount’ means for an area— 

12 ‘‘(A) for 2011 the sum of— 

‘‘(i) 2 13 ⁄3 of the applicable amount (as 

14 defined in subsection (k)) for the area and 

15 year; and 

‘‘(ii) 1 16 ⁄3 of the amount specified in 

17 paragraph (2) for the area and year; 

18 ‘‘(B) for 2012 the sum of— 

‘‘(i) 1 19 ⁄3 of the applicable amount for 

20 the area and year; and 

‘‘(ii) 2 21 ⁄3 of the amount specified in 

22 paragraph (2) for the area and year; and 

23 ‘‘(C) for a subsequent year the amount 

24 specified in paragraph (2) for the area and 

25 year. 


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1 ‘‘(2) SPECIFIED AMOUNT.—The amount speci2 fied in this paragraph for an area and year is the 

3 amount specified in subsection (c)(1)(D)(i) for the 

4 area and year adjusted (in a manner specified by the 

5 Secretary) to take into account the phase-out in the 

6 indirect costs of medical education from capitation 

7 rates described in subsection (k)(4). 

8 ‘‘(3) FEE-FOR-SERVICE PAYMENT FLOOR.—In 

9 no case shall the blended benchmark amount for an 

10 area and year be less than the amount specified in 

11 paragraph (2). 

12 ‘‘(4) EXCEPTION FOR PACE PLANS.—This sub13 section shall not apply to payments to a PACE pro14 gram under section 1894.’’. 

15 SEC. 1162. QUALITY BONUS PAYMENTS. 

16 (a) IN GENERAL.—Section 1853 of the Social Secu17 rity Act (42 U.S.C. 1395w–23), as amended by section 

18 1161, is amended— 

19 (1) in subsection (j), by inserting ‘‘subject to 

20 subsection (o),’’ after ‘‘For purposes of this part’’; 

21 and 

22 (2) by adding at the end the following new sub23 section: 

24 ‘‘(o) QUALITY BASED PAYMENT ADJUSTMENT.— 


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1 ‘‘(1) HIGH QUALITY PLAN ADJUSTMENT.—For 

2 years beginning with 2011, in the case of a Medicare 

3 Advantage plan that is identified (under paragraph 

4 (3)(E)(ii)) as a high quality MA plan with respect 

5 to the year, the blended benchmark amount under 

6 subsection (n)(1) shall be increased— 

7 ‘‘(A) for 2011, by 1.0 percent; 

8 ‘‘(B) for 2012, by 2.0 percent; and 

9 ‘‘(C) for a subsequent year, by 3.0 percent. 

10 ‘‘(2) IMPROVED QUALITY PLAN ADJUSTMENT.— 

11 For years beginning with 2011, in the case of a 

12 Medicare Advantage plan that is identified (under 

13 paragraph (3)(E)(iii)) as an improved quality MA 

14 plan with respect to the year, blended benchmark 

15 amount under subsection (n)(1) shall be increased— 

16 ‘‘(A) for 2011, by 0.33 percent; 

17 ‘‘(B) for 2012, by 0.66 percent; and 

18 ‘‘(C) for a subsequent year, by 1.0 percent. 

19 ‘‘(3) DETERMINATIONS OF QUALITY.— 

20 ‘‘(A) QUALITY PERFORMANCE.—The Sec21 retary shall provide for the computation of a 

22 quality performance score for each Medicare 

23 Advantage plan to be applied for each year be24 ginning with 2010. 

25 ‘‘(B) COMPUTATION OF SCORE.— 


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1 ‘‘(i) FOR YEARS BEFORE 2014.—For 

2 years before 2014, the quality performance 

3 score for a Medicare Advantage plan shall 

4 be computed based on a blend (as des5 ignated by the Secretary) of the plan’s per6 formance on— 

7 ‘‘(I) HEDIS effectiveness of care 

8 quality measures; 

9 ‘‘(II) CAHPS quality measures; 

10 and 

11 ‘‘(III) such other measures of 

12 clinical quality as the Secretary may 

13 specify. 

14 Such measures shall be risk-adjusted as 

15 the Secretary deems appropriate. 

16 ‘‘(ii) ESTABLISHMENT OF OUTCOME17 BASED MEASURES.—By not later than for 

18 2013 the Secretary shall implement report19 ing requirements for quality under this 

20 section on measures selected under clause 

21 (iii) that reflect the outcomes of care expe22 rienced by individuals enrolled in Medicare 

23 Advantage plans (in addition to measures 

24 described in clause (i)). Such measures 

25 may include— 


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1 ‘‘(I) measures of rates of admis2 sion and readmission to a hospital; 

3 ‘‘(II) measures of prevention 

4 quality, such as those established by 

5 the Agency for Healthcare Research 

6 and Quality (that include hospital ad7 mission rates for specified conditions); 

8 ‘‘(III) measures of patient mor9 tality and morbidity following surgery; 

10 ‘‘(IV) measures of health func11 tioning (such as limitations on activi12 ties of daily living) and survival for 

13 patients with chronic diseases; 

14 ‘‘(V) measures of patient safety; 

15 and 

16 ‘‘(VI) other measure of outcomes 

17 and patient quality of life as deter18 mined by the Secretary. 

19 Such measures shall be risk-adjusted as 

20 the Secretary deems appropriate. In deter21 mining the quality measures to be used 

22 under this clause, the Secretary shall take 

23 into consideration the recommendations of 

24 the Medicare Payment Advisory Commis25 sion in its report to Congress under section 


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1 168 of the Medicare Improvements for Pa2 tients and Providers Act of 2008 (Public 

3 Law 110–275) and shall provide pref4 erence to measures collected on and com5 parable to measures used in measuring 

6 quality under parts A and B. 

7 ‘‘(iii) RULES FOR SELECTION OF

8 MEASURES.—The Secretary shall select 

9 measures for purposes of clause (ii) con10 sistent with the following: 

11 ‘‘(I) The Secretary shall provide 

12 preference to clinical quality measures 

13 that have been endorsed by the entity 

14 with a contract with the Secretary 

15 under section 1890(a). 

16 ‘‘(II) Prior to any measure being 

17 selected under this clause, the Sec18 retary shall publish in the Federal 

19 Register such measure and provide for 

20 a period of public comment on such 

21 measure. 

22 ‘‘(iv) TRANSITIONAL USE OF

23 BLEND.—For payments for 2014 and 

24 2015, the Secretary may compute the qual25 ity performance score for a Medicare AdVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01393 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vantage plan based on a blend of the meas2 ures specified in clause (i) and the meas3 ures described in clause (ii) and selected 

4 under clause (iii). 

5 ‘‘(v) USE OF QUALITY OUTCOMES

6 MEASURES.—For payments beginning with 

7 2016, the preponderance of measures used 

8 under this paragraph shall be quality out9 comes measures described in clause (ii) 

10 and selected under clause (iii). 

11 ‘‘(C) DATA USED IN COMPUTING SCORE.— 

12 Such score for application for— 

13 ‘‘(i) payments in 2011 shall be based 

14 on quality performance data for plans for 

15 2009; and 

16 ‘‘(ii) payments in 2012 and a subse17 quent year shall be based on quality per18 formance data for plans for the second 

19 preceding year. 

20 ‘‘(D) REPORTING OF DATA.—Each Medi21 care Advantage organization shall provide for 

22 the reporting to the Secretary of quality per23 formance data described in subparagraph (B) 

24 (in order to determine a quality performance 


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1 score under this paragraph) in such time and 

2 manner as the Secretary shall specify. 

3 ‘‘(E) RANKING OF PLANS.— 

4 ‘‘(i) INITIAL RANKING.—Based on the 

5 quality performance score described in sub6 paragraph (B) achieved with respect to a 

7 year, the Secretary shall rank plan per8 formance— 

9 ‘‘(I) from highest to lowest based 

10 on absolute scores; and 

11 ‘‘(II) from highest to lowest 

12 based on percentage improvement in 

13 the score for the plan from the pre14 vious year. 

15 A plan which does not report quality per16 formance data under subparagraph (D) 

17 shall be counted, for purposes of such 

18 ranking, as having the lowest plan per19 formance and lowest percentage improve20 ment. 

21 ‘‘(ii) IDENTIFICATION OF HIGH QUAL22 ITY PLANS IN TOP QUINTILE BASED ON

23 PROJECTED ENROLLMENT.—The Secretary 

24 shall, based on the scores for each plan 

25 under clause (i)(I) and the Secretary’s proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01395 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 jected enrollment for each plan and subject 

2 to clause (iv), identify those Medicare Ad3 vantage plans with the highest score that, 

4 based upon projected enrollment, are pro5 jected to include in the aggregate 20 per6 cent of the total projected enrollment for 

7 the year. For purposes of this subsection, 

8 a plan so identified shall be referred to in 

9 this subsection as a ‘high quality MA 

10 plan’. 

11 ‘‘(iii) IDENTIFICATION OF IMPROVED

12 QUALITY PLANS IN TOP QUINTILE BASED

13 ON PROJECTED ENROLLMENT.—The Sec14 retary shall, based on the percentage im15 provement score for each plan under clause 

16 (i)(II) and the Secretary’s projected enroll17 ment for each plan and subject to clause 

18 (iv), identify those Medicare Advantage 

19 plans with the greatest percentage im20 provement score that, based upon projected 

21 enrollment, are projected to include in the 

22 aggregate 20 percent of the total projected 

23 enrollment for the year. For purposes of 

24 this subsection, a plan so identified that is 

25 not a high quality plan for the year shall 


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1 be referred to in this subsection as an ‘im2 proved quality MA plan’. 

3 ‘‘(iv) AUTHORITY TO DISQUALIFY

4 CERTAIN PLANS.—In applying clauses (ii) 

5 and (iii), the Secretary may determine not 

6 to identify a Medicare Advantage plan if 

7 the Secretary has identified deficiencies in 

8 the plan’s compliance with rules for such 

9 plans under this part. 

10 ‘‘(F) NOTIFICATION.—The Secretary, in 

11 the annual announcement required under sub12 section (b)(1)(B) in 2011 and each succeeding 

13 year, shall notify the Medicare Advantage orga14 nization that is offering a high quality plan or 

15 an improved quality plan of such identification 

16 for the year and the quality performance pay17 ment adjustment for such plan for the year. 

18 The Secretary shall provide for publication on 

19 the website for the Medicare program of the in20 formation described in the previous sentence.’’. 

21 SEC. 1163. EXTENSION OF SECRETARIAL CODING INTEN22 SITY ADJUSTMENT AUTHORITY. 

23 Section 1853(a)(1)(C)(ii) of the Social Security Act 

24 (42 U.S.C. 1395w–23(a)(1)(C)(ii)) is amended— 


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1 (1) in the matter before subclause (I), by strik2 ing ‘‘through 2010’’ and inserting ‘‘and each subse3 quent year’’; and 

4 (2) in subclause (II)— 

5 (A) by inserting ‘‘periodically’’ before ‘‘con6 duct an analysis’’; 

7 (B) by inserting ‘‘on a timely basis’’ after 

8 ‘‘are incorporated’’; and 

9 (C) by striking ‘‘only for 2008, 2009, and 

10 2010’’ and inserting ‘‘for 2008 and subsequent 

11 years’’. 

12 SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY 

13 ELECTION PERIODS. 

14 (a) 2 WEEK PROCESSING PERIOD FOR ANNUAL EN15 ROLLMENT PERIOD (AEP).—Paragraph (3)(B) of section 

16 1851(e) of the Social Security Act (42 U.S.C. 1395w– 

17 21(e)) is amended— 

18 (1) by striking ‘‘and’’ at the end of clause (iii); 

19 (2) in clause (iv)— 

20 (A) by striking ‘‘and succeeding years’’ 

21 and inserting ‘‘, 2008, 2009, and 2010’’; and 

22 (B) by striking the period at the end and 

23 inserting ‘‘; and’’; and 

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

25 clause: 


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1 ‘‘(v) with respect to 2011 and suc2 ceeding years, the period beginning on No3 vember 1 and ending on December 15 of 

4 the year before such year.’’. 

5 (b) ELIMINATION OF 3-MONTH ADDITIONAL OPEN

6 ENROLLMENT PERIOD (OEP).—Effective for plan years 

7 beginning with 2011, paragraph (2) of such section is 

8 amended by striking subparagraph (C). 

9 SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS. 

10 Section 1876(h)(5)(C) of the Social Security Act (42 

11 U.S.C. 1395mm(h)(5)(C)) is amended— 

12 (1) in clause (ii), by striking ‘‘January 1, 

13 2010’’ and inserting ‘‘January 1, 2012’’; and 

14 (2) in clause (iii), by striking ‘‘the service area 

15 for the year’’ and inserting ‘‘the portion of the 

16 plan’s service area for the year that is within the 

17 service area of a reasonable cost reimbursement con18 tract’’. 

19 SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EM20 PLOYER GROUP PLANS. 

21 (a) IN GENERAL.—The first sentence of paragraph 

22 (2) of section 1857(i) of the Social Security Act (42 

23 U.S.C. 1395w–27(i)) is amended by inserting before the 

24 period at the end the following: ‘‘, but only if 90 percent 

25 of the Medicare Advantage eligible individuals enrolled 


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1 under such plan reside in a county in which the MA orga2 nization offers an MA local plan’’. 

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

4 subsection (a) shall apply for plan years beginning on or 

5 after January 1, 2011, and shall not apply to plans which 

6 were in effect as of December 31, 2010. 

7 SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS. 

8 (a) REPORT TO CONGRESS.—Not later than 1 year 

9 after the date of the enactment of this Act, the Secretary 

10 of Health and Human Services shall submit to Congress 

11 a report that evaluates the adequacy of the risk adjust12 ment system under section 1853(a)(1)(C) of the Social Se13 curity Act (42 U.S.C. 1395–23(a)(1)(C)) in predicting 

14 costs for beneficiaries with chronic or co-morbid condi15 tions, beneficiaries dually-eligible for Medicare and Med16 icaid, and non-Medicaid eligible low-income beneficiaries; 

17 and the need and feasibility of including further grada18 tions of diseases or conditions and multiple years of bene19 ficiary data. 

20 (b) IMPROVEMENTS TO RISK ADJUSTMENT.—Not 

21 later than January 1, 2012, the Secretary shall implement 

22 necessary improvements to the risk adjustment system 

23 under section 1853(a)(1)(C) of the Social Security Act (42 

24 U.S.C. 1395–23(a)(1)(C)), taking into account the evalua25 tion under subsection (a). 


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1 SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STA2 BILIZATION FUND. 

3 (a) IN GENERAL.—Section 1858 of the Social Secu4 rity Act (42 U.S.C. 1395w–27a) is amended by striking 

5 subsection (e). 

6 (b) TRANSITION.—Any amount contained in the MA 

7 Regional Plan Stabilization Fund as of the date of the 

8 enactment of this Act shall be transferred to the Federal 

9 Supplementary Medical Insurance Trust Fund. 

10 PART 2—BENEFICIARY PROTECTIONS AND ANTI11 FRAUD 

12 SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL 

13 HEALTH SERVICES. 

14 (a) IN GENERAL.—Section 1852(a)(1) of the Social 

15 Security Act (42 U.S.C. 1395w–22(a)(1)) is amended— 

16 (1) in subparagraph (A), by inserting before the 

17 period at the end the following: ‘‘with cost-sharing 

18 that is no greater (and may be less) than the cost19 sharing that would otherwise be imposed under such 

20 program option’’; 

21 (2) in subparagraph (B)(i), by striking ‘‘or an 

22 actuarially equivalent level of cost-sharing as deter23 mined in this part’’; and 

24 (3) by amending clause (ii) of subparagraph 

25 (B) to read as follows: 


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1 ‘‘(ii) PERMITTING USE OF FLAT CO2 PAYMENT OR PER DIEM RATE.—Nothing in 

3 clause (i) shall be construed as prohibiting 

4 a Medicare Advantage plan from using a 

5 flat copayment or per diem rate, in lieu of 

6 the cost-sharing that would be imposed 

7 under part A or B, so long as the amount 

8 of the cost-sharing imposed does not ex9 ceed the amount of the cost-sharing that 

10 would be imposed under the respective part 

11 if the individual were not enrolled in a plan 

12 under this part.’’. 

13 (b) LIMITATION FOR DUAL ELIGIBLES AND QUALI14 FIED MEDICARE BENEFICIARIES.—Section 1852(a) of 

15 such Act is amended by adding at the end the following 

16 new paragraph: 

17 ‘‘(7) LIMITATION ON COST-SHARING FOR DUAL

18 ELIGIBLES AND QUALIFIED MEDICARE BENE19 FICIARIES.—In the case of a individual who is a full20 benefit dual eligible individual (as defined in section 

21 1935(c)(6)) or a qualified medicare beneficiary (as 

22 defined in section 1905(p)(1)) who is enrolled in a 

23 Medicare Advantage plan, the plan may not impose 

24 cost-sharing that exceeds the amount of cost-sharing 

25 that would be permitted with respect to the indiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01402 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vidual under this title and title XIX if the individual 

2 were not enrolled with such plan.’’. 

3 (c) EFFECTIVE DATES.— 

4 (1) The amendments made by subsection (a) 

5 shall apply to plan years beginning on or after Janu6 ary 1, 2011. 

7 (2) The amendments made by subsection (b) 

8 shall apply to plan years beginning on or after Janu9 ary 1, 2011. 

10 SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLL11 EES IN PLANS WITH ENROLLMENT SUSPEN12 SION. 

13 Section 1851(e)(4) of the Social Security Act (42 

14 U.S.C. 1395w(e)(4)) is amended— 

15 (1) in subparagraph (C), by striking at the end 

16 ‘‘or’’; 

17 (2) in subparagraph (D)— 

18 (A) by inserting ‘‘, taking into account the 

19 health or well-being of the individual’’ before 

20 the period; and 

21 (B) by redesignating such subparagraph as 

22 subparagraph (E); and 

23 (3) by inserting after subparagraph (C) the fol24 lowing new subparagraph: 


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1 ‘‘(D) the individual is enrolled in an MA 

2 plan and enrollment in the plan is suspended 

3 under paragraph (2)(B) or (3)(C) of section 

4 1857(g) because of a failure of the plan to meet 

5 applicable requirements; or’’. 

6 SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN 

7 ADMINISTRATIVE COSTS. 

8 (a) DISCLOSURE OF MEDICAL LOSS RATIOS AND

9 OTHER EXPENSE DATA.—Section 1851 of the Social Se10 curity Act (42 U.S.C. 1395w–21), as previously amended 

11 by this subtitle, is amended by adding at the end the fol12 lowing new subsection: 

13 ‘‘(p) PUBLICATION OF MEDICAL LOSS RATIOS AND

14 OTHER COST-RELATED INFORMATION.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall pub16 lish, not later than November 1 of each year (begin17 ning with 2011), for each MA plan contract, the 

18 medical loss ratio of the plan in the previous year. 

19 ‘‘(2) SUBMISSION OF DATA.— 

20 ‘‘(A) IN GENERAL.—Each MA organization 

21 shall submit to the Secretary, in a form and 

22 manner specified by the Secretary, data nec23 essary for the Secretary to publish the medical 

24 loss ratio on a timely basis. 


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1 ‘‘(B) DATA FOR 2010 AND 2011.—The data 

2 submitted under subparagraph (A) for 2010 

3 and for 2011 shall be consistent in content with 

4 the data reported as part of the MA plan bid 

5 in June 2009 for 2010. 

6 ‘‘(C) USE OF STANDARDIZED ELEMENTS

7 AND DEFINITIONS.—The data to be submitted 

8 under subparagraph (A) relating to medical loss 

9 ratio for a year, beginning with 2012, shall be 

10 submitted based on the standardized elements 

11 and definitions developed under paragraph (3). 

12 ‘‘(3) DEVELOPMENT OF DATA REPORTING

13 STANDARDS.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall 

15 develop and implement standardized data ele16 ments and definitions for reporting under this 

17 subsection, for contract years beginning with 

18 2012, of data necessary for the calculation of 

19 the medical loss ratio for MA plans. Not later 

20 than December 31, 2010, the Secretary shall 

21 publish a report describing the elements and 

22 definitions so developed. 

23 ‘‘(B) CONSULTATION.—The Secretary 

24 shall consult with the Health Choices Commis25 sioner, representatives of MA organizations, exVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01405 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 perts on health plan accounting systems, and 

2 representatives of the National Association of 

3 Insurance Commissioners, in the development 

4 of such data elements and definitions. 

5 ‘‘(4) MEDICAL LOSS RATIO TO BE DEFINED.— 

6 For purposes of this part, the term ‘medical loss 

7 ratio’ has the meaning given such term by the Sec8 retary, taking into account the meaning given such 

9 term by the Health Choices Commissioner under 

10 section 116 of the America’s Affordable Health 

11 Choices Act of 2009.’’. 

12 (b) MINIMUM MEDICAL LOSS RATIO.—Section 

13 1857(e) of the Social Security Act (42 U.S.C. 1395w– 

14 27(e)) is amended by adding at the end the following new 

15 paragraph: 

16 ‘‘(4) REQUIREMENT FOR MINIMUM MEDICAL

17 LOSS RATIO.—If the Secretary determines for a con18 tract year (beginning with 2014) that an MA plan 

19 has failed to have a medical loss ratio (as defined in 

20 section 1851(p)(4)) of at least .85— 

21 ‘‘(A) the Secretary shall require the Medi22 care Advantage organization offering the plan 

23 to give enrollees a rebate (in the second suc24 ceeding contract year) of premiums under this 

25 part (or part B or part D, if applicable) by 


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1 such amount as would provide for a benefits 

2 ratio of at least .85; 

3 ‘‘(B) for 3 consecutive contract years, the 

4 Secretary shall not permit the enrollment of 

5 new enrollees under the plan for coverage dur6 ing the second succeeding contract year; and 

7 ‘‘(C) the Secretary shall terminate the plan 

8 contract if the plan fails to have such a medical 

9 loss ratio for 5 consecutive contract years.’’. 

10 SEC. 1174. STRENGTHENING AUDIT AUTHORITY. 

11 (a) FOR PART C PAYMENTS RISK ADJUSTMENT.— 

12 Section 1857(d)(1) of the Social Security Act (42 U.S.C. 

13 1395w–27(d)(1)) is amended by inserting after ‘‘section 

14 1858(c))’’ the following: ‘‘, and data submitted with re15 spect to risk adjustment under section 1853(a)(3)’’. 

16 (b) ENFORCEMENT OF AUDITS AND DEFI17 CIENCIES.— 

18 (1) IN GENERAL.—Section 1857(e) of such Act, 

19 as amended by section 1173, is amended by adding 

20 at the end the following new paragraph: 

21 ‘‘(5) ENFORCEMENT OF AUDITS AND DEFI22 CIENCIES.— 

23 ‘‘(A) INFORMATION IN CONTRACT.—The 

24 Secretary shall require that each contract with 

25 an MA organization under this section shall inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01407 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 clude terms that inform the organization of the 

2 provisions in subsection (d). 

3 ‘‘(B) ENFORCEMENT AUTHORITY.—The 

4 Secretary is authorized, in connection with con5 ducting audits and other activities under sub6 section (d), to take such actions, including pur7 suit of financial recoveries, necessary to address 

8 deficiencies identified in such audits or other 

9 activities.’’. 

10 (2) APPLICATION UNDER PART D.—For provi11 sion applying the amendment made by paragraph 

12 (1) to prescription drug plans under part D, see sec13 tion 1860D–12(b)(3)(D) of the Social Security Act. 

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

15 this section shall take effect on the date of the enactment 

16 of this Act and shall apply to audits and activities con17 ducted for contract years beginning on or after January 

18 1, 2011. 

19 SEC. 1175. AUTHORITY TO DENY PLAN BIDS. 

20 (a) IN GENERAL.—Section 1854(a)(5) of the Social 

21 Security Act (42 U.S.C. 1395w–24(a)(5)) is amended by 

22 adding at the end the following new subparagraph: 

23 ‘‘(C) REJECTION OF BIDS.—Nothing in 

24 this section shall be construed as requiring the 


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1 Secretary to accept any or every bid by an MA 

2 organization under this subsection.’’. 

3 (b) APPLICATION UNDER PART D.—Section 1860D– 

4 11(d) of such Act (42 U.S.C. 1395w–111(d)) is amended 

5 by adding at the end the following new paragraph: 

6 ‘‘(3) REJECTION OF BIDS.—Paragraph (5)(C) 

7 of section 1854(a) shall apply with respect to bids 

8 under this section in the same manner as it applies 

9 to bids by an MA organization under such section.’’. 

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

11 this section shall apply to bids for contract years begin12 ning on or after January 1, 2011. 

13 PART 3—TREATMENT OF SPECIAL NEEDS PLANS 

14 SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN 

15 ENROLLMENT PERIOD OF INDIVIDUALS INTO 

16 CHRONIC CARE SPECIALIZED MA PLANS FOR 

17 SPECIAL NEEDS INDIVIDUALS. 

18 Section 1859(f)(4) of the Social Security Act (42 

19 U.S.C. 1395w–28(f)(4)) is amended by adding at the end 

20 the following new subparagraph: 

21 ‘‘(C) The plan does not enroll an individual 

22 on or after January 1, 2011, other than during 

23 an annual, coordinated open enrollment period 

24 or when at the time of the diagnosis of the dis25 ease or condition that qualifies the individual as 


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1 an individual described in subsection 

2 (b)(6)(B)(iii).’’. 

3 SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS 

4 PLANS TO RESTRICT ENROLLMENT. 

5 (a) IN GENERAL.—Section 1859(f)(1) of the Social 

6 Security Act (42 U.S.C. 1395w–28(f)(1)) is amended by 

7 striking ‘‘January 1, 2011’’ and inserting ‘‘January 1, 

8 2013 (or January 1, 2016, in the case of a plan described 

9 in section 1177(b)(1) of the America’s Affordable Health 

10 Choices Act of 2009)’’. 

11 (b) GRANDFATHERING OF CERTAIN PLANS.— 

12 (1) PLANS DESCRIBED.—For purposes of sec13 tion 1859(f)(1) of the Social Security Act (42 

14 U.S.C. 1395w–28(f)(1)), a plan described in this 

15 paragraph is a plan that had a contract with a State 

16 that had a State program to operate an integrated 

17 Medicaid-Medicare program that had been approved 

18 by the Centers for Medicare & Medicaid Services as 

19 of January 1, 2004. 

20 (2) ANALYSIS; REPORT.—The Secretary of 

21 Health and Human Services shall provide, through 

22 a contract with an independent health services eval23 uation organization, for an analysis of the plans de24 scribed in paragraph (1) with regard to the impact 

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1 faction, and other subjects as specified by the Sec2 retary. Not later than December 31, 2011, the Sec3 retary shall submit to Congress a report on such 

4 analysis and shall include in such report such rec5 ommendations with regard to the treatment of such 

6 plans as the Secretary deems appropriate. 

7 Subtitle E—Improvements to 

8 Medicare Part D 

9 SEC. 1181. ELIMINATION OF COVERAGE GAP. 

10 (a) IN GENERAL.—Section 1860D–2(b) of such Act 

11 (42 U.S.C. 1395w–102(b)) is amended— 

12 (1) in paragraph (3)(A), by striking ‘‘paragraph 

13 (4)’’ and inserting ‘‘paragraphs (4) and (7)’’; 

14 (2) in paragraph (4)(B)(i), by inserting ‘‘sub15 ject to paragraph (7)’’ after ‘‘purposes of this part’’; 

16 and 

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

18 paragraph: 

19 ‘‘(7) PHASED-IN ELIMINATION OF COVERAGE

20 GAP.— 

21 ‘‘(A) IN GENERAL.—For each year begin22 ning with 2011, the Secretary shall consistent 

23 with this paragraph progressively increase the 

24 initial coverage limit (described in subsection 

25 (b)(3)) and decrease the annual out-of-pocket 


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1 threshold from the amounts otherwise computed 

2 until there is a continuation of coverage from 

3 the initial coverage limit for expenditures in4 curred through the total amount of expendi5 tures at which benefits are available under 

6 paragraph (4). 

7 ‘‘(B) INCREASE IN INITIAL COVERAGE

8 LIMIT.—For a year beginning with 2011, the 

9 initial coverage limit otherwise computed with10 out regard to this paragraph shall be increased 

by 1 11 ⁄2 of the cumulative phase-in percentage (as 

12 defined in subparagraph (D)(ii) for the year) 

13 times the out-of-pocket gap amount (as defined 

14 in subparagraph (E)) for the year. 

15 ‘‘(C) DECREASE IN ANNUAL OUT-OF-POCK16 ET THRESHOLD.—For a year beginning with 

17 2011, the annual out-of-pocket threshold other18 wise computed without regard to this paragraph 

shall be decreased by 1 19 ⁄2 of the cumulative 

20 phase-in percentage of the out-of-pocket gap 

21 amount for the year multiplied by 1.75. 

22 ‘‘(D) PHASE–IN.—For purposes of this 

23 paragraph: 


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1 ‘‘(i) ANNUAL PHASE-IN PERCENT2 AGE.—The term ‘annual phase-in percent3 age’ means— 

4 ‘‘(I) for 2011, 13 percent; 

5 ‘‘(II) for 2012, 2013, 2014, and 

6 2015, 5 percent; 

7 ‘‘(III) for 2016 through 2018, 

8 7.5 percent; and 

9 ‘‘(IV) for 2019 and each subse10 quent year, 10 percent. 

11 ‘‘(ii) CUMULATIVE PHASE-IN PER12 CENTAGE.—The term ‘cumulative phase-in 

13 percentage’ means for a year the sum of 

14 the annual phase-in percentage for the 

15 year and the annual phase-in percentages 

16 for each previous year beginning with 

17 2011, but in no case more than 100 per18 cent. 

19 ‘‘(E) OUT-OF-POCKET GAP AMOUNT.—For 

20 purposes of this paragraph, the term ‘out-of21 pocket gap amount’ means for a year the 

22 amount by which— 

23 ‘‘(i) the annual out-of-pocket thresh24 old specified in paragraph (4)(B) for the 


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1 year (as determined as if this paragraph 

2 did not apply), exceeds 

3 ‘‘(ii) the sum of— 

4 ‘‘(I) the annual deductible under 

5 paragraph (1) for the year; and 

‘‘(II) 1 6 ⁄4 of the amount by which 

7 the initial coverage limit under para8 graph (3) for the year (as determined 

9 as if this paragraph did not apply) ex10 ceeds such annual deductible.’’. 

11 (b) REQUIRING DRUG MANUFACTURERS TO PRO12 VIDE DRUG REBATES FOR FULL-BENEFIT DUAL ELIGI13 BLES.— 

14 (1) IN GENERAL.—Section 1860D–2 of the So15 cial Security Act (42 U.S.C. 1396r–8) is amended— 

16 (A) in subsection (e)(1), in the matter be17 fore subparagraph (A), by inserting ‘‘and sub18 section (f)’’ after ‘‘this subsection’’; and 

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

20 subsection: 

21 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

22 FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 

23 ‘‘(1) IN GENERAL.—In this part, the term ‘cov24 ered part D drug’ does not include any drug or bio25 logic that is manufactured by a manufacturer that 


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1 has not entered into and have in effect a rebate 

2 agreement described in paragraph (2). 

3 ‘‘(2) REBATE AGREEMENT.—A rebate agree4 ment under this subsection shall require the manu5 facturer to provide to the Secretary a rebate for 

6 each rebate period (as defined in paragraph (6)(B)) 

7 ending after December 31, 2010, in the amount 

8 specified in paragraph (3) for any covered part D 

9 drug of the manufacturer dispensed after December 

10 31, 2010, to any full-benefit dual eligible individual 

11 (as defined in paragraph (6)(A)) for which payment 

12 was made by a PDP sponsor under part D or a MA 

13 organization under part C for such period. Such re14 bate shall be paid by the manufacturer to the Sec15 retary not later than 30 days after the date of re16 ceipt of the information described in section 1860D– 

17 12(b)(7), including as such section is applied under 

18 section 1857(f)(3). 

19 ‘‘(3) REBATE FOR FULL-BENEFIT DUAL ELIGI20 BLE MEDICARE DRUG PLAN ENROLLEES.— 

21 ‘‘(A) IN GENERAL.—The amount of the re22 bate specified under this paragraph for a manu23 facturer for a rebate period, with respect to 

24 each dosage form and strength of any covered 

25 part D drug provided by such manufacturer 


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1 and dispensed to a full-benefit dual eligible indi2 vidual, shall be equal to the product of— 

3 ‘‘(i) the total number of units of such 

4 dosage form and strength of the drug so 

5 provided and dispensed for which payment 

6 was made by a PDP sponsor under part D 

7 or a MA organization under part C for the 

8 rebate period (as reported under section 

9 1860D–12(b)(7), including as such section 

10 is applied under section 1857(f)(3)); and 

11 ‘‘(ii) the amount (if any) by which— 

12 ‘‘(I) the Medicaid rebate amount 

13 (as defined in subparagraph (B)) for 

14 such form, strength, and period, ex15 ceeds 

16 ‘‘(II) the average Medicare drug 

17 program full-benefit dual eligible re18 bate amount (as defined in subpara19 graph (C)) for such form, strength, 

20 and period. 

21 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

22 purposes of this paragraph, the term ‘Medicaid 

23 rebate amount’ means, with respect to each 

24 dosage form and strength of a covered part D 


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1 drug provided by the manufacturer for a rebate 

2 period— 

3 ‘‘(i) in the case of a single source 

4 drug or an innovator multiple source drug, 

5 the amount specified in paragraph 

6 (1)(A)(ii) of section 1927(b) plus the 

7 amount, if any, specified in paragraph 

8 (2)(A)(ii) of such section, for such form, 

9 strength, and period; or 

10 ‘‘(ii) in the case of any other covered 

11 outpatient drug, the amount specified in 

12 paragraph (3)(A)(i) of such section for 

13 such form, strength, and period. 

14 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

15 FULL-BENEFIT DUAL ELIGIBLE REBATE

16 AMOUNT.—For purposes of this subsection, the 

17 term ‘average Medicare drug program full-ben18 efit dual eligible rebate amount’ means, with re19 spect to each dosage form and strength of a 

20 covered part D drug provided by a manufac21 turer for a rebate period, the sum, for all PDP 

22 sponsors under part D and MA organizations 

23 administering a MA–PD plan under part C, 

24 of— 


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1 ‘‘(i) the product, for each such spon2 sor or organization, of— 

3 ‘‘(I) the sum of all rebates, dis4 counts, or other price concessions (not 

5 taking into account any rebate pro6 vided under paragraph (2) for such 

7 dosage form and strength of the drug 

8 dispensed, calculated on a per-unit 

9 basis, but only to the extent that any 

10 such rebate, discount, or other price 

11 concession applies equally to drugs 

12 dispensed to full-benefit dual eligible 

13 Medicare drug plan enrollees and 

14 drugs dispensed to PDP and MA–PD 

15 enrollees who are not full-benefit dual 

16 eligible individuals; and 

17 ‘‘(II) the number of the units of 

18 such dosage and strength of the drug 

19 dispensed during the rebate period to 

20 full-benefit dual eligible individuals 

21 enrolled in the prescription drug plans 

22 administered by the PDP sponsor or 

23 the MA–PD plans administered by the 

24 MA–PD organization; divided by 


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1 ‘‘(ii) the total number of units of such 

2 dosage and strength of the drug dispensed 

3 during the rebate period to full-benefit 

4 dual eligible individuals enrolled in all pre5 scription drug plans administered by PDP 

6 sponsors and all MA–PD plans adminis7 tered by MA–PD organizations. 

8 ‘‘(4) LENGTH OF AGREEMENT.—The provisions 

9 of paragraph (4) of section 1927(b) (other than 

10 clauses (iv) and (v) of subparagraph (B)) shall apply 

11 to rebate agreements under this subsection in the 

12 same manner as such paragraph applies to a rebate 

13 agreement under such section. 

14 ‘‘(5) OTHER TERMS AND CONDITIONS.—The 

15 Secretary shall establish other terms and conditions 

16 of the rebate agreement under this subsection, in17 cluding terms and conditions related to compliance, 

18 that are consistent with this subsection. 

19 ‘‘(6) DEFINITIONS.—In this subsection and sec20 tion 1860D–12(b)(7): 

21 ‘‘(A) FULL-BENEFIT DUAL ELIGIBLE INDI22 VIDUAL.—The term ‘full-benefit dual eligible in23 dividual’ has the meaning given such term in 

24 section 1935(c)(6). 


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1 ‘‘(B) REBATE PERIOD.—The term ‘rebate 

2 period’ has the meaning given such term in sec3 tion 1927(k)(8).’’. 

4 (2) REPORTING REQUIREMENT FOR THE DE5 TERMINATION AND PAYMENT OF REBATES BY MANU6 FACTURES RELATED TO REBATE FOR FULL-BENEFIT

7 DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLL8 EES.— 

9 (A) REQUIREMENTS FOR PDP SPON10 SORS.—Section 1860D–12(b) of the Social Se11 curity Act (42 U.S.C. 1395w–112(b)) is amend12 ed by adding at the end the following new para13 graph: 

14 ‘‘(7) REPORTING REQUIREMENT FOR THE DE15 TERMINATION AND PAYMENT OF REBATES BY MANU16 FACTURERS RELATED TO REBATE FOR FULL-BEN17 EFIT DUAL ELIGIBLE MEDICARE DRUG PLAN EN18 ROLLEES.— 

19 ‘‘(A) IN GENERAL.—For purposes of the 

20 rebate under section 1860D–2(f) for contract 

21 years beginning on or after January 1, 2011, 

22 each contract entered into with a PDP sponsor 

23 under this part with respect to a prescription 

24 drug plan shall require that the sponsor comply 

25 with subparagraphs (B) and (C). 


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1 ‘‘(B) REPORT FORM AND CONTENTS.—Not 

2 later than 60 days after the end of each rebate 

3 period (as defined in section 1860D–2(f)(6)(B)) 

4 within such a contract year to which such sec5 tion applies, a PDP sponsor of a prescription 

6 drug plan under this part shall report to each 

7 manufacturer— 

8 ‘‘(i) information (by National Drug 

9 Code number) on the total number of units 

10 of each dosage, form, and strength of each 

11 drug of such manufacturer dispensed to 

12 full-benefit dual eligible Medicare drug 

13 plan enrollees under any prescription drug 

14 plan operated by the PDP sponsor during 

15 the rebate period; 

16 ‘‘(ii) information on the price dis17 counts, price concessions, and rebates for 

18 such drugs for such form, strength, and 

19 period; 

20 ‘‘(iii) information on the extent to 

21 which such price discounts, price conces22 sions, and rebates apply equally to full23 benefit dual eligible Medicare drug plan 

24 enrollees and PDP enrollees who are not 


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1 full-benefit dual eligible Medicare drug 

2 plan enrollees; and 

3 ‘‘(iv) any additional information that 

4 the Secretary determines is necessary to 

5 enable the Secretary to calculate the aver6 age Medicare drug program full-benefit 

7 dual eligible rebate amount (as defined in 

8 paragraph (3)(C) of such section), and to 

9 determine the amount of the rebate re10 quired under this section, for such form, 

11 strength, and period. 

12 Such report shall be in a form consistent with 

13 a standard reporting format established by the 

14 Secretary. 

15 ‘‘(C) SUBMISSION TO SECRETARY.—Each 

16 PDP sponsor shall promptly transmit a copy of 

17 the information reported under subparagraph 

18 (B) to the Secretary for the purpose of audit 

19 oversight and evaluation. 

20 ‘‘(D) CONFIDENTIALITY OF INFORMA21 TION.—The provisions of subparagraph (D) of 

22 section 1927(b)(3), relating to confidentiality of 

23 information, shall apply to information reported 

24 by PDP sponsors under this paragraph in the 

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1 formation disclosed by manufacturers or whole2 salers under such section, except— 

3 ‘‘(i) that any reference to ‘this sec4 tion’ in clause (i) of such subparagraph 

5 shall be treated as being a reference to this 

6 section; 

7 ‘‘(ii) the reference to the Director of 

8 the Congressional Budget Office in clause 

9 (iii) of such subparagraph shall be treated 

10 as including a reference to the Medicare 

11 Payment Advisory Commission; and 

12 ‘‘(iii) clause (iv) of such subparagraph 

13 shall not apply. 

14 ‘‘(E) OVERSIGHT.—Information reported 

15 under this paragraph may be used by the In16 spector General of the Department of Health 

17 and Human Services for the statutorily author18 ized purposes of audit, investigation, and eval19 uations. 

20 ‘‘(F) PENALTIES FOR FAILURE TO PRO21 VIDE TIMELY INFORMATION AND PROVISION OF

22 FALSE INFORMATION.—In the case of a PDP 

23 sponsor— 

24 ‘‘(i) that fails to provide information 

25 required under subparagraph (B) on a 


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1 timely basis, the sponsor is subject to a 

2 civil money penalty in the amount of 

3 $10,000 for each day in which such infor4 mation has not been provided; or 

5 ‘‘(ii) that knowingly (as defined in 

6 section 1128A(i)) provides false informa7 tion under such subparagraph, the sponsor 

8 is subject to a civil money penalty in an 

9 amount not to exceed $100,000 for each 

10 item of false information. 

11 Such civil money penalties are in addition to 

12 other penalties as may be prescribed by law. 

13 The provisions of section 1128A (other than 

14 subsections (a) and (b)) shall apply to a civil 

15 money penalty under this subparagraph in the 

16 same manner as such provisions apply to a pen17 alty or proceeding under section 1128A(a).’’. 

18 (B) APPLICATION TO MA ORGANIZA19 TIONS.—Section 1857(f)(3) of the Social Secu20 rity Act (42 U.S.C. 1395w–27(f)(3)) is amend21 ed by adding at the end the following: 

22 ‘‘(D) REPORTING REQUIREMENT RELATED

23 TO REBATE FOR FULL-BENEFIT DUAL ELIGIBLE

24 MEDICARE DRUG PLAN ENROLLEES.—Section 

25 1860D–12(b)(7).’’. 


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1 (3) DEPOSIT OF REBATES INTO MEDICARE PRE2 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) 

3 of such Act (42 U.S.C. 1395w–116(c)) is amended 

4 by adding at the end the following new paragraph: 

5 ‘‘(6) REBATE FOR FULL-BENEFIT DUAL ELIGI6 BLE MEDICARE DRUG PLAN ENROLLEES.—Amounts 

7 paid under a rebate agreement under section 

8 1860D–2(f) shall be deposited into the Account and 

9 shall be used to pay for all or part of the gradual 

10 elimination of the coverage gap under section 

11 1860D–2(b)(7).’’. 

12 SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN 

13 ORIGINAL COVERAGE GAP. 

14 Section 1860D–2 of the Social Security Act (42 

15 U.S.C. 1395w–102), as amended by section 1181(a), is 

16 amended— 

17 (1) in subsection (b)(4)(C)(ii), by inserting 

18 ‘‘subject to subsection (g)(2)(C),’’ after ‘‘(ii)’’; 

19 (2) in subsection (e)(1), in the matter before 

20 subparagraph (A), by striking ‘‘subsection (f)’’ and 

21 inserting ‘‘subsections (f) and (g)’’ after ‘‘this sub22 section’’; and 

23 (3) by adding at the end the following new sub24 section: 


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1 ‘‘(g) REQUIREMENT FOR MANUFACTURER DISCOUNT

2 AGREEMENT FOR CERTAIN QUALIFYING DRUGS.— 

3 ‘‘(1) IN GENERAL.—In this part, the term ‘cov4 ered part D drug’ does not include any drug or bio5 logic that is manufactured by a manufacturer that 

6 has not entered into and have in effect for all quali7 fying drugs (as defined in paragraph (5)(A)) a dis8 count agreement described in paragraph (2). 

9 ‘‘(2) DISCOUNT AGREEMENT.— 

10 ‘‘(A) PERIODIC DISCOUNTS.—A discount 

11 agreement under this paragraph shall require 

12 the manufacturer involved to provide, to each 

13 PDP sponsor with respect to a prescription 

14 drug plan or each MA organization with respect 

15 to each MA–PD plan, a discount in an amount 

16 specified in paragraph (3) for qualifying drugs 

17 (as defined in paragraph (5)(A)) of the manu18 facturer dispensed to a qualifying enrollee after 

19 December 31, 2010, insofar as the individual is 

20 in the original gap in coverage (as defined in 

21 paragraph (5)(E)). 

22 ‘‘(B) DISCOUNT AGREEMENT.—Insofar as 

23 not inconsistent with this subsection, the Sec24 retary shall establish terms and conditions of 

25 such agreement, including terms and conditions 


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1 relating to compliance, similar to the terms and 

2 conditions for rebate agreements under para3 graphs (2), (3), and (4) of section 1927(b), ex4 cept that— 

5 ‘‘(i) discounts shall be applied under 

6 this subsection to prescription drug plans 

7 and MA–PD plans instead of State plans 

8 under title XIX; 

9 ‘‘(ii) PDP sponsors and MA organiza10 tions shall be responsible, instead of 

11 States, for provision of necessary utiliza12 tion information to drug manufacturers; 

13 and 

14 ‘‘(iii) sponsors and MA organizations 

15 shall be responsible for reporting informa16 tion on drug-component negotiated price, 

17 instead of other manufacturer prices. 

18 ‘‘(C) COUNTING DISCOUNT TOWARD TRUE

19 OUT-OF-POCKET COSTS.—Under the discount 

20 agreement, in applying subsection (b)(4), with 

21 regard to subparagraph (C)(i) of such sub22 section, if a qualified enrollee purchases the 

23 qualified drug insofar as the enrollee is in an 

24 actual gap of coverage (as defined in paragraph 

25 (5)(D)), the amount of the discount under the 


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1 agreement shall be treated and counted as costs 

2 incurred by the plan enrollee. 

3 ‘‘(3) DISCOUNT AMOUNT.—The amount of the 

4 discount specified in this paragraph for a discount 

5 period for a plan is equal to 50 percent of the 

6 amount of the drug-component negotiated price (as 

7 defined in paragraph (5)(C)) for qualifying drugs for 

8 the period involved. 

9 ‘‘(4) ADDITIONAL TERMS.—In the case of a dis10 count provided under this subsection with respect to 

11 a prescription drug plan offered by a PDP sponsor 

12 or an MA–PD plan offered by an MA organization, 

13 if a qualified enrollee purchases the qualified drug— 

14 ‘‘(A) insofar as the enrollee is in an actual 

15 gap of coverage (as defined in paragraph 

16 (5)(D)), the sponsor or plan shall provide the 

17 discount to the enrollee at the time the enrollee 

18 pays for the drug; and 

19 ‘‘(B) insofar as the enrollee is in the por20 tion of the original gap in coverage (as defined 

21 in paragraph (5)(E)) that is not in the actual 

22 gap in coverage, the discount shall not be ap23 plied against the negotiated price (as defined in 

24 subsection (d)(1)(B)) for the purpose of calcu25 lating the beneficiary payment. 


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1 ‘‘(5) DEFINITIONS.—In this subsection: 

2 ‘‘(A) QUALIFYING DRUG.—The term 

3 ‘qualifying drug’ means, with respect to a pre4 scription drug plan or MA–PD plan, a drug or 

5 biological product that— 

6 ‘‘(i)(I) is a drug produced or distrib7 uted under an original new drug applica8 tion approved by the Food and Drug Ad9 ministration, including a drug product 

10 marketed by any cross-licensed producers 

11 or distributors operating under the new 

12 drug application; 

13 ‘‘(II) is a drug that was originally 

14 marketed under an original new drug ap15 plication approved by the Food and Drug 

16 Administration; or 

17 ‘‘(III) is a biological product as ap18 proved under Section 351(a) of the Public 

19 Health Services Act; 

20 ‘‘(ii) is covered under the formulary of 

21 the plan; and 

22 ‘‘(iii) is dispensed to an individual 

23 who is in the original gap in coverage. 

24 ‘‘(B) QUALIFYING ENROLLEE.—The term 

25 ‘qualifying enrollee’ means an individual enVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01429 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 rolled in a prescription drug plan or MA–PD 

2 plan other than such an individual who is a 

3 subsidy-eligible individual (as defined in section 

4 1860D–14(a)(3)). 

5 ‘‘(C) DRUG-COMPONENT NEGOTIATED

6 PRICE.—The term ‘drug-component negotiated 

7 price’ means, with respect to a qualifying drug, 

8 the negotiated price (as defined in subsection 

9 (d)(1)(B)), as determined without regard to any 

10 dispensing fee, of the drug under the prescrip11 tion drug plan or MA–PD plan involved. 

12 ‘‘(D) ACTUAL GAP IN COVERAGE.—The 

13 term ‘actual gap in coverage’ means the gap in 

14 prescription drug coverage that occurs between 

15 the initial coverage limit (as modified under 

16 subparagraph (B) of subsection (b)(7)) and the 

17 annual out-of-pocket threshold (as modified 

18 under subparagraph (C) of such subsection). 

19 ‘‘(E) ORIGINAL GAP IN COVERAGE.—The 

20 term ‘original in gap coverage’ means the gap 

21 in prescription drug coverage that would occur 

22 between the initial coverage limit (described in 

23 subsection (b)(3)) and the out-of-pocket thresh24 old (as defined in subsection (b)(4))(B) if sub25 section (b)(7) did not apply.’’. 


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1 SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS2 SION OF CLAIMS BY PHARMACIES LOCATED 

3 IN OR CONTRACTING WITH LONG-TERM CARE 

4 FACILITIES. 

5 (a) PART D SUBMISSION.—Section 1860D–12(b) of 

6 the Social Security Act (42 U.S.C. 1395w–112(b)), as 

7 amended by section 172(a)(1) of Public Law 110–275, is 

8 amended by striking paragraph (5) and redesignating 

9 paragraph (6) and paragraph (7), as added by section 

10 1181(b)(2), as paragraph (5) and paragraph (6), respec11 tively. 

12 (b) SUBMISSION TO MA–PD PLANS.—Section 

13 1857(f)(3) of the Social Security Act (42 U.S.C. 1395w– 

14 27(f)(3)), as added by section 171(b) of Public Law 110– 

15 275 and amended by section 172(a)(2) of such Public 

16 Law, is amended by striking subparagraph (B) and redes17 ignating subparagraph (C) as subparagraph (B). 

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

19 this section shall apply for contract years beginning with 

20 2010. 


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1 SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS2 SISTANCE PROGRAMS AND INDIAN HEALTH 

3 SERVICE IN PROVIDING PRESCRIPTION 

4 DRUGS TOWARD THE ANNUAL OUT-OF-POCK5 ET THRESHOLD UNDER PART D. 

6 (a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the 

7 Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is 

8 amended— 

9 (1) in clause (i), by striking ‘‘and’’ at the end; 

10 (2) in clause (ii)— 

11 (A) by striking ‘‘such costs shall be treated 

12 as incurred only if’’ and inserting ‘‘subject to 

13 clause (iii), such costs shall be treated as in14 curred only if’’; 

15 (B) by striking ‘‘, under section 1860D– 

16 14, or under a State Pharmaceutical Assistance 

17 Program’’; and 

18 (C) by striking the period at the end and 

19 inserting ‘‘; and’’; and 

20 (3) by inserting after clause (ii) the following 

21 new clause: 

22 ‘‘(iii) such costs shall be treated as in23 curred and shall not be considered to be 

24 reimbursed under clause (ii) if such costs 

25 are borne or paid— 

26 ‘‘(I) under section 1860D–14; 


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1 ‘‘(II) under a State Pharma2 ceutical Assistance Program; 

3 ‘‘(III) by the Indian Health Serv4 ice, an Indian tribe or tribal organiza5 tion, or an urban Indian organization 

6 (as defined in section 4 of the Indian 

7 Health Care Improvement Act); or 

8 ‘‘(IV) under an AIDS Drug As9 sistance Program under part B of 

10 title XXVI of the Public Health Serv11 ice Act.’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to costs incurred on or after 

14 January 1, 2011. 

15 SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLL16 MENT FOR FORMULARY CHANGES THAT AD17 VERSELY IMPACT AN ENROLLEE. 

18 (a) IN GENERAL.—Section 1860D–1(b)(3) of the So19 cial Security Act (42 U.S.C. 1395w–101(b)(3)) is amend20 ed by adding at the end the following new subparagraph: 

21 ‘‘(F) CHANGE IN FORMULARY RESULTING

22 IN INCREASE IN COST-SHARING.— 

23 ‘‘(i) IN GENERAL.—Except as pro24 vided in clause (ii), in the case of an indi25 vidual enrolled in a prescription drug plan 


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1 (or MA–PD plan) who has been prescribed 

2 and is using a covered part D drug while 

3 so enrolled, if the formulary of the plan is 

4 materially changed (other than at the end 

5 of a contract year) so to reduce the cov6 erage (or increase the cost-sharing) of the 

7 drug under the plan. 

8 ‘‘(ii) EXCEPTION.—Clause (i) shall 

9 not apply in the case that a drug is re10 moved from the formulary of a plan be11 cause of a recall or withdrawal of the drug 

12 issued by the Food and Drug Administra13 tion, because the drug is replaced with a 

14 generic drug that is a therapeutic equiva15 lent, or because of utilization management 

16 applied to— 

17 ‘‘(I) a drug whose labeling in18 cludes a boxed warning required by 

19 the Food and Drug Administration 

20 under section 210.57(c)(1) of title 21, 

21 Code of Federal Regulations (or a 

22 successor regulation); or 

23 ‘‘(II) a drug required under sub24 section (c)(2) of section 505–1 of the 

25 Federal Food, Drug, and Cosmetic 


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1 Act to have a Risk Evaluation and 

2 Management Strategy that includes 

3 elements under subsection (f) of such 

4 section.’’. 

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

6 subsection (a) shall apply to contract years beginning on 

7 or after January 1, 2011. 

8 Subtitle F—Medicare Rural Access 

9 Protections 

10 SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. 

11 (a) ADDITIONAL TELEHEALTH SITE.— 

12 (1) IN GENERAL.—Paragraph (4)(C)(ii) of sec13 tion 1834(m) of the Social Security Act (42 U.S.C. 

14 1395m(m)) is amended by adding at the end the fol15 lowing new subclause: 

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

17 (2) EFFECTIVE DATE.—The amendment made 

18 by paragraph (1) shall apply to services furnished on 

19 or after January 1, 2011. 

20 (b) TELEHEALTH ADVISORY COMMITTEE.— 

21 (1) ESTABLISHMENT.—Section 1868 of the So22 cial Security Act (42 U.S.C. 1395ee) is amended— 

23 (A) in the heading, by adding at the end 

24 the following: ‘‘TELEHEALTH ADVISORY COM25 MITTEE’’; and 


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

2 subsection: 

3 ‘‘(c) TELEHEALTH ADVISORY COMMITTEE.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall appoint 

5 a Telehealth Advisory Committee (in this subsection 

6 referred to as the ‘Advisory Committee’) to make 

7 recommendations to the Secretary on policies of the 

8 Centers for Medicare & Medicaid Services regarding 

9 telehealth services as established under section 

10 1834(m), including the appropriate addition or dele11 tion of services (and HCPCS codes) to those speci12 fied in paragraphs (4)(F)(i) and (4)(F)(ii) of such 

13 section and for authorized payment under paragraph 

14 (1) of such section. 

15 ‘‘(2) MEMBERSHIP; TERMS.— 

16 ‘‘(A) MEMBERSHIP.— 

17 ‘‘(i) IN GENERAL.—The Advisory 

18 Committee shall be composed of 9 mem19 bers, to be appointed by the Secretary, of 

20 whom— 

21 ‘‘(I) 5 shall be practicing physi22 cians; 

23 ‘‘(II) 2 shall be practicing non24 physician health care practitioners; 

25 and 


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1 ‘‘(III) 2 shall be administrators 

2 of telehealth programs. 

3 ‘‘(ii) REQUIREMENTS FOR APPOINT4 ING MEMBERS.—In appointing members of 

5 the Advisory Committee, the Secretary 

6 shall— 

7 ‘‘(I) ensure that each member 

8 has prior experience with the practice 

9 of telemedicine or telehealth; 

10 ‘‘(II) give preference to individ11 uals who are currently providing tele12 medicine or telehealth services or who 

13 are involved in telemedicine or tele14 health programs; 

15 ‘‘(III) ensure that the member16 ship of the Advisory Committee rep17 resents a balance of specialties and 

18 geographic regions; and 

19 ‘‘(IV) take into account the rec20 ommendations of stakeholders. 

21 ‘‘(B) TERMS.—The members of the Advi22 sory Committee shall serve for such term as the 

23 Secretary may specify. 

24 ‘‘(C) CONFLICTS OF INTEREST.—An advi25 sory committee member may not participate 


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1 with respect to a particular matter considered 

2 in an advisory committee meeting if such mem3 ber (or an immediate family member of such 

4 member) has a financial interest that could be 

5 affected by the advice given to the Secretary 

6 with respect to such matter. 

7 ‘‘(3) MEETINGS.—The Advisory Committee 

8 shall meet twice each calendar year and at such 

9 other times as the Secretary may provide. 

10 ‘‘(4) PERMANENT COMMITTEE.—Section 14 of 

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

12 App.) shall not apply to the Advisory Committee.’’ 

13 (2) FOLLOWING RECOMMENDATIONS.—Section 

14 1834(m)(4)(F) of such Act (42 U.S.C. 

15 1395m(m)(4)(F)) is amended by adding at the end 

16 the following new clause: 

17 ‘‘(iii) RECOMMENDATIONS OF THE

18 TELEHEALTH ADVISORY COMMITTEE.—In 

19 making determinations under clauses (i) 

20 and (ii), the Secretary shall take into ac21 count the recommendations of the Tele22 health Advisory Committee (established 

23 under section 1868(c)) when adding or de24 leting services (and HCPCS codes) and in 

25 establishing policies of the Centers for 


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1 Medicare & Medicaid Services regarding 

2 the delivery of telehealth services. If the 

3 Secretary does not implement such a rec4 ommendation, the Secretary shall publish 

5 in the Federal Register a statement re6 garding the reason such recommendation 

7 was not implemented.’’ 

8 (3) WAIVER OF ADMINISTRATIVE LIMITA9 TION.—The Secretary of Health and Human Serv10 ices shall establish the Telehealth Advisory Com11 mittee under the amendment made by paragraph (1) 

12 notwithstanding any limitation that may apply to 

13 the number of advisory committees that may be es14 tablished (within the Department of Health and 

15 Human Services or otherwise). 

16 SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS 

17 PROVISION. 

18 Section 1833(t)(7)(D)(i) of the Social Security Act 

19 (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 

20 (1) in subclause (II)— 

21 (A) in the first sentence, by striking 

22 ‘‘‘2010’’and inserting ‘‘2012’’; and 

23 (B) in the second sentence, by striking ‘‘or 

24 2009’’ and inserting ‘‘, 2009, 2010, or 2011’’; 

25 and 


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1 (2) in subclause (III), by striking ‘‘January 1, 

2 2010’’ and inserting ‘‘January 1, 2012’’. 

3 SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLAS4 SIFICATIONS. 

5 Subsection (a) of section 106 of division B of the Tax 

6 Relief and Health Care Act of 2006 (42 U.S.C. 1395 

7 note), as amended by section 117 of the Medicare, Med8 icaid, and SCHIP Extension Act of 2007 (Public Law 

9 110–173) and section 124 of the Medicare Improvements 

10 for Patients and Providers Act of 2008 (Public Law 110– 

11 275), is amended by striking ‘‘September 30, 2009’’ and 

12 inserting ‘‘September 30, 2011’’. 

13 SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK. 

14 Section 1848(e)(1)(E) of the Social Security Act (42 

15 U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘before 

16 January 1, 2010’’ and inserting ‘‘before January 1, 

17 2012’’. 

18 SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COM19 PONENT OF CERTAIN PHYSICIAN PATHOL20 OGY SERVICES. 

21 Section 542(c) of the Medicare, Medicaid, and 

22 SCHIP Benefits Improvement and Protection Act of 2000 

23 (as enacted into law by section 1(a)(6) of Public Law 106– 

24 554), as amended by section 732 of the Medicare Prescrip25 tion Drug, Improvement, and Modernization Act of 2003 


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1 (42 U.S.C. 1395w–4 note), section 104 of division B of 

2 the Tax Relief and Health Care Act of 2006 (42 U.S.C. 

3 1395w–4 note), section 104 of the Medicare, Medicaid, 

4 and SCHIP Extension Act of 2007 (Public Law 110– 

5 173), and section 136 of the Medicare Improvements for 

6 Patients and Providers Act of 1008 (Public Law 110– 

7 275), is amended by striking ‘‘and 2009’’ and inserting 

8 ‘‘2009, 2010, and 2011’’. 

9 SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS. 

10 (a) IN GENERAL.—Section 1834(l)(13) of the Social 

11 Security Act (42 U.S.C. 1395m(l)(13)) is amended— 

12 (1) in subparagraph (A)— 

13 (A) in the matter preceding clause (i), by 

14 striking ‘‘before January 1, 2010’’ and insert15 ing ‘‘before January 1, 2012’’; and 

16 (B) in each of clauses (i) and (ii), by strik17 ing ‘‘before January 1, 2010’’ and inserting 

18 ‘‘before January 1, 2012’’. 

19 (b) AIR AMBULANCE IMPROVEMENTS.—Section 

20 146(b)(1) of the Medicare Improvements for Patients and 

21 Providers Act of 2008 (Public Law 110–275) is amended 

22 by striking ‘‘ending on December 31, 2009’’ and inserting 

23 ‘‘ending on December 31, 2011’’. 


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1 TITLE J—MEDICARE 

2 BENEFICIARY IMPROVEMENTS 

3 Subtitle A—Improving and Simpli4 fying Financial Assistance for 

5 Low Income Medicare Bene6 ficiaries 

7 SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAV8 INGS PROGRAM AND LOW-INCOME SUBSIDY 

9 PROGRAM. 

10 (a) APPLICATION OF HIGHEST LEVEL PERMITTED

11 UNDER LIS TO ALL SUBSIDY ELIGIBLE INDIVIDUALS.— 

12 (1) IN GENERAL.—Section 1860D–14(a)(1) of 

13 the Social Security Act (42 U.S.C. 1395w– 

14 114(a)(1)) is amended in the matter before subpara15 graph (A), by inserting ‘‘(or, beginning with 2012, 

16 paragraph (3)(E))’’ after ‘‘paragraph (3)(D)’’. 

17 (2) ANNUAL INCREASE IN LIS RESOURCE

18 TEST.—Section 1860D–14(a)(3)(E)(i) of such Act 

19 (42 U.S.C. 1395w–114(a)(3)(E)(i)) is amended— 

20 (A) by striking ‘‘and’’ at the end of sub21 clause (I); 

22 (B) in subclause (II), by inserting ‘‘(before 

23 2012)’’ after ‘‘subsequent year’’; 

24 (C) by striking the period at the end of 

25 subclause (II) and inserting a semicolon; 


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1 (D) by inserting after subclause (II) the 

2 following new subclauses: 

3 ‘‘(III) for 2012, $17,000 (or 

4 $34,000 in the case of the combined 

5 value of the individual’s assets or re6 sources and the assets or resources of 

7 the individual’s spouse); and 

8 ‘‘(IV) for a subsequent year, the 

9 dollar amounts specified in this sub10 clause (or subclause (III)) for the pre11 vious year increased by the annual 

12 percentage increase in the consumer 

13 price index (all items; U.S. city aver14 age) as of September of such previous 

15 year.’’; and 

16 (E) in the last sentence, by inserting ‘‘or 

17 (IV)’’ after ‘‘subclause (II)’’. 

18 (3) APPLICATION OF LIS TEST UNDER MEDI19 CARE SAVINGS PROGRAM.—Section 1905(p)(1)(C) of 

20 such Act (42 U.S.C. 1396d(p)(1)(C)) is amended— 

21 (A) by striking ‘‘effective beginning with 

22 January 1, 2010’’ and inserting ‘‘effective for 

23 the period beginning with January 1, 2010, and 

24 ending with December 31, 2011’’; and 


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1 (B) by inserting before the period at the 

2 end the following: ‘‘or, effective beginning with 

3 January 1, 2012, whose resources (as so deter4 mined) do not exceed the maximum resource 

5 level applied for the year under subparagraph 

6 (E) of section 1860D–14(a)(3) (determined 

7 without regard to the life insurance policy ex8 clusion provided under subparagraph (G) of 

9 such section) applicable to an individual or to 

10 the individual and the individual’s spouse (as 

11 the case may be)’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to eligibility determinations for 

14 income-related subsidies and medicare cost-sharing fur15 nished for periods beginning on or after January 1, 2012. 

16 SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR 

17 CERTAIN NON-INSTITUTIONALIZED FULL18 BENEFIT DUAL ELIGIBLE INDIVIDUALS. 

19 (a) IN GENERAL.—Section 1860D–14(a)(1)(D)(i) of 

20 the Social Security Act (42 U.S.C. 1395w– 

21 114(a)(1)(D)(i)) is amended— 

22 (1) by striking ‘‘INSTITUTIONALIZED INDIVID23 UALS.—In’’ and inserting ‘‘ELIMINATION OF COST24 SHARING FOR CERTAIN FULL-BENEFIT DUAL ELIGI25 BLE INDIVIDUALS.— 


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1 ‘‘(I) INSTITUTIONALIZED INDI2 VIDUALS.—In’’; and 

3 (2) by adding at the end the following new sub4 clause: 

5 ‘‘(II) CERTAIN OTHER INDIVID6 UALS.—In the case of an individual 

7 who is a full-benefit dual eligible indi8 vidual and with respect to whom there 

9 has been a determination that but for 

10 the provision of home and community 

11 based care (whether under section 

12 1915, 1932, or under a waiver under 

13 section 1115) the individual would re14 quire the level of care provided in a 

15 hospital or a nursing facility or inter16 mediate care facility for the mentally 

17 retarded the cost of which could be re18 imbursed under the State plan under 

19 title XIX, the elimination of any bene20 ficiary coinsurance described in sec21 tion 1860D–2(b)(2) (for all amounts 

22 through the total amount of expendi23 tures at which benefits are available 

24 under section 1860D–2(b)(4)).’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply to drugs dispensed on or after 

3 January 1, 2011. 

4 SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT. 

5 (a) ADMINISTRATIVE VERIFICATION OF INCOME AND

6 RESOURCES UNDER THE LOW-INCOME SUBSIDY PRO7 GRAM.— 

8 (1) IN GENERAL.—Clause (iii) of section 

9 1860D–14(a)(3)(E) of the Social Security Act (42 

10 U.S.C. 1395w–114(a)(3)(E)) is amended to read as 

11 follows: 

12 ‘‘(iii) CERTIFICATION OF INCOME AND

13 RESOURCES.—For purposes of applying 

14 this section— 

15 ‘‘(I) an individual shall be per16 mitted to apply on the basis of self17 certification of income and resources; 

18 and 

19 ‘‘(II) matters attested to in the 

20 application shall be subject to appro21 priate methods of verification without 

22 the need of the individual to provide 

23 additional documentation, except in 

24 extraordinary situations as determined 

25 by the Commissioner.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall apply beginning January 1, 

3 2010. 

4 (b) DISCLOSURES TO FACILITATE IDENTIFICATION

5 OF INDIVIDUALS LIKELY TO BE INELIGIBLE FOR THE

6 LOW-INCOME ASSISTANCE UNDER THE MEDICARE PRE7 SCRIPTION DRUG PROGRAM TO ASSIST SOCIAL SECURITY

8 ADMINISTRATION’S OUTREACH TO ELIGIBLE INDIVID9 UALS.—For provision authorizing disclosure of return in10 formation to facilitate identification of individuals likely 

11 to be ineligible for low-income subsidies under Medicare 

12 prescription drug program, see section 1801. 

13 SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIM14 BURSEMENTS FOR RETROACTIVE LOW IN15 COME SUBSIDY ENROLLMENT. 

16 (a) IN GENERAL.—In the case of a retroactive LIS 

17 enrollment beneficiary who is enrolled under a prescription 

18 drug plan under part D of title XVIII of the Social Secu19 rity Act (or an MA–PD plan under part C of such title), 

20 the beneficiary (or any eligible third party) is entitled to 

21 reimbursement by the plan for covered drug costs incurred 

22 by the beneficiary during the retroactive coverage period 

23 of the beneficiary in accordance with subsection (b) and 

24 in the case of such a beneficiary described in subsection 

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1 cally by the plan upon receipt of appropriate notice the 

2 beneficiary is eligible for assistance described in such sub3 section (c)(4)(A)(i) without further information required 

4 to be filed with the plan by the beneficiary. 

5 (b) ADMINISTRATIVE REQUIREMENTS RELATING TO

6 REIMBURSEMENTS.— 

7 (1) LINE-ITEM DESCRIPTION.—Each reimburse8 ment made by a prescription drug plan or MA–PD 

9 plan under subsection (a) shall include a line-item 

10 description of the items for which the reimbursement 

11 is made. 

12 (2) TIMING OF REIMBURSEMENTS.—A prescrip13 tion drug plan or MA–PD plan must make a reim14 bursement under subsection (a) to a retroactive LIS 

15 enrollment beneficiary, with respect to a claim, not 

16 later than 45 days after— 

17 (A) in the case of a beneficiary described 

18 in subsection (c)(4)(A)(i), the date on which the 

19 plan receives notice from the Secretary that the 

20 beneficiary is eligible for assistance described in 

21 such subsection; or 

22 (B) in the case of a beneficiary described 

23 in subsection (c)(4)(A)(ii), the date on which 

24 the beneficiary files the claim with the plan. 


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1 (3) REPORTING REQUIREMENT.—For each 

2 month beginning with January 2011, each prescrip3 tion drug plan and each MA–PD plan shall report 

4 to the Secretary the following: 

5 (A) The number of claims the plan has re6 adjudicated during the month due to a bene7 ficiary becoming retroactively eligible for sub8 sidies available under section 1860D–14 of the 

9 Social Security Act. 

10 (B) The total value of the readjudicated 

11 claim amount for the month. 

12 (C) The Medicare Health Insurance Claims 

13 Number of beneficiaries for whom claims were 

14 readjudicated. 

15 (D) For the claims described in subpara16 graphs (A) and (B), an attestation to the Ad17 ministrator of the Centers for Medicare & Med18 icaid Services of the total amount of reimburse19 ment the plan has provided to beneficiaries for 

20 premiums and cost-sharing that the beneficiary 

21 overpaid for which the plan received payment 

22 from the Centers for Medicare & Medicaid Serv23 ices. 

24 (c) DEFINITIONS.—For purposes of this section: 


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1 (1) COVERED DRUG COSTS.—The term ‘‘cov2 ered drug costs’’ means, with respect to a retroactive 

3 LIS enrollment beneficiary enrolled under a pre4 scription drug plan under part D of title XVIII of 

5 the Social Security Act (or an MA–PD plan under 

6 part C of such title), the amount by which— 

7 (A) the costs incurred by such beneficiary 

8 during the retroactive coverage period of the 

9 beneficiary for covered part D drugs, premiums, 

10 and cost-sharing under such title; exceeds 

11 (B) such costs that would have been in12 curred by such beneficiary during such period if 

13 the beneficiary had been both enrolled in the 

14 plan and recognized by such plan as qualified 

15 during such period for the low income subsidy 

16 under section 1860D–14 of the Social Security 

17 Act to which the individual is entitled. 

18 (2) ELIGIBLE THIRD PARTY.—The term ‘‘eligi19 ble third party’’ means, with respect to a retroactive 

20 LIS enrollment beneficiary, an organization or other 

21 third party that is owed payment on behalf of such 

22 beneficiary for covered drug costs incurred by such 

23 beneficiary during the retroactive coverage period of 

24 such beneficiary. 


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1 (3) RETROACTIVE COVERAGE PERIOD.—The 

2 term ‘‘retroactive coverage period’’ means— 

3 (A) with respect to a retroactive LIS en4 rollment beneficiary described in paragraph 

5 (4)(A)(i), the period— 

6 (i) beginning on the effective date of 

7 the assistance described in such paragraph 

8 for which the individual is eligible; and 

9 (ii) ending on the date the plan effec10 tuates the status of such individual as so 

11 eligible; and 

12 (B) with respect to a retroactive LIS en13 rollment beneficiary described in paragraph 

14 (4)(A)(ii), the period— 

15 (i) beginning on the date the indi16 vidual is both entitled to benefits under 

17 part A, or enrolled under part B, of title 

18 XVIII of the Social Security Act and eligi19 ble for medical assistance under a State 

20 plan under title XIX of such Act; and 

21 (ii) ending on the date the plan effec22 tuates the status of such individual as a 

23 full-benefit dual eligible individual (as de24 fined in section 1935(c)(6) of such Act). 


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1 (4) RETROACTIVE LIS ENROLLMENT BENE2 FICIARY.— 

3 (A) IN GENERAL.—The term ‘‘retroactive 

4 LIS enrollment beneficiary’’ means an indi5 vidual who— 

6 (i) is enrolled in a prescription drug 

7 plan under part D of title XVIII of the So8 cial Security Act (or an MA–PD plan 

9 under part C of such title) and subse10 quently becomes eligible as a full-benefit 

11 dual eligible individual (as defined in sec12 tion 1935(c)(6) of such Act), an individual 

13 receiving a low-income subsidy under sec14 tion 1860D–14 of such Act, an individual 

15 receiving assistance under the Medicare 

16 Savings Program implemented under 

17 clauses (i), (iii), and (iv) of section 

18 1902(a)(10)(E) of such Act, or an indi19 vidual receiving assistance under the sup20 plemental security income program under 

21 section 1611 of such Act; or 

22 (ii) subject to subparagraph (B)(i), is 

23 a full-benefit dual eligible individual (as 

24 defined in section 1935(c)(6) of such Act) 

25 who is automatically enrolled in such a 


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1 plan under section 1860D–1(b)(1)(C) of 

2 such Act. 

3 (B) EXCEPTION FOR BENEFICIARIES EN4 ROLLED IN RFP PLAN.— 

5 (i) IN GENERAL.—In no case shall an 

6 individual described in subparagraph 

7 (A)(ii) include an individual who is en8 rolled, pursuant to a RFP contract de9 scribed in clause (ii), in a prescription 

10 drug plan offered by the sponsor of such 

11 plan awarded such contract. 

12 (ii) RFP CONTRACT DESCRIBED.— 

13 The RFP contract described in this section 

14 is a contract entered into between the Sec15 retary and a sponsor of a prescription drug 

16 plan pursuant to the Centers for Medicare 

17 & Medicaid Services’ request for proposals 

18 issued on February 17, 2009, relating to 

19 Medicare part D retroactive coverage for 

20 certain low income beneficiaries, or a simi21 lar subsequent request for proposals. 

22 SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT. 

23 (a) IN GENERAL.—Section 1860D–1(b)(1)(C) of the 

24 Social Security Act (42 U.S.C. 1395w–101(b)(1)(C)) is 

25 amended by adding after ‘‘PDP region’’ the following: ‘‘or 


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1 through use of an intelligent assignment process that is 

2 designed to maximize the access of such individual to nec3 essary prescription drugs while minimizing costs to such 

4 individual and to the program under this part to the great5 est extent possible. In the case the Secretary enrolls such 

6 individuals through use of an intelligent assignment proc7 ess, such process shall take into account the extent to 

8 which prescription drugs necessary for the individual are 

9 covered in the case of a PDP sponsor of a prescription 

10 drug plan that uses a formulary, the use of prior author11 ization or other restrictions on access to coverage of such 

12 prescription drugs by such a sponsor, and the overall qual13 ity of a prescription drug plan as measured by quality rat14 ings established by the Secretary.’’ 

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

16 subsection (a) shall take effect for contract years begin17 ning with 2012. 

18 SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC 

19 ENROLLMENT PROCESS FOR CERTAIN SUB20 SIDY ELIGIBLE INDIVIDUALS. 

21 (a) SPECIAL ENROLLMENT PERIOD.—Section 

22 1860D–1(b)(3)(D) of the Social Security Act (42 U.S.C. 

23 1395w–101(b)(3)(D)) is amended to read as follows: 

24 ‘‘(D) SUBSIDY ELIGIBLE INDIVIDUALS.— 

25 In the case of an individual (as determined by 


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1 the Secretary) who is determined under sub2 paragraph (B) of section 1860D–14(a)(3) to be 

3 a subsidy eligible individual.’’. 

4 (b) AUTOMATIC ENROLLMENT.—Section 1860D– 

5 1(b)(1) of the Social Security Act (42 U.S.C. 1395w– 

6 101(b)(1)) is amended by adding at the end the following 

7 new subparagraph: 

8 ‘‘(D) SPECIAL RULE FOR SUBSIDY ELIGI9 BLE INDIVIDUALS.—The process established 

10 under subparagraph (A) shall include, in the 

11 case of an individual described in section 

12 1860D–1(b)(3)(D) who fails to enroll in a pre13 scription drug plan or an MA–PD plan during 

14 the special enrollment established under such 

15 section applicable to such individual, the appli16 cation of the assignment process described in 

17 subparagraph (C) to such individual in the 

18 same manner as such assignment process ap19 plies to a part D eligible individual described in 

20 such subparagraph (C). Nothing in the previous 

21 sentence shall prevent an individual described in 

22 such sentence from declining enrollment in a 

23 plan determined appropriate by the Secretary 

24 (or in the program under this part) or from 

25 changing such enrollment.’’. 


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

2 this section shall apply to subsidy determinations made 

3 for months beginning with January 2011. 

4 SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO RE5 BATE IN CALCULATION OF LOW INCOME SUB6 SIDY BENCHMARK. 

7 (a) IN GENERAL.—Section 1860D–14(b)(2)(B)(iii) 

8 of the Social Security Act (42 U.S.C. 1395w– 

9 114(b)(2)(B)(iii)) is amended by inserting before the pe10 riod the following: ‘‘before the application of the monthly 

11 rebate computed under section 1854(b)(1)(C)(i) for that 

12 plan and year involved’’. 

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

14 subsection (a) shall apply to subsidy determinations made 

15 for months beginning with January 2011. 

16 Subtitle B—Reducing Health 

17 Disparities 

18 SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN 

19 MEDICARE. 

20 (a) ENSURING EFFECTIVE COMMUNICATION BY THE

21 CENTERS FOR MEDICARE & MEDICAID SERVICES.— 

22 (1) STUDY ON MEDICARE PAYMENTS FOR LAN23 GUAGE SERVICES.—The Secretary of Health and 

24 Human Services shall conduct a study that examines 

25 the extent to which Medicare service providers utiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01456 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 lize, offer, or make available language services for 

2 beneficiaries who are limited English proficient and 

3 ways that Medicare should develop payment systems 

4 for language services. 

5 (2) ANALYSES.—The study shall include an 

6 analysis of each of the following: 

7 (A) How to develop and structure appro8 priate payment systems for language services 

9 for all Medicare service providers. 

10 (B) The feasibility of adopting a payment 

11 methodology for on-site interpreters, including 

12 interpreters who work as independent contrac13 tors and interpreters who work for agencies 

14 that provide on-site interpretation, pursuant to 

15 which such interpreters could directly bill Medi16 care for services provided in support of physi17 cian office services for an LEP Medicare pa18 tient. 

19 (C) The feasibility of Medicare contracting 

20 directly with agencies that provide off-site inter21 pretation including telephonic and video inter22 pretation pursuant to which such contractors 

23 could directly bill Medicare for the services pro24 vided in support of physician office services for 

25 an LEP Medicare patient. 


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1 (D) The feasibility of modifying the exist2 ing Medicare resource-based relative value scale 

3 (RBRVS) by using adjustments (such as multi4 pliers or add-ons) when a patient is LEP. 

5 (E) How each of options described in a 

6 previous paragraph would be funded and how 

7 such funding would affect physician payments, 

8 a physician’s practice, and beneficiary cost9 sharing. 

10 (F) The extent to which providers under 

11 parts A and B of title XVIII of the Social Secu12 rity Act, MA organizations offering Medicare 

13 Advantage plans under part C of such title and 

14 PDP sponsors of a prescription drug plan 

15 under part D of such title utilize, offer, or make 

16 available language services for beneficiaries with 

17 limited English proficiency. 

18 (G) The nature and type of language serv19 ices provided by States under title XIX of the 

20 Social Security Act and the extent to which 

21 such services could be utilized by beneficiaries 

22 and providers under title XVIII of such Act. 

23 (3) VARIATION IN PAYMENT SYSTEM DE24 SCRIBED.—The payment systems described in para25 graph (2)(A) may allow variations based upon types 


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1 of service providers, available delivery methods, and 

2 costs for providing language services including such 

3 factors as— 

4 (A) the type of language services provided 

5 (such as provision of health care or health care 

6 related services directly in a non-English lan7 guage by a bilingual provider or use of an inter8 preter); 

9 (B) type of interpretation services provided 

10 (such as in-person, telephonic, video interpreta11 tion); 

12 (C) the methods and costs of providing 

13 language services (including the costs of pro14 viding language services with internal staff or 

15 through contract with external independent con16 tractors or agencies, or both); 

17 (D) providing services for languages not 

18 frequently encountered in the United States; 

19 and 

20 (E) providing services in rural areas. 

21 (4) REPORT.—The Secretary shall submit a re22 port on the study conducted under subsection (a) to 

23 appropriate committees of Congress not later than 

24 12 months after the date of the enactment of this 

25 Act. 


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1 (5) EXEMPTION FROM PAPERWORK REDUCTION

2 ACT.—Chapter 35 of title 44, United States Code 

3 (commonly known as the ‘‘Paperwork Reduction 

4 Act’’), shall not apply for purposes of carrying out 

5 this subsection. 

6 (6) AUTHORIZATION OF APPROPRIATIONS.— 

7 There is authorized to be appropriated to carry out 

8 this subsection such sums as are necessary. 

9 (b) HEALTH PLANS.—Section 1857(g)(1) of the So10 cial Security Act (42 U.S.C. 1395w–27(g)(1)) is amend11 ed— 

12 (1) by striking ‘‘or’’ at the end of subparagraph 

13 (F); 

14 (2) by adding ‘‘or’’ at the end of subparagraph 

15 (G); and 

16 (3) by inserting after subparagraph (G) the fol17 lowing new subparagraph: 

18 ‘‘(H) fails substantially to provide lan19 guage services to limited English proficient 

20 beneficiaries enrolled in the plan that are re21 quired under law;’’. 


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1 SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR 

2 MEDICARE BENEFICIARIES WITH LIMITED 

3 ENGLISH PROFICIENCY BY PROVIDING REIM4 BURSEMENT FOR CULTURALLY AND LINGUIS5 TICALLY APPROPRIATE SERVICES. 

6 (a) IN GENERAL.—Not later than 6 months after the 

7 date of the completion of the study described in section 

8 1221(a), the Secretary, acting through the Centers for 

9 Medicare & Medicaid Services, shall carry out a dem10 onstration program under which the Secretary shall award 

11 not fewer than 24 3-year grants to eligible Medicare serv12 ice providers (as described in subsection (b)(1)) to improve 

13 effective communication between such providers and Medi14 care beneficiaries who are living in communities where ra15 cial and ethnic minorities, including populations that face 

16 language barriers, are underserved with respect to such 

17 services. In designing and carrying out the demonstration 

18 the Secretary shall take into consideration the results of 

19 the study conducted under section 1221(a) and adjust, as 

20 appropriate, the distribution of grants so as to better tar21 get Medicare beneficiaries who are in the greatest need 

22 of language services. The Secretary shall not authorize a 

23 grant larger than $500,000 over three years for any grant24 ee. 

25 (b) ELIGIBILITY; PRIORITY.— 


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

2 grant under subsection (a) an entity shall— 

3 (A) be— 

4 (i) a provider of services under part A 

5 of title XVIII of the Social Security Act; 

6 (ii) a service provider under part B of 

7 such title; 

8 (iii) a part C organization offering a 

9 Medicare part C plan under part C of such 

10 title; or 

11 (iv) a PDP sponsor of a prescription 

12 drug plan under part D of such title; and 

13 (B) prepare and submit to the Secretary 

14 an application, at such time, in such manner, 

15 and accompanied by such additional informa16 tion as the Secretary may require. 

17 (2) PRIORITY.— 

18 (A) DISTRIBUTION.—To the extent fea19 sible, in awarding grants under this section, the 

20 Secretary shall award— 

21 (i) at least 6 grants to providers of 

22 services described in paragraph (1)(A)(i); 

23 (ii) at least 6 grants to service pro24 viders described in paragraph (1)(A)(ii); 


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1 (iii) at least 6 grants to organizations 

2 described in paragraph (1)(A)(iii); and 

3 (iv) at least 6 grants to sponsors de4 scribed in paragraph (1)(A)(iv). 

5 (B) FOR COMMUNITY ORGANIZATIONS.— 

6 The Secretary shall give priority to applicants 

7 that have developed partnerships with commu8 nity organizations or with agencies with experi9 ence in language access. 

10 (C) VARIATION IN GRANTEES.—The Sec11 retary shall also ensure that the grantees under 

12 this section represent, among other factors, 

13 variations in— 

14 (i) different types of language services 

15 provided and of service providers and orga16 nizations under parts A through D of title 

17 XVIII of the Social Security Act; 

18 (ii) languages needed and their fre19 quency of use; 

20 (iii) urban and rural settings; 

21 (iv) at least two geographic regions, 

22 as defined by the Secretary; and 

23 (v) at least two large metropolitan 

24 statistical areas with diverse populations. 

25 (c) USE OF FUNDS.— 


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1 (1) IN GENERAL.—A grantee shall use grant 

2 funds received under this section to pay for the pro3 vision of competent language services to Medicare 

4 beneficiaries who are limited English proficient. 

5 Competent interpreter services may be provided 

6 through on-site interpretation, telephonic interpreta7 tion, or video interpretation or direct provision of 

8 health care or health care related services by a bilin9 gual health care provider. A grantee may use bilin10 gual providers, staff, or contract interpreters. A 

11 grantee may use grant funds to pay for competent 

12 translation services. A grantee may use up to 10 

13 percent of the grant funds to pay for administrative 

14 costs associated with the provision of competent lan15 guage services and for reporting required under sub16 section (e). 

17 (2) ORGANIZATIONS.—Grantees that are part C 

18 organizations or PDP sponsors must ensure that 

19 their network providers receive at least 50 percent of 

20 the grant funds to pay for the provision of com21 petent language services to Medicare beneficiaries 

22 who are limited English proficient, including physi23 cians and pharmacies. 

24 (3) DETERMINATION OF PAYMENTS FOR LAN25 GUAGE SERVICES.—Payments to grantees shall be 


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1 calculated based on the estimated numbers of lim2 ited English proficient Medicare beneficiaries in a 

3 grantee’s service area utilizing— 

4 (A) data on the numbers of limited 

5 English proficient individuals who speak 

6 English less than ‘‘very well’’ from the most re7 cently available data from the Bureau of the 

8 Census or other State-based study the Sec9 retary determines likely to yield accurate data 

10 regarding the number of such individuals served 

11 by the grantee; or 

12 (B) the grantee’s own data if the grantee 

13 routinely collects data on Medicare bene14 ficiaries’ primary language in a manner deter15 mined by the Secretary to yield accurate data 

16 and such data shows greater numbers of limited 

17 English proficient individuals than the data list18 ed in subparagraph (A). 

19 (4) LIMITATIONS.— 

20 (A) REPORTING.—Payments shall only be 

21 provided under this section to grantees that re22 port their costs of providing language services 

23 as required under subsection (e) and may be 

24 modified annually at the discretion of the Sec25 retary. If a grantee fails to provide the reports 


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1 under such section for the first year of a grant, 

2 the Secretary may terminate the grant and so3 licit applications from new grantees to partici4 pate in the subsequent two years of the dem5 onstration program. 

6 (B) TYPE OF SERVICES.— 

7 (i) IN GENERAL.—Subject to clause 

8 (ii), payments shall be provided under this 

9 section only to grantees that utilize com10 petent bilingual staff or competent inter11 preter or translation services which— 

12 (I) if the grantee operates in a 

13 State that has statewide health care 

14 interpreter standards, meet the State 

15 standards currently in effect; or 

16 (II) if the grantee operates in a 

17 State that does not have statewide 

18 health care interpreter standards, uti19 lizes competent interpreters who fol20 low the National Council on Inter21 preting in Health Care’s Code of Eth22 ics and Standards of Practice. 

23 (ii) EXEMPTIONS.—The requirements 

24 of clause (i) shall not apply— 


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1 (I) in the case of a Medicare ben2 eficiary who is limited English pro3 ficient (who has been informed in the 

4 beneficiary’s primary language of the 

5 availability of free interpreter and 

6 translation services) and who requests 

7 the use of family, friends, or other 

8 persons untrained in interpretation or 

9 translation and the grantee documents 

10 the request in the beneficiary’s record; 

11 and 

12 (II) in the case of a medical 

13 emergency where the delay directly as14 sociated with obtaining a competent 

15 interpreter or translation services 

16 would jeopardize the health of the pa17 tient. 

18 Nothing in clause (ii)(II) shall be con19 strued to exempt emergency rooms or simi20 lar entities that regularly provide health 

21 care services in medical emergencies from 

22 having in place systems to provide com23 petent interpreter and translation services 

24 without undue delay. 


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1 (d) ASSURANCES.—Grantees under this section 

2 shall— 

3 (1) ensure that appropriate clinical and support 

4 staff receive ongoing education and training in lin5 guistically appropriate service delivery; 

6 (2) ensure the linguistic competence of bilingual 

7 providers; 

8 (3) offer and provide appropriate language serv9 ices at no additional charge to each patient with lim10 ited English proficiency at all points of contact, in 

11 a timely manner during all hours of operation; 

12 (4) notify Medicare beneficiaries of their right 

13 to receive language services in their primary lan14 guage; 

15 (5) post signage in the languages of the com16 monly encountered group or groups present in the 

17 service area of the organization; and 

18 (6) ensure that— 

19 (A) primary language data are collected 

20 for recipients of language services; and 

21 (B) consistent with the privacy protections 

22 provided under the regulations promulgated 

23 pursuant to section 264(c) of the Health Insur24 ance Portability and Accountability Act of 1996 

25 (42 U.S.C. 1320d–2 note), if the recipient of 


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1 language services is a minor or is incapacitated, 

2 the primary language of the parent or legal 

3 guardian is collected and utilized. 

4 (e) REPORTING REQUIREMENTS.—Grantees under 

5 this section shall provide the Secretary with reports at the 

6 conclusion of the each year of a grant under this section. 

7 Each report shall include at least the following informa8 tion: 

9 (1) The number of Medicare beneficiaries to 

10 whom language services are provided. 

11 (2) The languages of those Medicare bene12 ficiaries. 

13 (3) The types of language services provided 

14 (such as provision of services directly in non-English 

15 language by a bilingual health care provider or use 

16 of an interpreter). 

17 (4) Type of interpretation (such as in-person, 

18 telephonic, or video interpretation). 

19 (5) The methods of providing language services 

20 (such as staff or contract with external independent 

21 contractors or agencies). 

22 (6) The length of time for each interpretation 

23 encounter. 


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1 (7) The costs of providing language services 

2 (which may be actual or estimated, as determined by 

3 the Secretary). 

4 (f) NO COST SHARING.—Limited English proficient 

5 Medicare beneficiaries shall not have to pay cost-sharing 

6 or co-pays for language services provided through this 

7 demonstration program. 

8 (g) EVALUATION AND REPORT.—The Secretary shall 

9 conduct an evaluation of the demonstration program 

10 under this section and shall submit to the appropriate 

11 committees of Congress a report not later than 1 year 

12 after the completion of the program. The report shall in13 clude the following: 

14 (1) An analysis of the patient outcomes and 

15 costs of furnishing care to the limited English pro16 ficient Medicare beneficiaries participating in the 

17 project as compared to such outcomes and costs for 

18 limited English proficient Medicare beneficiaries not 

19 participating. 

20 (2) The effect of delivering culturally and lin21 guistically appropriate services on beneficiary access 

22 to care, utilization of services, efficiency and cost-ef23 fectiveness of health care delivery, patient satisfac24 tion, and select health outcomes. 


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1 (3) Recommendations, if any, regarding the ex2 tension of such project to the entire Medicare pro3 gram. 

4 (h) GENERAL PROVISIONS.—Nothing in this section 

5 shall be construed to limit otherwise existing obligations 

6 of recipients of Federal financial assistance under title VI 

7 of the Civil Rights Act of 1964 (42 U.S.C. 2000(d) et 

8 seq.) or any other statute. 

9 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated to carry out this section 

11 $16,000,000 for each fiscal year of the demonstration pro12 gram. 

13 SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS 

14 SERVICES. 

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

16 Human Services shall enter into an arrangement with the 

17 Institute of Medicine under which the Institute will pre18 pare and publish, not later than 3 years after the date 

19 of the enactment of this Act, a report on the impact of 

20 language access services on the health and health care of 

21 limited English proficient populations. 

22 (b) CONTENTS.—Such report shall include— 

23 (1) recommendations on the development and 

24 implementation of policies and practices by health 


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1 care organizations and providers for limited English 

2 proficient patient populations; 

3 (2) a description of the effect of providing lan4 guage access services on quality of health care and 

5 access to care and reduced medical error; and 

6 (3) a description of the costs associated with or 

7 savings related to provision of language access serv8 ices. 

9 SEC. 1224. DEFINITIONS. 

10 In this subtitle: 

11 (1) BILINGUAL.—The term ‘‘bilingual’’ with re12 spect to an individual means a person who has suffi13 cient degree of proficiency in two languages and can 

14 ensure effective communication can occur in both 

15 languages. 

16 (2) COMPETENT INTERPRETER SERVICES.—The 

17 term ‘‘competent interpreter services’’ means a 

18 trans-language rendition of a spoken message in 

19 which the interpreter comprehends the source lan20 guage and can speak comprehensively in the target 

21 language to convey the meaning intended in the 

22 source language. The interpreter knows health and 

23 health-related terminology and provides accurate in24 terpretations by choosing equivalent expressions that 

25 convey the best matching and meaning to the source 


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1 language and captures, to the greatest possible ex2 tent, all nuances intended in the source message. 

3 (3) COMPETENT TRANSLATION SERVICES.—The 

4 term ‘‘competent translation services’’ means a 

5 trans-language rendition of a written document in 

6 which the translator comprehends the source lan7 guage and can write comprehensively in the target 

8 language to convey the meaning intended in the 

9 source language. The translator knows health and 

10 health-related terminology and provides accurate 

11 translations by choosing equivalent expressions that 

12 convey the best matching and meaning to the source 

13 language and captures, to the greatest possible ex14 tent, all nuances intended in the source document. 

15 (4) EFFECTIVE COMMUNICATION.—The term 

16 ‘‘effective communication’’ means an exchange of in17 formation between the provider of health care or 

18 health care-related services and the limited English 

19 proficient recipient of such services that enables lim20 ited English proficient individuals to access, under21 stand, and benefit from health care or health care22 related services. 

23 (5) INTERPRETING/INTERPRETATION.—The 

24 terms ‘‘interpreting’’ and ‘‘interpretation’’ mean the 


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1 transmission of a spoken message from one language 

2 into another, faithfully, accurately, and objectively. 

3 (6) HEALTH CARE SERVICES.—The term 

4 ‘‘health care services’’ means services that address 

5 physical as well as mental health conditions in all 

6 care settings. 

7 (7) HEALTH CARE-RELATED SERVICES.—The 

8 term ‘‘health care-related services’’ means human or 

9 social services programs or activities that provide ac10 cess, referrals or links to health care. 

11 (8) LANGUAGE ACCESS.—The term ‘‘language 

12 access’’ means the provision of language services to 

13 an LEP individual designed to enhance that individ14 ual’s access to, understanding of or benefit from 

15 health care or health care-related services. 

16 (9) LANGUAGE SERVICES.—The term ‘‘lan17 guage services’’ means provision of health care serv18 ices directly in a non-English language, interpreta19 tion, translation, and non-English signage. 

20 (10) LIMITED ENGLISH PROFICIENT.—The 

21 term ‘‘limited English proficient’’ or ‘‘LEP’’ with re22 spect to an individual means an individual who 

23 speaks a primary language other than English and 

24 who cannot speak, read, write or understand the 

25 English language at a level that permits the indiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01474 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vidual to effectively communicate with clinical or 

2 nonclinical staff at an entity providing health care or 

3 health care related services. 

4 (11) MEDICARE BENEFICIARY.—The term 

5 ‘‘Medicare beneficiary’’ means an individual entitled 

6 to benefits under part A of title XVIII of the Social 

7 Security Act or enrolled under part B of such title. 

8 (12) MEDICARE PROGRAM.—The term ‘‘Medi9 care program’’ means the programs under parts A 

10 through D of title XVIII of the Social Security Act. 

11 (13) SERVICE PROVIDER.—The term ‘‘service 

12 provider’’ includes all suppliers, providers of services, 

13 or entities under contract to provide coverage, items 

14 or services under any part of title XVIII of the So15 cial Security Act. 

16 Subtitle C—Miscellaneous 

17 Improvements 

18 SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS 

19 PROCESS. 

20 Section 1833(g)(5) of the Social Security Act (42 

21 U.S.C. 1395l(g)(5)), as amended by section 141 of the 

22 Medicare Improvements for Patients and Providers Act of 

23 2008 (Public Law 110–275), is amended by striking ‘‘De24 cember 31, 2009’’ and inserting ‘‘December 31, 2011’’. 


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1 SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNO2 SUPPRESSIVE DRUGS FOR KIDNEY TRANS3 PLANT PATIENTS AND OTHER RENAL DIALY4 SIS PROVISIONS. 

5 (a) PROVISION OF APPROPRIATE COVERAGE OF IM6 MUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE PRO7 GRAM FOR KIDNEY TRANSPLANT RECIPIENTS.— 

8 (1) CONTINUED ENTITLEMENT TO IMMUNO9 SUPPRESSIVE DRUGS.— 

10 (A) KIDNEY TRANSPLANT RECIPIENTS.— 

11 Section 226A(b)(2) of the Social Security Act 

12 (42 U.S.C. 426–1(b)(2)) is amended by insert13 ing ‘‘(except for coverage of immunosuppressive 

14 drugs under section 1861(s)(2)(J))’’ before ‘‘, 

15 with the thirty-sixth month’’. 

16 (B) APPLICATION.—Section 1836 of such 

17 Act (42 U.S.C. 1395o) is amended— 

18 (i) by striking ‘‘Every individual who’’ 

19 and inserting ‘‘(a) IN GENERAL.—Every 

20 individual who’’; and 

21 (ii) by adding at the end the following 

22 new subsection: 

23 ‘‘(b) SPECIAL RULES APPLICABLE TO INDIVIDUALS

24 ONLY ELIGIBLE FOR COVERAGE OF IMMUNOSUPPRESSIVE

25 DRUGS.— 


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1 ‘‘(1) IN GENERAL.—In the case of an individual 

2 whose eligibility for benefits under this title has 

3 ended on or after January 1, 2012, except for the 

4 coverage of immunosuppressive drugs by reason of 

5 section 226A(b)(2), the following rules shall apply: 

6 ‘‘(A) The individual shall be deemed to be 

7 enrolled under this part for purposes of receiv8 ing coverage of such drugs. 

9 ‘‘(B) The individual shall be responsible 

10 for providing for payment of the portion of the 

11 premium under section 1839 which is not cov12 ered under the Medicare savings program (as 

13 defined in section 1144(c)(7)) in order to re14 ceive such coverage. 

15 ‘‘(C) The provision of such drugs shall be 

16 subject to the application of— 

17 ‘‘(i) the deductible under section 

18 1833(b); and 

19 ‘‘(ii) the coinsurance amount applica20 ble for such drugs (as determined under 

21 this part). 

22 ‘‘(D) If the individual is an inpatient of a 

23 hospital or other entity, the individual is enti24 tled to receive coverage of such drugs under 

25 this part. 


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1 ‘‘(2) ESTABLISHMENT OF PROCEDURES IN

2 ORDER TO IMPLEMENT COVERAGE.—The Secretary 

3 shall establish procedures for— 

4 ‘‘(A) identifying individuals that are enti5 tled to coverage of immunosuppressive drugs by 

6 reason of section 226A(b)(2); and 

7 ‘‘(B) distinguishing such individuals from 

8 individuals that are enrolled under this part for 

9 the complete package of benefits under this 

10 part.’’. 

11 (C) TECHNICAL AMENDMENT TO CORRECT

12 DUPLICATE SUBSECTION DESIGNATION.—Sub13 section (d) of section 226A of such Act (42 

14 U.S.C. 426–1), as added by section 

15 201(a)(3)(D)(ii) of the Social Security Inde16 pendence and Program Improvements Act of 

17 1994 (Public Law 103–296; 108 Stat. 1497), is 

18 redesignated as subsection (d). 

19 (2) EXTENSION OF SECONDARY PAYER RE20 QUIREMENTS FOR ESRD BENEFICIARIES.—Section 

21 1862(b)(1)(C) of such Act (42 U.S.C. 

22 1395y(b)(1)(C)) is amended by adding at the end 

23 the following new sentence: ‘‘With regard to im24 munosuppressive drugs furnished on or after the 

25 date of the enactment of the America’s Affordable 


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1 Health Choices Act of 2009, this subparagraph shall 

2 be applied without regard to any time limitation.’’. 

3 (b) MEDICARE COVERAGE FOR ESRD PATIENTS.— 

4 Section 1881 of such Act is further amended— 

5 (1) in subsection (b)(14)(B)(iii), by inserting ‘‘, 

6 including oral drugs that are not the oral equivalent 

7 of an intravenous drug (such as oral phosphate bind8 ers and calcimimetics),’’ after ‘‘other drugs and 

9 biologicals’’; 

10 (2) in subsection (b)(14)(E)(ii)— 

11 (A) in the first sentence— 

12 (i) by striking ‘‘a one-time election to 

13 be excluded from the phase-in’’ and insert14 ing ‘‘an election, with respect to 2011, 

15 2012, or 2013, to be excluded from the 

16 phase-in (or the remainder of the phase17 in)’’; and 

18 (ii) by adding at the end the fol19 lowing: ‘‘for such year and for each subse20 quent year during the phase-in described 

21 in clause (i)’’; and 

22 (B) in the second sentence— 

23 (i) by striking ‘‘January 1, 2011’’ and 

24 inserting ‘‘the first date of such year’’; and 


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1 (ii) by inserting ‘‘and at a time’’ after 

2 ‘‘form and manner’’; and 

3 (3) in subsection (h)(4)(E), by striking ‘‘lesser’’ 

4 and inserting ‘‘greater’’. 

5 SEC. 1233. ADVANCE CARE PLANNING CONSULTATION. 

6 (a) MEDICARE.— 

7 (1) IN GENERAL.—Section 1861 of the Social 

8 Security Act (42 U.S.C. 1395x) is amended— 

9 (A) in subsection (s)(2)— 

10 (i) by striking ‘‘and’’ at the end of 

11 subparagraph (DD); 

12 (ii) by adding ‘‘and’’ at the end of 

13 subparagraph (EE); and 

14 (iii) by adding at the end the fol15 lowing new subparagraph: 

16 ‘‘(FF) advance care planning consultation (as 

17 defined in subsection (hhh)(1));’’; and 

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

19 subsection: 

20 ‘‘Advance Care Planning Consultation 

21 ‘‘(hhh)(1) Subject to paragraphs (3) and (4), the 

22 term ‘advance care planning consultation’ means a con23 sultation between the individual and a practitioner de24 scribed in paragraph (2) regarding advance care planning, 

25 if, subject to paragraph (3), the individual involved has 


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1 not had such a consultation within the last 5 years. Such 

2 consultation shall include the following: 

3 ‘‘(A) An explanation by the practitioner of ad4 vance care planning, including key questions and 

5 considerations, important steps, and suggested peo6 ple to talk to. 

7 ‘‘(B) An explanation by the practitioner of ad8 vance directives, including living wills and durable 

9 powers of attorney, and their uses. 

10 ‘‘(C) An explanation by the practitioner of the 

11 role and responsibilities of a health care proxy. 

12 ‘‘(D) The provision by the practitioner of a list 

13 of national and State-specific resources to assist con14 sumers and their families with advance care plan15 ning, including the national toll-free hotline, the ad16 vance care planning clearinghouses, and State legal 

17 service organizations (including those funded 

18 through the Older Americans Act of 1965). 

19 ‘‘(E) An explanation by the practitioner of the 

20 continuum of end-of-life services and supports avail21 able, including palliative care and hospice, and bene22 fits for such services and supports that are available 

23 under this title. 


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1 ‘‘(F)(i) Subject to clause (ii), an explanation of 

2 orders regarding life sustaining treatment or similar 

3 orders, which shall include— 

4 ‘‘(I) the reasons why the development of 

5 such an order is beneficial to the individual and 

6 the individual’s family and the reasons why 

7 such an order should be updated periodically as 

8 the health of the individual changes; 

9 ‘‘(II) the information needed for an indi10 vidual or legal surrogate to make informed deci11 sions regarding the completion of such an 

12 order; and 

13 ‘‘(III) the identification of resources that 

14 an individual may use to determine the require15 ments of the State in which such individual re16 sides so that the treatment wishes of that indi17 vidual will be carried out if the individual is un18 able to communicate those wishes, including re19 quirements regarding the designation of a sur20 rogate decisionmaker (also known as a health 

21 care proxy). 

22 ‘‘(ii) The Secretary shall limit the requirement 

23 for explanations under clause (i) to consultations 

24 furnished in a State— 


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1 ‘‘(I) in which all legal barriers have been 

2 addressed for enabling orders for life sustaining 

3 treatment to constitute a set of medical orders 

4 respected across all care settings; and 

5 ‘‘(II) that has in effect a program for or6 ders for life sustaining treatment described in 

7 clause (iii). 

8 ‘‘(iii) A program for orders for life sustaining 

9 treatment for a States described in this clause is a 

10 program that— 

11 ‘‘(I) ensures such orders are standardized 

12 and uniquely identifiable throughout the State; 

13 ‘‘(II) distributes or makes accessible such 

14 orders to physicians and other health profes15 sionals that (acting within the scope of the pro16 fessional’s authority under State law) may sign 

17 orders for life sustaining treatment; 

18 ‘‘(III) provides training for health care 

19 professionals across the continuum of care 

20 about the goals and use of orders for life sus21 taining treatment; and 

22 ‘‘(IV) is guided by a coalition of stake23 holders includes representatives from emergency 

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1 tion, state medical association, state surveyors, 

2 agency responsible for senior services, state de3 partment of health, state hospital association, 

4 home health association, state bar association, 

5 and state hospice association. 

6 ‘‘(2) A practitioner described in this paragraph is— 

7 ‘‘(A) a physician (as defined in subsection 

8 (r)(1)); and 

9 ‘‘(B) a nurse practitioner or physician’s assist10 ant who has the authority under State law to sign 

11 orders for life sustaining treatments. 

12 ‘‘(3)(A) An initial preventive physical examination 

13 under subsection (WW), including any related discussion 

14 during such examination, shall not be considered an ad15 vance care planning consultation for purposes of applying 

16 the 5-year limitation under paragraph (1). 

17 ‘‘(B) An advance care planning consultation with re18 spect to an individual may be conducted more frequently 

19 than provided under paragraph (1) if there is a significant 

20 change in the health condition of the individual, including 

21 diagnosis of a chronic, progressive, life-limiting disease, a 

22 life-threatening or terminal diagnosis or life-threatening 

23 injury, or upon admission to a skilled nursing facility, a 

24 long-term care facility (as defined by the Secretary), or 

25 a hospice program. 


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1 ‘‘(4) A consultation under this subsection may in2 clude the formulation of an order regarding life sustaining 

3 treatment or a similar order. 

4 ‘‘(5)(A) For purposes of this section, the term ‘order 

5 regarding life sustaining treatment’ means, with respect 

6 to an individual, an actionable medical order relating to 

7 the treatment of that individual that— 

8 ‘‘(i) is signed and dated by a physician (as de9 fined in subsection (r)(1)) or another health care 

10 professional (as specified by the Secretary and who 

11 is acting within the scope of the professional’s au12 thority under State law in signing such an order, in13 cluding a nurse practitioner or physician assistant) 

14 and is in a form that permits it to stay with the in15 dividual and be followed by health care professionals 

16 and providers across the continuum of care; 

17 ‘‘(ii) effectively communicates the individual’s 

18 preferences regarding life sustaining treatment, in19 cluding an indication of the treatment and care de20 sired by the individual; 

21 ‘‘(iii) is uniquely identifiable and standardized 

22 within a given locality, region, or State (as identified 

23 by the Secretary); and 


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1 ‘‘(iv) may incorporate any advance directive (as 

2 defined in section 1866(f)(3)) if executed by the in3 dividual. 

4 ‘‘(B) The level of treatment indicated under subpara5 graph (A)(ii) may range from an indication for full treat6 ment to an indication to limit some or all or specified 

7 interventions. Such indicated levels of treatment may in8 clude indications respecting, among other items— 

9 ‘‘(i) the intensity of medical intervention if the 

10 patient is pulse less, apneic, or has serious cardiac 

11 or pulmonary problems; 

12 ‘‘(ii) the individual’s desire regarding transfer 

13 to a hospital or remaining at the current care set14 ting; 

15 ‘‘(iii) the use of antibiotics; and 

16 ‘‘(iv) the use of artificially administered nutri17 tion and hydration.’’. 

18 (2) PAYMENT.—Section 1848(j)(3) of such Act 

19 (42 U.S.C. 1395w–4(j)(3)) is amended by inserting 

20 ‘‘(2)(FF),’’ after ‘‘(2)(EE),’’. 

21 (3) FREQUENCY LIMITATION.—Section 1862(a) 

22 of such Act (42 U.S.C. 1395y(a)) is amended— 

23 (A) in paragraph (1)— 

24 (i) in subparagraph (N), by striking 

25 ‘‘and’’ at the end; 


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1 (ii) in subparagraph (O) by striking 

2 the semicolon at the end and inserting ‘‘, 

3 and’’; and 

4 (iii) by adding at the end the fol5 lowing new subparagraph: 

6 ‘‘(P) in the case of advance care planning 

7 consultations (as defined in section 

8 1861(hhh)(1)), which are performed more fre9 quently than is covered under such section;’’; 

10 and 

11 (B) in paragraph (7), by striking ‘‘or (K)’’ 

12 and inserting ‘‘(K), or (P)’’. 

13 (4) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply to consultations fur15 nished on or after January 1, 2011. 

16 (b) EXPANSION OF PHYSICIAN QUALITY REPORTING

17 INITIATIVE FOR END OF LIFE CARE.— 

18 (1) PHYSICIAN’S QUALITY REPORTING INITIA19 TIVE.—Section 1848(k)(2) of the Social Security Act 

20 (42 U.S.C. 1395w–4(k)(2)) is amended by adding at 

21 the end the following new paragraphs: 

22 ‘‘(3) PHYSICIAN’S QUALITY REPORTING INITIA23 TIVE.— 

24 ‘‘(A) IN GENERAL.—For purposes of re25 porting data on quality measures for covered 


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1 professional services furnished during 2011 and 

2 any subsequent year, to the extent that meas3 ures are available, the Secretary shall include 

4 quality measures on end of life care and ad5 vanced care planning that have been adopted or 

6 endorsed by a consensus-based organization, if 

7 appropriate. Such measures shall measure both 

8 the creation of and adherence to orders for life9 sustaining treatment. 

10 ‘‘(B) PROPOSED SET OF MEASURES.—The 

11 Secretary shall publish in the Federal Register 

12 proposed quality measures on end of life care 

13 and advanced care planning that the Secretary 

14 determines are described in subparagraph (A) 

15 and would be appropriate for eligible profes16 sionals to use to submit data to the Secretary. 

17 The Secretary shall provide for a period of pub18 lic comment on such set of measures before fi19 nalizing such proposed measures.’’. 

20 (c) INCLUSION OF INFORMATION IN MEDICARE & 

21 YOU HANDBOOK.— 

22 (1) MEDICARE & YOU HANDBOOK.— 

23 (A) IN GENERAL.—Not later than 1 year 

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

25 Secretary of Health and Human Services shall 


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1 update the online version of the Medicare & 

2 You Handbook to include the following: 

3 (i) An explanation of advance care 

4 planning and advance directives, includ5 ing— 

6 (I) living wills; 

7 (II) durable power of attorney; 

8 (III) orders of life-sustaining 

9 treatment; and 

10 (IV) health care proxies. 

11 (ii) A description of Federal and State 

12 resources available to assist individuals 

13 and their families with advance care plan14 ning and advance directives, including— 

15 (I) available State legal service 

16 organizations to assist individuals 

17 with advance care planning, including 

18 those organizations that receive fund19 ing pursuant to the Older Americans 

20 Act of 1965 (42 U.S.C. 93001 et 

21 seq.); 

22 (II) website links or addresses for 

23 State-specific advance directive forms; 

24 and 


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1 (III) any additional information, 

2 as determined by the Secretary. 

3 (B) UPDATE OF PAPER AND SUBSEQUENT

4 VERSIONS.—The Secretary shall include the in5 formation described in subparagraph (A) in all 

6 paper and electronic versions of the Medicare & 

7 You Handbook that are published on or after 

8 the date that is 1 year after the date of the en9 actment of this Act. 

10 SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND 

11 WAIVER OF LIMITED ENROLLMENT PENALTY 

12 FOR TRICARE BENEFICIARIES. 

13 (a) PART B SPECIAL ENROLLMENT PERIOD.— 

14 (1) IN GENERAL.—Section 1837 of the Social 

15 Security Act (42 U.S.C. 1395p) is amended by add16 ing at the end the following new subsection: 

17 ‘‘(l)(1) In the case of any individual who is a covered 

18 beneficiary (as defined in section 1072(5) of title 10, 

19 United States Code) at the time the individual is entitled 

20 to hospital insurance benefits under part A under section 

21 226(b) or section 226A and who is eligible to enroll but 

22 who has elected not to enroll (or to be deemed enrolled) 

23 during the individual’s initial enrollment period, there 

24 shall be a special enrollment period described in paragraph 

25 (2). 


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1 ‘‘(2) The special enrollment period described in this 

2 paragraph, with respect to an individual, is the 12-month 

3 period beginning on the day after the last day of the initial 

4 enrollment period of the individual or, if later, the 12- 

5 month period beginning with the month the individual is 

6 notified of enrollment under this section. 

7 ‘‘(3) In the case of an individual who enrolls during 

8 the special enrollment period provided under paragraph 

9 (1), the coverage period under this part shall begin on the 

10 first day of the month in which the individual enrolls or, 

11 at the option of the individual, on the first day of the sec12 ond month following the last month of the individual’s ini13 tial enrollment period. 

14 ‘‘(4) The Secretary of Defense shall establish a meth15 od for identifying individuals described in paragraph (1) 

16 and providing notice to them of their eligibility for enroll17 ment during the special enrollment period described in 

18 paragraph (2).’’. 

19 (2) EFFECTIVE DATE.—The amendment made 

20 by paragraph (1) shall apply to elections made on or 

21 after the date of the enactment of this Act. 

22 (b) WAIVER OF INCREASE OF PREMIUM.— 

23 (1) IN GENERAL.—Section 1839(b) of the So24 cial Security Act (42 U.S.C. 1395r(b)) is amended 


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1 by striking ‘‘section 1837(i)(4)’’ and inserting ‘‘sub2 section (i)(4) or (l) of section 1837’’. 

3 (2) EFFECTIVE DATE.— 

4 (A) IN GENERAL.—The amendment made 

5 by paragraph (1) shall apply with respect to 

6 elections made on or after the date of the en7 actment of this Act. 

8 (B) REBATES FOR CERTAIN DISABLED

9 AND ESRD BENEFICIARIES.— 

10 (i) IN GENERAL.—With respect to 

11 premiums for months on or after January 

12 2005 and before the month of the enact13 ment of this Act, no increase in the pre14 mium shall be effected for a month in the 

15 case of any individual who is a covered 

16 beneficiary (as defined in section 1072(5) 

17 of title 10, United States Code) at the time 

18 the individual is entitled to hospital insur19 ance benefits under part A of title XVIII 

20 of the Social Security Act under section 

21 226(b) or 226A of such Act, and who is el22 igible to enroll, but who has elected not to 

23 enroll (or to be deemed enrolled), during 

24 the individual’s initial enrollment period, 

25 and who enrolls under this part within the 


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1 12-month period that begins on the first 

2 day of the month after the month of notifi3 cation of entitlement under this part. 

4 (ii) CONSULTATION WITH DEPART5 MENT OF DEFENSE.—The Secretary of 

6 Health and Human Services shall consult 

7 with the Secretary of Defense in identi8 fying individuals described in this para9 graph. 

10 (iii) REBATES.—The Secretary of 

11 Health and Human Services shall establish 

12 a method for providing rebates of premium 

13 increases paid for months on or after Jan14 uary 1, 2005, and before the month of the 

15 enactment of this Act for which a penalty 

16 was applied and collected. 

17 SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX 

18 YEAR IN CASE OF GAINS FROM SALE OF PRI19 MARY RESIDENCE IN COMPUTING PART B IN20 COME-RELATED PREMIUM. 

21 (a) IN GENERAL.—Section 1839(i)(4)(C)(ii)(II) of 

22 the Social Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) 

23 is amended by inserting ‘‘sale of primary residence,’’ after 

24 ‘‘divorce of such individual,’’. 


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

2 subsection (a) shall apply to premiums and payments for 

3 years beginning with 2011. 

4 SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PA5 TIENT DECISIONS AIDS. 

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

7 Human Services shall establish a shared decision making 

8 demonstration program (in this subsection referred to as 

9 the ‘‘program’’) under the Medicare program using pa10 tient decision aids to meet the objective of improving the 

11 understanding by Medicare beneficiaries of their medical 

12 treatment options, as compared to comparable Medicare 

13 beneficiaries who do not participate in a shared decision 

14 making process using patient decision aids. 

15 (b) SITES.— 

16 (1) ENROLLMENT.—The Secretary shall enroll 

17 in the program not more than 30 eligible providers 

18 who have experience in implementing, and have in19 vested in the necessary infrastructure to implement, 

20 shared decision making using patient decision aids. 

21 (2) APPLICATION.—An eligible provider seeking 

22 to participate in the program shall submit to the 

23 Secretary an application at such time and containing 

24 such information as the Secretary may require. 


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1 (3) PREFERENCE.—In enrolling eligible pro2 viders in the program, the Secretary shall give pref3 erence to eligible providers that— 

4 (A) have documented experience in using 

5 patient decision aids for the conditions identi6 fied by the Secretary and in using shared deci7 sion making; 

8 (B) have the necessary information tech9 nology infrastructure to collect the information 

10 required by the Secretary for reporting pur11 poses; and 

12 (C) are trained in how to use patient deci13 sion aids and shared decision making. 

14 (c) FOLLOW-UP COUNSELING VISIT.— 

15 (1) IN GENERAL.—An eligible provider partici16 pating in the program shall routinely schedule Medi17 care beneficiaries for a counseling visit after the 

18 viewing of such a patient decision aid to answer any 

19 questions the beneficiary may have with respect to 

20 the medical care of the condition involved and to as21 sist the beneficiary in thinking through how their 

22 preferences and concerns relate to their medical 

23 care. 

24 (2) PAYMENT FOR FOLLOW-UP COUNSELING

25 VISIT.—The Secretary shall establish procedures for 


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1 making payments for such counseling visits provided 

2 to Medicare beneficiaries under the program. Such 

3 procedures shall provide for the establishment— 

4 (A) of a code (or codes) to represent such 

5 services; and 

6 (B) of a single payment amount for such 

7 service that includes the professional time of 

8 the health care provider and a portion of the 

9 reasonable costs of the infrastructure of the eli10 gible provider such as would be made under the 

11 applicable payment systems to that provider for 

12 similar covered services. 

13 (d) COSTS OF AIDS.—An eligible provider partici14 pating in the program shall be responsible for the costs 

15 of selecting, purchasing, and incorporating such patient 

16 decision aids into the provider’s practice, and reporting 

17 data on quality and outcome measures under the program. 

18 (e) FUNDING.—The Secretary shall provide for the 

19 transfer from the Federal Supplementary Medical Insur20 ance Trust Fund established under section 1841 of the 

21 Social Security Act (42 U.S.C. 1395t) of such funds as 

22 are necessary for the costs of carrying out the program. 

23 (f) WAIVER AUTHORITY.—The Secretary may waive 

24 such requirements of titles XI and XVIII of the Social 

25 Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.) 


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1 as may be necessary for the purpose of carrying out the 

2 program. 

3 (g) REPORT.—Not later than 12 months after the 

4 date of completion of the program, the Secretary shall sub5 mit to Congress a report on such program, together with 

6 recommendations for such legislation and administrative 

7 action as the Secretary determines to be appropriate. The 

8 final report shall include an evaluation of the impact of 

9 the use of the program on health quality, utilization of 

10 health care services, and on improving the quality of life 

11 of such beneficiaries. 

12 (h) DEFINITIONS.—In this section: 

13 (1) ELIGIBLE PROVIDER.—The term ‘‘eligible 

14 provider’’ means the following: 

15 (A) A primary care practice. 

16 (B) A specialty practice. 

17 (C) A multispecialty group practice. 

18 (D) A hospital. 

19 (E) A rural health clinic. 

20 (F) A federally qualified health center (as 

21 defined in section 1861(aa)(4) of the Social Se22 curity Act (42 U.S.C. 1395x(aa)(4)). 

23 (G) An integrated delivery system. 

24 (H) A State cooperative entity that in25 cludes the State government and at least one 


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1 other health care provider which is set up for 

2 the purpose of testing shared decision making 

3 and patient decision aids. 

4 (2) PATIENT DECISION AID.—The term ‘‘pa5 tient decision aid’’ means an educational tool (such 

6 as the Internet, a video, or a pamphlet) that helps 

7 patients (or, if appropriate, the family caregiver of 

8 the patient) understand and communicate their be9 liefs and preferences related to their treatment op10 tions, and to decide with their health care provider 

11 what treatments are best for them based on their 

12 treatment options, scientific evidence, circumstances, 

13 beliefs, and preferences. 

14 (3) SHARED DECISION MAKING.—The term 

15 ‘‘shared decision making’’ means a collaborative 

16 process between patient and clinician that engages 

17 the patient in decision making, provides patients 

18 with information about trade-offs among treatment 

19 options, and facilitates the incorporation of patient 

20 preferences and values into the medical plan. 


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1 TITLE K—PROMOTING PRIMARY 

2 CARE, MENTAL HEALTH 

3 SERVICES, AND COORDI4 NATED CARE 

5 SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT 

6 PROGRAM. 

7 Title XVIII of the Social Security Act is amended by 

8 inserting after section 1866C the following new section: 

9 ‘‘ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM

10 ‘‘SEC. 1866D. (a) IN GENERAL.—The Secretary shall 

11 conduct a pilot program (in this section referred to as the 

12 ‘pilot program’) to test different payment incentive mod13 els, including (to the extent practicable) the specific pay14 ment incentive models described in subsection (c), de15 signed to reduce the growth of expenditures and improve 

16 health outcomes in the provision of items and services 

17 under this title to applicable beneficiaries (as defined in 

18 subsection (d)) by qualifying accountable care organiza19 tions (as defined in subsection (b)(1)) in order to— 

20 ‘‘(1) promote accountability for a patient popu21 lation and coordinate items and services under parts 

22 A and B; 

23 ‘‘(2) encourage investment in infrastructure and 

24 redesigned care processes for high quality and effi25 cient service delivery; and 


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1 ‘‘(3) reward physician practices and other phy2 sician organizational models for the provision of high 

3 quality and efficient health care services. 

4 ‘‘(b) QUALIFYING ACCOUNTABLE CARE ORGANIZA5 TIONS (ACOS).— 

6 ‘‘(1) QUALIFYING ACO DEFINED.—In this sec7 tion: 

8 ‘‘(A) IN GENERAL.—The terms ‘qualifying 

9 accountable care organization’ and ‘qualifying 

10 ACO’ mean a group of physicians or other phy11 sician organizational model (as defined in sub12 paragraph (D)) that— 

13 ‘‘(i) is organized at least in part for 

14 the purpose of providing physicians’ serv15 ices; and 

16 ‘‘(ii) meets such criteria as the Sec17 retary determines to be appropriate to par18 ticipate in the pilot program, including the 

19 criteria specified in paragraph (2). 

20 ‘‘(B) INCLUSION OF OTHER PROVIDERS.— 

21 Nothing in this subsection shall be construed as 

22 preventing a qualifying ACO from including a 

23 hospital or any other provider of services or 

24 supplier furnishing items or services for which 

25 payment may be made under this title that is 


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1 affiliated with the ACO under an arrangement 

2 structured so that such provider or supplier 

3 participates in the pilot program and shares in 

4 any incentive payments under the pilot pro5 gram. 

6 ‘‘(C) PHYSICIAN.—The term ‘physician’ in7 cludes, except as the Secretary may otherwise 

8 provide, any individual who furnishes services 

9 for which payment may be made as physicians’ 

10 services. 

11 ‘‘(D) OTHER PHYSICIAN ORGANIZATIONAL

12 MODEL.—The term ‘other physician organiza13 tion model’ means, with respect to a qualifying 

14 ACO any model of organization under which 

15 physicians enter into agreements with other 

16 providers for the purposes of participation in 

17 the pilot program in order to provide high qual18 ity and efficient health care services and share 

19 in any incentive payments under such program. 

20 ‘‘(E) OTHER SERVICES.—Nothing in this 

21 paragraph shall be construed as preventing a 

22 qualifying ACO from furnishing items or serv23 ices, for which payment may not be made under 

24 this title, for purposes of achieving performance 

25 goals under the pilot program. 


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1 ‘‘(2) QUALIFYING CRITERIA.—The following are 

2 criteria described in this paragraph for an organized 

3 group of physicians to be a qualifying ACO: 

4 ‘‘(A) The group has a legal structure that 

5 would allow the group to receive and distribute 

6 incentive payments under this section. 

7 ‘‘(B) The group includes a sufficient num8 ber of primary care physicians for the applica9 ble beneficiaries for whose care the group is ac10 countable (as determined by the Secretary). 

11 ‘‘(C) The group reports on quality meas12 ures in such form, manner, and frequency as 

13 specified by the Secretary (which may be for 

14 the group, for providers of services and sup15 pliers, or both). 

16 ‘‘(D) The group reports to the Secretary 

17 (in a form, manner and frequency as specified 

18 by the Secretary) such data as the Secretary 

19 determines appropriate to monitor and evaluate 

20 the pilot program. 

21 ‘‘(E) The group provides notice to applica22 ble beneficiaries regarding the pilot program (as 

23 determined appropriate by the Secretary). 

24 ‘‘(F) The group contributes to a best prac25 tices network or website, that shall be mainVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01502 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tained by the Secretary for the purpose of shar2 ing strategies on quality improvement, care co3 ordination, and efficiency that the groups be4 lieve are effective. 

5 ‘‘(G) The group utilizes patient-centered 

6 processes of care, including those that empha7 size patient and caregiver involvement in plan8 ning and monitoring of ongoing care manage9 ment plan. 

10 ‘‘(H) The group meets other criteria deter11 mined to be appropriate by the Secretary. 

12 ‘‘(c) SPECIFIC PAYMENT INCENTIVE MODELS.—The 

13 specific payment incentive models described in this sub14 section are the following: 

15 ‘‘(1) PERFORMANCE TARGET MODEL.—Under 

16 the performance target model under this paragraph 

17 (in this paragraph referred to as the ‘performance 

18 target model’): 

19 ‘‘(A) IN GENERAL.—A qualifying ACO 

20 qualifies to receive an incentive payment if ex21 penditures for applicable beneficiaries are less 

22 than a target spending level or a target rate of 

23 growth. The incentive payment shall be made 

24 only if savings are greater than would result 


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1 from normal variation in expenditures for items 

2 and services covered under parts A and B. 

3 ‘‘(B) COMPUTATION OF PERFORMANCE

4 TARGET.— 

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall establish a performance target for 

7 each qualifying ACO comprised of a base 

8 amount (described in clause (ii)) increased 

9 to the current year by an adjustment fac10 tor (described in clause (iii)). Such a tar11 get may be established on a per capita 

12 basis, as the Secretary determines to be 

13 appropriate. 

14 ‘‘(ii) BASE AMOUNT.—For purposes of 

15 clause (i), the base amount in this sub16 paragraph is equal to the average total 

17 payments (or allowed charges) under parts 

18 A and B (and may include part D, if the 

19 Secretary determines appropriate) for ap20 plicable beneficiaries for whom the quali21 fying ACO furnishes items and services in 

22 a base period determined by the Secretary. 

23 Such base amount may be determined on 

24 a per capita basis. 


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1 ‘‘(iii) ADJUSTMENT FACTOR.—For 

2 purposes of clause (i), the adjustment fac3 tor in this clause may equal an annual per 

4 capita amount that reflects changes in ex5 penditures from the period of the base 

6 amount to the current year that would rep7 resent an appropriate performance target 

8 for applicable beneficiaries (as determined 

9 by the Secretary). Such adjustment factor 

10 may be determined as an amount or rate, 

11 may be determined on a national, regional, 

12 local, or organization-specific basis, and 

13 may be determined on a per capita basis. 

14 Such adjustment factor also may be ad15 justed for risk as determined appropriate 

16 by the Secretary. 

17 ‘‘(iv) REBASING.—Under this model 

18 the Secretary shall periodically rebase the 

19 base expenditure amount described in 

20 clause (ii). 

21 ‘‘(C) MEETING TARGET.— 

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

23 (ii), a qualifying ACO that meet or exceeds 

24 annual quality and performance targets for 

25 a year shall receive an incentive payment 


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1 for such year equal to a portion (as deter2 mined appropriate by the Secretary) of the 

3 amount by which payments under this title 

4 for such year relative are estimated to be 

5 below the performance target for such 

6 year, as determined by the Secretary. The 

7 Secretary may establish a cap on incentive 

8 payments for a year for a qualifying ACO. 

9 ‘‘(ii) LIMITATION.—The Secretary 

10 shall limit incentive payments to each 

11 qualifying ACO under this paragraph as 

12 necessary to ensure that the aggregate ex13 penditures with respect to applicable bene14 ficiaries for such ACOs under this title (in15 clusive of incentive payments described in 

16 this subparagraph) do not exceed the 

17 amount that the Secretary estimates would 

18 be expended for such ACO for such bene19 ficiaries if the pilot program under this 

20 section were not implemented. 

21 ‘‘(D) REPORTING AND OTHER REQUIRE22 MENTS.—In carrying out such model, the Sec23 retary may (as the Secretary determines to be 

24 appropriate) incorporate reporting require25 ments, incentive payments, and penalties reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01506 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 lated to the physician quality reporting initia2 tive (PQRI), electronic prescribing, electronic 

3 health records, and other similar initiatives 

4 under section 1848, and may use alternative 

5 criteria than would otherwise apply under such 

6 section for determining whether to make such 

7 payments. The incentive payments described in 

8 this subparagraph shall not be included in the 

9 limit described in subparagraph (C)(ii) or in the 

10 performance target model described in this 

11 paragraph. 

12 ‘‘(2) PARTIAL CAPITATION MODEL.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (B), a partial capitation model described 

15 in this paragraph (in this paragraph referred to 

16 as a ‘partial capitation model’) is a model in 

17 which a qualifying ACO would be at financial 

18 risk for some, but not all, of the items and serv19 ices covered under parts A and B, such as at 

20 risk for some or all physicians’ services or all 

21 items and services under part B. The Secretary 

22 may limit a partial capitation model to ACOs 

23 that are highly integrated systems of care and 

24 to ACOs capable of bearing risk, as determined 

25 to be appropriate by the Secretary. 


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1 ‘‘(B) NO ADDITIONAL PROGRAM EXPENDI2 TURES.—Payments to a qualifying ACO for ap3 plicable beneficiaries for a year under the par4 tial capitation model shall be established in a 

5 manner that does not result in spending more 

6 for such ACO for such beneficiaries than would 

7 otherwise be expended for such ACO for such 

8 beneficiaries for such year if the pilot program 

9 were not implemented, as estimated by the Sec10 retary. 

11 ‘‘(3) OTHER PAYMENT MODELS.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), the Secretary may develop other 

14 payment models that meet the goals of this 

15 pilot program to improve quality and efficiency. 

16 ‘‘(B) NO ADDITIONAL PROGRAM EXPENDI17 TURES.—Subparagraph (B) of paragraph (2) 

18 shall apply to a payment model under subpara19 graph (A) in a similar manner as such subpara20 graph (B) applies to the payment model under 

21 paragraph (2). 

22 ‘‘(d) APPLICABLE BENEFICIARIES.— 

23 ‘‘(1) IN GENERAL.—In this section, the term 

24 ‘applicable beneficiary’ means, with respect to a 

25 qualifying ACO, an individual who— 


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1 ‘‘(A) is enrolled under part B and entitled 

2 to benefits under part A; 

3 ‘‘(B) is not enrolled in a Medicare Advan4 tage plan under part C or a PACE program 

5 under section 1894; and 

6 ‘‘(C) meets such other criteria as the Sec7 retary determines appropriate, which may in8 clude criteria relating to frequency of contact 

9 with physicians in the ACO. 

10 ‘‘(2) FOLLOWING APPLICABLE BENE11 FICIARIES.—The Secretary may monitor data on ex12 penditures and quality of services under this title 

13 after an applicable beneficiary discontinues receiving 

14 services under this title through a qualifying ACO. 

15 ‘‘(e) IMPLEMENTATION.— 

16 ‘‘(1) STARTING DATE.—The pilot program shall 

17 begin no later than January 1, 2012. An agreement 

18 with a qualifying ACO under the pilot program may 

19 cover a multi-year period of between 3 and 5 years. 

20 ‘‘(2) WAIVER.—The Secretary may waive such 

21 provisions of this title (including section 1877) and 

22 title XI in the manner the Secretary determines nec23 essary in order implement the pilot program. 

24 ‘‘(3) PERFORMANCE RESULTS REPORTS.—The 

25 Secretary shall report performance results to qualiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01509 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 fying ACOs under the pilot program at least annu2 ally. 

3 ‘‘(4) LIMITATIONS ON REVIEW.—There shall be 

4 no administrative or judicial review under section 

5 1869, section 1878, or otherwise of— 

6 ‘‘(A) the elements, parameters, scope, and 

7 duration of the pilot program; 

8 ‘‘(B) the selection of qualifying ACOs for 

9 the pilot program; 

10 ‘‘(C) the establishment of targets, meas11 urement of performance, determinations with 

12 respect to whether savings have been achieved 

13 and the amount of savings; 

14 ‘‘(D) determinations regarding whether, to 

15 whom, and in what amounts incentive payments 

16 are paid; and 

17 ‘‘(E) decisions about the extension of the 

18 program under subsection (g), expansion of the 

19 program under subsection (h) or extensions 

20 under subsection (i). 

21 ‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 

22 United States Code shall not apply to this section. 

23 ‘‘(f) EVALUATION; MONITORING.— 

24 ‘‘(1) IN GENERAL.—The Secretary shall evalu25 ate the payment incentive model for each qualifying 


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1 ACO under the pilot program to assess impacts on 

2 beneficiaries, providers of services, suppliers and the 

3 program under this title. The Secretary shall make 

4 such evaluation publicly available within 60 days of 

5 the date of completion of such report. 

6 ‘‘(2) MONITORING.—The Inspector General of 

7 the Department of Health and Human Services shall 

8 provide for monitoring of the operation of ACOs 

9 under the pilot program with regard to violations of 

10 section 1877 (popularly known as the ‘Stark law’). 

11 ‘‘(g) EXTENSION OF PILOT AGREEMENT WITH SUC12 CESSFUL ORGANIZATIONS.— 

13 ‘‘(1) REPORTS TO CONGRESS.—Not later than 

14 2 years after the date the first agreement is entered 

15 into under this section, and biennially thereafter for 

16 six years, the Secretary shall submit to Congress 

17 and make publicly available a report on the use of 

18 authorities under the pilot program. Each report 

19 shall address the impact of the use of those authori20 ties on expenditures, access, and quality under this 

21 title. 

22 ‘‘(2) EXTENSION.—Subject to the report pro23 vided under paragraph (1), with respect to a quali24 fying ACO, the Secretary may extend the duration 


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1 of the agreement for such ACO under the pilot pro2 gram as the Secretary determines appropriate if— 

3 ‘‘(A) the ACO receives incentive payments 

4 with respect to any of the first 4 years of the 

5 pilot agreement and is consistently meeting 

6 quality standards; or 

7 ‘‘(B) the ACO is consistently exceeding 

8 quality standards and is not increasing spend9 ing under the program. 

10 ‘‘(3) TERMINATION.—The Secretary may termi11 nate an agreement with a qualifying ACO under the 

12 pilot program if such ACO did not receive incentive 

13 payments or consistently failed to meet quality 

14 standards in any of the first 3 years under the pro15 gram. 

16 ‘‘(h) EXPANSION TO ADDITIONAL ACOS.— 

17 ‘‘(1) TESTING AND REFINEMENT OF PAYMENT

18 INCENTIVE MODELS.—Subject to the evaluation de19 scribed in subsection (f), the Secretary may enter 

20 into agreements under the pilot program with addi21 tional qualifying ACOs to further test and refine 

22 payment incentive models with respect to qualifying 

23 ACOs. 

24 ‘‘(2) EXPANDING USE OF SUCCESSFUL MODELS

25 TO PROGRAM IMPLEMENTATION.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), the Secretary may issue regulations 

3 to implement, on a permanent basis, 1 or more 

4 models if, and to the extent that, such models 

5 are beneficial to the program under this title, as 

6 determined by the Secretary. 

7 ‘‘(B) CERTIFICATION.—The Chief Actuary 

8 of the Centers for Medicare & Medicaid Serv9 ices shall certify that 1 or more of such models 

10 described in subparagraph (A) would result in 

11 estimated spending that would be less than 

12 what spending would otherwise be estimated to 

13 be in the absence of such expansion. 

14 ‘‘(i) TREATMENT OF PHYSICIAN GROUP PRACTICE

15 DEMONSTRATION.— 

16 ‘‘(1) EXTENSION.—The Secretary may enter in 

17 to an agreement with a qualifying ACO under the 

18 demonstration under section 1866A, subject to re19 basing and other modifications deemed appropriate 

20 by the Secretary, until the pilot program under this 

21 section is operational. 

22 ‘‘(2) TRANSITION.—For purposes of extension 

23 of an agreement with a qualifying ACO under sub24 section (g)(2), the Secretary shall treat receipt of an 

25 incentive payment for a year by an organization 


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1 under the physician group practice demonstration 

2 pursuant to section 1866A as a year for which an 

3 incentive payment is made under such subsection, as 

4 long as such practice group practice organization 

5 meets the criteria under subsection (b)(2). 

6 ‘‘(j) ADDITIONAL PROVISIONS.— 

7 ‘‘(1) AUTHORITY FOR SEPARATE INCENTIVE

8 ARRANGEMENTS.—The Secretary may create sepa9 rate incentive arrangements (including using mul10 tiple years of data, varying thresholds, varying 

11 shared savings amounts, and varying shared savings 

12 limits) for different categories of qualifying ACOs to 

13 reflect natural variations in data availability, vari14 ation in average annual attributable expenditures, 

15 program integrity, and other matters the Secretary 

16 deems appropriate. 

17 ‘‘(2) ENCOURAGEMENT OF PARTICIPATION OF

18 SMALLER ORGANIZATIONS.—In order to encourage 

19 the participation of smaller accountable care organi20 zations under the pilot program, the Secretary may 

21 limit a qualifying ACO’s exposure to high cost pa22 tients under the program. 

23 ‘‘(3) INVOLVEMENT IN PRIVATE PAYER AR24 RANGEMENTS.—Nothing in this section shall be con25 strued as preventing qualifying ACOs participating 


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1 in the pilot program from negotiating similar con2 tracts with private payers. 

3 ‘‘(4) ANTIDISCRIMINATION LIMITATION.—The 

4 Secretary shall not enter into an agreement with an 

5 entity to provide health care items or services under 

6 the pilot program, or with an entity to administer 

7 the program, unless such entity guarantees that it 

8 will not deny, limit, or condition the coverage or pro9 vision of benefits under the program, for individuals 

10 eligible to be enrolled under such program, based on 

11 any health status-related factor described in section 

12 2702(a)(1) of the Public Health Service Act. 

13 ‘‘(5) CONSTRUCTION.—Nothing in this section 

14 shall be construed to compel or require an organiza15 tion to use an organization-specific target growth 

16 rate for an accountable care organization under this 

17 section for purposes of section 1848. 

18 ‘‘(6) FUNDING.—For purposes of administering 

19 and carrying out the pilot program, other than for 

20 payments for items and services furnished under this 

21 title and incentive payments under subsection (c)(1), 

22 in addition to funds otherwise appropriated, there 

23 are appropriated to the Secretary for the Center for 

24 Medicare & Medicaid Services Program Management 

25 Account $25,000,000 for each of fiscal years 2010 


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1 through 2014 and $20,000,000 for fiscal year 2015. 

2 Amounts appropriated under this paragraph for a 

3 fiscal year shall be available until expended.’’. 

4 SEC. 1302. MEDICAL HOME PILOT PROGRAM. 

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

6 Act is amended by inserting after section 1866D, as in7 serted by section 1301, the following new section: 

8 ‘‘MEDICAL HOME PILOT PROGRAM

9 ‘‘SEC. 1866E. (a) ESTABLISHMENT AND MEDICAL

10 HOME MODELS.— 

11 ‘‘(1) ESTABLISHMENT OF PILOT PROGRAM.— 

12 The Secretary shall establish a medical home pilot 

13 program (in this section referred to as the ‘pilot pro14 gram’) for the purpose of evaluating the feasibility 

15 and advisability of reimbursing qualified patient-cen16 tered medical homes for furnishing medical home 

17 services (as defined under subsection (b)(1)) to high 

18 need beneficiaries (as defined in subsection 

19 (d)(1)(C)) and to targeted high need beneficiaries 

20 (as defined in subsection (c)(1)(C)). 

21 ‘‘(2) SCOPE.—Subject to subsection (g), the 

22 pilot program shall include urban, rural, and under23 served areas. 

24 ‘‘(3) MODELS OF MEDICAL HOMES IN THE

25 PILOT PROGRAM.—The pilot program shall evaluate 

26 each of the following medical home models: 


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1 ‘‘(A) INDEPENDENT PATIENT-CENTERED

2 MEDICAL HOME MODEL.—Independent patient3 centered medical home model under subsection 

4 (c). 

5 ‘‘(B) COMMUNITY-BASED MEDICAL HOME

6 MODEL.—Community-based medical home 

7 model under subsection (d). 

8 ‘‘(4) PARTICIPATION OF NURSE PRACTITIONERS

9 AND PHYSICIAN ASSISTANTS.— 

10 ‘‘(A) Nothing in this section shall be con11 strued as preventing a nurse practitioner from 

12 leading a patient centered medical home so long 

13 as— 

14 ‘‘(i) all the requirements of this sec15 tion are met; and 

16 ‘‘(ii) the nurse practitioner is acting 

17 consistently with State law. 

18 ‘‘(B) Nothing in this section shall be con19 strued as preventing a physician assistant from 

20 participating in a patient centered medical 

21 home so long as— 

22 ‘‘(i) all the requirements of this sec23 tion are met; and 

24 ‘‘(ii) the physician assistant is acting 

25 consistently with State law. 


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1 ‘‘(b) DEFINITIONS.—For purposes of this section: 

2 ‘‘(1) PATIENT-CENTERED MEDICAL HOME

3 SERVICES.—The term ‘patient-centered medical 

4 home services’ means services that— 

5 ‘‘(A) provide beneficiaries with direct and 

6 ongoing access to a primary care or principal 

7 care by a physician or nurse practitioner who 

8 accepts responsibility for providing first contact, 

9 continuous and comprehensive care to such ben10 eficiary; 

11 ‘‘(B) coordinate the care provided to a ben12 eficiary by a team of individuals at the practice 

13 level across office, institutional and home set14 tings led by a primary care or principal care 

15 physician or nurse practitioner, as needed and 

16 appropriate; 

17 ‘‘(C) provide for all the patient’s health 

18 care needs or take responsibility for appro19 priately arranging care with other qualified pro20 viders for all stages of life; 

21 ‘‘(D) provide continuous access to care and 

22 communication with participating beneficiaries; 

23 ‘‘(E) provide support for patient self-man24 agement, proactive and regular patient moni25 toring, support for family caregivers, use paVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01518 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tient-centered processes, and coordination with 

2 community resources; 

3 ‘‘(F) integrate readily accessible, clinically 

4 useful information on participating patients 

5 that enables the practice to treat such patients 

6 comprehensively and systematically; and 

7 ‘‘(G) implement evidence-based guidelines 

8 and apply such guidelines to the identified 

9 needs of beneficiaries over time and with the in10 tensity needed by such beneficiaries. 

11 ‘‘(2) PRIMARY CARE.—The term ‘primary care’ 

12 means health care that is provided by a physician or 

13 nurse practitioner who practices in the field of fam14 ily medicine, general internal medicine, geriatric 

15 medicine, or pediatric medicine. 

16 ‘‘(3) PRINCIPAL CARE.—The term ‘principal 

17 care’ means integrated, accessible health care that is 

18 provided by a physician who is a medical sub19 specialist that addresses the majority of the personal 

20 health care needs of patients with chronic conditions 

21 requiring the subspecialist’s expertise, and for whom 

22 the subspecialist assumes care management. 

23 ‘‘(c) INDEPENDENT PATIENT-CENTERED MEDICAL

24 HOME MODEL.— 

25 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) PAYMENT AUTHORITY.—Under the 

2 independent patient-centered medical home 

3 model under this subsection, the Secretary shall 

4 make payments for medical home services fur5 nished by an independent patient-centered med6 ical home (as defined in subparagraph (B)) 

7 pursuant to paragraph (3)(B) for a targeted 

8 high need beneficiaries (as defined in subpara9 graph (C)). 

10 ‘‘(B) INDEPENDENT PATIENT-CENTERED

11 MEDICAL HOME DEFINED.—In this section, the 

12 term ‘independent patient-centered medical 

13 home’ means a physician-directed or nurse14 practitioner-directed practice that is qualified 

15 under paragraph (2) as— 

16 ‘‘(i) providing beneficiaries with pa17 tient-centered medical home services; and 

18 ‘‘(ii) meets such other requirements as 

19 the Secretary may specify. 

20 ‘‘(C) TARGETED HIGH NEED BENEFICIARY

21 DEFINED.—For purposes of this subsection, the 

22 term ‘targeted high need beneficiary’ means a 

23 high need beneficiary who, based on a risk score 

24 as specified by the Secretary, is generally within 


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1 the upper 50th percentile of Medicare bene2 ficiaries. 

3 ‘‘(D) BENEFICIARY ELECTION TO PARTICI4 PATE.—The Secretary shall determine an ap5 propriate method of ensuring that beneficiaries 

6 have agreed to participate in the pilot program. 

7 ‘‘(E) IMPLEMENTATION.—The pilot pro8 gram under this subsection shall begin no later 

9 than 6 months after the date of the enactment 

10 of this section. 

11 ‘‘(2) STANDARD SETTING AND QUALIFICATION

12 PROCESS FOR PATIENT-CENTERED MEDICAL

13 HOMES.—The Secretary shall review alternative 

14 models for standard setting and qualification, and 

15 shall establish a process— 

16 ‘‘(A) to establish standards to enable med17 ical practices to qualify as patient-centered 

18 medical homes; and 

19 ‘‘(B) to initially provide for the review and 

20 certification of medical practices as meeting 

21 such standards. 

22 ‘‘(3) PAYMENT.— 

23 ‘‘(A) ESTABLISHMENT OF METHOD24 OLOGY.—The Secretary shall establish a meth25 odology for the payment for medical home servVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01521 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ices furnished by independent patient-centered 

2 medical homes. Under such methodology, the 

3 Secretary shall adjust payments to medical 

4 homes based on beneficiary risk scores to en5 sure that higher payments are made for higher 

6 risk beneficiaries. 

7 ‘‘(B) PER BENEFICIARY PER MONTH PAY8 MENTS.—Under such payment methodology, the 

9 Secretary shall pay independent patient-cen10 tered medical homes a monthly fee for each tar11 geted high need beneficiary who consents to re12 ceive medical home services through such med13 ical home. 

14 ‘‘(C) PROSPECTIVE PAYMENT.—The fee 

15 under subparagraph (B) shall be paid on a pro16 spective basis. 

17 ‘‘(D) AMOUNT OF PAYMENT.—In deter18 mining the amount of such fee, the Secretary 

19 shall consider the following: 

20 ‘‘(i) The clinical work and practice ex21 penses involved in providing the medical 

22 home services provided by the independent 

23 patient-centered medical home (such as 

24 providing increased access, care coordina25 tion, population disease management, and 


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1 teaching self-care skills for managing 

2 chronic illnesses) for which payment is not 

3 made under this title as of the date of the 

4 enactment of this section. 

5 ‘‘(ii) Allow for differential payments 

6 based on capabilities of the independent 

7 patient-centered medical home. 

8 ‘‘(iii) Use appropriate risk-adjustment 

9 in determining the amount of the per bene10 ficiary per month payment under this 

11 paragraph in a manner that ensures that 

12 higher payments are made for higher risk 

13 beneficiaries. 

14 ‘‘(4) ENCOURAGING PARTICIPATION OF VARI15 ETY OF PRACTICES.—The pilot program under this 

16 subsection shall be designed to include the participa17 tion of physicians in practices with fewer than 10 

18 full-time equivalent physicians, as well as physicians 

19 in larger practices, particularly in underserved and 

20 rural areas, as well as federally qualified community 

21 health centers, and rural health centers. 

22 ‘‘(5) NO DUPLICATION IN PILOT PARTICIPA23 TION.—A physician in a group practice that partici24 pates in the accountable care organization pilot pro25 gram under section 1866D shall not be eligible to 


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1 participate in the pilot program under this sub2 section, unless the pilot program under this section 

3 has been implemented on a permanent basis under 

4 subsection (e)(3). 

5 ‘‘(d) COMMUNITY-BASED MEDICAL HOME MODEL.— 

6 ‘‘(1) IN GENERAL.— 

7 ‘‘(A) AUTHORITY FOR PAYMENTS.—Under 

8 the community-based medical home model 

9 under this subsection (in this section referred to 

10 as the ‘CBMH model’), the Secretary shall 

11 make payments for the furnishing of medical 

12 home services by a community-based medical 

13 home (as defined in subparagraph (B)) pursu14 ant to paragraph (5)(B) for high need bene15 ficiaries. 

16 ‘‘(B) COMMUNITY-BASED MEDICAL HOME

17 DEFINED.—In this section, the term ‘commu18 nity-based medical home’ means a nonprofit 

19 community-based or State-based organization 

20 that is certified under paragraph (2) as meeting 

21 the following requirements: 

22 ‘‘(i) The organization provides bene23 ficiaries with medical home services. 

24 ‘‘(ii) The organization provides med25 ical home services under the supervision of 


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1 and in close collaboration with the primary 

2 care or principal care physician or nurse 

3 practitioner designated by the beneficiary 

4 as his or her community-based medical 

5 home provider. 

6 ‘‘(iii) The organization employs com7 munity health workers, including nurses or 

8 other non-physician practitioners, lay 

9 health workers, or other persons as deter10 mined appropriate by the Secretary, that 

11 assist the primary or principal care physi12 cian or nurse practitioner in chronic care 

13 management activities such as teaching 

14 self-care skills for managing chronic ill15 nesses, transitional care services, care plan 

16 setting, medication therapy management 

17 services for patients with multiple chronic 

18 diseases, or help beneficiaries access the 

19 health care and community-based resources 

20 in their local geographic area. 

21 ‘‘(iv) The organization meets such 

22 other requirements as the Secretary may 

23 specify. 

24 ‘‘(C) HIGH NEED BENEFICIARY.—In this 

25 section, the term ‘high need beneficiary’ means 


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1 an individual who requires regular medical 

2 monitoring, advising, or treatment. 

3 ‘‘(2) QUALIFICATION PROCESS FOR COMMU4 NITY-BASED MEDICAL HOMES.—The Secretary shall 

5 establish a process— 

6 ‘‘(A) for the initial qualification of commu7 nity-based or State-based organizations as com8 munity-based medical homes; and 

9 ‘‘(B) to provide for the review and quali10 fication of such community-based and State11 based organizations pursuant to criteria estab12 lished by the Secretary. 

13 ‘‘(3) DURATION.—The pilot program for com14 munity-based medical homes under this subsection 

15 shall start no later than 2 years after the date of the 

16 enactment of this section. Each demonstration site 

17 under the pilot program shall operate for a period 

18 of up to 5 years after the initial implementation 

19 phase, without regard to the receipt of a initial im20 plementation funding under subsection (i). 

21 ‘‘(4) PREFERENCE.—In selecting sites for the 

22 CBMH model, the Secretary may give preference 

23 to— 

24 ‘‘(A) applications from geographic areas 

25 that propose to coordinate health care services 


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1 for chronically ill beneficiaries across a variety 

2 of health care settings, such as primary care 

3 physician practices with fewer than 10 physi4 cians, specialty physicians, nurse practitioner 

5 practices, Federally qualified health centers, 

6 rural health clinics, and other settings; 

7 ‘‘(B) applications that include other payors 

8 that furnish medical home services for chron9 ically ill patients covered by such payors; and 

10 ‘‘(C) applications from States that propose 

11 to use the medical home model to coordinate 

12 health care services for individuals enrolled 

13 under this title, individuals enrolled under title 

14 XIX, and full-benefit dual eligible individuals 

15 (as defined in section 1935(c)(6)) with chronic 

16 diseases across a variety of health care settings. 

17 ‘‘(5) PAYMENTS.— 

18 ‘‘(A) ESTABLISHMENT OF METHOD19 OLOGY.—The Secretary shall establish a meth20 odology for the payment for medical home serv21 ices furnished under the CBMH model. 

22 ‘‘(B) PER BENEFICIARY PER MONTH PAY23 MENTS.—Under such payment methodology, the 

24 Secretary shall make two separate monthly pay25 ments for each high need beneficiary who conVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01527 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sents to receive medical home services through 

2 such medical home, as follows: 

3 ‘‘(i) PAYMENT TO COMMUNITY-BASED

4 ORGANIZATION.—One monthly payment to 

5 a community-based or State-based organi6 zation. 

7 ‘‘(ii) PAYMENT TO PRIMARY OR PRIN8 CIPAL CARE PRACTICE.—One monthly pay9 ment to the primary or principal care prac10 tice for such beneficiary. 

11 ‘‘(C) PROSPECTIVE PAYMENT.—The pay12 ments under subparagraph (B) shall be paid on 

13 a prospective basis. 

14 ‘‘(D) AMOUNT OF PAYMENT.—In deter15 mining the amount of such payment, the Sec16 retary shall consider the following: 

17 ‘‘(i) The clinical work and practice ex18 penses involved in providing the medical 

19 home services provided by the community20 based medical home (such as providing in21 creased access, care coordination, care plan 

22 setting, population disease management, 

23 and teaching self-care skills for managing 

24 chronic illnesses) for which payment is not 


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1 made under this title as of the date of the 

2 enactment of this section. 

3 ‘‘(ii) Use appropriate risk-adjustment 

4 in determining the amount of the per bene5 ficiary per month payment under this 

6 paragraph. 

7 ‘‘(6) INITIAL IMPLEMENTATION FUNDING.— 

8 The Secretary may make available initial implemen9 tation funding to a community based or State-based 

10 organization or a State that is participating in the 

11 pilot program under this subsection. Such organiza12 tion shall provide the Secretary with a detailed im13 plementation plan that includes how such funds will 

14 be used. 

15 ‘‘(e) EXPANSION OF PROGRAM.— 

16 ‘‘(1) EVALUATION OF COST AND QUALITY.— 

17 The Secretary shall evaluate the pilot program to 

18 determine— 

19 ‘‘(A) the extent to which medical homes re20 sult in— 

21 ‘‘(i) improvement in the quality and 

22 coordination of health care services, par23 ticularly with regard to the care of complex 

24 patients; 


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1 ‘‘(ii) improvement in reducing health 

2 disparities; 

3 ‘‘(iii) reductions in preventable hos4 pitalizations; 

5 ‘‘(iv) prevention of readmissions; 

6 ‘‘(v) reductions in emergency room 

7 visits; 

8 ‘‘(vi) improvement in health outcomes, 

9 including patient functional status where 

10 applicable; 

11 ‘‘(vii) improvement in patient satisfac12 tion; 

13 ‘‘(viii) improved efficiency of care such 

14 as reducing duplicative diagnostic tests and 

15 laboratory tests; and 

16 ‘‘(ix) reductions in health care ex17 penditures; and 

18 ‘‘(B) the feasability and advisability of re19 imbursing medical homes for medical home 

20 services under this title on a permanent basis. 

21 ‘‘(2) REPORT.—Not later than 60 days after 

22 the date of completion of the evaluation under para23 graph (1), the Secretary shall submit to Congress 

24 and make available to the public a report on the 

25 findings of the evaluation under paragraph (1). 


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1 ‘‘(3) EXPANSION OF PROGRAM.— 

2 ‘‘(A) IN GENERAL.—Subject to the results 

3 of the evaluation under paragraph (1) and sub4 paragraph (B), the Secretary may issue regula5 tions to implement, on a permanent basis, one 

6 or more models, if, and to the extent that such 

7 model or models, are beneficial to the program 

8 under this title, including that such implemen9 tation will improve quality of care, as deter10 mined by the Secretary. 

11 ‘‘(B) CERTIFICATION REQUIREMENT.—The 

12 Secretary may not issue such regulations unless 

13 the Chief Actuary of the Centers for Medicare 

14 & Medicaid Services certifies that the expansion 

15 of the components of the pilot program de16 scribed in subparagraph (A) would result in es17 timated spending under this title that would be 

18 no more than the level of spending that the 

19 Secretary estimates would otherwise be spent 

20 under this title in the absence of such expan21 sion. 

22 ‘‘(f) ADMINISTRATIVE PROVISIONS.— 

23 ‘‘(1) NO DUPLICATION IN PAYMENTS.—During 

24 any month, the Secretary may not make payments 

25 under this section under more than one model or 


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1 through more than one medical home under any 

2 model for the furnishing of medical home services to 

3 an individual. 

4 ‘‘(2) NO EFFECT ON PAYMENT FOR EVALUA5 TION AND MANAGEMENT SERVICES.—Payments 

6 made under this section are in addition to, and have 

7 no effect on the amount of, payment for evaluation 

8 and management services made under this title. 

9 ‘‘(3) ADMINISTRATION.—Chapter 35 of title 44, 

10 United States Code shall not apply to this section. 

11 ‘‘(g) FUNDING.— 

12 ‘‘(1) OPERATIONAL COSTS.—For purposes of 

13 administering and carrying out the pilot program 

14 (including the design, implementation, technical as15 sistance for and evaluation of such program), in ad16 dition to funds otherwise available, there shall be 

17 transferred from the Federal Supplementary Medical 

18 Insurance Trust Fund under section 1841 to the 

19 Secretary for the Centers for Medicare & Medicaid 

20 Services Program Management Account $6,000,000 

21 for each of fiscal years 2010 through 2014. 

22 Amounts appropriated under this paragraph for a 

23 fiscal year shall be available until expended. 

24 ‘‘(2) PATIENT-CENTERED MEDICAL HOME

25 SERVICES.—In addition to funds otherwise available, 


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1 there shall be available to the Secretary for the Cen2 ters for Medicare & Medicaid Services, from the 

3 Federal Supplementary Medical Insurance Trust 

4 Fund under section 1841— 

5 ‘‘(A) $200,000,000 for each of fiscal years 

6 2010 through 2014 for payments for medical 

7 home services under subsection (c)(3); and 

8 ‘‘(B) $125,000,000 for each of fiscal years 

9 2012 through 2016, for payments under sub10 section (d)(5). 

11 Amounts available under this paragraph for a fiscal 

12 year shall be available until expended. 

13 ‘‘(3) INITIAL IMPLEMENTATION.—In addition 

14 to funds otherwise available, there shall be available 

15 to the Secretary for the Centers for Medicare & 

16 Medicaid Services, from the Federal Supplementary 

17 Medical Insurance Trust Fund under section 1841, 

18 $2,500,000 for each of fiscal years 2010 through 

19 2012, under subsection (d)(6). Amounts available 

20 under this paragraph for a fiscal year shall be avail21 able until expended. 

22 ‘‘(h) TREATMENT OF TRHCA MEDICARE MEDICAL

23 HOME DEMONSTRATION FUNDING.— 

24 ‘‘(1) In addition to funds otherwise available for 

25 payment of medical home services under subsection 


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1 (c)(3), there shall also be available the amount pro2 vided in subsection (g) of section 204 of division B 

3 of the Tax Relief and Health Care Act of 2006 (42 

4 U.S.C. 1395b–1 note). 

5 ‘‘(2) Notwithstanding section 1302(c) of the 

6 America’s Affordable Health Choices Act of 2009, in 

7 addition to funds provided in paragraph (1) and 

8 subsection (g)(2)(A), the funding for medical home 

9 services that would otherwise have been available if 

10 such section 204 medical home demonstration had 

11 been implemented (without regard to subsection (g) 

12 of such section) shall be available to the independent 

13 patient-centered medical home model described in 

14 subsection (c).’’. 

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

16 this section shall apply to services furnished on or after 

17 the date of the enactment of this Act. 

18 (c) CONFORMING REPEAL.—Section 204 of division 

19 B of the Tax Relief and Health Care Act of 2006 (42 

20 U.S.C. 1395b–1 note), as amended by section 133(a)(2) 

21 of the Medicare Improvements for Patients and Providers 

22 Act of 2008 (Public Law 110–275), is repealed. 


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1 SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY 

2 CARE SERVICES. 

3 (a) IN GENERAL.—Section 1833 of the Social Secu4 rity Act is amended by inserting after subsection (o) the 

5 following new subsection: 

6 ‘‘(p) PRIMARY CARE PAYMENT INCENTIVES.— 

7 ‘‘(1) IN GENERAL.—In the case of primary care 

8 services (as defined in paragraph (2)) furnished on 

9 or after January 1, 2011, by a primary care practi10 tioner (as defined in paragraph (3)) for which 

11 amounts are payable under section 1848, in addition 

12 to the amount otherwise paid under this part there 

13 shall also be paid to the practitioner (or to an em14 ployer or facility in the cases described in clause (A) 

15 of section 1842(b)(6)) (on a monthly or quarterly 

16 basis) from the Federal Supplementary Medical In17 surance Trust Fund an amount equal 5 percent (or 

18 10 percent if the practitioner predominately fur19 nishes such services in an area that is designated 

20 (under section 332(a)(1)(A) of the Public Health 

21 Service Act) as a primary care health professional 

22 shortage area. 

23 ‘‘(2) PRIMARY CARE SERVICES DEFINED.—In 

24 this subsection, the term ‘primary care services’— 


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1 ‘‘(A) means services which are evaluation 

2 and management services as defined in section 

3 1848(j)(5)(A); and 

4 ‘‘(B) includes services furnished by another 

5 health care professional that would be described 

6 in subparagraph (A) if furnished by a physi7 cian. 

8 ‘‘(3) PRIMARY CARE PRACTITIONER DE9 FINED.—In this subsection, the term ‘primary care 

10 practitioner’— 

11 ‘‘(A) means a physician or other health 

12 care practitioner (including a nurse practi13 tioner) who— 

14 ‘‘(i) specializes in family medicine, 

15 general internal medicine, general pediat16 rics, geriatrics, or obstetrics and gyne17 cology; and 

18 ‘‘(ii) has allowed charges for primary 

19 care services that account for at least 50 

20 percent of the physician’s or practitioner’s 

21 total allowed charges under section 1848, 

22 as determined by the Secretary for the 

23 most recent period for which data are 

24 available; and 


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1 ‘‘(B) includes a physician assistant who is 

2 under the supervision of a practitioner de3 scribed in subparagraph (A). 

4 ‘‘(4) LIMITATION ON REVIEW.—There shall be 

5 no administrative or judicial review under section 

6 1869, section 1878, or otherwise, respecting— 

7 ‘‘(A) any determination or designation 

8 under this subsection; 

9 ‘‘(B) the identification of services as pri10 mary care services under this subsection; and 

11 ‘‘(C) the identification of a practitioner as 

12 a primary care practitioner under this sub13 section. 

14 ‘‘(5) COORDINATION WITH OTHER PAY15 MENTS.— 

16 ‘‘(A) WITH OTHER PRIMARY CARE INCEN17 TIVES.—The provisions of this subsection shall 

18 not be taken into account in applying sub19 sections (m) and (u) and any payment under 

20 such subsections shall not be taken into account 

21 in computing payments under this subsection. 

22 ‘‘(B) WITH QUALITY INCENTIVES.—Pay23 ments under this subsection shall not be taken 

24 into account in determining the amounts that 


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1 would otherwise be paid under this part for 

2 purposes of section 1834(g)(2)(B).’’. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Section 1833 of such Act (42 U.S.C. 

5 1395l(m)) is amended by redesignating paragraph 

6 (4) as paragraph (5) and by inserting after para7 graph (3) the following new paragraph: 

8 ‘‘(4) The provisions of this subsection shall not be 

9 taken into account in applying subsections (m) or (u) and 

10 any payment under such subsections shall not be taken 

11 into account in computing payments under this sub12 section.’’. 

13 (2) Section 1848(m)(5)(B) of such Act (42 

14 U.S.C. 1395w–4(m)(5)(B)) is amended by inserting 

15 ‘‘, (p),’’ after ‘‘(m)’’. 

16 (3) Section 1848(o)(1)(B)(iv) of such Act (42 

17 U.S.C. 1395w–4(o)(1)(B)(iv)) is amended by insert18 ing ‘‘primary care’’ before ‘‘health professional 

19 shortage area’’. 

20 SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CER21 TIFIED NURSE-MIDWIVES. 

22 (a) IN GENERAL.—Section 1833(a)(1)(K) of the So23 cial Security Act (42 U.S.C.1395l(a)(1)(K)) is amended 

24 by striking ‘‘(but in no event’’ and all that follows through 

25 ‘‘performed by a physician)’’. 


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

2 subsection (a) shall apply to services furnished on or after 

3 January 1, 2011. 

4 SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR 

5 PREVENTIVE SERVICES. 

6 (a) MEDICARE COVERED PREVENTIVE SERVICES DE7 FINED.—Section 1861 of the Social Security Act (42 

8 U.S.C. 1395x), as amended by section 1235(a)(2), is 

9 amended by adding at the end the following new sub10 section: 

11 ‘‘Medicare Covered Preventive Services 

12 ‘‘(iii)(1) Subject to the succeeding provisions of this 

13 subsection, the term ‘Medicare covered preventive services’ 

14 means the following: 

15 ‘‘(A) Prostate cancer screening tests (as defined 

16 in subsection (oo)). 

17 ‘‘(B) Colorectal cancer screening tests (as de18 fined in subsection (pp) and when applicable as de19 scribed in section 1305). 

20 ‘‘(C) Diabetes outpatient self-management 

21 training services (as defined in subsection (qq)). 

22 ‘‘(D) Screening for glaucoma for certain indi23 viduals (as described in subsection (s)(2)(U)). 


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1 ‘‘(E) Medical nutrition therapy services for cer2 tain individuals (as described in subsection 

3 (s)(2)(V)). 

4 ‘‘(F) An initial preventive physical examination 

5 (as defined in subsection (ww)). 

6 ‘‘(G) Cardiovascular screening blood tests (as 

7 defined in subsection (xx)(1)). 

8 ‘‘(H) Diabetes screening tests (as defined in 

9 subsection (yy)). 

10 ‘‘(I) Ultrasound screening for abdominal aortic 

11 aneurysm for certain individuals (as described in de12 scribed in subsection (s)(2)(AA)). 

13 ‘‘(J) Pneumococcal and influenza vaccines and 

14 their administration (as described in subsection 

15 (s)(10)(A)) and hepatitis B vaccine and its adminis16 tration for certain individuals (as described in sub17 section (s)(10)(B)). 

18 ‘‘(K) Screening mammography (as defined in 

19 subsection (jj)). 

20 ‘‘(L) Screening pap smear and screening pelvic 

21 exam (as defined in subsection (nn)). 

22 ‘‘(M) Bone mass measurement (as defined in 

23 subsection (rr)). 

24 ‘‘(N) Kidney disease education services (as de25 fined in subsection (ggg)). 


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1 ‘‘(O) Additional preventive services (as defined 

2 in subsection (ddd)). 

3 ‘‘(2) With respect to specific Medicare covered pre4 ventive services, the limitations and conditions described 

5 in the provisions referenced in paragraph (1) with respect 

6 to such services shall apply.’’. 

7 (b) PAYMENT AND ELIMINATION OF COST-SHAR8 ING.— 

9 (1) IN GENERAL.— 

10 (A) IN GENERAL.—Section 1833(a) of the 

11 Social Security Act (42 U.S.C. 1395l(a)) is 

12 amended by adding after and below paragraph 

13 (9) the following: 

14 ‘‘With respect to Medicare covered preventive services, in 

15 any case in which the payment rate otherwise provided 

16 under this part is computed as a percent of less than 100 

17 percent of an actual charge, fee schedule rate, or other 

18 rate, such percentage shall be increased to 100 percent.’’. 

19 (B) APPLICATION TO SIGMOIDOSCOPIES

20 AND COLONOSCOPIES.—Section 1834(d) of such 

21 Act (42 U.S.C. 1395m(d)) is amended— 

22 (i) in paragraph (2)(C), by amending 

23 clause (ii) to read as follows: 

24 ‘‘(ii) NO COINSURANCE.—In the case 

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1 scribed in clause (i), there shall be no coin2 surance applied.’’; and 

3 (ii) in paragraph (3)(C), by amending 

4 clause (ii) to read as follows: 

5 ‘‘(ii) NO COINSURANCE.—In the case 

6 of a beneficiary who receives services de7 scribed in clause (i), there shall be no coin8 surance applied.’’. 

9 (2) ELIMINATION OF COINSURANCE IN OUT10 PATIENT HOSPITAL SETTINGS.— 

11 (A) EXCLUSION FROM OPD FEE SCHED12 ULE.—Section 1833(t)(1)(B)(iv) of the Social 

13 Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is 

14 amended by striking ‘‘screening mammography 

15 (as defined in section 1861(jj)) and diagnostic 

16 mammography’’ and inserting ‘‘diagnostic 

17 mammograms and Medicare covered preventive 

18 services (as defined in section 1861(iii)(1))’’. 

19 (B) CONFORMING AMENDMENTS.—Section 

20 1833(a)(2) of the Social Security Act (42 

21 U.S.C. 1395l(a)(2)) is amended— 

22 (i) in subparagraph (F), by striking 

23 ‘‘and’’ after the semicolon at the end; 

24 (ii) in subparagraph (G)(ii), by adding 

25 ‘‘and’’ at the end; and 


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1 (iii) by adding at the end the fol2 lowing new subparagraph: 

3 ‘‘(H) with respect to additional preventive 

4 services (as defined in section 1861(ddd)) fur5 nished by an outpatient department of a hos6 pital, the amount determined under paragraph 

7 (1)(W);’’. 

8 (3) WAIVER OF APPLICATION OF DEDUCTIBLE

9 FOR ALL PREVENTIVE SERVICES.—The first sen10 tence of section 1833(b) of the Social Security Act 

11 (42 U.S.C. 1395l(b)) is amended— 

12 (A) in clause (1), by striking ‘‘items and 

13 services described in section 1861(s)(10)(A)’’ 

14 and inserting ‘‘Medicare covered preventive 

15 services (as defined in section 1861(iii))’’; 

16 (B) by inserting ‘‘and’’ before ‘‘(4)’’; and 

17 (C) by striking clauses (5) through (8). 

18 (4) APPLICATION TO PROVIDERS OF SERV19 ICES.—Section 1866(a)(2)(A)(ii) of such Act (42 

20 U.S.C. 1395cc(a)(2)(A)(ii)) is amended by inserting 

21 ‘‘other than for Medicare covered preventive services 

22 and’’ after ‘‘for such items and services (’’. 

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

24 this section shall apply to services furnished on or after 

25 January 1, 2011. 


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1 SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL 

2 CANCER SCREENING TESTS REGARDLESS OF 

3 CODING, SUBSEQUENT DIAGNOSIS, OR ANCIL4 LARY TISSUE REMOVAL. 

5 (a) IN GENERAL.—Section 1833(b) of the Social Se6 curity Act (42 U.S.C. 1395l(b)), as amended by section 

7 1305(b)(3), is amended by adding at the end the following 

8 new sentence: ‘‘Clause (1) of the first sentence of this sub9 section shall apply with respect to a colorectal cancer 

10 screening test regardless of the code that is billed for the 

11 establishment of a diagnosis as a result of the test, or for 

12 the removal of tissue or other matter or other procedure 

13 that is furnished in connection with, as a result of, and 

14 in the same clinical encounter as, the screening test.’’. 

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

16 subsection (a) shall apply to items and services furnished 

17 on or after January 1, 2011. 

18 SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERV19 ICES FROM COVERAGE UNDER THE MEDI20 CARE SKILLED NURSING FACILITY PROSPEC21 TIVE PAYMENT SYSTEM AND CONSOLIDATED 

22 PAYMENT. 

23 (a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the 

24 Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 

25 amended by inserting ‘‘clinical social worker services,’’ 

26 after ‘‘qualified psychologist services,’’. 


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1 (b) CONFORMING AMENDMENT.—Section 

2 1861(hh)(2) of the Social Security Act (42 U.S.C. 

3 1395x(hh)(2)) is amended by striking ‘‘and other than 

4 services furnished to an inpatient of a skilled nursing facil5 ity which the facility is required to provide as a require6 ment for participation’’. 

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

8 this section shall apply to items and services furnished on 

9 or after July 1, 2010. 

10 SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERA11 PIST SERVICES AND MENTAL HEALTH COUN12 SELOR SERVICES. 

13 (a) COVERAGE OF MARRIAGE AND FAMILY THERA14 PIST SERVICES.— 

15 (1) COVERAGE OF SERVICES.—Section 

16 1861(s)(2) of the Social Security Act (42 U.S.C. 

17 1395x(s)(2)), as amended by section 1235, is 

18 amended— 

19 (A) in subparagraph (EE), by striking 

20 ‘‘and’’ at the end; 

21 (B) in subparagraph (FF), by adding 

22 ‘‘and’’ at the end; and 

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

24 subparagraph: 


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1 ‘‘(GG) marriage and family therapist serv2 ices (as defined in subsection (jjj));’’. 

3 (2) DEFINITION.—Section 1861 of the Social 

4 Security Act (42 U.S.C. 1395x), as amended by sec5 tions 1235 and 1305, is amended by adding at the 

6 end the following new subsection: 

7 ‘‘Marriage and Family Therapist Services 

8 ‘‘(jjj)(1) The term ‘marriage and family therapist 

9 services’ means services performed by a marriage and 

10 family therapist (as defined in paragraph (2)) for the diag11 nosis and treatment of mental illnesses, which the mar12 riage and family therapist is legally authorized to perform 

13 under State law (or the State regulatory mechanism pro14 vided by State law) of the State in which such services 

15 are performed, as would otherwise be covered if furnished 

16 by a physician or as incident to a physician’s professional 

17 service, but only if no facility or other provider charges 

18 or is paid any amounts with respect to the furnishing of 

19 such services. 

20 ‘‘(2) The term ‘marriage and family therapist’ means 

21 an individual who— 

22 ‘‘(A) possesses a master’s or doctoral degree 

23 which qualifies for licensure or certification as a 

24 marriage and family therapist pursuant to State 

25 law; 


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1 ‘‘(B) after obtaining such degree has performed 

2 at least 2 years of clinical supervised experience in 

3 marriage and family therapy; and 

4 ‘‘(C) is licensed or certified as a marriage and 

5 family therapist in the State in which marriage and 

6 family therapist services are performed.’’. 

7 (3) PROVISION FOR PAYMENT UNDER PART

8 B.—Section 1832(a)(2)(B) of the Social Security 

9 Act (42 U.S.C. 1395k(a)(2)(B)) is amended by add10 ing at the end the following new clause: 

11 ‘‘(v) marriage and family therapist 

12 services;’’. 

13 (4) AMOUNT OF PAYMENT.— 

14 (A) IN GENERAL.—Section 1833(a)(1) of 

15 the Social Security Act (42 U.S.C. 1395l(a)(1)) 

16 is amended— 

17 (i) by striking ‘‘and’’ before ‘‘(W)’’; 

18 and 

19 (ii) by inserting before the semicolon 

20 at the end the following: ‘‘, and (X) with 

21 respect to marriage and family therapist 

22 services under section 1861(s)(2)(GG), the 

23 amounts paid shall be 80 percent of the 

24 lesser of the actual charge for the services 

25 or 75 percent of the amount determined 


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1 for payment of a psychologist under clause 

2 (L)’’. 

3 (B) DEVELOPMENT OF CRITERIA WITH RE4 SPECT TO CONSULTATION WITH A HEALTH

5 CARE PROFESSIONAL.—The Secretary of Health 

6 and Human Services shall, taking into consider7 ation concerns for patient confidentiality, de8 velop criteria with respect to payment for mar9 riage and family therapist services for which 

10 payment may be made directly to the marriage 

11 and family therapist under part B of title 

12 XVIII of the Social Security Act (42 U.S.C. 

13 1395j et seq.) under which such a therapist 

14 must agree to consult with a patient’s attending 

15 or primary care physician or nurse practitioner 

16 in accordance with such criteria. 

17 (5) EXCLUSION OF MARRIAGE AND FAMILY

18 THERAPIST SERVICES FROM SKILLED NURSING FA19 CILITY PROSPECTIVE PAYMENT SYSTEM.—Section 

20 1888(e)(2)(A)(ii) of the Social Security Act (42 

21 U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 

22 1307(a), is amended by inserting ‘‘marriage and 

23 family therapist services (as defined in subsection 

24 (jjj)(1)),’’ after ‘‘clinical social worker services,’’. 


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1 (6) COVERAGE OF MARRIAGE AND FAMILY

2 THERAPIST SERVICES PROVIDED IN RURAL HEALTH

3 CLINICS AND FEDERALLY QUALIFIED HEALTH CEN4 TERS.—Section 1861(aa)(1)(B) of the Social Secu5 rity Act (42 U.S.C. 1395x(aa)(1)(B)) is amended by 

6 striking ‘‘or by a clinical social worker (as defined 

7 in subsection (hh)(1)),’’ and inserting ‘‘, by a clinical 

8 social worker (as defined in subsection (hh)(1)), or 

9 by a marriage and family therapist (as defined in 

10 subsection (jjj)(2)),’’. 

11 (7) INCLUSION OF MARRIAGE AND FAMILY

12 THERAPISTS AS PRACTITIONERS FOR ASSIGNMENT

13 OF CLAIMS.—Section 1842(b)(18)(C) of the Social 

14 Security Act (42 U.S.C. 1395u(b)(18)(C)) is amend15 ed by adding at the end the following new clause: 

16 ‘‘(vii) A marriage and family therapist (as de17 fined in section 1861(jjj)(2)).’’. 

18 (b) COVERAGE OF MENTAL HEALTH COUNSELOR

19 SERVICES.— 

20 (1) COVERAGE OF SERVICES.—Section 

21 1861(s)(2) of the Social Security Act (42 U.S.C. 

22 1395x(s)(2)), as previously amended, is further 

23 amended— 

24 (A) in subparagraph (FF), by striking 

25 ‘‘and’’ at the end; 


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1 (B) in subparagraph (GG), by inserting 

2 ‘‘and’’ at the end; and 

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

4 subparagraph: 

5 ‘‘(HH) mental health counselor services (as de6 fined in subsection (kkk)(1));’’. 

7 (2) DEFINITION.—Section 1861 of the Social 

8 Security Act (42 U.S.C. 1395x), as previously 

9 amended, is amended by adding at the end the fol10 lowing new subsection: 

11 ‘‘Mental Health Counselor Services 

12 ‘‘(kkk)(1) The term ‘mental health counselor services’ 

13 means services performed by a mental health counselor (as 

14 defined in paragraph (2)) for the diagnosis and treatment 

15 of mental illnesses which the mental health counselor is 

16 legally authorized to perform under State law (or the 

17 State regulatory mechanism provided by the State law) of 

18 the State in which such services are performed, as would 

19 otherwise be covered if furnished by a physician or as inci20 dent to a physician’s professional service, but only if no 

21 facility or other provider charges or is paid any amounts 

22 with respect to the furnishing of such services. 

23 ‘‘(2) The term ‘mental health counselor’ means an 

24 individual who— 


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1 ‘‘(A) possesses a master’s or doctor’s degree 

2 which qualifies the individual for licensure or certifi3 cation for the practice of mental health counseling in 

4 the State in which the services are performed; 

5 ‘‘(B) after obtaining such a degree has per6 formed at least 2 years of supervised mental health 

7 counselor practice; and 

8 ‘‘(C) is licensed or certified as a mental health 

9 counselor or professional counselor by the State in 

10 which the services are performed.’’. 

11 (3) PROVISION FOR PAYMENT UNDER PART

12 B.—Section 1832(a)(2)(B) of the Social Security 

13 Act (42 U.S.C. 1395k(a)(2)(B)), as amended by 

14 subsection (a)(3), is further amended— 

15 (A) by striking ‘‘and’’ at the end of clause 

16 (iv); 

17 (B) by adding ‘‘and’’ at the end of clause 

18 (v); and 

19 (C) by adding at the end the following new 

20 clause: 

21 ‘‘(vi) mental health counselor serv22 ices;’’. 

23 (4) AMOUNT OF PAYMENT.— 

24 (A) IN GENERAL.—Section 1833(a)(1) of 

25 the Social Security Act (42 U.S.C. 


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1 1395l(a)(1)), as amended by subsection (a), is 

2 further amended— 

3 (i) by striking ‘‘and’’before ‘‘(X)’’; 

4 and 

5 (ii) by inserting before the semicolon 

6 at the end the following: ‘‘, and (Y), with 

7 respect to mental health counselor services 

8 under section 1861(s)(2)(HH), the 

9 amounts paid shall be 80 percent of the 

10 lesser of the actual charge for the services 

11 or 75 percent of the amount determined 

12 for payment of a psychologist under clause 

13 (L)’’. 

14 (B) DEVELOPMENT OF CRITERIA WITH RE15 SPECT TO CONSULTATION WITH A PHYSICIAN.— 

16 The Secretary of Health and Human Services 

17 shall, taking into consideration concerns for pa18 tient confidentiality, develop criteria with re19 spect to payment for mental health counselor 

20 services for which payment may be made di21 rectly to the mental health counselor under part 

22 B of title XVIII of the Social Security Act (42 

23 U.S.C. 1395j et seq.) under which such a coun24 selor must agree to consult with a patient’s atVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01552 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tending or primary care physician in accordance 

2 with such criteria. 

3 (5) EXCLUSION OF MENTAL HEALTH COUN4 SELOR SERVICES FROM SKILLED NURSING FACILITY

5 PROSPECTIVE PAYMENT SYSTEM.—Section 

6 1888(e)(2)(A)(ii) of the Social Security Act (42 

7 U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 

8 1307(a) and subsection (a), is amended by inserting 

9 ‘‘mental health counselor services (as defined in sec10 tion 1861(kkk)(1)),’’ after ‘‘marriage and family 

11 therapist services (as defined in subsection 

12 (jjj)(1)),’’. 

13 (6) COVERAGE OF MENTAL HEALTH COUN14 SELOR SERVICES PROVIDED IN RURAL HEALTH

15 CLINICS AND FEDERALLY QUALIFIED HEALTH CEN16 TERS.—Section 1861(aa)(1)(B) of the Social Secu17 rity Act (42 U.S.C. 1395x(aa)(1)(B)), as amended 

18 by subsection (a), is amended by striking ‘‘or by a 

19 marriage and family therapist (as defined in sub20 section (jjj)(2)),’’ and inserting ‘‘by a marriage and 

21 family therapist (as defined in subsection (jjj)(2)), 

22 or a mental health counselor (as defined in sub23 section (kkk)(2)),’’. 

24 (7) INCLUSION OF MENTAL HEALTH COUN25 SELORS AS PRACTITIONERS FOR ASSIGNMENT OF


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1 CLAIMS.—Section 1842(b)(18)(C) of the Social Se2 curity Act (42 U.S.C. 1395u(b)(18)(C)), as amended 

3 by subsection (a)(7), is amended by adding at the 

4 end the following new clause: 

5 ‘‘(viii) A mental health counselor (as defined in 

6 section 1861(kkk)(2)).’’. 

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

8 this section shall apply to items and services furnished on 

9 or after January 1, 2011. 

10 SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN11 TAL HEALTH ADD-ON. 

12 Section 138(a)(1) of the Medicare Improvements for 

13 Patients and Providers Act of 2008 (Public Law 110–275) 

14 is amended by striking ‘‘December 31, 2009’’ and insert15 ing ‘‘December 31, 2011’’. 

16 SEC. 1310. EXPANDING ACCESS TO VACCINES. 

17 (a) IN GENERAL.—Paragraph (10) of section 

18 1861(s) of the Social Security Act (42 U.S.C. 1395w(s)) 

19 is amended to read as follows: 

20 ‘‘(10) federally recommended vaccines (as de21 fined in subsection (lll)) and their respective admin22 istration;’’. 

23 (b) FEDERALLY RECOMMENDED VACCINES DE24 FINED.—Section 1861 of such Act is further amended by 

25 adding at the end the following new subsection: 


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1 ‘‘Federally Recommended Vaccines 

2 ‘‘(lll) The term ‘federally recommended vaccine’ 

3 means an approved vaccine recommended by the Advisory 

4 Committee on Immunization Practices (an advisory com5 mittee established by the Secretary, acting through the Di6 rector of the Centers for Disease Control and Preven7 tion).’’. 

8 (c) CONFORMING AMENDMENTS.— 

9 (1) Section 1833 of such Act (42 U.S.C. 1395l) 

10 is amended, in each of subsections (a)(1)(B), 

11 (a)(2)(G), (a)(3)(A), and (b)(1) (as amended by sec12 tion 1305(b)), by striking ‘‘1861(s)(10)(A)’’ or 

13 ‘‘1861(s)(10)(B)’’ and inserting ‘‘1861(s)(10)’’ each 

14 place it appears. 

15 (2) Section 1842(o)(1)(A)(iv) of such Act (42 

16 U.S.C. 1395u(o)(1)(A)(iv)) is amended— 

17 (A) by striking ‘‘subparagraph (A) or (B) 

18 of’’; and 

19 (B) by inserting before the period the fol20 lowing: ‘‘and before January 1, 2011, and influ21 enza vaccines furnished on or after January 1, 

22 2011’’. 

23 (3) Section 1847A(c)(6) of such Act (42 U.S.C. 

24 1395w–3a(c)(6)) is amended by striking subpara25 graph (G) and inserting the following: 


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1 ‘‘(G) IMPLEMENTATION.—Chapter 35 of 

2 title 44, United States Code shall not apply to 

3 manufacturer provision of information pursuant 

4 to section 1927(b)(3)(A)(iii) for purposes of im5 plementation of this section.’’. 

6 (4) Section 1860D–2(e)(1)(B) of such Act (42 

7 U.S.C. 1395w–102(e)(1)(B)) is amended by striking 

8 ‘‘such term includes a vaccine’’ and all that follows 

9 through ‘‘its administration) and’’. 

10 (5) Section 1861(ww)(2)(A) of such Act (42 

11 U.S.C. 1395x(ww)(2)(A))) is amended by striking 

12 ‘‘Pneumococcal, influenza, and hepatitis B and ad13 ministration’’ and inserting ‘‘Federally recommended 

14 vaccines (as defined in subsection (lll)) and their re15 spective administration’’. 

16 (6) Section 1861(iii)(1) of such Act, as added 

17 by section 1305(a), is amended by amending sub18 paragraph (J) to read as follows: 

19 ‘‘(J) Federally recommended vaccines (as de20 fined in subsection (lll)) and their respective admin21 istration.’’. 

22 (7) Section 1927(b)(3)(A)(iii) of such Act (42 

23 U.S.C. 1396r–8(b)(3)(A)(iii)) is amended, in the 

24 matter following subclause (III), by inserting 

25 ‘‘(A)(iv) (including influenza vaccines furnished on 


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1 or after January 1, 2011),’’ after ‘‘described in sub2 paragraph.’’ 

3 (d) EFFECTIVE DATES.—The amendments made 

4 by— 

5 (1) this section (other than by subsection 

6 (c)(7)) shall apply to vaccines administered on or 

7 after January 1, 2011; and 

8 (2) by subsection (c)(7) shall apply to calendar 

9 quarters beginning on or after January 1, 2010. 

10 TITLE L—QUALITY 

11 Subtitle A—Comparative 

12 Effectiveness Research 

13 SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH. 

14 (a) IN GENERAL.—title XI of the Social Security Act 

15 is amended by adding at the end the following new part: 

16 ‘‘PART D—COMPARATIVE EFFECTIVENESS RESEARCH

17 ‘‘COMPARATIVE EFFECTIVENESS RESEARCH

18 ‘‘SEC. 1181. (a) CENTER FOR COMPARATIVE EFFEC19 TIVENESS RESEARCH ESTABLISHED.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall estab21 lish within the Agency for Healthcare Research and 

22 Quality a Center for Comparative Effectiveness Re23 search (in this section referred to as the ‘Center’) to 

24 conduct, support, and synthesize research (including 

25 research conducted or supported under section 1013 


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1 of the Medicare Prescription Drug, Improvement, 

2 and Modernization Act of 2003) with respect to the 

3 outcomes, effectiveness, and appropriateness of 

4 health care services and procedures in order to iden5 tify the manner in which diseases, disorders, and 

6 other health conditions can most effectively and ap7 propriately be prevented, diagnosed, treated, and 

8 managed clinically. 

9 ‘‘(2) DUTIES.—The Center shall— 

10 ‘‘(A) conduct, support, and synthesize re11 search relevant to the comparative effectiveness 

12 of the full spectrum of health care items, serv13 ices and systems, including pharmaceuticals, 

14 medical devices, medical and surgical proce15 dures, and other medical interventions; 

16 ‘‘(B) conduct and support systematic re17 views of clinical research, including original re18 search conducted subsequent to the date of the 

19 enactment of this section; 

20 ‘‘(C) continuously develop rigorous sci21 entific methodologies for conducting compara22 tive effectiveness studies, and use such meth23 odologies appropriately; 

24 ‘‘(D) submit to the Comparative Effective25 ness Research Commission, the Secretary, and 


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1 Congress appropriate relevant reports described 

2 in subsection (d)(2); and 

3 ‘‘(E) encourage, as appropriate, the devel4 opment and use of clinical registries and the de5 velopment of clinical effectiveness research data 

6 networks from electronic health records, post 

7 marketing drug and medical device surveillance 

8 efforts, and other forms of electronic health 

9 data. 

10 ‘‘(3) POWERS.— 

11 ‘‘(A) OBTAINING OFFICIAL DATA.—The 

12 Center may secure directly from any depart13 ment or agency of the United States informa14 tion necessary to enable it to carry out this sec15 tion. Upon request of the Center, the head of 

16 that department or agency shall furnish that in17 formation to the Center on an agreed upon 

18 schedule. 

19 ‘‘(B) DATA COLLECTION.—In order to 

20 carry out its functions, the Center shall— 

21 ‘‘(i) utilize existing information, both 

22 published and unpublished, where possible, 

23 collected and assessed either by its own 

24 staff or under other arrangements made in 

25 accordance with this section, 


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1 ‘‘(ii) carry out, or award grants or 

2 contracts for, original research and experi3 mentation, where existing information is 

4 inadequate, and 

5 ‘‘(iii) adopt procedures allowing any 

6 interested party to submit information for 

7 the use by the Center and Commission 

8 under subsection (b) in making reports 

9 and recommendations. 

10 ‘‘(C) ACCESS OF GAO TO INFORMATION.— 

11 The Comptroller General shall have unrestricted 

12 access to all deliberations, records, and non13 proprietary data of the Center and Commission 

14 under subsection (b), immediately upon request. 

15 ‘‘(D) PERIODIC AUDIT.—The Center and 

16 Commission under subsection (b) shall be sub17 ject to periodic audit by the Comptroller Gen18 eral. 

19 ‘‘(b) OVERSIGHT BY COMPARATIVE EFFECTIVENESS

20 RESEARCH COMMISSION.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall estab22 lish an independent Comparative Effectiveness Re23 search Commission (in this section referred to as the 

24 ‘Commission’) to oversee and evaluate the activities 

25 carried out by the Center under subsection (a), subVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01560 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ject to the authority of the Secretary, to ensure such 

2 activities result in highly credible research and infor3 mation resulting from such research. 

4 ‘‘(2) DUTIES.—The Commission shall— 

5 ‘‘(A) determine national priorities for re6 search described in subsection (a) and in mak7 ing such determinations consult with a broad 

8 array of public and private stakeholders, includ9 ing patients and health care providers and pay10 ers; 

11 ‘‘(B) monitor the appropriateness of use of 

12 the CERTF described in subsection (g) with re13 spect to the timely production of comparative 

14 effectiveness research determined to be a na15 tional priority under subparagraph (A); 

16 ‘‘(C) identify highly credible research 

17 methods and standards of evidence for such re18 search to be considered by the Center; 

19 ‘‘(D) review the methodologies developed 

20 by the center under subsection (a)(2)(C); 

21 ‘‘(E) not later than one year after the date 

22 of the enactment of this section, enter into an 

23 arrangement under which the Institute of Medi24 cine of the National Academy of Sciences shall 


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1 conduct an evaluation and report on standards 

2 of evidence for such research; 

3 ‘‘(F) support forums to increase stake4 holder awareness and permit stakeholder feed5 back on the efforts of the Center to advance 

6 methods and standards that promote highly 

7 credible research; 

8 ‘‘(G) make recommendations for policies 

9 that would allow for public access of data pro10 duced under this section, in accordance with ap11 propriate privacy and proprietary practices, 

12 while ensuring that the information produced 

13 through such data is timely and credible; 

14 ‘‘(H) appoint a clinical perspective advisory 

15 panel for each research priority determined 

16 under subparagraph (A), which shall consult 

17 with patients and advise the Center on research 

18 questions, methods, and evidence gaps in terms 

19 of clinical outcomes for the specific research in20 quiry to be examined with respect to such pri21 ority to ensure that the information produced 

22 from such research is clinically relevant to deci23 sions made by clinicians and patients at the 

24 point of care; 


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1 ‘‘(I) make recommendations for the pri2 ority for periodic reviews of previous compara3 tive effectiveness research and studies con4 ducted by the Center under subsection (a); 

5 ‘‘(J) routinely review processes of the Cen6 ter with respect to such research to confirm 

7 that the information produced by such research 

8 is objective, credible, consistent with standards 

9 of evidence established under this section, and 

10 developed through a transparent process that 

11 includes consultations with appropriate stake12 holders; and 

13 ‘‘(K) make recommendations to the center 

14 for the broad dissemination of the findings of 

15 research conducted and supported under this 

16 section that enables clinicians, patients, con17 sumers, and payers to make more informed 

18 health care decisions that improve quality and 

19 value. 

20 ‘‘(3) COMPOSITION OF COMMISSION.— 

21 ‘‘(A) IN GENERAL.—The members of the 

22 Commission shall consist of— 

23 ‘‘(i) the Director of the Agency for 

24 Healthcare Research and Quality; 


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1 ‘‘(ii) the Chief Medical Officer of the 

2 Centers for Medicare & Medicaid Services; 

3 and 

4 ‘‘(iii) 15 additional members who shall 

5 represent broad constituencies of stake6 holders including clinicians, patients, re7 searchers, third-party payers, consumers of 

8 Federal and State beneficiary programs. 

9 Of such members, at least 9 shall be practicing 

10 physicians, health care practitioners, con11 sumers, or patients. 

12 ‘‘(B) QUALIFICATIONS.— 

13 ‘‘(i) DIVERSE REPRESENTATION OF

14 PERSPECTIVES.—The members of the 

15 Commission shall represent a broad range 

16 of perspectives and shall collectively have 

17 experience in the following areas: 

18 ‘‘(I) Epidemiology. 

19 ‘‘(II) Health services research. 

20 ‘‘(III) Bioethics. 

21 ‘‘(IV) Decision sciences. 

22 ‘‘(V) Health disparities. 

23 ‘‘(VI) Economics. 

24 ‘‘(ii) DIVERSE REPRESENTATION OF

25 HEALTH CARE COMMUNITY.—At least one 


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1 member shall represent each of the fol2 lowing health care communities: 

3 ‘‘(I) Patients. 

4 ‘‘(II) Health care consumers. 

5 ‘‘(III) Practicing Physicians, in6 cluding surgeons. 

7 ‘‘(IV) Other health care practi8 tioners engaged in clinical care. 

9 ‘‘(V) Employers. 

10 ‘‘(VI) Public payers. 

11 ‘‘(VII) Insurance plans. 

12 ‘‘(VIII) Clinical researchers who 

13 conduct research on behalf of pharma14 ceutical or device manufacturers. 

15 ‘‘(C) LIMITATION.—No more than 3 of the 

16 Members of the Commission may be representa17 tives of pharmaceutical or device manufacturers 

18 and such representatives shall be clinical re19 searchers described under subparagraph 

20 (B)(ii)(VIII). 

21 ‘‘(4) APPOINTMENT.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 appoint the members of the Commission. 

24 ‘‘(B) CONSULTATION.—In considering can25 didates for appointment to the Commission, the 


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1 Secretary may consult with the Government Ac2 countability Office and the Institute of Medicine 

3 of the National Academy of Sciences. 

4 ‘‘(5) CHAIRMAN; VICE CHAIRMAN.—The Sec5 retary shall designate a member of the Commission, 

6 at the time of appointment of the member, as Chair7 man and a member as Vice Chairman for that term 

8 of appointment, except that in the case of vacancy 

9 of the Chairmanship or Vice Chairmanship, the Sec10 retary may designate another member for the re11 mainder of that member’s term. The Chairman shall 

12 serve as an ex officio member of the National Advi13 sory Council of the Agency for Health Care Re14 search and Quality under section 931(c)(3)(B) of 

15 the Public Health Service Act. 

16 ‘‘(6) TERMS.— 

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

18 subparagraph (B), each member of the Com19 mission shall be appointed for a term of 4 

20 years. 

21 ‘‘(B) TERMS OF INITIAL APPOINTEES.—Of 

22 the members first appointed— 

23 ‘‘(i) 8 shall be appointed for a term of 

24 4 years; and 


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1 ‘‘(ii) 7 shall be appointed for a term 

2 of 3 years. 

3 ‘‘(7) COORDINATION.—To enhance effectiveness 

4 and coordination, the Secretary is encouraged, to the 

5 greatest extent possible, to seek coordination be6 tween the Commission and the National Advisory 

7 Council of the Agency for Healthcare Research and 

8 Quality. 

9 ‘‘(8) CONFLICTS OF INTEREST.— 

10 ‘‘(A) IN GENERAL.—In appointing the 

11 members of the Commission or a clinical per12 spective advisory panel described in paragraph 

13 (2)(H), the Secretary or the Commission, re14 spectively, shall take into consideration any fi15 nancial interest (as defined in subparagraph 

16 (D)), consistent with this paragraph, and de17 velop a plan for managing any identified con18 flicts. 

19 ‘‘(B) EVALUATION AND CRITERIA.—When 

20 considering an appointment to the Commission 

21 or a clinical perspective advisory panel de22 scribed paragraph (2)(H) the Secretary or the 

23 Commission shall review the expertise of the in24 dividual and the financial disclosure report filed 

25 by the individual pursuant to the Ethics in GovVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01567 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ernment Act of 1978 for each individual under 

2 consideration for the appointment, so as to re3 duce the likelihood that an appointed individual 

4 will later require a written determination as re5 ferred to in section 208(b)(1) of title 18, United 

6 States Code, a written certification as referred 

7 to in section 208(b)(3) of title 18, United 

8 States Code, or a waiver as referred to in sub9 paragraph (D)(iii) for service on the Commis10 sion at a meeting of the Commission. 

11 ‘‘(C) DISCLOSURES; PROHIBITIONS ON

12 PARTICIPATION; WAIVERS.— 

13 ‘‘(i) DISCLOSURE OF FINANCIAL IN14 TEREST.—Prior to a meeting of the Com15 mission or a clinical perspective advisory 

16 panel described in paragraph (2)(H) re17 garding a ‘particular matter’ (as that term 

18 is used in section 208 of title 18, United 

19 States Code), each member of the Commis20 sion or the clinical perspective advisory 

21 panel who is a full-time Government em22 ployee or special Government employee 

23 shall disclose to the Secretary financial in24 terests in accordance with subsection (b) of 

25 such section 208. 


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1 ‘‘(ii) PROHIBITIONS ON PARTICIPA2 TION.—Except as provided under clause 

3 (iii), a member of the Commission or a 

4 clinical perspective advisory panel de5 scribed in paragraph (2)(H) may not par6 ticipate with respect to a particular matter 

7 considered in meeting of the Commission 

8 or the clinical perspective advisory panel if 

9 such member (or an immediate family 

10 member of such member) has a financial 

11 interest that could be affected by the ad12 vice given to the Secretary with respect to 

13 such matter, excluding interests exempted 

14 in regulations issued by the Director of the 

15 Office of Government Ethics as too remote 

16 or inconsequential to affect the integrity of 

17 the services of the Government officers or 

18 employees to which such regulations apply. 

19 ‘‘(iii) WAIVER.—If the Secretary de20 termines it necessary to afford the Com21 mission or a clinical perspective advisory 

22 panel described in paragraph 2(H) essen23 tial expertise, the Secretary may grant a 

24 waiver of the prohibition in clause (ii) to 


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1 permit a member described in such sub2 paragraph to— 

3 ‘‘(I) participate as a non-voting 

4 member with respect to a particular 

5 matter considered in a Commission or 

6 a clinical perspective advisory panel 

7 meeting; or 

8 ‘‘(II) participate as a voting 

9 member with respect to a particular 

10 matter considered in a Commission or 

11 a clinical perspective advisory panel 

12 meeting. 

13 ‘‘(iv) LIMITATION ON WAIVERS AND

14 OTHER EXCEPTIONS.— 

15 ‘‘(I) DETERMINATION OF ALLOW16 ABLE EXCEPTIONS FOR THE COMMIS17 SION.—The number of waivers grant18 ed to members of the Commission 

19 cannot exceed one-half of the total 

20 number of members for the Commis21 sion. 

22 ‘‘(II) PROHIBITION ON VOTING

23 STATUS ON CLINICAL PERSPECTIVE

24 ADVISORY PANELS.—No voting mem25 ber of any clinical perspective advisory 


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1 panel shall be in receipt of a waiver. 

2 No more than two nonvoting members 

3 of any clinical perspective advisory 

4 panel shall receive a waiver. 

5 ‘‘(D) FINANCIAL INTEREST DEFINED.— 

6 For purposes of this paragraph, the term ‘fi7 nancial interest’ means a financial interest 

8 under section 208(a) of title 18, United States 

9 Code. 

10 ‘‘(9) COMPENSATION.—While serving on the 

11 business of the Commission (including travel time), 

12 a member of the Commission shall be entitled to 

13 compensation at the per diem equivalent of the rate 

14 provided for level IV of the Executive Schedule 

15 under section 5315 of title 5, United States Code; 

16 and while so serving away from home and the mem17 ber’s regular place of business, a member may be al18 lowed travel expenses, as authorized by the Director 

19 of the Commission. 

20 ‘‘(10) AVAILABILITY OF REPORTS.—The Com21 mission shall transmit to the Secretary a copy of 

22 each report submitted under this subsection and 

23 shall make such reports available to the public. 

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

25 CONSULTANTS.—Subject to such review as the SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01571 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary deems necessary to assure the efficient ad2 ministration of the Commission, the Commission 

3 may— 

4 ‘‘(A) appoint an Executive Director (sub5 ject to the approval of the Secretary) and such 

6 other personnel as Federal employees under 

7 section 2105 of title 5, United States Code, as 

8 may be necessary to carry out its duties (with9 out regard to the provisions of title 5, United 

10 States Code, governing appointments in the 

11 competitive service); 

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

13 may be required in the performance of its du14 ties from appropriate Federal departments and 

15 agencies; 

16 ‘‘(C) enter into contracts or make other ar17 rangements, as may be necessary for the con18 duct of the work of the Commission (without 

19 regard to section 3709 of the Revised Statutes 

20 (41 U.S.C. 5)); 

21 ‘‘(D) make advance, progress, and other 

22 payments which relate to the work of the Com23 mission; 


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1 ‘‘(E) provide transportation and subsist2 ence for persons serving without compensation; 

3 and 

4 ‘‘(F) prescribe such rules and regulations 

5 as it deems necessary with respect to the inter6 nal organization and operation of the Commis7 sion. 

8 ‘‘(c) RESEARCH REQUIREMENTS.—Any research con9 ducted, supported, or synthesized under this section shall 

10 meet the following requirements: 

11 ‘‘(1) ENSURING TRANSPARENCY, CREDIBILITY, 

12 AND ACCESS.— 

13 ‘‘(A) The establishment of the agenda and 

14 conduct of the research shall be insulated from 

15 inappropriate political or stakeholder influence. 

16 ‘‘(B) Methods of conducting such research 

17 shall be scientifically based. 

18 ‘‘(C) All aspects of the prioritization of re19 search, conduct of the research, and develop20 ment of conclusions based on the research shall 

21 be transparent to all stakeholders. 

22 ‘‘(D) The process and methods for con23 ducting such research shall be publicly docu24 mented and available to all stakeholders. 


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1 ‘‘(E) Throughout the process of such re2 search, the Center shall provide opportunities 

3 for all stakeholders involved to review and pro4 vide public comment on the methods and find5 ings of such research. 

6 ‘‘(2) USE OF CLINICAL PERSPECTIVE ADVISORY

7 PANELS.—The research shall meet a national re8 search priority determined under subsection 

9 (b)(2)(A) and shall consider advice given to the Cen10 ter by the clinical perspective advisory panel for the 

11 national research priority. 

12 ‘‘(3) STAKEHOLDER INPUT.— 

13 ‘‘(A) IN GENERAL.—The Commission shall 

14 consult with patients, health care providers, 

15 health care consumer representatives, and other 

16 appropriate stakeholders with an interest in the 

17 research through a transparent process rec18 ommended by the Commission. 

19 ‘‘(B) SPECIFIC AREAS OF CONSULTA20 TION.—Consultation shall include where 

21 deemed appropriate by the Commission— 

22 ‘‘(i) recommending research priorities 

23 and questions; 

24 ‘‘(ii) recommending research meth25 odologies; and 


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1 ‘‘(iii) advising on and assisting with 

2 efforts to disseminate research findings. 

3 ‘‘(C) OMBUDSMAN.—The Secretary shall 

4 designate a patient ombudsman. The ombuds5 man shall— 

6 ‘‘(i) serve as an available point of con7 tact for any patients with an interest in 

8 proposed comparative effectiveness studies 

9 by the Center; and 

10 ‘‘(ii) ensure that any comments from 

11 patients regarding proposed comparative 

12 effectiveness studies are reviewed by the 

13 Commission. 

14 ‘‘(4) TAKING INTO ACCOUNT POTENTIAL DIF15 FERENCES.—Research shall— 

16 ‘‘(A) be designed, as appropriate, to take 

17 into account the potential for differences in the 

18 effectiveness of health care items and services 

19 used with various subpopulations such as racial 

20 and ethnic minorities, women, different age 

21 groups (including children, adolescents, adults, 

22 and seniors), and individuals with different 

23 comorbidities; and 


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1 ‘‘(B) seek, as feasible and appropriate, to 

2 include members of such subpopulations as sub3 jects in the research. 

4 ‘‘(d) PUBLIC ACCESS TO COMPARATIVE EFFECTIVE5 NESS INFORMATION.— 

6 ‘‘(1) IN GENERAL.—Not later than 90 days 

7 after receipt by the Center or Commission, as appli8 cable, of a relevant report described in paragraph 

9 (2) made by the Center, Commission, or clinical per10 spective advisory panel under this section, appro11 priate information contained in such report shall be 

12 posted on the official public Internet site of the Cen13 ter and of the Commission, as applicable. 

14 ‘‘(2) RELEVANT REPORTS DESCRIBED.—For 

15 purposes of this section, a relevant report is each of 

16 the following submitted by the Center or a grantee 

17 or contractor of the Center: 

18 ‘‘(A) Any interim or progress reports as 

19 deemed appropriate by the Secretary. 

20 ‘‘(B) Stakeholder comments. 

21 ‘‘(C) A final report. 

22 ‘‘(e) DISSEMINATION AND INCORPORATION OF COM23 PARATIVE EFFECTIVENESS INFORMATION.— 

24 ‘‘(1) DISSEMINATION.—The Center shall pro25 vide for the dissemination of appropriate findings 


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1 produced by research supported, conducted, or syn2 thesized under this section to health care providers, 

3 patients, vendors of health information technology 

4 focused on clinical decision support, appropriate pro5 fessional associations, and Federal and private 

6 health plans, and other relevant stakeholders. In dis7 seminating such findings the Center shall— 

8 ‘‘(A) convey findings of research so that 

9 they are comprehensible and useful to patients 

10 and providers in making health care decisions; 

11 ‘‘(B) discuss findings and other consider12 ations specific to certain sub-populations, risk 

13 factors, and comorbidities as appropriate; 

14 ‘‘(C) include considerations such as limita15 tions of research and what further research 

16 may be needed, as appropriate; 

17 ‘‘(D) not include any data that the dis18 semination of which would violate the privacy of 

19 research participants or violate any confiden20 tiality agreements made with respect to the use 

21 of data under this section; and 

22 ‘‘(E) assist the users of health information 

23 technology focused on clinical decision support 

24 to promote the timely incorporation of such 


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1 findings into clinical practices and promote the 

2 ease of use of such incorporation. 

3 ‘‘(2) DISSEMINATION PROTOCOLS AND STRATE4 GIES.—The Center shall develop protocols and strat5 egies for the appropriate dissemination of research 

6 findings in order to ensure effective communication 

7 of findings and the use and incorporation of such 

8 findings into relevant activities for the purpose of in9 forming higher quality and more effective and effi10 cient decisions regarding medical items and services. 

11 In developing and adopting such protocols and strat12 egies, the Center shall consult with stakeholders con13 cerning the types of dissemination that will be most 

14 useful to the end users of information and may pro15 vide for the utilization of multiple formats for con16 veying findings to different audiences, including dis17 semination to individuals with limited English pro18 ficiency. 

19 ‘‘(f) REPORTS TO CONGRESS.— 

20 ‘‘(1) ANNUAL REPORTS.—Beginning not later 

21 than one year after the date of the enactment of this 

22 section, the Director of the Agency of Healthcare 

23 Research and Quality and the Commission shall sub24 mit to Congress an annual report on the activities 

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1 search, conducted under this section. Each such re2 port shall include a discussion of the Center’s com3 pliance with subsection (c)(B)(4), including any rea4 sons for lack of compliance with such subsection. 

5 ‘‘(2) RECOMMENDATION FOR FAIR SHARE PER

6 CAPITA AMOUNT FOR ALL-PAYER FINANCING.—Be7 ginning not later than December 31, 2011, the Sec8 retary shall submit to Congress an annual rec9 ommendation for a fair share per capita amount de10 scribed in subsection (c)(1) of section 9511 of the 

11 Internal Revenue Code of 1986 for purposes of 

12 funding the CERTF under such section. 

13 ‘‘(3) ANALYSIS AND REVIEW.—Not later than 

14 December 31, 2013, the Secretary, in consultation 

15 with the Commission, shall submit to Congress a re16 port on all activities conducted or supported under 

17 this section as of such date. Such report shall in18 clude an evaluation of the overall costs of such ac19 tivities and an analysis of the backlog of any re20 search proposals approved by the Commission but 

21 not funded. 

22 ‘‘(g) FUNDING OF COMPARATIVE EFFECTIVENESS

23 RESEARCH.—For fiscal year 2010 and each subsequent 

24 fiscal year, amounts in the Comparative Effectiveness Re25 search Trust Fund (referred to in this section as the 


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1 ‘CERTF’) under section 9511 of the Internal Revenue 

2 Code of 1986 shall be available, without the need for fur3 ther appropriations and without fiscal year limitation, to 

4 the Secretary to carry out this section. 

5 ‘‘(h) CONSTRUCTION.—Nothing in this section shall 

6 be construed to permit the Commission or the Center to 

7 mandate coverage, reimbursement, or other policies for 

8 any public or private payer.’’. 

9 (b) COMPARATIVE EFFECTIVENESS RESEARCH

10 TRUST FUND; FINANCING FOR THE TRUST FUND.—For 

11 provision establishing a Comparative Effectiveness Re12 search Trust Fund and financing such Trust Fund, see 

13 section 1802. 

14 Subtitle B—Nursing Home 

15 Transparency 

16 PART 1—IMPROVING TRANSPARENCY OF INFOR17 MATION ON SKILLED NURSING FACILITIES 

18 AND NURSING FACILITIES 

19 SEC. 1411. REQUIRED DISCLOSURE OF OWNERSHIP AND 

20 ADDITIONAL DISCLOSABLE PARTIES INFOR21 MATION. 

22 (a) IN GENERAL.—Section 1124 of the Social Secu23 rity Act (42 U.S.C. 1320a–3) is amended by adding at 

24 the end the following new subsection: 


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1 ‘‘(c) REQUIRED DISCLOSURE OF OWNERSHIP AND

2 ADDITIONAL DISCLOSABLE PARTIES INFORMATION.— 

3 ‘‘(1) DISCLOSURE.—A facility (as defined in 

4 paragraph (7)(B)) shall have the information de5 scribed in paragraph (3) available— 

6 ‘‘(A) during the period beginning on the 

7 date of the enactment of this subsection and 

8 ending on the date such information is made 

9 available to the public under section 1411(b) of 

10 the America’s Affordable Health Choices Act of 

11 2009, for submission to the Secretary, the In12 spector General of the Department of Health 

13 and Human Services, the State in which the fa14 cility is located, and the State long-term care 

15 ombudsman in the case where the Secretary, 

16 the Inspector General, the State, or the State 

17 long-term care ombudsman requests such infor18 mation; and 

19 ‘‘(B) beginning on the effective date of the 

20 final regulations promulgated under paragraph 

21 (4)(A), for reporting such information in ac22 cordance with such final regulations. 

23 Nothing in subparagraph (A) shall be construed as 

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1 tive date of the final regulations promulgated under 

2 paragraph (4)(A). 

3 ‘‘(2) PUBLIC AVAILABILITY OF INFORMATION.— 

4 During the period described in paragraph (1)(A), a 

5 facility shall— 

6 ‘‘(A) make the information described in 

7 paragraph (3) available to the public upon re8 quest and update such information as may be 

9 necessary to reflect changes in such informa10 tion; and 

11 ‘‘(B) post a notice of the availability of 

12 such information in the lobby of the facility in 

13 a prominent manner. 

14 ‘‘(3) INFORMATION DESCRIBED.— 

15 ‘‘(A) IN GENERAL.—The following infor16 mation is described in this paragraph: 

17 ‘‘(i) The information described in sub18 sections (a) and (b), subject to subpara19 graph (C). 

20 ‘‘(ii) The identity of and information 

21 on— 

22 ‘‘(I) each member of the gov23 erning body of the facility, including 

24 the name, title, and period of service 

25 of each such member; 


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1 ‘‘(II) each person or entity who is 

2 an officer, director, member, partner, 

3 trustee, or managing employee of the 

4 facility, including the name, title, and 

5 date of start of service of each such 

6 person or entity; and 

7 ‘‘(III) each person or entity who 

8 is an additional disclosable party of 

9 the facility. 

10 ‘‘(iii) The organizational structure of 

11 each person and entity described in sub12 clauses (II) and (III) of clause (ii) and a 

13 description of the relationship of each such 

14 person or entity to the facility and to one 

15 another. 

16 ‘‘(B) SPECIAL RULE WHERE INFORMATION

17 IS ALREADY REPORTED OR SUBMITTED.—To 

18 the extent that information reported by a facil19 ity to the Internal Revenue Service on Form 

20 990, information submitted by a facility to the 

21 Securities and Exchange Commission, or infor22 mation otherwise submitted to the Secretary or 

23 any other Federal agency contains the informa24 tion described in clauses (i), (ii), or (iii) of sub25 paragraph (A), the Secretary may allow, to the 


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1 extent practicable, such Form or such informa2 tion to meet the requirements of paragraph (1) 

3 and to be submitted in a manner specified by 

4 the Secretary. 

5 ‘‘(C) SPECIAL RULE.—In applying sub6 paragraph (A)(i)— 

7 ‘‘(i) with respect to subsections (a) 

8 and (b), ‘ownership or control interest’ 

9 shall include direct or indirect interests, in10 cluding such interests in intermediate enti11 ties; and 

12 ‘‘(ii) subsection (a)(3)(A)(ii) shall in13 clude the owner of a whole or part interest 

14 in any mortgage, deed of trust, note, or 

15 other obligation secured, in whole or in 

16 part, by the entity or any of the property 

17 or assets thereof, if the interest is equal to 

18 or exceeds 5 percent of the total property 

19 or assets of the entirety. 

20 ‘‘(4) REPORTING.— 

21 ‘‘(A) IN GENERAL.—Not later than the 

22 date that is 2 years after the date of the enact23 ment of this subsection, the Secretary shall pro24 mulgate regulations requiring, effective on the 

25 date that is 90 days after the date on which 


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1 such final regulations are published in the Fed2 eral Register, a facility to report the informa3 tion described in paragraph (3) to the Secretary 

4 in a standardized format, and such other regu5 lations as are necessary to carry out this sub6 section. Such final regulations shall ensure that 

7 the facility certifies, as a condition of participa8 tion and payment under the program under 

9 title XVIII or XIX, that the information re10 ported by the facility in accordance with such 

11 final regulations is accurate and current. 

12 ‘‘(B) GUIDANCE.—The Secretary shall pro13 vide guidance and technical assistance to States 

14 on how to adopt the standardized format under 

15 subparagraph (A). 

16 ‘‘(5) NO EFFECT ON EXISTING REPORTING RE17 QUIREMENTS.—Nothing in this subsection shall re18 duce, diminish, or alter any reporting requirement 

19 for a facility that is in effect as of the date of the 

20 enactment of this subsection. 

21 ‘‘(6) DEFINITIONS.—In this subsection: 

22 ‘‘(A) ADDITIONAL DISCLOSABLE PARTY.— 

23 The term ‘additional disclosable party’ means, 

24 with respect to a facility, any person or entity 

25 who— 


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1 ‘‘(i) exercises operational, financial, or 

2 managerial control over the facility or a 

3 part thereof, or provides policies or proce4 dures for any of the operations of the facil5 ity, or provides financial or cash manage6 ment services to the facility; 

7 ‘‘(ii) leases or subleases real property 

8 to the facility, or owns a whole or part in9 terest equal to or exceeding 5 percent of 

10 the total value of such real property; 

11 ‘‘(iii) lends funds or provides a finan12 cial guarantee to the facility in an amount 

13 which is equal to or exceeds $50,000; or 

14 ‘‘(iv) provides management or admin15 istrative services, clinical consulting serv16 ices, or accounting or financial services to 

17 the facility. 

18 ‘‘(B) FACILITY.—The term ‘facility’ means 

19 a disclosing entity which is— 

20 ‘‘(i) a skilled nursing facility (as de21 fined in section 1819(a)); or 

22 ‘‘(ii) a nursing facility (as defined in 

23 section 1919(a)). 

24 ‘‘(C) MANAGING EMPLOYEE.—The term 

25 ‘managing employee’ means, with respect to a 


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1 facility, an individual (including a general man2 ager, business manager, administrator, director, 

3 or consultant) who directly or indirectly man4 ages, advises, or supervises any element of the 

5 practices, finances, or operations of the facility. 

6 ‘‘(D) ORGANIZATIONAL STRUCTURE.—The 

7 term ‘organizational structure’ means, in the 

8 case of— 

9 ‘‘(i) a corporation, the officers, direc10 tors, and shareholders of the corporation 

11 who have an ownership interest in the cor12 poration which is equal to or exceeds 5 

13 percent; 

14 ‘‘(ii) a limited liability company, the 

15 members and managers of the limited li16 ability company (including, as applicable, 

17 what percentage each member and man18 ager has of the ownership interest in the 

19 limited liability company); 

20 ‘‘(iii) a general partnership, the part21 ners of the general partnership; 

22 ‘‘(iv) a limited partnership, the gen23 eral partners and any limited partners of 

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1 ership interest in the limited partnership 

2 which is equal to or exceeds 10 percent; 

3 ‘‘(v) a trust, the trustees of the trust; 

4 ‘‘(vi) an individual, contact informa5 tion for the individual; and 

6 ‘‘(vii) any other person or entity, such 

7 information as the Secretary determines 

8 appropriate.’’. 

9 (b) PUBLIC AVAILABILITY OF INFORMATION.— 

10 (1) IN GENERAL.—Not later than the date that 

11 is 1 year after the date on which the final regula12 tions promulgated under section 1124(c)(4)(A) of 

13 the Social Security Act, as added by subsection (a), 

14 are published in the Federal Register, the informa15 tion reported in accordance with such final regula16 tions shall be made available to the public in accord17 ance with procedures established by the Secretary. 

18 (2) DEFINITIONS.—In this subsection: 

19 (A) NURSING FACILITY.—The term ‘‘nurs20 ing facility’’ has the meaning given such term 

21 in section 1919(a) of the Social Security Act 

22 (42 U.S.C. 1396r(a)). 

23 (B) SECRETARY.—The term ‘‘Secretary’’ 

24 means the Secretary of Health and Human 

25 Services. 


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1 (C) SKILLED NURSING FACILITY.—The 

2 term ‘‘skilled nursing facility’’ has the meaning 

3 given such term in section 1819(a) of the Social 

4 Security Act (42 U.S.C. 1395i–3(a)). 

5 (c) CONFORMING AMENDMENTS.— 

6 (1) SKILLED NURSING FACILITIES.—Section 

7 1819(d)(1) of the Social Security Act (42 U.S.C. 

8 1395i–3(d)(1)) is amended by striking subparagraph 

9 (B) and redesignating subparagraph (C) as subpara10 graph (B). 

11 (2) NURSING FACILITIES.—Section 1919(d)(1) 

12 of the Social Security Act (42 U.S.C. 1396r(d)(1)) 

13 is amended by striking subparagraph (B) and redes14 ignating subparagraph (C) as subparagraph (B). 

15 SEC. 1412. ACCOUNTABILITY REQUIREMENTS. 

16 (a) EFFECTIVE COMPLIANCE AND ETHICS PRO17 GRAMS.— 

18 (1) SKILLED NURSING FACILITIES.—Section 

19 1819(d)(1) of the Social Security Act (42 U.S.C. 

20 1395i–3(d)(1)), as amended by section 1411(c)(1), 

21 is amended by adding at the end the following new 

22 subparagraph: 

23 ‘‘(C) COMPLIANCE AND ETHICS PRO24 GRAMS.— 


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1 ‘‘(i) REQUIREMENT.—On or after the 

2 date that is 36 months after the date of 

3 the enactment of this subparagraph, a 

4 skilled nursing facility shall, with respect 

5 to the entity that operates the facility (in 

6 this subparagraph referred to as the ‘oper7 ating organization’ or ‘organization’), have 

8 in operation a compliance and ethics pro9 gram that is effective in preventing and de10 tecting criminal, civil, and administrative 

11 violations under this Act and in promoting 

12 quality of care consistent with regulations 

13 developed under clause (ii). 

14 ‘‘(ii) DEVELOPMENT OF REGULA15 TIONS.— 

16 ‘‘(I) IN GENERAL.—Not later 

17 than the date that is 2 years after 

18 such date of the enactment, the Sec19 retary, in consultation with the In20 spector General of the Department of 

21 Health and Human Services, shall 

22 promulgate regulations for an effec23 tive compliance and ethics program 

24 for operating organizations, which 


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1 may include a model compliance pro2 gram. 

3 ‘‘(II) DESIGN OF REGULA4 TIONS.—Such regulations with respect 

5 to specific elements or formality of a 

6 program may vary with the size of the 

7 organization, such that larger organi8 zations should have a more formal 

9 and rigorous program and include es10 tablished written policies defining the 

11 standards and procedures to be fol12 lowed by its employees. Such require13 ments shall specifically apply to the 

14 corporate level management of multi15 unit nursing home chains. 

16 ‘‘(III) EVALUATION.—Not later 

17 than 3 years after the date of promul18 gation of regulations under this 

19 clause, the Secretary shall complete 

20 an evaluation of the compliance and 

21 ethics programs required to be estab22 lished under this subparagraph. Such 

23 evaluation shall determine if such pro24 grams led to changes in deficiency ci25 tations, changes in quality performVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01591 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ance, or changes in other metrics of 

2 resident quality of care. The Secretary 

3 shall submit to Congress a report on 

4 such evaluation and shall include in 

5 such report such recommendations re6 garding changes in the requirements 

7 for such programs as the Secretary 

8 determines appropriate. 

9 ‘‘(iii) REQUIREMENTS FOR COMPLI10 ANCE AND ETHICS PROGRAMS.—In this 

11 subparagraph, the term ‘compliance and 

12 ethics program’ means, with respect to a 

13 skilled nursing facility, a program of the 

14 operating organization that— 

15 ‘‘(I) has been reasonably de16 signed, implemented, and enforced so 

17 that it generally will be effective in 

18 preventing and detecting criminal, 

19 civil, and administrative violations 

20 under this Act and in promoting qual21 ity of care; and 

22 ‘‘(II) includes at least the re23 quired components specified in clause 

24 (iv). 


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1 ‘‘(iv) REQUIRED COMPONENTS OF

2 PROGRAM.—The required components of a 

3 compliance and ethics program of an orga4 nization are the following: 

5 ‘‘(I) The organization must have 

6 established compliance standards and 

7 procedures to be followed by its em8 ployees, contractors, and other agents 

9 that are reasonably capable of reduc10 ing the prospect of criminal, civil, and 

11 administrative violations under this 

12 Act. 

13 ‘‘(II) Specific individuals within 

14 high-level personnel of the organiza15 tion must have been assigned overall 

16 responsibility to oversee compliance 

17 with such standards and procedures 

18 and have sufficient resources and au19 thority to assure such compliance. 

20 ‘‘(III) The organization must 

21 have used due care not to delegate 

22 substantial discretionary authority to 

23 individuals whom the organization 

24 knew, or should have known through 

25 the exercise of due diligence, had a 


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1 propensity to engage in criminal, civil, 

2 and administrative violations under 

3 this Act. 

4 ‘‘(IV) The organization must 

5 have taken steps to communicate ef6 fectively its standards and procedures 

7 to all employees and other agents, 

8 such as by requiring participation in 

9 training programs or by disseminating 

10 publications that explain in a practical 

11 manner what is required. 

12 ‘‘(V) The organization must have 

13 taken reasonable steps to achieve com14 pliance with its standards, such as by 

15 utilizing monitoring and auditing sys16 tems reasonably designed to detect 

17 criminal, civil, and administrative vio18 lations under this Act by its employ19 ees and other agents and by having in 

20 place and publicizing a reporting sys21 tem whereby employees and other 

22 agents could report violations by oth23 ers within the organization without 

24 fear of retribution. 


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1 ‘‘(VI) The standards must have 

2 been consistently enforced through ap3 propriate disciplinary mechanisms, in4 cluding, as appropriate, discipline of 

5 individuals responsible for the failure 

6 to detect an offense. 

7 ‘‘(VII) After an offense has been 

8 detected, the organization must have 

9 taken all reasonable steps to respond 

10 appropriately to the offense and to 

11 prevent further similar offenses, in12 cluding repayment of any funds to 

13 which it was not entitled and any nec14 essary modification to its program to 

15 prevent and detect criminal, civil, and 

16 administrative violations under this 

17 Act. 

18 ‘‘(VIII) The organization must 

19 periodically undertake reassessment of 

20 its compliance program to identify 

21 changes necessary to reflect changes 

22 within the organization and its facili23 ties. 

24 ‘‘(v) COORDINATION.—The provisions 

25 of this subparagraph shall apply with reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01595 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 spect to a skilled nursing facility in lieu of 

2 section 1874(d).’’. 

3 (2) NURSING FACILITIES.—Section 1919(d)(1) 

4 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

5 as amended by section 1411(c)(2), is amended by 

6 adding at the end the following new subparagraph: 

7 ‘‘(C) COMPLIANCE AND ETHICS PRO8 GRAM.— 

9 ‘‘(i) REQUIREMENT.—On or after the 

10 date that is 36 months after the date of 

11 the enactment of this subparagraph, a 

12 nursing facility shall, with respect to the 

13 entity that operates the facility (in this 

14 subparagraph referred to as the ‘operating 

15 organization’ or ‘organization’), have in op16 eration a compliance and ethics program 

17 that is effective in preventing and detect18 ing criminal, civil, and administrative viola19 tions under this Act and in promoting 

20 quality of care consistent with regulations 

21 developed under clause (ii). 

22 ‘‘(ii) DEVELOPMENT OF REGULA23 TIONS.— 

24 ‘‘(I) IN GENERAL.—Not later 

25 than the date that is 2 years after 


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1 such date of the enactment, the Sec2 retary, in consultation with the In3 spector General of the Department of 

4 Health and Human Services, shall de5 velop regulations for an effective com6 pliance and ethics program for oper7 ating organizations, which may in8 clude a model compliance program. 

9 ‘‘(II) DESIGN OF REGULA10 TIONS.—Such regulations with respect 

11 to specific elements or formality of a 

12 program may vary with the size of the 

13 organization, such that larger organi14 zations should have a more formal 

15 and rigorous program and include es16 tablished written policies defining the 

17 standards and procedures to be fol18 lowed by its employees. Such require19 ments may specifically apply to the 

20 corporate level management of multi21 unit nursing home chains. 

22 ‘‘(III) EVALUATION.—Not later 

23 than 3 years after the date of promul24 gation of regulations under this clause 

25 the Secretary shall complete an evalVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01597 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 uation of the compliance and ethics 

2 programs required to be established 

3 under this subparagraph. Such eval4 uation shall determine if such pro5 grams led to changes in deficiency ci6 tations, changes in quality perform7 ance, or changes in other metrics of 

8 resident quality of care. The Secretary 

9 shall submit to Congress a report on 

10 such evaluation and shall include in 

11 such report such recommendations re12 garding changes in the requirements 

13 for such programs as the Secretary 

14 determines appropriate. 

15 ‘‘(iii) REQUIREMENTS FOR COMPLI16 ANCE AND ETHICS PROGRAMS.—In this 

17 subparagraph, the term ‘compliance and 

18 ethics program’ means, with respect to a 

19 nursing facility, a program of the oper20 ating organization that— 

21 ‘‘(I) has been reasonably de22 signed, implemented, and enforced so 

23 that it generally will be effective in 

24 preventing and detecting criminal, 

25 civil, and administrative violations 


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1 under this Act and in promoting qual2 ity of care; and 

3 ‘‘(II) includes at least the re4 quired components specified in clause 

5 (iv). 

6 ‘‘(iv) REQUIRED COMPONENTS OF

7 PROGRAM.—The required components of a 

8 compliance and ethics program of an orga9 nization are the following: 

10 ‘‘(I) The organization must have 

11 established compliance standards and 

12 procedures to be followed by its em13 ployees and other agents that are rea14 sonably capable of reducing the pros15 pect of criminal, civil, and administra16 tive violations under this Act. 

17 ‘‘(II) Specific individuals within 

18 high-level personnel of the organiza19 tion must have been assigned overall 

20 responsibility to oversee compliance 

21 with such standards and procedures 

22 and has sufficient resources and au23 thority to assure such compliance. 

24 ‘‘(III) The organization must 

25 have used due care not to delegate 


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1 substantial discretionary authority to 

2 individuals whom the organization 

3 knew, or should have known through 

4 the exercise of due diligence, had a 

5 propensity to engage in criminal, civil, 

6 and administrative violations under 

7 this Act. 

8 ‘‘(IV) The organization must 

9 have taken steps to communicate ef10 fectively its standards and procedures 

11 to all employees and other agents, 

12 such as by requiring participation in 

13 training programs or by disseminating 

14 publications that explain in a practical 

15 manner what is required. 

16 ‘‘(V) The organization must have 

17 taken reasonable steps to achieve com18 pliance with its standards, such as by 

19 utilizing monitoring and auditing sys20 tems reasonably designed to detect 

21 criminal, civil, and administrative vio22 lations under this Act by its employ23 ees and other agents and by having in 

24 place and publicizing a reporting sys25 tem whereby employees and other 


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1 agents could report violations by oth2 ers within the organization without 

3 fear of retribution. 

4 ‘‘(VI) The standards must have 

5 been consistently enforced through ap6 propriate disciplinary mechanisms, in7 cluding, as appropriate, discipline of 

8 individuals responsible for the failure 

9 to detect an offense. 

10 ‘‘(VII) After an offense has been 

11 detected, the organization must have 

12 taken all reasonable steps to respond 

13 appropriately to the offense and to 

14 prevent further similar offenses, in15 cluding repayment of any funds to 

16 which it was not entitled and any nec17 essary modification to its program to 

18 prevent and detect criminal, civil, and 

19 administrative violations under this 

20 Act. 

21 ‘‘(VIII) The organization must 

22 periodically undertake reassessment of 

23 its compliance program to identify 

24 changes necessary to reflect changes 


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1 within the organization and its facili2 ties. 

3 ‘‘(v) COORDINATION.—The provisions 

4 of this subparagraph shall apply with re5 spect to a nursing facility in lieu of section 

6 1902(a)(77).’’. 

7 (b) QUALITY ASSURANCE AND PERFORMANCE IM8 PROVEMENT PROGRAM.— 

9 (1) SKILLED NURSING FACILITIES.—Section 

10 1819(b)(1)(B) of the Social Security Act (42 U.S.C. 

11 1396r(b)(1)(B)) is amended— 

12 (A) by striking ‘‘ASSURANCE’’ and insert13 ing ‘‘ASSURANCE AND QUALITY ASSURANCE

14 AND PERFORMANCE IMPROVEMENT PROGRAM’’; 

15 (B) by designating the matter beginning 

16 with ‘‘A nursing facility’’ as a clause (i) with 

17 the heading ‘‘IN GENERAL.—’’ and the appro18 priate indentation; and 

19 (C) by adding at the end the following new 

20 clause: 

21 ‘‘(ii) QUALITY ASSURANCE AND PER22 FORMANCE IMPROVEMENT PROGRAM.— 

23 ‘‘(I) IN GENERAL.—Not later 

24 than December 31, 2011, the Sec25 retary shall establish and implement a 


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1 quality assurance and performance 

2 improvement program (in this clause 

3 referred to as the ‘QAPI program’) 

4 for skilled nursing facilities, including 

5 multi-unit chains of such facilities. 

6 Under the QAPI program, the Sec7 retary shall establish standards relat8 ing to such facilities and provide tech9 nical assistance to such facilities on 

10 the development of best practices in 

11 order to meet such standards. Not 

12 later than 1 year after the date on 

13 which the regulations are promulgated 

14 under subclause (II), a skilled nursing 

15 facility must submit to the Secretary 

16 a plan for the facility to meet such 

17 standards and implement such best 

18 practices, including how to coordinate 

19 the implementation of such plan with 

20 quality assessment and assurance ac21 tivities conducted under clause (i). 

22 ‘‘(II) REGULATIONS.—The Sec23 retary shall promulgate regulations to 

24 carry out this clause.’’. 


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1 (2) NURSING FACILITIES.—Section 

2 1919(b)(1)(B) of the Social Security Act (42 U.S.C. 

3 1396r(b)(1)(B)) is amended— 

4 (A) by striking ‘‘ASSURANCE’’ and insert5 ing ‘‘ASSURANCE AND QUALITY ASSURANCE

6 AND PERFORMANCE IMPROVEMENT PROGRAM’’; 

7 (B) by designating the matter beginning 

8 with ‘‘A nursing facility’’ as a clause (i) with 

9 the heading ‘‘IN GENERAL.—’’ and the appro10 priate indentation; and 

11 (C) by adding at the end the following new 

12 clause: 

13 ‘‘(ii) QUALITY ASSURANCE AND PER14 FORMANCE IMPROVEMENT PROGRAM.— 

15 ‘‘(I) IN GENERAL.—Not later 

16 than December 31, 2011, the Sec17 retary shall establish and implement a 

18 quality assurance and performance 

19 improvement program (in this clause 

20 referred to as the ‘QAPI program’) 

21 for nursing facilities, including multi22 unit chains of such facilities. Under 

23 the QAPI program, the Secretary 

24 shall establish standards relating to 

25 such facilities and provide technical 


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1 assistance to such facilities on the de2 velopment of best practices in order to 

3 meet such standards. Not later than 1 

4 year after the date on which the regu5 lations are promulgated under sub6 clause (II), a nursing facility must 

7 submit to the Secretary a plan for the 

8 facility to meet such standards and 

9 implement such best practices, includ10 ing how to coordinate the implementa11 tion of such plan with quality assess12 ment and assurance activities con13 ducted under clause (i). 

14 ‘‘(II) REGULATIONS.—The Sec15 retary shall promulgate regulations to 

16 carry out this clause.’’. 

17 (3) PROPOSAL TO REVISE QUALITY ASSURANCE

18 AND PERFORMANCE IMPROVEMENT PROGRAMS.— 

19 The Secretary shall include in the proposed rule 

20 published under section 1888(e) of the Social Secu21 rity Act (42 U.S.C. 1395yy(e)(5)(A)) for the subse22 quent fiscal year to the extent otherwise authorized 

23 under section 1819(b)(1)(B) or 1819(d)(1)(C) of the 

24 Social Security Act or other statutory or regulatory 

25 authority, one or more proposals for skilled nursing 


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1 facilities to modify and strengthen quality assurance 

2 and performance improvement programs in such fa3 cilities. At the time of publication of such proposed 

4 rule and to the extent otherwise authorized under 

5 section 1919(b)(1)(B) or 1919(d)(1)(C) of such Act 

6 or other regulatory authority. 

7 (4) FACILITY PLAN.—Not later than 1 year 

8 after the date on which the regulations are promul9 gated under subclause (II) of clause (ii) of sections 

10 1819(b)(1)(B) and 1919(b)(1)(B) of the Social Se11 curity Act, as added by paragraphs (1) and (2), a 

12 skilled nursing facility and a nursing facility must 

13 submit to the Secretary a plan for the facility to 

14 meet the standards under such regulations and im15 plement such best practices, including how to coordi16 nate the implementation of such plan with quality 

17 assessment and assurance activities conducted under 

18 clause (i) of such sections. 

19 (c) GAO STUDY ON NURSING FACILITY UNDER20 CAPITALIZATION.— 

21 (1) IN GENERAL.—The Comptroller General of 

22 the United States shall conduct a study that exam23 ines the following: 

24 (A) The extent to which corporations that 

25 own or operate large numbers of nursing faciliVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01606 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ties, taking into account ownership type (includ2 ing private equity and control interests), are 

3 undercapitalizing such facilities. 

4 (B) The effects of such undercapitalization 

5 on quality of care, including staffing and food 

6 costs, at such facilities. 

7 (C) Options to address such undercapital8 ization, such as requirements relating to surety 

9 bonds, liability insurance, or minimum capital10 ization. 

11 (2) REPORT.—Not later than 18 months after 

12 the date of the enactment of this Act, the Comp13 troller General shall submit to Congress a report on 

14 the study conducted under paragraph (1). 

15 (3) NURSING FACILITY.—In this subsection, the 

16 term ‘‘nursing facility’’ includes a skilled nursing fa17 cility. 

18 SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE. 

19 (a) SKILLED NURSING FACILITIES.— 

20 (1) IN GENERAL.—Section 1819 of the Social 

21 Security Act (42 U.S.C. 1395i–3) is amended— 

22 (A) by redesignating subsection (i) as sub23 section (j); and 

24 (B) by inserting after subsection (h) the 

25 following new subsection: 


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1 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

2 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA3 TION.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 ensure that the Department of Health and 

6 Human Services includes, as part of the infor7 mation provided for comparison of nursing 

8 homes on the official Internet website of the 

9 Federal Government for Medicare beneficiaries 

10 (commonly referred to as the ‘Nursing Home 

11 Compare’ Medicare website) (or a successor 

12 website), the following information in a manner 

13 that is prominent, easily accessible, readily un14 derstandable to consumers of long-term care 

15 services, and searchable: 

16 ‘‘(i) Information that is reported to 

17 the Secretary under section 1124(c)(4). 

18 ‘‘(ii) Information on the ‘Special 

19 Focus Facility program’ (or a successor 

20 program) established by the Centers for 

21 Medicare and Medicaid Services, according 

22 to procedures established by the Secretary. 

23 Such procedures shall provide for the in24 clusion of information with respect to, and 


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1 the names and locations of, those facilities 

2 that, since the previous quarter— 

3 ‘‘(I) were newly enrolled in the 

4 program; 

5 ‘‘(II) are enrolled in the program 

6 and have failed to significantly im7 prove; 

8 ‘‘(III) are enrolled in the pro9 gram and have significantly improved; 

10 ‘‘(IV) have graduated from the 

11 program; and 

12 ‘‘(V) have closed voluntarily or 

13 no longer participate under this title. 

14 ‘‘(iii) Staffing data for each facility 

15 (including resident census data and data 

16 on the hours of care provided per resident 

17 per day) based on data submitted under 

18 subsection (b)(8)(C), including information 

19 on staffing turnover and tenure, in a for20 mat that is clearly understandable to con21 sumers of long-term care services and al22 lows such consumers to compare dif23 ferences in staffing between facilities and 

24 State and national averages for the facili25 ties. Such format shall include— 


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1 ‘‘(I) concise explanations of how 

2 to interpret the data (such as a plain 

3 English explanation of data reflecting 

4 ‘nursing home staff hours per resident 

5 day’); 

6 ‘‘(II) differences in types of staff 

7 (such as training associated with dif8 ferent categories of staff); 

9 ‘‘(III) the relationship between 

10 nurse staffing levels and quality of 

11 care; and 

12 ‘‘(IV) an explanation that appro13 priate staffing levels vary based on 

14 patient case mix. 

15 ‘‘(iv) Links to State Internet websites 

16 with information regarding State survey 

17 and certification programs, links to Form 

18 2567 State inspection reports (or a suc19 cessor form) on such websites, information 

20 to guide consumers in how to interpret and 

21 understand such reports, and the facility 

22 plan of correction or other response to 

23 such report. 

24 ‘‘(v) The standardized complaint form 

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1 ing explanatory material on what com2 plaint forms are, how they are used, and 

3 how to file a complaint with the State sur4 vey and certification program and the 

5 State long-term care ombudsman program. 

6 ‘‘(vi) Summary information on the 

7 number, type, severity, and outcome of 

8 substantiated complaints. 

9 ‘‘(vii) The number of adjudicated in10 stances of criminal violations by employees 

11 of a nursing facility— 

12 ‘‘(I) that were committed inside 

13 the facility; 

14 ‘‘(II) with respect to such in15 stances of violations or crimes com16 mitted inside of the facility that were 

17 the violations or crimes of abuse, ne18 glect, and exploitation, criminal sexual 

19 abuse, or other violations or crimes 

20 that resulted in serious bodily injury; 

21 and 

22 ‘‘(III) the number of civil mone23 tary penalties levied against the facil24 ity, employees, contractors, and other 

25 agents. 


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1 ‘‘(B) DEADLINE FOR PROVISION OF INFOR2 MATION.— 

3 ‘‘(i) IN GENERAL.—Except as pro4 vided in clause (ii), the Secretary shall en5 sure that the information described in sub6 paragraph (A) is included on such website 

7 (or a successor website) not later than 1 

8 year after the date of the enactment of this 

9 subsection. 

10 ‘‘(ii) EXCEPTION.—The Secretary 

11 shall ensure that the information described 

12 in subparagraph (A)(i) and (A)(iii) is in13 cluded on such website (or a successor 

14 website) not later than the date on which 

15 the requirements under section 1124(c)(4) 

16 and subsection (b)(8)(C)(ii) are imple17 mented. 

18 ‘‘(2) REVIEW AND MODIFICATION OF

19 WEBSITE.— 

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

21 establish a process— 

22 ‘‘(i) to review the accuracy, clarity of 

23 presentation, timeliness, and comprehen24 siveness of information reported on such 


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1 website as of the day before the date of the 

2 enactment of this subsection; and 

3 ‘‘(ii) not later than 1 year after the 

4 date of the enactment of this subsection, to 

5 modify or revamp such website in accord6 ance with the review conducted under 

7 clause (i). 

8 ‘‘(B) CONSULTATION.—In conducting the 

9 review under subparagraph (A)(i), the Sec10 retary shall consult with— 

11 ‘‘(i) State long-term care ombudsman 

12 programs; 

13 ‘‘(ii) consumer advocacy groups; 

14 ‘‘(iii) provider stakeholder groups; and 

15 ‘‘(iv) any other representatives of pro16 grams or groups the Secretary determines 

17 appropriate.’’. 

18 (2) TIMELINESS OF SUBMISSION OF SURVEY

19 AND CERTIFICATION INFORMATION.— 

20 (A) IN GENERAL.—Section 1819(g)(5) of 

21 the Social Security Act (42 U.S.C. 1395i– 

22 3(g)(5)) is amended by adding at the end the 

23 following new subparagraph: 

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1 RETARY.—In order to improve the timeliness of 

2 information made available to the public under 

3 subparagraph (A) and provided on the Nursing 

4 Home Compare Medicare website under sub5 section (i), each State shall submit information 

6 respecting any survey or certification made re7 specting a skilled nursing facility (including any 

8 enforcement actions taken by the State) to the 

9 Secretary not later than the date on which the 

10 State sends such information to the facility. 

11 The Secretary shall use the information sub12 mitted under the preceding sentence to update 

13 the information provided on the Nursing Home 

14 Compare Medicare website as expeditiously as 

15 practicable but not less frequently than quar16 terly.’’. 

17 (B) EFFECTIVE DATE.—The amendment 

18 made by this paragraph shall take effect 1 year 

19 after the date of the enactment of this Act. 

20 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec21 tion 1819(f) of such Act is amended by adding at 

22 the end the following new paragraph: 

23 ‘‘(8) SPECIAL FOCUS FACILITY PROGRAM.— 

24 ‘‘(A) IN GENERAL.—The Secretary shall 

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1 forcement of requirements for skilled nursing 

2 facilities that the Secretary has identified as 

3 having substantially failed to meet applicable 

4 requirement of this Act. 

5 ‘‘(B) PERIODIC SURVEYS.—Under such 

6 program the Secretary shall conduct surveys of 

7 each facility in the program not less than once 

8 every 6 months.’’. 

9 (b) NURSING FACILITIES.— 

10 (1) IN GENERAL.—Section 1919 of the Social 

11 Security Act (42 U.S.C. 1396r) is amended— 

12 (A) by redesignating subsection (i) as sub13 section (j); and 

14 (B) by inserting after subsection (h) the 

15 following new subsection: 

16 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

17 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA18 TION.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 ensure that the Department of Health and 

21 Human Services includes, as part of the infor22 mation provided for comparison of nursing 

23 homes on the official Internet website of the 

24 Federal Government for Medicare beneficiaries 

25 (commonly referred to as the ‘Nursing Home 


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1 Compare’ Medicare website) (or a successor 

2 website), the following information in a manner 

3 that is prominent, easily accessible, readily un4 derstandable to consumers of long-term care 

5 services, and searchable: 

6 ‘‘(i) Staffing data for each facility (in7 cluding resident census data and data on 

8 the hours of care provided per resident per 

9 day) based on data submitted under sub10 section (b)(8)(C)(ii), including information 

11 on staffing turnover and tenure, in a for12 mat that is clearly understandable to con13 sumers of long-term care services and al14 lows such consumers to compare dif15 ferences in staffing between facilities and 

16 State and national averages for the facili17 ties. Such format shall include— 

18 ‘‘(I) concise explanations of how 

19 to interpret the data (such as plain 

20 English explanation of data reflecting 

21 ‘nursing home staff hours per resident 

22 day’); 

23 ‘‘(II) differences in types of staff 

24 (such as training associated with dif25 ferent categories of staff); 


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1 ‘‘(III) the relationship between 

2 nurse staffing levels and quality of 

3 care; and 

4 ‘‘(IV) an explanation that appro5 priate staffing levels vary based on 

6 patient case mix. 

7 ‘‘(ii) Links to State Internet websites 

8 with information regarding State survey 

9 and certification programs, links to Form 

10 2567 State inspection reports (or a suc11 cessor form) on such websites, information 

12 to guide consumers in how to interpret and 

13 understand such reports, and the facility 

14 plan of correction or other response to 

15 such report. 

16 ‘‘(iii) The standardized complaint 

17 form developed under subsection (f)(10), 

18 including explanatory material on what 

19 complaint forms are, how they are used, 

20 and how to file a complaint with the State 

21 survey and certification program and the 

22 State long-term care ombudsman program. 

23 ‘‘(iv) Summary information on the 

24 number, type, severity, and outcome of 

25 substantiated complaints. 


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1 ‘‘(v) The number of adjudicated in2 stances of criminal violations by employees 

3 of a nursing facility— 

4 ‘‘(I) that were committed inside 

5 of the facility; and 

6 ‘‘(II) with respect to such in7 stances of violations or crimes com8 mitted outside of the facility, that 

9 were the violations or crimes that re10 sulted in the serious bodily injury of 

11 an elder. 

12 ‘‘(B) DEADLINE FOR PROVISION OF INFOR13 MATION.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clause (ii), the Secretary shall en16 sure that the information described in sub17 paragraph (A) is included on such website 

18 (or a successor website) not later than 1 

19 year after the date of the enactment of this 

20 subsection. 

21 ‘‘(ii) EXCEPTION.—The Secretary 

22 shall ensure that the information described 

23 in subparagraph (A)(i) and (A)(iii) is in24 cluded on such website (or a successor 

25 website) not later than the date on which 


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1 the requirements under section 1124(c)(4) 

2 and subsection (b)(8)(C)(ii) are imple3 mented. 

4 ‘‘(2) REVIEW AND MODIFICATION OF

5 WEBSITE.— 

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

7 establish a process— 

8 ‘‘(i) to review the accuracy, clarity of 

9 presentation, timeliness, and comprehen10 siveness of information reported on such 

11 website as of the day before the date of the 

12 enactment of this subsection; and 

13 ‘‘(ii) not later than 1 year after the 

14 date of the enactment of this subsection, to 

15 modify or revamp such website in accord16 ance with the review conducted under 

17 clause (i). 

18 ‘‘(B) CONSULTATION.—In conducting the 

19 review under subparagraph (A)(i), the Sec20 retary shall consult with— 

21 ‘‘(i) State long-term care ombudsman 

22 programs; 

23 ‘‘(ii) consumer advocacy groups; 

24 ‘‘(iii) provider stakeholder groups; 


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1 ‘‘(iv) skilled nursing facility employees 

2 and their representatives; and 

3 ‘‘(v) any other representatives of pro4 grams or groups the Secretary determines 

5 appropriate.’’. 

6 (2) TIMELINESS OF SUBMISSION OF SURVEY

7 AND CERTIFICATION INFORMATION.— 

8 (A) IN GENERAL.—Section 1919(g)(5) of 

9 the Social Security Act (42 U.S.C. 1396r(g)(5)) 

10 is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(E) SUBMISSION OF SURVEY AND CER13 TIFICATION INFORMATION TO THE SEC14 RETARY.—In order to improve the timeliness of 

15 information made available to the public under 

16 subparagraph (A) and provided on the Nursing 

17 Home Compare Medicare website under sub18 section (i), each State shall submit information 

19 respecting any survey or certification made re20 specting a nursing facility (including any en21 forcement actions taken by the State) to the 

22 Secretary not later than the date on which the 

23 State sends such information to the facility. 

24 The Secretary shall use the information sub25 mitted under the preceding sentence to update 


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1 the information provided on the Nursing Home 

2 Compare Medicare website as expeditiously as 

3 practicable but not less frequently than quar4 terly.’’. 

5 (B) EFFECTIVE DATE.—The amendment 

6 made by this paragraph shall take effect 1 year 

7 after the date of the enactment of this Act. 

8 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec9 tion 1919(f) of such Act is amended by adding at 

10 the end of the following new paragraph: 

11 ‘‘(10) SPECIAL FOCUS FACILITY PROGRAM.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 conduct a special focus facility program for en14 forcement of requirements for nursing facilities 

15 that the Secretary has identified as having sub16 stantially failed to meet applicable requirements 

17 of this Act. 

18 ‘‘(B) PERIODIC SURVEYS.—Under such 

19 program the Secretary shall conduct surveys of 

20 each facility in the program not less often than 

21 once every 6 months.’’. 

22 (c) AVAILABILITY OF REPORTS ON SURVEYS, CER23 TIFICATIONS, AND COMPLAINT INVESTIGATIONS.— 

24 (1) SKILLED NURSING FACILITIES.—Section 

25 1819(d)(1) of the Social Security Act (42 U.S.C. 


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1 1395i–3(d)(1)), as amended by sections 1411 and 

2 1412, is amended by adding at the end the following 

3 new subparagraph: 

4 ‘‘(D) AVAILABILITY OF SURVEY, CERTIFI5 CATION, AND COMPLAINT INVESTIGATION RE6 PORTS.—A skilled nursing facility must— 

7 ‘‘(i) have reports with respect to any 

8 surveys, certifications, and complaint in9 vestigations made respecting the facility 

10 during the 3 preceding years available for 

11 any individual to review upon request; and 

12 ‘‘(ii) post notice of the availability of 

13 such reports in areas of the facility that 

14 are prominent and accessible to the public. 

15 The facility shall not make available under 

16 clause (i) identifying information about com17 plainants or residents.’’. 

18 (2) NURSING FACILITIES.—Section 1919(d)(1) 

19 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

20 as amended by sections 1411 and 1412, is amended 

21 by adding at the end the following new subpara22 graph: 

23 ‘‘(D) AVAILABILITY OF SURVEY, CERTIFI24 CATION, AND COMPLAINT INVESTIGATION RE25 PORTS.—A nursing facility must— 


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1 ‘‘(i) have reports with respect to any 

2 surveys, certifications, and complaint in3 vestigations made respecting the facility 

4 during the 3 preceding years available for 

5 any individual to review upon request; and 

6 ‘‘(ii) post notice of the availability of 

7 such reports in areas of the facility that 

8 are prominent and accessible to the public. 

9 The facility shall not make available under 

10 clause (i) identifying information about com11 plainants or residents.’’. 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall take effect 1 year after the 

14 date of the enactment of this Act. 

15 (d) GUIDANCE TO STATES ON FORM 2567 STATE IN16 SPECTION REPORTS AND COMPLAINT INVESTIGATION RE17 PORTS.— 

18 (1) GUIDANCE.—The Secretary of Health and 

19 Human Services (in this subtitle referred to as the 

20 ‘‘Secretary’’) shall provide guidance to States on 

21 how States can establish electronic links to Form 

22 2567 State inspection reports (or a successor form), 

23 complaint investigation reports, and a facility’s plan 

24 of correction or other response to such Form 2567 

25 State inspection reports (or a successor form) on the 


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1 Internet website of the State that provides informa2 tion on skilled nursing facilities and nursing facili3 ties and the Secretary shall, if possible, include such 

4 information on Nursing Home Compare. 

5 (2) REQUIREMENT.—Section 1902(a)(9) of the 

6 Social Security Act (42 U.S.C. 1396a(a)(9)) is 

7 amended— 

8 (A) by striking ‘‘and’’ at the end of sub9 paragraph (B); 

10 (B) by striking the semicolon at the end of 

11 subparagraph (C) and inserting ‘‘, and’’; and 

12 (C) by adding at the end the following new 

13 subparagraph: 

14 ‘‘(D) that the State maintain a consumer15 oriented website providing useful information to 

16 consumers regarding all skilled nursing facili17 ties and all nursing facilities in the State, in18 cluding for each facility, Form 2567 State in19 spection reports (or a successor form), com20 plaint investigation reports, the facility’s plan of 

21 correction, and such other information that the 

22 State or the Secretary considers useful in as23 sisting the public to assess the quality of long 

24 term care options and the quality of care pro25 vided by individual facilities;’’. 


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1 (3) DEFINITIONS.—In this subsection: 

2 (A) NURSING FACILITY.—The term ‘‘nurs3 ing facility’’ has the meaning given such term 

4 in section 1919(a) of the Social Security Act 

5 (42 U.S.C. 1396r(a)). 

6 (B) SECRETARY.—The term ‘‘Secretary’’ 

7 means the Secretary of Health and Human 

8 Services. 

9 (C) SKILLED NURSING FACILITY.—The 

10 term ‘‘skilled nursing facility’’ has the meaning 

11 given such term in section 1819(a) of the Social 

12 Security Act (42 U.S.C. 1395i–3(a)). 

13 SEC. 1414. REPORTING OF EXPENDITURES. 

14 Section 1888 of the Social Security Act (42 U.S.C. 

15 1395yy) is amended by adding at the end the following 

16 new subsection: 

17 ‘‘(f) REPORTING OF DIRECT CARE EXPENDI18 TURES.— 

19 ‘‘(1) IN GENERAL.—For cost reports submitted 

20 under this title for cost reporting periods beginning 

21 on or after the date that is 3 years after the date 

22 of the enactment of this subsection, skilled nursing 

23 facilities shall separately report expenditures for 

24 wages and benefits for direct care staff (breaking 

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1 fessional nurses, certified nurse assistants, and other 

2 medical and therapy staff). 

3 ‘‘(2) MODIFICATION OF FORM.—The Secretary, 

4 in consultation with private sector accountants expe5 rienced with skilled nursing facility cost reports, 

6 shall redesign such reports to meet the requirement 

7 of paragraph (1) not later than 1 year after the date 

8 of the enactment of this subsection. 

9 ‘‘(3) CATEGORIZATION BY FUNCTIONAL AC10 COUNTS.—Not later than 30 months after the date 

11 of the enactment of this subsection, the Secretary, 

12 working in consultation with the Medicare Payment 

13 Advisory Commission, the Inspector General of the 

14 Department of Health and Human Services, and 

15 other expert parties the Secretary determines appro16 priate, shall take the expenditures listed on cost re17 ports, as modified under paragraph (1), submitted 

18 by skilled nursing facilities and categorize such ex19 penditures, regardless of any source of payment for 

20 such expenditures, for each skilled nursing facility 

21 into the following functional accounts on an annual 

22 basis: 

23 ‘‘(A) Spending on direct care services (in24 cluding nursing, therapy, and medical services). 


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1 ‘‘(B) Spending on indirect care (including 

2 housekeeping and dietary services). 

3 ‘‘(C) Capital assets (including building and 

4 land costs). 

5 ‘‘(D) Administrative services costs. 

6 ‘‘(4) AVAILABILITY OF INFORMATION SUB7 MITTED.—The Secretary shall establish procedures 

8 to make information on expenditures submitted 

9 under this subsection readily available to interested 

10 parties upon request, subject to such requirements 

11 as the Secretary may specify under the procedures 

12 established under this paragraph.’’. 

13 SEC. 1415. STANDARDIZED COMPLAINT FORM. 

14 (a) SKILLED NURSING FACILITIES.— 

15 (1) DEVELOPMENT BY THE SECRETARY.—Sec16 tion 1819(f) of the Social Security Act (42 U.S.C. 

17 1395i–3(f)), as amended by section 1413(a)(3), is 

18 amended by adding at the end the following new 

19 paragraph: 

20 ‘‘(9) STANDARDIZED COMPLAINT FORM.—The 

21 Secretary shall develop a standardized complaint 

22 form for use by a resident (or a person acting on the 

23 resident’s behalf) in filing a complaint with a State 

24 survey and certification agency and a State longVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01627 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 term care ombudsman program with respect to a 

2 skilled nursing facility.’’. 

3 (2) STATE REQUIREMENTS.—Section 1819(e) 

4 of the Social Security Act (42 U.S.C. 1395i–3(e)) is 

5 amended by adding at the end the following new 

6 paragraph: 

7 ‘‘(6) COMPLAINT PROCESSES AND WHISTLE8 BLOWER PROTECTION.— 

9 ‘‘(A) COMPLAINT FORMS.—The State must 

10 make the standardized complaint form devel11 oped under subsection (f)(9) available upon re12 quest to— 

13 ‘‘(i) a resident of a skilled nursing fa14 cility; 

15 ‘‘(ii) any person acting on the resi16 dent’s behalf; and 

17 ‘‘(iii) any person who works at a 

18 skilled nursing facility or is a representa19 tive of such a worker. 

20 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

21 The State must establish a complaint resolution 

22 process in order to ensure that a resident, the 

23 legal representative of a resident of a skilled 

24 nursing facility, or other responsible party is 

25 not retaliated against if the resident, legal repVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01628 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 resentative, or responsible party has com2 plained, in good faith, about the quality of care 

3 or other issues relating to the skilled nursing 

4 facility, that the legal representative of a resi5 dent of a skilled nursing facility or other re6 sponsible party is not denied access to such 

7 resident or otherwise retaliated against if such 

8 representative party has complained, in good 

9 faith, about the quality of care provided by the 

10 facility or other issues relating to the facility, 

11 and that a person who works at a skilled nurs12 ing facility is not retaliated against if the work13 er has complained, in good faith, about quality 

14 of care or services or an issue relating to the 

15 quality of care or services provided at the facil16 ity, whether the resident, legal representative, 

17 other responsible party, or worker used the 

18 form developed under subsection (f)(9) or some 

19 other method for submitting the complaint. 

20 Such complaint resolution process shall in21 clude— 

22 ‘‘(i) procedures to assure accurate 

23 tracking of complaints received, including 

24 notification to the complainant that a com25 plaint has been received; 


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1 ‘‘(ii) procedures to determine the like2 ly severity of a complaint and for the in3 vestigation of the complaint; 

4 ‘‘(iii) deadlines for responding to a 

5 complaint and for notifying the complain6 ant of the outcome of the investigation; 

7 and 

8 ‘‘(iv) procedures to ensure that the 

9 identity of the complainant will be kept 

10 confidential. 

11 ‘‘(C) WHISTLEBLOWER PROTECTION.— 

12 ‘‘(i) PROHIBITION AGAINST RETALIA13 TION.—No person who works at a skilled 

14 nursing facility may be penalized, discrimi15 nated, or retaliated against with respect to 

16 any aspect of employment, including dis17 charge, promotion, compensation, terms, 

18 conditions, or privileges of employment, or 

19 have a contract for services terminated, be20 cause the person (or anyone acting at the 

21 person’s request) complained, in good 

22 faith, about the quality of care or services 

23 provided by a nursing facility or about 

24 other issues relating to quality of care or 

25 services, whether using the form developed 


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1 under subsection (f)(9) or some other 

2 method for submitting the complaint. 

3 ‘‘(ii) RETALIATORY REPORTING.—A 

4 skilled nursing facility may not file a com5 plaint or a report against a person who 

6 works (or has worked at the facility with 

7 the appropriate State professional discipli8 nary agency because the person (or anyone 

9 acting at the person’s request) complained 

10 in good faith, as described in clause (i). 

11 ‘‘(iii) COMMENCEMENT OF ACTION.— 

12 Any person who believes the person has 

13 been penalized, discriminated, or retaliated 

14 against or had a contract for services ter15 minated in violation of clause (i) or against 

16 whom a complaint has been filed in viola17 tion of clause (ii) may bring an action at 

18 law or equity in the appropriate district 

19 court of the United States, which shall 

20 have jurisdiction over such action without 

21 regard to the amount in controversy or the 

22 citizenship of the parties, and which shall 

23 have jurisdiction to grant complete relief, 

24 including, but not limited to, injunctive re25 lief (such as reinstatement, compensatory 


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1 damages (which may include reimburse2 ment of lost wages, compensation, and 

3 benefits), costs of litigation (including rea4 sonable attorney and expert witness fees), 

5 exemplary damages where appropriate, and 

6 such other relief as the court deems just 

7 and proper. 

8 ‘‘(iv) RIGHTS NOT WAIVABLE.—The 

9 rights protected by this paragraph may not 

10 be diminished by contract or other agree11 ment, and nothing in this paragraph shall 

12 be construed to diminish any greater or 

13 additional protection provided by Federal 

14 or State law or by contract or other agree15 ment. 

16 ‘‘(v) REQUIREMENT TO POST NOTICE

17 OF EMPLOYEE RIGHTS.—Each skilled 

18 nursing facility shall post conspicuously in 

19 an appropriate location a sign (in a form 

20 specified by the Secretary) specifying the 

21 rights of persons under this paragraph and 

22 including a statement that an employee 

23 may file a complaint with the Secretary 

24 against a skilled nursing facility that vio25 lates the provisions of this paragraph and 


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1 information with respect to the manner of 

2 filing such a complaint. 

3 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

4 in this paragraph shall be construed as pre5 venting a resident of a skilled nursing facility 

6 (or a person acting on the resident’s behalf) 

7 from submitting a complaint in a manner or 

8 format other than by using the standardized 

9 complaint form developed under subsection 

10 (f)(9) (including submitting a complaint orally). 

11 ‘‘(E) GOOD FAITH DEFINED.—For pur12 poses of this paragraph, an individual shall be 

13 deemed to be acting in good faith with respect 

14 to the filing of a complaint if the individual rea15 sonably believes— 

16 ‘‘(i) the information reported or dis17 closed in the complaint is true; and 

18 ‘‘(ii) the violation of this title has oc19 curred or may occur in relation to such in20 formation.’’. 

21 (b) NURSING FACILITIES.— 

22 (1) DEVELOPMENT BY THE SECRETARY.—Sec23 tion 1919(f) of the Social Security Act (42 U.S.C. 

24 1395i–3(f)), as amended by section 1413(b), is 


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1 amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(11) STANDARDIZED COMPLAINT FORM.—The 

4 Secretary shall develop a standardized complaint 

5 form for use by a resident (or a person acting on the 

6 resident’s behalf) in filing a complaint with a State 

7 survey and certification agency and a State long8 term care ombudsman program with respect to a 

9 nursing facility.’’. 

10 (2) STATE REQUIREMENTS.—Section 1919(e) 

11 of the Social Security Act (42 U.S.C. 1395i–3(e)) is 

12 amended by adding at the end the following new 

13 paragraph: 

14 ‘‘(8) COMPLAINT PROCESSES AND WHISTLE15 BLOWER PROTECTION.— 

16 ‘‘(A) COMPLAINT FORMS.—The State must 

17 make the standardized complaint form devel18 oped under subsection (f)(11) available upon re19 quest to— 

20 ‘‘(i) a resident of a nursing facility; 

21 ‘‘(ii) any person acting on the resi22 dent’s behalf; and 

23 ‘‘(iii) any person who works at a nurs24 ing facility or a representative of such a 

25 worker. 


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1 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

2 The State must establish a complaint resolution 

3 process in order to ensure that a resident, the 

4 legal representative of a resident of a nursing 

5 facility, or other responsible party is not retali6 ated against if the resident, legal representa7 tive, or responsible party has complained, in 

8 good faith, about the quality of care or other 

9 issues relating to the nursing facility, that the 

10 legal representative of a resident of a nursing 

11 facility or other responsible party is not denied 

12 access to such resident or otherwise retaliated 

13 against if such representative party has com14 plained, in good faith, about the quality of care 

15 provided by the facility or other issues relating 

16 to the facility, and that a person who works at 

17 a nursing facility is not retaliated against if the 

18 worker has complained, in good faith, about 

19 quality of care or services or an issue relating 

20 to the quality of care or services provided at the 

21 facility, whether the resident, legal representa22 tive, other responsible party, or worker used the 

23 form developed under subsection (f)(11) or 

24 some other method for submitting the comVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01635 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plaint. Such complaint resolution process shall 

2 include— 

3 ‘‘(i) procedures to assure accurate 

4 tracking of complaints received, including 

5 notification to the complainant that a com6 plaint has been received; 

7 ‘‘(ii) procedures to determine the like8 ly severity of a complaint and for the in9 vestigation of the complaint; 

10 ‘‘(iii) deadlines for responding to a 

11 complaint and for notifying the complain12 ant of the outcome of the investigation; 

13 and 

14 ‘‘(iv) procedures to ensure that the 

15 identity of the complainant will be kept 

16 confidential. 

17 ‘‘(C) WHISTLEBLOWER PROTECTION.— 

18 ‘‘(i) PROHIBITION AGAINST RETALIA19 TION.—No person who works at a nursing 

20 facility may be penalized, discriminated, or 

21 retaliated against with respect to any as22 pect of employment, including discharge, 

23 promotion, compensation, terms, condi24 tions, or privileges of employment, or have 

25 a contract for services terminated, because 


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1 the person (or anyone acting at the per2 son’s request) complained, in good faith, 

3 about the quality of care or services pro4 vided by a nursing facility or about other 

5 issues relating to quality of care or serv6 ices, whether using the form developed 

7 under subsection (f)(11) or some other 

8 method for submitting the complaint. 

9 ‘‘(ii) RETALIATORY REPORTING.—A 

10 nursing facility may not file a complaint or 

11 a report against a person who works (or 

12 has worked at the facility with the appro13 priate State professional disciplinary agen14 cy because the person (or anyone acting at 

15 the person’s request) complained in good 

16 faith, as described in clause (i). 

17 ‘‘(iii) COMMENCEMENT OF ACTION.— 

18 Any person who believes the person has 

19 been penalized, discriminated, or retaliated 

20 against or had a contract for services ter21 minated in violation of clause (i) or against 

22 whom a complaint has been filed in viola23 tion of clause (ii) may bring an action at 

24 law or equity in the appropriate district 

25 court of the United States, which shall 


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1 have jurisdiction over such action without 

2 regard to the amount in controversy or the 

3 citizenship of the parties, and which shall 

4 have jurisdiction to grant complete relief, 

5 including, but not limited to, injunctive re6 lief (such as reinstatement, compensatory 

7 damages (which may include reimburse8 ment of lost wages, compensation, and 

9 benefits), costs of litigation (including rea10 sonable attorney and expert witness fees), 

11 exemplary damages where appropriate, and 

12 such other relief as the court deems just 

13 and proper. 

14 ‘‘(iv) RIGHTS NOT WAIVABLE.—The 

15 rights protected by this paragraph may not 

16 be diminished by contract or other agree17 ment, and nothing in this paragraph shall 

18 be construed to diminish any greater or 

19 additional protection provided by Federal 

20 or State law or by contract or other agree21 ment. 

22 ‘‘(v) REQUIREMENT TO POST NOTICE

23 OF EMPLOYEE RIGHTS.—Each nursing fa24 cility shall post conspicuously in an appro25 priate location a sign (in a form specified 


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1 by the Secretary) specifying the rights of 

2 persons under this paragraph and includ3 ing a statement that an employee may file 

4 a complaint with the Secretary against a 

5 nursing facility that violates the provisions 

6 of this paragraph and information with re7 spect to the manner of filing such a com8 plaint. 

9 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

10 in this paragraph shall be construed as pre11 venting a resident of a nursing facility (or a 

12 person acting on the resident’s behalf) from 

13 submitting a complaint in a manner or format 

14 other than by using the standardized complaint 

15 form developed under subsection (f)(11) (in16 cluding submitting a complaint orally). 

17 ‘‘(E) GOOD FAITH DEFINED.—For pur18 poses of this paragraph, an individual shall be 

19 deemed to be acting in good faith with respect 

20 to the filing of a complaint if the individual rea21 sonably believes— 

22 ‘‘(i) the information reported or dis23 closed in the complaint is true; and 


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1 ‘‘(ii) the violation of this title has oc2 curred or may occur in relation to such in3 formation.’’. 

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

5 this section shall take effect 1 year after the date of the 

6 enactment of this Act. 

7 SEC. 1416. ENSURING STAFFING ACCOUNTABILITY. 

8 (a) SKILLED NURSING FACILITIES.—Section 

9 1819(b)(8) of the Social Security Act (42 U.S.C. 1395i– 

10 3(b)(8)) is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(C) SUBMISSION OF STAFFING INFORMA13 TION BASED ON PAYROLL DATA IN A UNIFORM

14 FORMAT.—Beginning not later than 2 years 

15 after the date of the enactment of this subpara16 graph, and after consulting with State long17 term care ombudsman programs, consumer ad18 vocacy groups, provider stakeholder groups, em19 ployees and their representatives, and other 

20 parties the Secretary deems appropriate, the 

21 Secretary shall require a skilled nursing facility 

22 to electronically submit to the Secretary direct 

23 care staffing information (including information 

24 with respect to agency and contract staff) based 

25 on payroll and other verifiable and auditable 


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1 data in a uniform format (according to speci2 fications established by the Secretary in con3 sultation with such programs, groups, and par4 ties). Such specifications shall require that the 

5 information submitted under the preceding sen6 tence— 

7 ‘‘(i) specify the category of work a 

8 certified employee performs (such as 

9 whether the employee is a registered nurse, 

10 licensed practical nurse, licensed vocational 

11 nurse, certified nursing assistant, thera12 pist, or other medical personnel); 

13 ‘‘(ii) include resident census data and 

14 information on resident case mix; 

15 ‘‘(iii) include a regular reporting 

16 schedule; and 

17 ‘‘(iv) include information on employee 

18 turnover and tenure and on the hours of 

19 care provided by each category of certified 

20 employees referenced in clause (i) per resi21 dent per day. 

22 Nothing in this subparagraph shall be con23 strued as preventing the Secretary from requir24 ing submission of such information with respect 

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1 fore other categories of certified employees. In2 formation under this subparagraph with respect 

3 to agency and contract staff shall be kept sepa4 rate from information on employee staffing.’’. 

5 (b) NURSING FACILITIES.—Section 1919(b)(8) of the 

6 Social Security Act (42 U.S.C. 1396r(b)(8)) is amended 

7 by adding at the end the following new subparagraph: 

8 ‘‘(C) SUBMISSION OF STAFFING INFORMA9 TION BASED ON PAYROLL DATA IN A UNIFORM

10 FORMAT.—Beginning not later than 2 years 

11 after the date of the enactment of this subpara12 graph, and after consulting with State long13 term care ombudsman programs, consumer ad14 vocacy groups, provider stakeholder groups, em15 ployees and their representatives, and other 

16 parties the Secretary deems appropriate, the 

17 Secretary shall require a nursing facility to elec18 tronically submit to the Secretary direct care 

19 staffing information (including information with 

20 respect to agency and contract staff) based on 

21 payroll and other verifiable and auditable data 

22 in a uniform format (according to specifications 

23 established by the Secretary in consultation 

24 with such programs, groups, and parties). Such 


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1 specifications shall require that the information 

2 submitted under the preceding sentence— 

3 ‘‘(i) specify the category of work a 

4 certified employee performs (such as 

5 whether the employee is a registered nurse, 

6 licensed practical nurse, licensed vocational 

7 nurse, certified nursing assistant, thera8 pist, or other medical personnel); 

9 ‘‘(ii) include resident census data and 

10 information on resident case mix; 

11 ‘‘(iii) include a regular reporting 

12 schedule; and 

13 ‘‘(iv) include information on employee 

14 turnover and tenure and on the hours of 

15 care provided by each category of certified 

16 employees referenced in clause (i) per resi17 dent per day. 

18 Nothing in this subparagraph shall be con19 strued as preventing the Secretary from requir20 ing submission of such information with respect 

21 to specific categories, such as nursing staff, be22 fore other categories of certified employees. In23 formation under this subparagraph with respect 

24 to agency and contract staff shall be kept sepa25 rate from information on employee staffing.’’. 


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1 PART 2—TARGETING ENFORCEMENT 

2 SEC. 1421. CIVIL MONEY PENALTIES. 

3 (a) SKILLED NURSING FACILITIES.— 

4 (1) IN GENERAL.—Section 1819(h)(2)(B)(ii) of 

5 the Social Security Act (42 U.S.C. 1395i– 

6 3(h)(2)(B)(ii)) is amended to read as follows: 

7 ‘‘(ii) AUTHORITY WITH RESPECT TO

8 CIVIL MONEY PENALTIES.— 

9 ‘‘(I) AMOUNT.—The Secretary 

10 may impose a civil money penalty in 

11 the applicable per instance or per day 

12 amount (as defined in subclause (II) 

13 and (III)) for each day or instance, 

14 respectively, of noncompliance (as de15 termined appropriate by the Sec16 retary). 

17 ‘‘(II) APPLICABLE PER INSTANCE

18 AMOUNT.—In this clause, the term 

19 ‘applicable per instance amount’ 

20 means— 

21 ‘‘(aa) in the case where the 

22 deficiency is found to be a direct 

23 proximate cause of death of a 

24 resident of the facility, an 

25 amount not to exceed $100,000; 


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1 ‘‘(bb) in each case of a defi2 ciency where the facility is cited 

3 for actual harm or immediate 

4 jeopardy, an amount not less 

5 than $3,050 and not more than 

6 $25,000; and 

7 ‘‘(cc) in each case of any 

8 other deficiency, an amount not 

9 less than $250 and not to exceed 

10 $3050. 

11 ‘‘(III) APPLICABLE PER DAY

12 AMOUNT.—In this clause, the term 

13 ‘applicable per day amount’ means— 

14 ‘‘(aa) in each case of a defi15 ciency where the facility is cited 

16 for actual harm or immediate 

17 jeopardy, an amount not less 

18 than $3,050 and not more than 

19 $25,000; and 

20 ‘‘(bb) in each case of any 

21 other deficiency, an amount not 

22 less than $250 and not to exceed 

23 $3,050. 

24 ‘‘(IV) REDUCTION OF CIVIL

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1 CUMSTANCES.—Subject to subclauses 

2 (V) and (VI), in the case where a fa3 cility self-reports and promptly cor4 rects a deficiency for which a penalty 

5 was imposed under this clause not 

6 later than 10 calendar days after the 

7 date of such imposition, the Secretary 

8 may reduce the amount of the penalty 

9 imposed by not more than 50 percent. 

10 ‘‘(V) PROHIBITION ON REDUC11 TION FOR CERTAIN DEFICIENCIES.— 

12 ‘‘(aa) REPEAT DEFI13 CIENCIES.—The Secretary may 

14 not reduce under subclause (IV) 

15 the amount of a penalty if the 

16 deficiency is a repeat deficiency. 

17 ‘‘(bb) CERTAIN OTHER DE18 FICIENCIES.—The Secretary may 

19 not reduce under subclause (IV) 

20 the amount of a penalty if the 

21 penalty is imposed for a defi22 ciency described in subclause 

23 (II)(aa) or (III)(aa) and the ac24 tual harm or widespread harm 

25 immediately jeopardizes the 


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1 health or safety of a resident or 

2 residents of the facility, or if the 

3 penalty is imposed for a defi4 ciency described in subclause 

5 (II)(bb). 

6 ‘‘(VI) LIMITATION ON AGGRE7 GATE REDUCTIONS.—The aggregate 

8 reduction in a penalty under sub9 clause (IV) may not exceed 35 percent 

10 on the basis of self-reporting, on the 

11 basis of a waiver or an appeal (as pro12 vided for under regulations under sec13 tion 488.436 of title 42, Code of Fed14 eral Regulations), or on the basis of 

15 both. 

16 ‘‘(VII) COLLECTION OF CIVIL

17 MONEY PENALTIES.—In the case of a 

18 civil money penalty imposed under 

19 this clause, the Secretary— 

20 ‘‘(aa) subject to item (cc), 

21 shall, not later than 30 days 

22 after the date of imposition of 

23 the penalty, provide the oppor24 tunity for the facility to partici25 pate in an independent informal 


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1 dispute resolution process which 

2 generates a written record prior 

3 to the collection of such penalty, 

4 but such opportunity shall not af5 fect the responsibility of the 

6 State survey agency for making 

7 final recommendations for such 

8 penalties; 

9 ‘‘(bb) in the case where the 

10 penalty is imposed for each day 

11 of noncompliance, shall not im12 pose a penalty for any day during 

13 the period beginning on the ini14 tial day of the imposition of the 

15 penalty and ending on the day on 

16 which the informal dispute reso17 lution process under item (aa) is 

18 completed; 

19 ‘‘(cc) may provide for the 

20 collection of such civil money 

21 penalty and the placement of 

22 such amounts collected in an es23 crow account under the direction 

24 of the Secretary on the earlier of 

25 the date on which the informal 


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1 dispute resolution process under 

2 item (aa) is completed or the 

3 date that is 90 days after the 

4 date of the imposition of the pen5 alty; 

6 ‘‘(dd) may provide that such 

7 amounts collected are kept in 

8 such account pending the resolu9 tion of any subsequent appeals; 

10 ‘‘(ee) in the case where the 

11 facility successfully appeals the 

12 penalty, may provide for the re13 turn of such amounts collected 

14 (plus interest) to the facility; and 

15 ‘‘(ff) in the case where all 

16 such appeals are unsuccessful, 

17 may provide that some portion of 

18 such amounts collected may be 

19 used to support activities that 

20 benefit residents, including as21 sistance to support and protect 

22 residents of a facility that closes 

23 (voluntarily or involuntarily) or is 

24 decertified (including offsetting 

25 costs of relocating residents to 


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1 home and community-based set2 tings or another facility), projects 

3 that support resident and family 

4 councils and other consumer in5 volvement in assuring quality 

6 care in facilities, and facility im7 provement initiatives approved by 

8 the Secretary (including joint 

9 training of facility staff and sur10 veyors, technical assistance for 

11 facilities under quality assurance 

12 programs, the appointment of 

13 temporary management, and 

14 other activities approved by the 

15 Secretary). 

16 ‘‘(VIII) PROCEDURE.—The pro17 visions of section 1128A (other than 

18 subsections (a) and (b) and except to 

19 the extent that such provisions require 

20 a hearing prior to the imposition of a 

21 civil money penalty) shall apply to a 

22 civil money penalty under this clause 

23 in the same manner as such provi24 sions apply to a penalty or proceeding 

25 under section 1128A(a).’’. 


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1 (2) CONFORMING AMENDMENT.—The second 

2 sentence of section 1819(h)(5) of the Social Security 

3 Act (42 U.S.C. 1395i–3(h)(5)) is amended by insert4 ing ‘‘(ii),’’ after ‘‘(i),’’. 

5 (b) NURSING FACILITIES.— 

6 (1) PENALTIES IMPOSED BY THE STATE.— 

7 (A) IN GENERAL.—Section 1919(h)(2) of 

8 the Social Security Act (42 U.S.C. 1396r(h)(2)) 

9 is amended— 

10 (i) in subparagraph (A)(ii), by strik11 ing the first sentence and inserting the fol12 lowing: ‘‘A civil money penalty in accord13 ance with subparagraph (G).’’; and 

14 (ii) by adding at the end the following 

15 new subparagraph: 

16 ‘‘(G) CIVIL MONEY PENALTIES.— 

17 ‘‘(i) IN GENERAL.—The State may 

18 impose a civil money penalty under sub19 paragraph (A)(ii) in the applicable per in20 stance or per day amount (as defined in 

21 subclause (II) and (III)) for each day or 

22 instance, respectively, of noncompliance (as 

23 determined appropriate by the Secretary). 


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1 ‘‘(ii) APPLICABLE PER INSTANCE

2 AMOUNT.—In this subparagraph, the term 

3 ‘applicable per instance amount’ means— 

4 ‘‘(I) in the case where the defi5 ciency is found to be a direct proxi6 mate cause of death of a resident of 

7 the facility, an amount not to exceed 

8 $100,000; 

9 ‘‘(II) in each case of a deficiency 

10 where the facility is cited for actual 

11 harm or immediate jeopardy, an 

12 amount not less than $3,050 and not 

13 more than $25,000; and 

14 ‘‘(III) in each case of any other 

15 deficiency, an amount not less than 

16 $250 and not to exceed $3,050. 

17 ‘‘(iii) APPLICABLE PER DAY

18 AMOUNT.—In this subparagraph, the term 

19 ‘applicable per day amount’ means— 

20 ‘‘(I) in each case of a deficiency 

21 where the facility is cited for actual 

22 harm or immediate jeopardy, an 

23 amount not less than $3,050 and not 

24 more than $25,000; and 


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1 ‘‘(II) in each case of any other 

2 deficiency, an amount not less than 

3 $250 and not to exceed $3,050. 

4 ‘‘(iv) REDUCTION OF CIVIL MONEY

5 PENALTIES IN CERTAIN CIR6 CUMSTANCES.—Subject to clauses (v) and 

7 (vi), in the case where a facility self-re8 ports and promptly corrects a deficiency 

9 for which a penalty was imposed under 

10 subparagraph (A)(ii) not later than 10 cal11 endar days after the date of such imposi12 tion, the State may reduce the amount of 

13 the penalty imposed by not more than 50 

14 percent. 

15 ‘‘(v) PROHIBITION ON REDUCTION

16 FOR CERTAIN DEFICIENCIES.— 

17 ‘‘(I) REPEAT DEFICIENCIES.— 

18 The State may not reduce under 

19 clause (iv) the amount of a penalty if 

20 the State had reduced a penalty im21 posed on the facility in the preceding 

22 year under such clause with respect to 

23 a repeat deficiency. 

24 ‘‘(II) CERTAIN OTHER DEFI25 CIENCIES.—The State may not reduce 


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1 under clause (iv) the amount of a pen2 alty if the penalty is imposed for a de3 ficiency described in clause (ii)(II) or 

4 (iii)(I) and the actual harm or wide5 spread harm that immediately jeop6 ardizes the health or safety of a resi7 dent or residents of the facility, or if 

8 the penalty is imposed for a deficiency 

9 described in clause (ii)(I). 

10 ‘‘(III) LIMITATION ON AGGRE11 GATE REDUCTIONS.—The aggregate 

12 reduction in a penalty under clause 

13 (iv) may not exceed 35 percent on the 

14 basis of self-reporting, on the basis of 

15 a waiver or an appeal (as provided for 

16 under regulations under section 

17 488.436 of title 42, Code of Federal 

18 Regulations), or on the basis of both. 

19 ‘‘(iv) COLLECTION OF CIVIL MONEY

20 PENALTIES.—In the case of a civil money 

21 penalty imposed under subparagraph 

22 (A)(ii), the State— 

23 ‘‘(I) subject to subclause (III), 

24 shall, not later than 30 days after the 

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1 vide the opportunity for the facility to 

2 participate in an independent informal 

3 dispute resolution process which gen4 erates a written record prior to the 

5 collection of such penalty, but such 

6 opportunity shall not affect the re7 sponsibility of the State survey agency 

8 for making final recommendations for 

9 such penalties; 

10 ‘‘(II) in the case where the pen11 alty is imposed for each day of non12 compliance, shall not impose a penalty 

13 for any day during the period begin14 ning on the initial day of the imposi15 tion of the penalty and ending on the 

16 day on which the informal dispute res17 olution process under subclause (I) is 

18 completed; 

19 ‘‘(III) may provide for the collec20 tion of such civil money penalty and 

21 the placement of such amounts col22 lected in an escrow account under the 

23 direction of the State on the earlier of 

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1 clause (I) is completed or the date 

2 that is 90 days after the date of the 

3 imposition of the penalty; 

4 ‘‘(IV) may provide that such 

5 amounts collected are kept in such ac6 count pending the resolution of any 

7 subsequent appeals; 

8 ‘‘(V) in the case where the facil9 ity successfully appeals the penalty, 

10 may provide for the return of such 

11 amounts collected (plus interest) to 

12 the facility; and 

13 ‘‘(VI) in the case where all such 

14 appeals are unsuccessful, may provide 

15 that such funds collected shall be used 

16 for the purposes described in the sec17 ond sentence of subparagraph 

18 (A)(ii).’’. 

19 (B) CONFORMING AMENDMENT.—The sec20 ond sentence of section 1919(h)(2)(A)(ii) of the 

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

22 1396r(h)(2)(A)(ii)) is amended by inserting be23 fore the period at the end the following: ‘‘, and 

24 some portion of such funds may be used to sup25 port activities that benefit residents, including 


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1 assistance to support and protect residents of a 

2 facility that closes (voluntarily or involuntarily) 

3 or is decertified (including offsetting costs of re4 locating residents to home and community5 based settings or another facility), projects that 

6 support resident and family councils and other 

7 consumer involvement in assuring quality care 

8 in facilities, and facility improvement initiatives 

9 approved by the Secretary (including joint 

10 training of facility staff and surveyors, pro11 viding technical assistance to facilities under 

12 quality assurance programs, the appointment of 

13 temporary management, and other activities ap14 proved by the Secretary)’’. 

15 (2) PENALTIES IMPOSED BY THE SEC16 RETARY.— 

17 (A) IN GENERAL.—Section 

18 1919(h)(3)(C)(ii) of the Social Security Act (42 

19 U.S.C. 1396r(h)(3)(C)) is amended to read as 

20 follows: 

21 ‘‘(ii) AUTHORITY WITH RESPECT TO

22 CIVIL MONEY PENALTIES.— 

23 ‘‘(I) AMOUNT.—Subject to sub24 clause (II), the Secretary may impose 

25 a civil money penalty in an amount 


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1 not to exceed $10,000 for each day or 

2 each instance of noncompliance (as 

3 determined appropriate by the Sec4 retary). 

5 ‘‘(II) REDUCTION OF CIVIL

6 MONEY PENALTIES IN CERTAIN CIR7 CUMSTANCES.—Subject to subclause 

8 (III), in the case where a facility self9 reports and promptly corrects a defi10 ciency for which a penalty was im11 posed under this clause not later than 

12 10 calendar days after the date of 

13 such imposition, the Secretary may 

14 reduce the amount of the penalty im15 posed by not more than 50 percent. 

16 ‘‘(III) PROHIBITION ON REDUC17 TION FOR REPEAT DEFICIENCIES.— 

18 The Secretary may not reduce the 

19 amount of a penalty under subclause 

20 (II) if the Secretary had reduced a 

21 penalty imposed on the facility in the 

22 preceding year under such subclause 

23 with respect to a repeat deficiency. 

24 ‘‘(IV) COLLECTION OF CIVIL

25 MONEY PENALTIES.—In the case of a 


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1 civil money penalty imposed under 

2 this clause, the Secretary— 

3 ‘‘(aa) subject to item (bb), 

4 shall, not later than 30 days 

5 after the date of imposition of 

6 the penalty, provide the oppor7 tunity for the facility to partici8 pate in an independent informal 

9 dispute resolution process which 

10 generates a written record prior 

11 to the collection of such penalty; 

12 ‘‘(bb) in the case where the 

13 penalty is imposed for each day 

14 of noncompliance, shall not im15 pose a penalty for any day during 

16 the period beginning on the ini17 tial day of the imposition of the 

18 penalty and ending on the day on 

19 which the informal dispute reso20 lution process under item (aa) is 

21 completed; 

22 ‘‘(cc) may provide for the 

23 collection of such civil money 

24 penalty and the placement of 

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1 crow account under the direction 

2 of the Secretary on the earlier of 

3 the date on which the informal 

4 dispute resolution process under 

5 item (aa) is completed or the 

6 date that is 90 days after the 

7 date of the imposition of the pen8 alty; 

9 ‘‘(dd) may provide that such 

10 amounts collected are kept in 

11 such account pending the resolu12 tion of any subsequent appeals; 

13 ‘‘(ee) in the case where the 

14 facility successfully appeals the 

15 penalty, may provide for the re16 turn of such amounts collected 

17 (plus interest) to the facility; and 

18 ‘‘(ff) in the case where all 

19 such appeals are unsuccessful, 

20 may provide that some portion of 

21 such amounts collected may be 

22 used to support activities that 

23 benefit residents, including as24 sistance to support and protect 

25 residents of a facility that closes 


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1 (voluntarily or involuntarily) or is 

2 decertified (including offsetting 

3 costs of relocating residents to 

4 home and community-based set5 tings or another facility), projects 

6 that support resident and family 

7 councils and other consumer in8 volvement in assuring quality 

9 care in facilities, and facility im10 provement initiatives approved by 

11 the Secretary (including joint 

12 training of facility staff and sur13 veyors, technical assistance for 

14 facilities under quality assurance 

15 programs, the appointment of 

16 temporary management, and 

17 other activities approved by the 

18 Secretary). 

19 ‘‘(V) PROCEDURE.—The provi20 sions of section 1128A (other than 

21 subsections (a) and (b) and except to 

22 the extent that such provisions require 

23 a hearing prior to the imposition of a 

24 civil money penalty) shall apply to a 

25 civil money penalty under this clause 


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1 in the same manner as such provi2 sions apply to a penalty or proceeding 

3 under section 1128A(a).’’. 

4 (B) CONFORMING AMENDMENT.—Section 

5 1919(h)(8) of the Social Security Act (42 

6 U.S.C. 1396r(h)(5)(8)) is amended by inserting 

7 ‘‘and in paragraph (3)(C)(ii)’’ after ‘‘paragraph 

8 (2)(A)’’. 

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

10 this section shall take effect 1 year after the date of the 

11 enactment of this Act. 

12 SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PRO13 GRAM. 

14 (a) ESTABLISHMENT.— 

15 (1) IN GENERAL.—The Secretary, in consulta16 tion with the Inspector General of the Department 

17 of Health and Human Services, shall establish a 

18 pilot program (in this section referred to as the 

19 ‘‘pilot program’’) to develop, test, and implement use 

20 of an independent monitor to oversee interstate and 

21 large intrastate chains of skilled nursing facilities 

22 and nursing facilities. 

23 (2) SELECTION.—The Secretary shall select 

24 chains of skilled nursing facilities and nursing facili25 ties described in paragraph (1) to participate in the 


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1 pilot program from among those chains that submit 

2 an application to the Secretary at such time, in such 

3 manner, and containing such information as the Sec4 retary may require. 

5 (3) DURATION.—The Secretary shall conduct 

6 the pilot program for a two-year period. 

7 (4) IMPLEMENTATION.—The Secretary shall 

8 implement the pilot program not later than one year 

9 after the date of the enactment of this Act. 

10 (b) REQUIREMENTS.—The Secretary shall evaluate 

11 chains selected to participate in the pilot program based 

12 on criteria selected by the Secretary, including where evi13 dence suggests that one or more facilities of the chain are 

14 experiencing serious safety and quality of care problems. 

15 Such criteria may include the evaluation of a chain that 

16 includes one or more facilities participating in the ‘‘Special 

17 Focus Facility’’ program (or a successor program) or one 

18 or more facilities with a record of repeated serious safety 

19 and quality of care deficiencies. 

20 (c) RESPONSIBILITIES OF THE INDEPENDENT MON21 ITOR.—An independent monitor that enters into a con22 tract with the Secretary to participate in the conduct of 

23 such program shall— 

24 (1) conduct periodic reviews and prepare root25 cause quality and deficiency analyses of a chain to 


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1 assess if facilities of the chain are in compliance 

2 with State and Federal laws and regulations applica3 ble to the facilities; 

4 (2) undertake sustained oversight of the chain, 

5 whether publicly or privately held, to involve the 

6 owners of the chain and the principal business part7 ners of such owners in facilitating compliance by fa8 cilities of the chain with State and Federal laws and 

9 regulations applicable to the facilities; 

10 (3) analyze the management structure, distribu11 tion of expenditures, and nurse staffing levels of fa12 cilities of the chain in relation to resident census, 

13 staff turnover rates, and tenure; 

14 (4) report findings and recommendations with 

15 respect to such reviews, analyses, and oversight to 

16 the chain and facilities of the chain, to the Secretary 

17 and to relevant States; and 

18 (5) publish the results of such reviews, anal19 yses, and oversight. 

20 (d) IMPLEMENTATION OF RECOMMENDATIONS.— 

21 (1) RECEIPT OF FINDING BY CHAIN.—Not later 

22 than 10 days after receipt of a finding of an inde23 pendent monitor under subsection (c)(4), a chain 

24 participating in the pilot program shall submit to 

25 the independent monitor a report— 


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1 (A) outlining corrective actions the chain 

2 will take to implement the recommendations in 

3 such report; or 

4 (B) indicating that the chain will not im5 plement such recommendations and why it will 

6 not do so. 

7 (2) RECEIPT OF REPORT BY INDEPENDENT

8 MONITOR.—Not later than 10 days after the date of 

9 receipt of a report submitted by a chain under para10 graph (1), an independent monitor shall finalize its 

11 recommendations and submit a report to the chain 

12 and facilities of the chain, the Secretary, and the 

13 State (or States) involved, as appropriate, containing 

14 such final recommendations. 

15 (e) COST OF APPOINTMENT.—A chain shall be re16 sponsible for a portion of the costs associated with the 

17 appointment of independent monitors under the pilot pro18 gram. The chain shall pay such portion to the Secretary 

19 (in an amount and in accordance with procedures estab20 lished by the Secretary). 

21 (f) WAIVER AUTHORITY.—The Secretary may waive 

22 such requirements of titles XVIII and XIX of the Social 

23 Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as 

24 may be necessary for the purpose of carrying out the pilot 

25 program. 


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1 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated such sums as may be 

3 necessary to carry out this section. 

4 (h) DEFINITIONS.—In this section: 

5 (1) FACILITY.—The term ‘‘facility’’ means a 

6 skilled nursing facility or a nursing facility. 

7 (2) NURSING FACILITY.—The term ‘‘nursing 

8 facility’’ has the meaning given such term in section 

9 1919(a) of the Social Security Act (42 U.S.C. 

10 1396r(a)). 

11 (3) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Health and Human Services, acting 

13 through the Assistant Secretary for Planning and 

14 Evaluation. 

15 (4) SKILLED NURSING FACILITY.—The term 

16 ‘‘skilled nursing facility’’ has the meaning given such 

17 term in section 1819(a) of the Social Security Act 

18 (42 U.S.C. 1395(a)). 

19 (i) EVALUATION AND REPORT.— 

20 (1) EVALUATION.—The Inspector General of 

21 the Department of Health and Human Services shall 

22 evaluate the pilot program. Such evaluation shall— 

23 (A) determine whether the independent 

24 monitor program should be established on a 

25 permanent basis; and 


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1 (B) if the Inspector General determines 

2 that the independent monitor program should 

3 be established on a permanent basis, rec4 ommend appropriate procedures and mecha5 nisms for such establishment. 

6 (2) REPORT.—Not later than 180 days after 

7 the completion of the pilot program, the Inspector 

8 General shall submit to Congress and the Secretary 

9 a report containing the results of the evaluation con10 ducted under paragraph (1), together with rec11 ommendations for such legislation and administra12 tive action as the Inspector General determines ap13 propriate. 

14 SEC. 1423. NOTIFICATION OF FACILITY CLOSURE. 

15 (a) SKILLED NURSING FACILITIES.— 

16 (1) IN GENERAL.—Section 1819(c) of the So17 cial Security Act (42 U.S.C. 1395i–3(c)) is amended 

18 by adding at the end the following new paragraph: 

19 ‘‘(7) NOTIFICATION OF FACILITY CLOSURE.— 

20 ‘‘(A) IN GENERAL.—Any individual who is 

21 the administrator of a skilled nursing facility 

22 must— 

23 ‘‘(i) submit to the Secretary, the State 

24 long-term care ombudsman, residents of 

25 the facility, and the legal representatives of 


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1 such residents or other responsible parties, 

2 written notification of an impending clo3 sure— 

4 ‘‘(I) subject to subclause (II), not 

5 later than the date that is 60 days 

6 prior to the date of such closure; and 

7 ‘‘(II) in the case of a facility 

8 where the Secretary terminates the fa9 cility’s participation under this title, 

10 not later than the date that the Sec11 retary determines appropriate; 

12 ‘‘(ii) ensure that the facility does not 

13 admit any new residents on or after the 

14 date on which such written notification is 

15 submitted; and 

16 ‘‘(iii) include in the notice a plan for 

17 the transfer and adequate relocation of the 

18 residents of the facility by a specified date 

19 prior to closure that has been approved by 

20 the State, including assurances that the 

21 residents will be transferred to the most 

22 appropriate facility or other setting in 

23 terms of quality, services, and location, 

24 taking into consideration the needs and 

25 best interests of each resident. 


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1 ‘‘(B) RELOCATION.— 

2 ‘‘(i) IN GENERAL.—The State shall 

3 ensure that, before a facility closes, all 

4 residents of the facility have been success5 fully relocated to another facility or an al6 ternative home and community-based set7 ting. 

8 ‘‘(ii) CONTINUATION OF PAYMENTS

9 UNTIL RESIDENTS RELOCATED.—The Sec10 retary may, as the Secretary determines 

11 appropriate, continue to make payments 

12 under this title with respect to residents of 

13 a facility that has submitted a notification 

14 under subparagraph (A) during the period 

15 beginning on the date such notification is 

16 submitted and ending on the date on which 

17 the resident is successfully relocated.’’. 

18 (2) CONFORMING AMENDMENTS.—Section 

19 1819(h)(4) of the Social Security Act (42 U.S.C. 

20 1395i–3(h)(4)) is amended— 

21 (A) in the first sentence, by striking ‘‘the 

22 Secretary shall terminate’’ and inserting ‘‘the 

23 Secretary, subject to subsection (c)(7), shall 

24 terminate’’; and 


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1 (B) in the second sentence, by striking 

2 ‘‘subsection (c)(2)’’ and inserting ‘‘paragraphs 

3 (2) and (7) of subsection (c)’’. 

4 (b) NURSING FACILITIES.— 

5 (1) IN GENERAL.—Section 1919(c) of the So6 cial Security Act (42 U.S.C. 1396r(c)) is amended 

7 by adding at the end the following new paragraph: 

8 ‘‘(9) NOTIFICATION OF FACILITY CLOSURE.— 

9 ‘‘(A) IN GENERAL.—Any individual who is 

10 an administrator of a nursing facility must— 

11 ‘‘(i) submit to the Secretary, the State 

12 long-term care ombudsman, residents of 

13 the facility, and the legal representatives of 

14 such residents or other responsible parties, 

15 written notification of an impending clo16 sure— 

17 ‘‘(I) subject to subclause (II), not 

18 later than the date that is 60 days 

19 prior to the date of such closure; and 

20 ‘‘(II) in the case of a facility 

21 where the Secretary terminates the fa22 cility’s participation under this title, 

23 not later than the date that the Sec24 retary determines appropriate; 


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1 ‘‘(ii) ensure that the facility does not 

2 admit any new residents on or after the 

3 date on which such written notification is 

4 submitted; and 

5 ‘‘(iii) include in the notice a plan for 

6 the transfer and adequate relocation of the 

7 residents of the facility by a specified date 

8 prior to closure that has been approved by 

9 the State, including assurances that the 

10 residents will be transferred to the most 

11 appropriate facility or other setting in 

12 terms of quality, services, and location, 

13 taking into consideration the needs and 

14 best interests of each resident. 

15 ‘‘(B) RELOCATION.— 

16 ‘‘(i) IN GENERAL.—The State shall 

17 ensure that, before a facility closes, all 

18 residents of the facility have been success19 fully relocated to another facility or an al20 ternative home and community-based set21 ting. 

22 ‘‘(ii) CONTINUATION OF PAYMENTS

23 UNTIL RESIDENTS RELOCATED.—The Sec24 retary may, as the Secretary determines 

25 appropriate, continue to make payments 


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1 under this title with respect to residents of 

2 a facility that has submitted a notification 

3 under subparagraph (A) during the period 

4 beginning on the date such notification is 

5 submitted and ending on the date on which 

6 the resident is successfully relocated.’’. 

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

8 this section shall take effect 1 year after the date of the 

9 enactment of this Act. 

10 PART 3—IMPROVING STAFF TRAINING 

11 SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING. 

12 (a) SKILLED NURSING FACILITIES.—Section 

13 1819(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C. 

14 1395i–3(f)(2)(A)(i)(I)) is amended by inserting ‘‘(includ15 ing, in the case of initial training and, if the Secretary 

16 determines appropriate, in the case of ongoing training, 

17 dementia management training and resident abuse preven18 tion training)’’ after ‘‘curriculum’’. 

19 (b) NURSING FACILITIES.—Section 

20 1919(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C. 

21 1396r(f)(2)(A)(i)(I)) is amended by inserting ‘‘(including, 

22 in the case of initial training and, if the Secretary deter23 mines appropriate, in the case of ongoing training, demen24 tia management training and resident abuse prevention 

25 training)’’ after ‘‘curriculum’’. 


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

2 this section shall take effect 1 year after the date of the 

3 enactment of this Act. 

4 SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED 

5 FOR CERTIFIED NURSE AIDES AND SUPER6 VISORY STAFF. 

7 (a) STUDY.— 

8 (1) IN GENERAL.—The Secretary shall conduct 

9 a study on the content of training for certified nurse 

10 aides and supervisory staff of skilled nursing facili11 ties and nursing facilities. The study shall include an 

12 analysis of the following: 

13 (A) Whether the number of initial training 

14 hours for certified nurse aides required under 

15 sections 1819(f)(2)(A)(i)(II) and 

16 1919(f)(2)(A)(i)(II) of the Social Security Act 

17 (42 U.S.C. 1395i–3(f)(2)(A)(i)(II); 

18 1396r(f)(2)(A)(i)(II)) should be increased from 

19 75 and, if so, what the required number of ini20 tial training hours should be, including any rec21 ommendations for the content of such training 

22 (including training related to dementia). 

23 (B) Whether requirements for ongoing 

24 training under such sections 

25 1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) 


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1 should be increased from 12 hours per year, in2 cluding any recommendations for the content of 

3 such training. 

4 (2) CONSULTATION.—In conducting the anal5 ysis under paragraph (1)(A), the Secretary shall 

6 consult with States that, as of the date of the enact7 ment of this Act, require more than 75 hours of 

8 training for certified nurse aides. 

9 (3) DEFINITIONS.—In this section: 

10 (A) NURSING FACILITY.—The term ‘‘nurs11 ing facility’’ has the meaning given such term 

12 in section 1919(a) of the Social Security Act 

13 (42 U.S.C. 1396r(a)). 

14 (B) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of Health and Human 

16 Services, acting through the Assistant Secretary 

17 for Planning and Evaluation. 

18 (C) SKILLED NURSING FACILITY.—The 

19 term ‘‘skilled nursing facility’’ has the meaning 

20 given such term in section 1819(a) of the Social 

21 Security Act (42 U.S.C. 1395(a)). 

22 (b) REPORT.—Not later than 2 years after the date 

23 of the enactment of this Act, the Secretary shall submit 

24 to Congress a report containing the results of the study 

25 conducted under subsection (a), together with recVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01674 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ommendations for such legislation and administrative ac2 tion as the Secretary determines appropriate. 

3 Subtitle C—Quality Measurements 

4 SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR 

5 QUALITY IMPROVEMENT. 

6 Title XI of the Social Security Act, as amended by 

7 section 1401(a), is further amended by adding at the end 

8 the following new part: 

9 ‘‘PART E—QUALITY IMPROVEMENT

10 ‘‘ESTABLISHMENT OF NATIONAL PRIORITIES FOR

11 PERFORMANCE IMPROVEMENT

12 ‘‘SEC. 1191. (a) ESTABLISHMENT OF NATIONAL PRI13 ORITIES BY THE SECRETARY.—The Secretary shall estab14 lish and periodically update, not less frequently than tri15 ennially, national priorities for performance improvement. 

16 ‘‘(b) RECOMMENDATIONS FOR NATIONAL PRIOR17 ITIES.—In establishing and updating national priorities 

18 under subsection (a), the Secretary shall solicit and con19 sider recommendations from multiple outside stake20 holders. 

21 ‘‘(c) CONSIDERATIONS IN SETTING NATIONAL PRI22 ORITIES.—With respect to such priorities, the Secretary 

23 shall ensure that priority is given to areas in the delivery 

24 of health care services in the United States that— 


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1 ‘‘(1) contribute to a large burden of disease, in2 cluding those that address the health care provided 

3 to patients with prevalent, high-cost chronic dis4 eases; 

5 ‘‘(2) have the greatest potential to decrease 

6 morbidity and mortality in this country, including 

7 those that are designed to eliminate harm to pa8 tients; 

9 ‘‘(3) have the greatest potential for improving 

10 the performance, affordability, and patient11 centeredness of health care, including those due to 

12 variations in care; 

13 ‘‘(4) address health disparities across groups 

14 and areas; and 

15 ‘‘(5) have the potential for rapid improvement 

16 due to existing evidence, standards of care or other 

17 reasons. 

18 ‘‘(d) DEFINITIONS.—In this part: 

19 ‘‘(1) CONSENSUS-BASED ENTITY.—The term 

20 ‘consensus-based entity’ means an entity with a con21 tract with the Secretary under section 1890. 

22 ‘‘(2) QUALITY MEASURE.—The term ‘quality 

23 measure’ means a national consensus standard for 

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1 ices, physicians, and other health care practitioners 

2 in the delivery of health care services. 

3 ‘‘(e) FUNDING.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall provide 

5 for the transfer, from the Federal Hospital Insur6 ance Trust Fund under section 1817 and the Fed7 eral Supplementary Medical Insurance Trust Fund 

8 under section 1841 (in such proportion as the Sec9 retary determines appropriate), of $2,000,000, for 

10 the activities under this section for each of the fiscal 

11 years 2010 through 2014. 

12 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

13 For purposes of carrying out the provisions of this 

14 section, in addition to funds otherwise available, out 

15 of any funds in the Treasury not otherwise appro16 priated, there are appropriated to the Secretary of 

17 Health and Human Services $2,000,000 for each of 

18 the fiscal years 2010 through 2014.’’. 

19 SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; 

20 GAO EVALUATION OF DATA COLLECTION 

21 PROCESS FOR QUALITY MEASUREMENT. 

22 Part E of title XI of the Social Security Act, as added 

23 by section 1441, is amended by adding at the end the fol24 lowing new sections: 


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1 ‘‘SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES. 

2 ‘‘(a) AGREEMENTS WITH QUALIFIED ENTITIES.— 

3 ‘‘(1) IN GENERAL.—The Secretary shall enter 

4 into agreements with qualified entities to develop 

5 quality measures for the delivery of health care serv6 ices in the United States. 

7 ‘‘(2) FORM OF AGREEMENTS.—The Secretary 

8 may carry out paragraph (1) by contract, grant, or 

9 otherwise. 

10 ‘‘(3) RECOMMENDATIONS OF CONSENSUS11 BASED ENTITY.—In carrying out this section, the 

12 Secretary shall— 

13 ‘‘(A) seek public input; and 

14 ‘‘(B) take into consideration recommenda15 tions of the consensus-based entity with a con16 tract with the Secretary under section 1890(a). 

17 ‘‘(b) DETERMINATION OF AREAS WHERE QUALITY

18 MEASURES ARE REQUIRED.—Consistent with the na19 tional priorities established under this part and with the 

20 programs administered by the Centers for Medicare & 

21 Medicaid Services and in consultation with other relevant 

22 Federal agencies, the Secretary shall determine areas in 

23 which quality measures for assessing health care services 

24 in the United States are needed. 

25 ‘‘(c) DEVELOPMENT OF QUALITY MEASURES.— 


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1 ‘‘(1) PATIENT-CENTERED AND POPULATION2 BASED MEASURES.—Quality measures developed 

3 under agreements under subsection (a) shall be de4 signed— 

5 ‘‘(A) to assess outcomes and functional 

6 status of patients; 

7 ‘‘(B) to assess the continuity and coordina8 tion of care and care transitions for patients 

9 across providers and health care settings, in10 cluding end of life care; 

11 ‘‘(C) to assess patient experience and pa12 tient engagement; 

13 ‘‘(D) to assess the safety, effectiveness, 

14 and timeliness of care; 

15 ‘‘(E) to assess health disparities including 

16 those associated with individual race, ethnicity, 

17 age, gender, place of residence or language; 

18 ‘‘(F) to assess the efficiency and resource 

19 use in the provision of care; 

20 ‘‘(G) to the extent feasible, to be collected 

21 as part of health information technologies sup22 porting better delivery of health care services; 

23 ‘‘(H) to be available free of charge to users 

24 for the use of such measures; and 


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1 ‘‘(I) to assess delivery of health care serv2 ices to individuals regardless of age. 

3 ‘‘(2) AVAILABILITY OF MEASURES.—The Sec4 retary shall make quality measures developed under 

5 this section available to the public. 

6 ‘‘(3) TESTING OF PROPOSED MEASURES.—The 

7 Secretary may use amounts made available under 

8 subsection (f) to fund the testing of proposed quality 

9 measures by qualified entities. Testing funded under 

10 this paragraph shall include testing of the feasibility 

11 and usability of proposed measures. 

12 ‘‘(4) UPDATING OF ENDORSED MEASURES.— 

13 The Secretary may use amounts made available 

14 under subsection (f) to fund the updating (and test15 ing, if applicable) by consensus-based entities of 

16 quality measures that have been previously endorsed 

17 by such an entity as new evidence is developed, in 

18 a manner consistent with section 1890(b)(3). 

19 ‘‘(d) QUALIFIED ENTITIES.—Before entering into 

20 agreements with a qualified entity, the Secretary shall en21 sure that the entity is a public, nonprofit or academic in22 stitution with technical expertise in the area of health 

23 quality measurement. 

24 ‘‘(e) APPLICATION FOR GRANT.—A grant may be 

25 made under this section only if an application for the 


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1 grant is submitted to the Secretary and the application 

2 is in such form, is made in such manner, and contains 

3 such agreements, assurances, and information as the Sec4 retary determines to be necessary to carry out this section. 

5 ‘‘(f) FUNDING.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall provide 

7 for the transfer, from the Federal Hospital Insur8 ance Trust Fund under section 1817 and the Fed9 eral Supplementary Medical Insurance Trust Fund 

10 under section 1841 (in such proportion as the Sec11 retary determines appropriate), of $25,000,000, to 

12 the Secretary for purposes of carrying out this sec13 tion for each of the fiscal years 2010 through 2014. 

14 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

15 For purposes of carrying out the provisions of this 

16 section, in addition to funds otherwise available, out 

17 of any funds in the Treasury not otherwise appro18 priated, there are appropriated to the Secretary of 

19 Health and Human Services $25,000,000 for each 

20 of the fiscal years 2010 through 2014. 

21 ‘‘SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROC22 ESS FOR QUALITY MEASUREMENT. 

23 ‘‘(a) GAO EVALUATIONS.—The Comptroller General 

24 of the United States shall conduct periodic evaluations of 


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1 the implementation of the data collection processes for 

2 quality measures used by the Secretary. 

3 ‘‘(b) CONSIDERATIONS.—In carrying out the evalua4 tion under subsection (a), the Comptroller General shall 

5 determine— 

6 ‘‘(1) whether the system for the collection of 

7 data for quality measures provides for validation of 

8 data as relevant and scientifically credible; 

9 ‘‘(2) whether data collection efforts under the 

10 system use the most efficient and cost-effective 

11 means in a manner that minimizes administrative 

12 burden on persons required to collect data and that 

13 adequately protects the privacy of patients’ personal 

14 health information and provides data security; 

15 ‘‘(3) whether standards under the system pro16 vide for an appropriate opportunity for physicians 

17 and other clinicians and institutional providers of 

18 services to review and correct findings; and 

19 ‘‘(4) the extent to which quality measures are 

20 consistent with section 1192(c)(1) or result in direct 

21 or indirect costs to users of such measures. 

22 ‘‘(c) REPORT.—The Comptroller General shall sub23 mit reports to Congress and to the Secretary containing 

24 a description of the findings and conclusions of the results 

25 of each such evaluation.’’. 


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1 SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT 

2 INTO SELECTION OF QUALITY MEASURES. 

3 Section 1808 of the Social Security Act (42 U.S.C. 

4 1395b–9) is amended by adding at the end the following 

5 new subsection: 

6 ‘‘(d) MULTI-STAKEHOLDER PRE-RULEMAKING INPUT

7 INTO SELECTION OF QUALITY MEASURES.— 

8 ‘‘(1) LIST OF MEASURES.—Not later than De9 cember 1 before each year (beginning with 2011), 

10 the Secretary shall make public a list of measures 

11 being considered for selection for quality measure12 ment by the Secretary in rulemaking with respect to 

13 payment systems under this title beginning in the 

14 payment year beginning in such year and for pay15 ment systems beginning in the calendar year fol16 lowing such year, as the case may be. 

17 ‘‘(2) CONSULTATION ON SELECTION OF EN18 DORSED QUALITY MEASURES.—A consensus-based 

19 entity that has entered into a contract under section 

20 1890 shall, as part of such contract, convene multi21 stakeholder groups to provide recommendations on 

22 the selection of individual or composite quality meas23 ures, for use in reporting performance information 

24 to the public or for use in public health care pro25 grams. 


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1 ‘‘(3) MULTI-STAKEHOLDER INPUT.—Not later 

2 than February 1 of each year (beginning with 

3 2011), the consensus-based entity described in para4 graph (2) shall transmit to the Secretary the rec5 ommendations of multi-stakeholder groups provided 

6 under paragraph (2). Such recommendations shall 

7 be included in the transmissions the consensus-based 

8 entity makes to the Secretary under the contract 

9 provided for under section 1890. 

10 ‘‘(4) REQUIREMENT FOR TRANSPARENCY IN

11 PROCESS.— 

12 ‘‘(A) IN GENERAL.—In convening multi13 stakeholder groups under paragraph (2) with 

14 respect to the selection of quality measures, the 

15 consensus-based entity described in such para16 graph shall provide for an open and transparent 

17 process for the activities conducted pursuant to 

18 such convening. 

19 ‘‘(B) SELECTION OF ORGANIZATIONS PAR20 TICIPATING IN MULTI-STAKEHOLDER

21 GROUPS.—The process under paragraph (2) 

22 shall ensure that the selection of representatives 

23 of multi-stakeholder groups includes provision 

24 for public nominations for, and the opportunity 

25 for public comment on, such selection. 


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1 ‘‘(5) USE OF INPUT.—The respective proposed 

2 rule shall contain a summary of the recommenda3 tions made by the multi-stakeholder groups under 

4 paragraph (2), as well as other comments received 

5 regarding the proposed measures, and the extent to 

6 which such proposed rule follows such recommenda7 tions and the rationale for not following such rec8 ommendations. 

9 ‘‘(6) MULTI-STAKEHOLDER GROUPS.—For pur10 poses of this subsection, the term ‘multi-stakeholder 

11 groups’ means, with respect to a quality measure, a 

12 voluntary collaborative of organizations representing 

13 persons interested in or affected by the use of such 

14 quality measure, such as the following: 

15 ‘‘(A) Hospitals and other institutional pro16 viders. 

17 ‘‘(B) Physicians. 

18 ‘‘(C) Health care quality alliances. 

19 ‘‘(D) Nurses and other health care practi20 tioners. 

21 ‘‘(E) Health plans. 

22 ‘‘(F) Patient advocates and consumer 

23 groups. 

24 ‘‘(G) Employers. 


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1 ‘‘(H) Public and private purchasers of 

2 health care items and services. 

3 ‘‘(I) Labor organizations. 

4 ‘‘(J) Relevant departments or agencies of 

5 the United States. 

6 ‘‘(K) Biopharmaceutical companies and 

7 manufacturers of medical devices. 

8 ‘‘(L) Licensing, credentialing, and accred9 iting bodies. 

10 ‘‘(7) FUNDING.— 

11 ‘‘(A) IN GENERAL.—The Secretary shall 

12 provide for the transfer, from the Federal Hos13 pital Insurance Trust Fund under section 1817 

14 and the Federal Supplementary Medical Insur15 ance Trust Fund under section 1841 (in such 

16 proportion as the Secretary determines appro17 priate), of $1,000,000, to the Secretary for pur18 poses of carrying out this subsection for each of 

19 the fiscal years 2010 through 2014. 

20 ‘‘(B) AUTHORIZATION OF APPROPRIA21 TIONS.—For purposes of carrying out the provi22 sions of this subsection, in addition to funds 

23 otherwise available, out of any funds in the 

24 Treasury not otherwise appropriated, there are 

25 appropriated to the Secretary of Health and 


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1 Human Services $1,000,000 for each of the fis2 cal years 2010 through 2014.’’. 

3 SEC. 1444. APPLICATION OF QUALITY MEASURES. 

4 (a) INPATIENT HOSPITAL SERVICES.—Section 

5 1886(b)(3)(B) of such Act (42 U.S.C. 1395ww(b)(3)(B)) 

6 is amended by adding at the end the following new clause: 

7 ‘‘(x)(I) Subject to subclause (II), for purposes of re8 porting data on quality measures for inpatient hospital 

9 services furnished during fiscal year 2012 and each subse10 quent fiscal year, the quality measures specified under 

11 clause (viii) shall be measures selected by the Secretary 

12 from measures that have been endorsed by the entity with 

13 a contract with the Secretary under section 1890(a). 

14 ‘‘(II) In the case of a specified area or medical topic 

15 determined appropriate by the Secretary for which a fea16 sible and practical quality measure has not been endorsed 

17 by the entity with a contract under section 1890(a), the 

18 Secretary may specify a measure that is not so endorsed 

19 as long as due consideration is given to measures that 

20 have been endorsed or adopted by a consensus organiza21 tion identified by the Secretary. The Secretary shall sub22 mit such a non-endorsed measure to the entity for consid23 eration for endorsement. If the entity considers but does 

24 not endorse such a measure and if the Secretary does not 

25 phase-out use of such measure, the Secretary shall include 


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1 the rationale for continued use of such a measure in rule2 making.’’. 

3 (b) OUTPATIENT HOSPITAL SERVICES.—Section 

4 1833(t)(17) of such Act (42 U.S.C. 1395l(t)(17)) is 

5 amended by adding at the end the following new subpara6 graph: 

7 ‘‘(F) USE OF ENDORSED QUALITY MEAS8 URES.—The provisions of clause (x) of section 

9 1886(b)(3)(C) shall apply to quality measures 

10 for covered OPD services under this paragraph 

11 in the same manner as such provisions apply to 

12 quality measures for inpatient hospital serv13 ices.’’. 

14 (c) PHYSICIANS’ SERVICES.—Section 

15 1848(k)(2)(C)(ii) of such Act (42 U.S.C. 1395w– 

16 4(k)(2)(C)(ii)) is amended by adding at the end the fol17 lowing: ‘‘The Secretary shall submit such a non-endorsed 

18 measure to the entity for consideration for endorsement. 

19 If the entity considers but does not endorse such a meas20 ure and if the Secretary does not phase-out use of such 

21 measure, the Secretary shall include the rationale for con22 tinued use of such a measure in rulemaking.’’. 

23 (d) RENAL DIALYSIS SERVICES.—Section 

24 1881(h)(2)(B)(ii) of such Act (42 U.S.C. 

25 1395rr(h)(2)(B)(ii)) is amended by adding at the end the 


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1 following: ‘‘The Secretary shall submit such a non-en2 dorsed measure to the entity for consideration for endorse3 ment. If the entity considers but does not endorse such 

4 a measure and if the Secretary does not phase-out use 

5 of such measure, the Secretary shall include the rationale 

6 for continued use of such a measure in rulemaking.’’. 

7 (e) ENDORSEMENT OF STANDARDS.—Section 

8 1890(b)(2) of the Social Security Act (42 U.S.C. 

9 1395aaa(b)(2)) is amended by adding after and below sub10 paragraph (B) the following: 

11 ‘‘ ‘If the entity does not endorse a measure, such en12 tity shall explain the reasons and provide sugges13 tions about changes to such measure that might 

14 make it a potentially endorsable measure.’ ’’. 

15 (f) EFFECTIVE DATE.—Except as otherwise pro16 vided, the amendments made by this section shall apply 

17 to quality measures applied for payment years beginning 

18 with 2012 or fiscal year 2012, as the case may be. 

19 SEC. 1445. CONSENSUS-BASED ENTITY FUNDING. 

20 Section 1890(d) of the Social Security Act (42 U.S.C. 

21 1395aaa(d)) is amended by striking ‘‘for each of fiscal 

22 years 2009 through 2012’’ and inserting ‘‘for fiscal year 

23 2009, and $12,000,000 for each of the fiscal years 2010 

24 through 2012.’’ 


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1 Subtitle D—Physician Payments 

2 Sunshine Provision 

3 SEC. 1451. REPORTS ON FINANCIAL RELATIONSHIPS BE4 TWEEN MANUFACTURERS AND DISTRIBU5 TORS OF COVERED DRUGS, DEVICES, 

6 BIOLOGICALS, OR MEDICAL SUPPLIES 

7 UNDER MEDICARE, MEDICAID, OR CHIP AND 

8 PHYSICIANS AND OTHER HEALTH CARE ENTI9 TIES AND BETWEEN PHYSICIANS AND OTHER 

10 HEALTH CARE ENTITIES. 

11 (a) IN GENERAL.—Part A of title XI of the Social 

12 Security Act (42 U.S.C. 1301 et seq.), as amended by sec13 tion 1631(a), is further amended by inserting after section 

14 1128G the following new section: 

15 ‘‘SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS’ FINAN16 CIAL RELATIONSHIPS WITH MANUFACTUR17 ERS AND DISTRIBUTORS OF COVERED 

18 DRUGS, DEVICES, BIOLOGICALS, OR MEDICAL 

19 SUPPLIES UNDER MEDICARE, MEDICAID, OR 

20 CHIP AND WITH ENTITIES THAT BILL FOR 

21 SERVICES UNDER MEDICARE. 

22 ‘‘(a) REPORTING OF PAYMENTS OR OTHER TRANS23 FERS OF VALUE.— 

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

25 subsection, not later than March 31, 2011, and anVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01690 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 nually thereafter, each applicable manufacturer or 

2 distributor that provides a payment or other transfer 

3 of value to a covered recipient, or to an entity or in4 dividual at the request of or designated on behalf of 

5 a covered recipient, shall submit to the Secretary, in 

6 such electronic form as the Secretary shall require, 

7 the following information with respect to the pre8 ceding calendar year: 

9 ‘‘(A) With respect to the covered recipient, 

10 the recipient’s name, business address, physi11 cian specialty, and national provider identifier. 

12 ‘‘(B) With respect to the payment or other 

13 transfer of value, other than a drug sample— 

14 ‘‘(i) its value and date; 

15 ‘‘(ii) the name of the related drug, de16 vice, or supply, if available; and 

17 ‘‘(iii) a description of its form, indi18 cated (as appropriate for all that apply) 

19 as— 

20 ‘‘(I) cash or a cash equivalent; 

21 ‘‘(II) in-kind items or services; 

22 ‘‘(III) stock, a stock option, or 

23 any other ownership interest, divi24 dend, profit, or other return on invest25 ment; or 


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1 ‘‘(IV) any other form (as defined 

2 by the Secretary). 

3 ‘‘(C) With respect to a drug sample, the 

4 name, number, date, and dosage units of the 

5 sample. 

6 ‘‘(2) AGGREGATE REPORTING.—Information 

7 submitted by an applicable manufacturer or dis8 tributor under paragraph (1) shall include the ag9 gregate amount of all payments or other transfers of 

10 value provided by the manufacturer or distributor to 

11 covered recipients (and to entities or individuals at 

12 the request of or designated on behalf of a covered 

13 recipient) during the year involved, including all pay14 ments and transfers of value regardless of whether 

15 such payments or transfer of value were individually 

16 disclosed. 

17 ‘‘(3) SPECIAL RULE FOR CERTAIN PAYMENTS

18 OR OTHER TRANSFERS OF VALUE.—In the case 

19 where an applicable manufacturer or distributor pro20 vides a payment or other transfer of value to an en21 tity or individual at the request of or designated on 

22 behalf of a covered recipient, the manufacturer or 

23 distributor shall disclose that payment or other 

24 transfer of value under the name of the covered re25 cipient. 


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1 ‘‘(4) DELAYED REPORTING FOR PAYMENTS

2 MADE PURSUANT TO PRODUCT DEVELOPMENT

3 AGREEMENTS.—In the case of a payment or other 

4 transfer of value made to a covered recipient by an 

5 applicable manufacturer or distributor pursuant to a 

6 product development agreement for services fur7 nished in connection with the development of a new 

8 drug, device, biological, or medical supply, the appli9 cable manufacturer or distributor may report the 

10 value and recipient of such payment or other trans11 fer of value in the first reporting period under this 

12 subsection in the next reporting deadline after the 

13 earlier of the following: 

14 ‘‘(A) The date of the approval or clearance 

15 of the covered drug, device, biological, or med16 ical supply by the Food and Drug Administra17 tion. 

18 ‘‘(B) Two calendar years after the date 

19 such payment or other transfer of value was 

20 made. 

21 ‘‘(5) DELAYED REPORTING FOR PAYMENTS

22 MADE PURSUANT TO CLINICAL INVESTIGATIONS.—In 

23 the case of a payment or other transfer of value 

24 made to a covered recipient by an applicable manu25 facturer or distributor in connection with a clinical 


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1 investigation regarding a new drug, device, biologi2 cal, or medical supply, the applicable manufacturer 

3 or distributor may report as required under this sec4 tion in the next reporting period under this sub5 section after the earlier of the following: 

6 ‘‘(A) The date that the clinical investiga7 tion is registered on the website maintained by 

8 the National Institutes of Health pursuant to 

9 section 671 of the Food and Drug Administra10 tion Amendments Act of 2007. 

11 ‘‘(B) Two calendar years after the date 

12 such payment or other transfer of value was 

13 made. 

14 ‘‘(6) CONFIDENTIALITY.—Information de15 scribed in paragraph (4) or (5) shall be considered 

16 confidential and shall not be subject to disclosure 

17 under section 552 of title 5, United States Code, or 

18 any other similar Federal, State, or local law, until 

19 or after the date on which the information is made 

20 available to the public under such paragraph. 

21 ‘‘(b) REPORTING OF OWNERSHIP INTEREST BY PHY22 SICIANS IN HOSPITALS AND OTHER ENTITIES THAT BILL

23 MEDICARE.—Not later than March 31 of each year (be24 ginning with 2011), each hospital or other health care en25 tity (not including a Medicare Advantage organization) 


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1 that bills the Secretary under part A or part B of title 

2 XVIII for services shall report on the ownership shares 

3 (other than ownership shares described in section 1877(c)) 

4 of each physician who, directly or indirectly, owns an in5 terest in the entity. In this subsection, the term ‘physician’ 

6 includes a physician’s immediate family members (as de7 fined for purposes of section 1877(a)). 

8 ‘‘(c) PUBLIC AVAILABILITY.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall estab10 lish procedures to ensure that, not later than Sep11 tember 30, 2011, and on June 30 of each year be12 ginning thereafter, the information submitted under 

13 subsections (a) and (b), other than information re14 gard drug samples, with respect to the preceding 

15 calendar year is made available through an Internet 

16 website that— 

17 ‘‘(A) is searchable and is in a format that 

18 is clear and understandable; 

19 ‘‘(B) contains information that is pre20 sented by the name of the applicable manufac21 turer or distributor, the name of the covered re22 cipient, the business address of the covered re23 cipient, the specialty (if applicable) of the cov24 ered recipient, the value of the payment or 

25 other transfer of value, the date on which the 


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1 payment or other transfer of value was provided 

2 to the covered recipient, the form of the pay3 ment or other transfer of value, indicated (as 

4 appropriate) under subsection (a)(1)(B)(ii), the 

5 nature of the payment or other transfer of 

6 value, indicated (as appropriate) under sub7 section (a)(1)(B)(iii), and the name of the cov8 ered drug, device, biological, or medical supply, 

9 as applicable; 

10 ‘‘(C) contains information that is able to 

11 be easily aggregated and downloaded; 

12 ‘‘(D) contains a description of any enforce13 ment actions taken to carry out this section, in14 cluding any penalties imposed under subsection 

15 (d), during the preceding year; 

16 ‘‘(E) contains background information on 

17 industry-physician relationships; 

18 ‘‘(F) in the case of information submitted 

19 with respect to a payment or other transfer of 

20 value described in subsection (a)(5), lists such 

21 information separately from the other informa22 tion submitted under subsection (a) and des23 ignates such separately listed information as 

24 funding for clinical research; 


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1 ‘‘(G) contains any other information the 

2 Secretary determines would be helpful to the 

3 average consumer; and 

4 ‘‘(H) provides the covered recipient an op5 portunity to submit corrections to the informa6 tion made available to the public with respect to 

7 the covered recipient. 

8 ‘‘(2) ACCURACY OF REPORTING.—The accuracy 

9 of the information that is submitted under sub10 sections (a) and (b) and made available under para11 graph (1) shall be the responsibility of the applicable 

12 manufacturer or distributor of a covered drug, de13 vice, biological, or medical supply reporting under 

14 subsection (a) or hospital or other health care entity 

15 reporting physician ownership under subsection (b). 

16 The Secretary shall establish procedures to ensure 

17 that the covered recipient is provided with an oppor18 tunity to submit corrections to the manufacturer, 

19 distributor, hospital, or other entity reporting under 

20 subsection (a) or (b) with regard to information 

21 made public with respect to the covered recipient 

22 and, under such procedures, the corrections shall be 

23 transmitted to the Secretary. 

24 ‘‘(3) SPECIAL RULE FOR DRUG SAMPLES.—In25 formation relating to drug samples provided under 


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1 subsection (a) shall not be made available to the 

2 public by the Secretary but may be made available 

3 outside the Department of Health and Human Serv4 ices by the Secretary for research or legitimate busi5 ness purposes pursuant to data use agreements. 

6 ‘‘(4) SPECIAL RULE FOR NATIONAL PROVIDER

7 IDENTIFIERS.—Information relating to national pro8 vider identifiers provided under subsection (a) shall 

9 not be made available to the public by the Secretary 

10 but may be made available outside the Department 

11 of Health and Human Services by the Secretary for 

12 research or legitimate business purposes pursuant to 

13 data use agreements. 

14 ‘‘(d) PENALTIES FOR NONCOMPLIANCE.— 

15 ‘‘(1) FAILURE TO REPORT.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), except as provided in paragraph (2), 

18 any applicable manufacturer or distributor that 

19 fails to submit information required under sub20 section (a) in a timely manner in accordance 

21 with regulations promulgated to carry out such 

22 subsection, and any hospital or other entity that 

23 fails to submit information required under sub24 section (b) in a timely manner in accordance 

25 with regulations promulgated to carry out such 


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1 subsection shall be subject to a civil money pen2 alty of not less than $1,000, but not more than 

3 $10,000, for each payment or other transfer of 

4 value or ownership or investment interest not 

5 reported as required under such subsection. 

6 Such penalty shall be imposed and collected in 

7 the same manner as civil money penalties under 

8 subsection (a) of section 1128A are imposed 

9 and collected under that section. 

10 ‘‘(B) LIMITATION.—The total amount of 

11 civil money penalties imposed under subpara12 graph (A) with respect to each annual submis13 sion of information under subsection (a) by an 

14 applicable manufacturer or distributor or other 

15 entity shall not exceed $150,000. 

16 ‘‘(2) KNOWING FAILURE TO REPORT.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), any applicable manufacturer or dis19 tributor that knowingly fails to submit informa20 tion required under subsection (a) in a timely 

21 manner in accordance with regulations promul22 gated to carry out such subsection and any hos23 pital or other entity that fails to submit infor24 mation required under subsection (b) in a time25 ly manner in accordance with regulations proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01699 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mulgated to carry out such subsection, shall be 

2 subject to a civil money penalty of not less than 

3 $10,000, but not more than $100,000, for each 

4 payment or other transfer of value or ownership 

5 or investment interest not reported as required 

6 under such subsection. Such penalty shall be 

7 imposed and collected in the same manner as 

8 civil money penalties under subsection (a) of 

9 section 1128A are imposed and collected under 

10 that section. 

11 ‘‘(B) LIMITATION.—The total amount of 

12 civil money penalties imposed under subpara13 graph (A) with respect to each annual submis14 sion of information under subsection (a) or (b) 

15 by an applicable manufacturer, distributor, or 

16 entity shall not exceed $1,000,000, or, if great17 er, 0.1 percentage of the total annual revenues 

18 of the manufacturer, distributor, or entity. 

19 ‘‘(3) USE OF FUNDS.—Funds collected by the 

20 Secretary as a result of the imposition of a civil 

21 money penalty under this subsection shall be used to 

22 carry out this section. 

23 ‘‘(4) ENFORCEMENT THROUGH STATE ATTOR24 NEYS GENERAL.—The attorney general of a State, 

25 after providing notice to the Secretary of an intent 


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1 to proceed under this paragraph in a specific case 

2 and providing the Secretary with an opportunity to 

3 bring an action under this subsection and the Sec4 retary declining such opportunity, may proceed 

5 under this subsection against a manufacturer or dis6 tributor in the State. 

7 ‘‘(e) ANNUAL REPORT TO CONGRESS.—Not later 

8 than April 1 of each year beginning with 2011, the Sec9 retary shall submit to Congress a report that includes the 

10 following: 

11 ‘‘(1) The information submitted under this sec12 tion during the preceding year, aggregated for each 

13 applicable manufacturer or distributor of a covered 

14 drug, device, biological, or medical supply that sub15 mitted such information during such year. 

16 ‘‘(2) A description of any enforcement actions 

17 taken to carry out this section, including any pen18 alties imposed under subsection (d), during the pre19 ceding year. 

20 ‘‘(f) DEFINITIONS.—In this section: 

21 ‘‘(1) APPLICABLE MANUFACTURER; APPLICA22 BLE DISTRIBUTOR.—The term ‘applicable manufac23 turer’ means a manufacturer of a covered drug, de24 vice, biological, or medical supply, and the term ‘apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01701 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plicable distributor’ means a distributor of a covered 

2 drug, device, or medical supply. 

3 ‘‘(2) CLINICAL INVESTIGATION.—The term 

4 ‘clinical investigation’ means any experiment involv5 ing one or more human subjects, or materials de6 rived from human subjects, in which a drug or de7 vice is administered, dispensed, or used. 

8 ‘‘(3) COVERED DRUG, DEVICE, BIOLOGICAL, OR

9 MEDICAL SUPPLY.—The term ‘covered’ means, with 

10 respect to a drug, device, biological, or medical sup11 ply, such a drug, device, biological, or medical supply 

12 for which payment is available under title XVIII or 

13 a State plan under title XIX or XXI (or a waiver 

14 of such a plan). 

15 ‘‘(4) COVERED RECIPIENT.—The term ‘covered 

16 recipient’ means the following: 

17 ‘‘(A) A physician. 

18 ‘‘(B) A physician group practice. 

19 ‘‘(C) Any other prescriber of a covered 

20 drug, device, biological, or medical supply. 

21 ‘‘(D) A pharmacy or pharmacist. 

22 ‘‘(E) A health insurance issuer, group 

23 health plan, or other entity offering a health 

24 benefits plan, including any employee of such 

25 an issuer, plan, or entity. 


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1 ‘‘(F) A pharmacy benefit manager, includ2 ing any employee of such a manager. 

3 ‘‘(G) A hospital. 

4 ‘‘(H) A medical school. 

5 ‘‘(I) A sponsor of a continuing medical 

6 education program. 

7 ‘‘(J) A patient advocacy or disease specific 

8 group. 

9 ‘‘(K) A organization of health care profes10 sionals. 

11 ‘‘(L) A biomedical researcher. 

12 ‘‘(M) A group purchasing organization. 

13 ‘‘(5) DISTRIBUTOR OF A COVERED DRUG, DE14 VICE, OR MEDICAL SUPPLY.—The term ‘distributor 

15 of a covered drug, device, or medical supply’ means 

16 any entity which is engaged in the marketing or dis17 tribution of a covered drug, device, or medical sup18 ply (or any subsidiary of or entity affiliated with 

19 such entity), but does not include a wholesale phar20 maceutical distributor. 

21 ‘‘(6) EMPLOYEE.—The term ‘employee’ has the 

22 meaning given such term in section 1877(h)(2). 

23 ‘‘(7) KNOWINGLY.—The term ‘knowingly’ has 

24 the meaning given such term in section 3729(b) of 

25 title 31, United States Code. 


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1 ‘‘(8) MANUFACTURER OF A COVERED DRUG, 

2 DEVICE, BIOLOGICAL, OR MEDICAL SUPPLY.—The 

3 term ‘manufacturer of a covered drug, device, bio4 logical, or medical supply’ means any entity which is 

5 engaged in the production, preparation, propagation, 

6 compounding, conversion, processing, marketing, or 

7 distribution of a covered drug, device, biological, or 

8 medical supply (or any subsidiary of or entity affili9 ated with such entity). 

10 ‘‘(9) PAYMENT OR OTHER TRANSFER OF

11 VALUE.— 

12 ‘‘(A) IN GENERAL.—The term ‘payment or 

13 other transfer of value’ means a transfer of 

14 anything of value for or of any of the following: 

15 ‘‘(i) Gift, food, or entertainment. 

16 ‘‘(ii) Travel or trip. 

17 ‘‘(iii) Honoraria. 

18 ‘‘(iv) Research funding or grant. 

19 ‘‘(v) Education or conference funding. 

20 ‘‘(vi) Consulting fees. 

21 ‘‘(vii) Ownership or investment inter22 est and royalties or license fee. 

23 ‘‘(B) INCLUSIONS.—Subject to subpara24 graph (C), the term ‘payment or other transfer 

25 of value’ includes any compensation, gift, honoVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01704 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 rarium, speaking fee, consulting fee, travel, 

2 services, dividend, profit distribution, stock or 

3 stock option grant, or any ownership or invest4 ment interest held by a physician in a manufac5 turer (excluding a dividend or other profit dis6 tribution from, or ownership or investment in7 terest in, a publicly traded security or mutual 

8 fund (as described in section 1877(c))). 

9 ‘‘(C) EXCLUSIONS.—The term ‘payment or 

10 other transfer of value’ does not include the fol11 lowing: 

12 ‘‘(i) Any payment or other transfer of 

13 value provided by an applicable manufac14 turer or distributor to a covered recipient 

15 where the amount transferred to, requested 

16 by, or designated on behalf of the covered 

17 recipient does not exceed $5. 

18 ‘‘(ii) The loan of a covered device for 

19 a short-term trial period, not to exceed 90 

20 days, to permit evaluation of the covered 

21 device by the covered recipient. 

22 ‘‘(iii) Items or services provided under 

23 a contractual warranty, including the re24 placement of a covered device, where the 

25 terms of the warranty are set forth in the 


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1 purchase or lease agreement for the cov2 ered device. 

3 ‘‘(iv) A transfer of anything of value 

4 to a covered recipient when the covered re5 cipient is a patient and not acting in the 

6 professional capacity of a covered recipient. 

7 ‘‘(v) In-kind items used for the provi8 sion of charity care. 

9 ‘‘(vi) A dividend or other profit dis10 tribution from, or ownership or investment 

11 interest in, a publicly traded security and 

12 mutual fund (as described in section 

13 1877(c)). 

14 ‘‘(vii) Compensation paid by a manu15 facturer or distributor of a covered drug, 

16 device, biological, or medical supply to a 

17 covered recipient who is directly employed 

18 by and works solely for such manufacturer 

19 or distributor. 

20 ‘‘(viii) Any discount or cash rebate. 

21 ‘‘(10) PHYSICIAN.—The term ‘physician’ has 

22 the meaning given that term in section 1861(r). For 

23 purposes of this section, such term does not include 

24 a physician who is an employee of the applicable 


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1 manufacturer that is required to submit information 

2 under subsection (a). 

3 ‘‘(g) ANNUAL REPORTS TO STATES.—Not later than 

4 April 1 of each year beginning with 2011, the Secretary 

5 shall submit to States a report that includes a summary 

6 of the information submitted under subsections (a) and 

7 (d) during the preceding year with respect to covered re8 cipients or other hospitals and entities in the State. 

9 ‘‘(h) RELATION TO STATE LAWS.— 

10 ‘‘(1) IN GENERAL.—Effective on January 1, 

11 2011, subject to paragraph (2), the provisions of 

12 this section shall preempt any law or regulation of 

13 a State or of a political subdivision of a State that 

14 requires an applicable manufacturer and applicable 

15 distributor (as such terms are defined in subsection 

16 (f)) to disclose or report, in any format, the type of 

17 information (described in subsection (a)) regarding a 

18 payment or other transfer of value provided by the 

19 manufacturer to a covered recipient (as so defined). 

20 ‘‘(2) NO PREEMPTION OF ADDITIONAL RE21 QUIREMENTS.—Paragraph (1) shall not preempt any 

22 law or regulation of a State or of a political subdivi23 sion of a State that requires any of the following: 


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1 ‘‘(A) The disclosure or reporting of infor2 mation not of the type required to be disclosed 

3 or reported under this section. 

4 ‘‘(B) The disclosure or reporting, in any 

5 format, of the type of information required to 

6 be disclosed or reported under this section to a 

7 Federal, State, or local governmental agency for 

8 public health surveillance, investigation, or 

9 other public health purposes or health oversight 

10 purposes. 

11 ‘‘(C) The discovery or admissibility of in12 formation described in this section in a crimi13 nal, civil, or administrative proceeding.’’. 

14 (b) AVAILABILITY OF INFORMATION FROM THE DIS15 CLOSURE OF FINANCIAL RELATIONSHIP REPORT

16 (DFRR).—The Secretary of Health and Human Services 

17 shall submit to Congress a report on the full results of 

18 the Disclosure of Physician Financial Relationships sur19 veys required pursuant to section 5006 of the Deficit Re20 duction Act of 2005. Such report shall be submitted to 

21 Congress not later than the date that is 6 months after 

22 the date such surveys are collected and shall be made pub23 licly available on an Internet website of the Department 

24 of Health and Human Services. 


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1 Subtitle E—Public Reporting on 

2 Health Care-Associated Infections 

3 SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY 

4 HOSPITALS AND AMBULATORY SURGICAL 

5 CENTERS ON HEALTH CARE-ASSOCIATED IN6 FECTIONS. 

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

8 is amended by inserting after section 1138 the following 

9 section: 

10 ‘‘SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY 

11 HOSPITALS AND AMBULATORY SURGICAL 

12 CENTERS ON HEALTH CARE-ASSOCIATED IN13 FECTIONS. 

14 ‘‘(a) REPORTING REQUIREMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall provide 

16 that a hospital (as defined in subsection (g)) or am17 bulatory surgical center meeting the requirements of 

18 titles XVIII or XIX may participate in the programs 

19 established under such titles (pursuant to the appli20 cable provisions of law, including sections 

21 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in accord22 ance with this section, the hospital or center reports 

23 such information on health care-associated infections 

24 that develop in the hospital or center (and such deVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01709 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mographic information associated with such infec2 tions) as the Secretary specifies. 

3 ‘‘(2) REPORTING PROTOCOLS.—Such informa4 tion shall be reported in accordance with reporting 

5 protocols established by the Secretary through the 

6 Director of the Centers for Disease Control and Pre7 vention (in this section referred to as the ‘CDC’) 

8 and to the National Healthcare Safety Network of 

9 the CDC or under such another reporting system of 

10 such Centers as determined appropriate by the Sec11 retary in consultation with such Director. 

12 ‘‘(3) COORDINATION WITH HIT.—The Sec13 retary, through the Director of the CDC and the Of14 fice of the National Coordinator for Health Informa15 tion Technology, shall ensure that the transmission 

16 of information under this subsection is coordinated 

17 with systems established under the HITECH Act, 

18 where appropriate. 

19 ‘‘(4) PROCEDURES TO ENSURE THE VALIDITY

20 OF INFORMATION.—The Secretary shall establish 

21 procedures regarding the validity of the information 

22 submitted under this subsection in order to ensure 

23 that such information is appropriately compared 

24 across hospitals and centers. Such procedures shall 


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1 address failures to report as well as errors in report2 ing. 

3 ‘‘(5) IMPLEMENTATION.—Not later than 1 year 

4 after the date of enactment of this section, the Sec5 retary, through the Director of CDC, shall promul6 gate regulations to carry out this section. 

7 ‘‘(b) PUBLIC POSTING OF INFORMATION.—The Sec8 retary shall promptly post, on the official public Internet 

9 site of the Department of Health and Human Services, 

10 the information reported under subsection (a). Such infor11 mation shall be set forth in a manner that allows for the 

12 comparison of information on health care-associated infec13 tions— 

14 ‘‘(1) among hospitals and ambulatory surgical 

15 centers; and 

16 ‘‘(2) by demographic information. 

17 ‘‘(c) ANNUAL REPORT TO CONGRESS.—On an annual 

18 basis the Secretary shall submit to the Congress a report 

19 that summarizes each of the following: 

20 ‘‘(1) The number and types of health care-asso21 ciated infections reported under subsection (a) in 

22 hospitals and ambulatory surgical centers during 

23 such year. 


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1 ‘‘(2) Factors that contribute to the occurrence 

2 of such infections, including health care worker im3 munization rates. 

4 ‘‘(3) Based on the most recent information 

5 available to the Secretary on the composition of the 

6 professional staff of hospitals and ambulatory sur7 gical centers, the number of certified infection con8 trol professionals on the staff of hospitals and ambu9 latory surgical centers. 

10 ‘‘(4) The total increases or decreases in health 

11 care costs that resulted from increases or decreases 

12 in the rates of occurrence of each such type of infec13 tion during such year. 

14 ‘‘(5) Recommendations, in coordination with the 

15 Center for Quality Improvement established under 

16 section 931 of the Public Health Service Act, for 

17 best practices to eliminate the rates of occurrence of 

18 each such type of infection in hospitals and ambula19 tory surgical centers. 

20 ‘‘(d) NON-PREEMPTION OF STATE LAWS.—Nothing 

21 in this section shall be construed as preempting or other22 wise affecting any provision of State law relating to the 

23 disclosure of information on health care-associated infec24 tions or patient safety procedures for a hospital or ambu25 latory surgical center. 


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1 ‘‘(e) HEALTH CARE-ASSOCIATED INFECTION.—For 

2 purposes of this section: 

3 ‘‘(1) IN GENERAL.—The term ‘health care-asso4 ciated infection’ means an infection that develops in 

5 a patient who has received care in any institutional 

6 setting where health care is delivered and is related 

7 to receiving health care. 

8 ‘‘(2) RELATED TO RECEIVING HEALTH CARE.— 

9 The term ‘related to receiving health care’, with re10 spect to an infection, means that the infection was 

11 not incubating or present at the time health care 

12 was provided. 

13 ‘‘(f) APPLICATION TO CRITICAL ACCESS HOS14 PITALS.—For purposes of this section, the term ‘hospital’ 

15 includes a critical access hospital, as defined in section 

16 1861(mm)(1).’’. 

17 (b) EFFECTIVE DATE.—With respect to section 

18 1138A of the Social Security Act (as inserted by sub19 section (a) of this section), the requirement under such 

20 section that hospitals and ambulatory surgical centers 

21 submit reports takes effect on such date (not later than 

22 2 years after the date of the enactment of this Act) as 

23 the Secretary of Health and Human Services shall specify. 

24 In order to meet such deadline, the Secretary may imple25 ment such section through guidance or other instructions. 


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1 (c) GAO REPORT.—Not later than 18 months after 

2 the date of the enactment of this Act, the Comptroller 

3 General of the United States shall submit to Congress a 

4 report on the program established under section 1138A 

5 of the Social Security Act, as inserted by subsection (a). 

6 Such report shall include an analysis of the appropriate7 ness of the types of information required for submission, 

8 compliance with reporting requirements, the success of the 

9 validity procedures established, and any conflict or overlap 

10 between the reporting required under such section and any 

11 other reporting systems mandated by either the States or 

12 the Federal Government. 

13 (d) REPORT ON ADDITIONAL DATA.—Not later than 

14 18 months after the date of the enactment of this Act, 

15 the Secretary of Health and Human Services shall submit 

16 to the Congress a report on the appropriateness of expand17 ing the requirements under such section to include addi18 tional information (such as health care worker immuniza19 tion rates), in order to improve health care quality and 

20 patient safety. 


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1 TITLE M—MEDICARE GRADUATE 

2 MEDICAL EDUCATION 

3 SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSI4 TIONS. 

5 (a) IN GENERAL.—Section 1886(h) of the Social Se6 curity Act (42 U.S.C. 1395ww(h)) is amended— 

7 (1) in paragraph (4)(F)(i), by striking ‘‘para8 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

9 (2) in paragraph (4)(H)(i), by striking ‘‘para10 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

11 (3) in paragraph (7)(E), by inserting ‘‘and 

12 paragraph (8)’’ after ‘‘this paragraph’’; and 

13 (4) by adding at the end the following new 

14 paragraph: 

15 ‘‘(8) ADDITIONAL REDISTRIBUTION OF UNUSED

16 RESIDENCY POSITIONS.— 

17 ‘‘(A) REDUCTIONS IN LIMIT BASED ON UN18 USED POSITIONS.— 

19 ‘‘(i) PROGRAMS SUBJECT TO REDUC20 TION.—If a hospital’s reference resident 

21 level (specified in clause (ii)) is less than 

22 the otherwise applicable resident limit (as 

23 defined in subparagraph (C)(ii)), effective 

24 for portions of cost reporting periods oc25 curring on or after July 1, 2011, the othVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01715 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erwise applicable resident limit shall be re2 duced by 90 percent of the difference be3 tween such otherwise applicable resident 

4 limit and such reference resident level. 

5 ‘‘(ii) REFERENCE RESIDENT LEVEL.— 

6 ‘‘(I) IN GENERAL.—Except as 

7 otherwise provided in a subsequent 

8 subclause, the reference resident level 

9 specified in this clause for a hospital 

10 is the highest resident level for any of 

11 the 3 most recent cost reporting peri12 ods (ending before the date of the en13 actment of this paragraph) of the hos14 pital for which a cost report has been 

15 settled (or, if not, submitted (subject 

16 to audit)), as determined by the Sec17 retary. 

18 ‘‘(II) USE OF MOST RECENT AC19 COUNTING PERIOD TO RECOGNIZE EX20 PANSION OF EXISTING PROGRAMS.—If 

21 a hospital submits a timely request to 

22 increase its resident level due to an 

23 expansion, or planned expansion, of 

24 an existing residency training pro25 gram that is not reflected on the most 


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1 recent settled or submitted cost re2 port, after audit and subject to the 

3 discretion of the Secretary, subject to 

4 subclause (IV), the reference resident 

5 level for such hospital is the resident 

6 level that includes the additional resi7 dents attributable to such expansion 

8 or establishment, as determined by 

9 the Secretary. The Secretary is au10 thorized to determine an alternative 

11 reference resident level for a hospital 

12 that submitted to the Secretary a 

13 timely request, before the start of the 

14 2009–2010 academic year, for an in15 crease in its reference resident level 

16 due to a planned expansion. 

17 ‘‘(III) SPECIAL PROVIDER

18 AGREEMENT.—In the case of a hos19 pital described in paragraph 

20 (4)(H)(v), the reference resident level 

21 specified in this clause is the limita22 tion applicable under subclause (I) of 

23 such paragraph. 

24 ‘‘(IV) PREVIOUS REDISTRIBU25 TION.—The reference resident level 


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1 specified in this clause for a hospital 

2 shall be increased to the extent re3 quired to take into account an in4 crease in resident positions made 

5 available to the hospital under para6 graph (7)(B) that are not otherwise 

7 taken into account under a previous 

8 subclause. 

9 ‘‘(iii) AFFILIATION.—The provisions 

10 of clause (i) shall be applied to hospitals 

11 which are members of the same affiliated 

12 group (as defined by the Secretary under 

13 paragraph (4)(H)(ii)) and to the extent the 

14 hospitals can demonstrate that they are 

15 filling any additional resident slots allo16 cated to other hospitals through an affili17 ation agreement, the Secretary shall adjust 

18 the determination of available slots accord19 ingly, or which the Secretary otherwise has 

20 permitted the resident positions (under 

21 section 402 of the Social Security Amend22 ments of 1967) to be aggregated for pur23 poses of applying the resident position lim24 itations under this subsection. 

25 ‘‘(B) REDISTRIBUTION.— 


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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall increase the otherwise applicable resi3 dent limit for each qualifying hospital that 

4 submits an application under this subpara5 graph by such number as the Secretary 

6 may approve for portions of cost reporting 

7 periods occurring on or after July 1, 2011. 

8 The estimated aggregate number of in9 creases in the otherwise applicable resident 

10 limit under this subparagraph may not ex11 ceed the Secretary’s estimate of the aggre12 gate reduction in such limits attributable 

13 to subparagraph (A). 

14 ‘‘(ii) REQUIREMENTS FOR QUALI15 FYING HOSPITALS.—A hospital is not a 

16 qualifying hospital for purposes of this 

17 paragraph unless the following require18 ments are met: 

19 ‘‘(I) MAINTENANCE OF PRIMARY

20 CARE RESIDENT LEVEL.—The hos21 pital maintains the number of primary 

22 care residents at a level that is not 

23 less than the base level of primary 

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1 dent positions provided to the hospital 

2 under this subparagraph. For pur3 poses of this subparagraph, the ‘base 

4 level of primary care residents’ for a 

5 hospital is the level of such residents 

6 as of a base period (specified by the 

7 Secretary), determined without regard 

8 to whether such positions were in ex9 cess of the otherwise applicable resi10 dent limit for such period but taking 

11 into account the application of sub12 clauses (II) and (III) of subparagraph 

13 (A)(ii). 

14 ‘‘(II) DEDICATED ASSIGNMENT

15 OF ADDITIONAL RESIDENT POSITIONS

16 TO PRIMARY CARE.—The hospital as17 signs all such additional resident posi18 tions for primary care residents. 

19 ‘‘(III) ACCREDITATION.—The 

20 hospital’s residency programs in pri21 mary care are fully accredited or, in 

22 the case of a residency training pro23 gram not in operation as of the base 

24 year, the hospital is actively applying 

25 for such accreditation for the program 


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1 for such additional resident positions 

2 (as determined by the Secretary). 

3 ‘‘(iii) CONSIDERATIONS IN REDIS4 TRIBUTION.—In determining for which 

5 qualifying hospitals the increase in the oth6 erwise applicable resident limit is provided 

7 under this subparagraph, the Secretary 

8 shall take into account the demonstrated 

9 likelihood of the hospital filling the posi10 tions within the first 3 cost reporting peri11 ods beginning on or after July 1, 2011, 

12 made available under this subparagraph, 

13 as determined by the Secretary. 

14 ‘‘(iv) PRIORITY FOR CERTAIN HOS15 PITALS.—In determining for which quali16 fying hospitals the increase in the other17 wise applicable resident limit is provided 

18 under this subparagraph, the Secretary 

19 shall distribute the increase to qualifying 

20 hospitals based on the following criteria: 

21 ‘‘(I) The Secretary shall give 

22 preference to hospitals that had a re23 duction in resident training positions 

24 under subparagraph (A). 


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1 ‘‘(II) The Secretary shall give 

2 preference to hospitals with 3-year 

3 primary care residency training pro4 grams, such as family practice and 

5 general internal medicine. 

6 ‘‘(III) The Secretary shall give 

7 preference to hospitals insofar as they 

8 have in effect formal arrangements 

9 (as determined by the Secretary) that 

10 place greater emphasis upon training 

11 in Federally qualified health centers, 

12 rural health clinics, and other nonpro13 vider settings, and to hospitals that 

14 receive additional payments under 

15 subsection (d)(5)(F) and emphasize 

16 training in an outpatient department. 

17 ‘‘(IV) The Secretary shall give 

18 preference to hospitals with a number 

19 of positions (as of July 1, 2009) in 

20 excess of the otherwise applicable resi21 dent limit for such period. 

22 ‘‘(V) The Secretary shall give 

23 preference to hospitals that place 

24 greater emphasis upon training in a 

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1 ignated under section 332 of the Pub2 lic Health Service Act) or a health 

3 professional needs area (designated 

4 under section 2211 of such Act). 

5 ‘‘(VI) The Secretary shall give 

6 preference to hospitals in States that 

7 have low resident-to-population ratios 

8 (including a greater preference for 

9 those States with lower resident-to10 population ratios). 

11 ‘‘(v) LIMITATION.—In no case shall 

12 more than 20 full-time equivalent addi13 tional residency positions be made available 

14 under this subparagraph with respect to 

15 any hospital. 

16 ‘‘(vi) APPLICATION OF PER RESIDENT

17 AMOUNTS FOR PRIMARY CARE.—With re18 spect to additional residency positions in a 

19 hospital attributable to the increase pro20 vided under this subparagraph, the ap21 proved FTE resident amounts are deemed 

22 to be equal to the hospital per resident 

23 amounts for primary care and nonprimary 

24 care computed under paragraph (2)(D) for 

25 that hospital. 


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1 ‘‘(vi) DISTRIBUTION.—The Secretary 

2 shall distribute the increase in resident 

3 training positions to qualifying hospitals 

4 under this subparagraph not later than 

5 July 1, 2011. 

6 ‘‘(C) RESIDENT LEVEL AND LIMIT DE7 FINED.—In this paragraph: 

8 ‘‘(i) The term ‘resident level’ has the 

9 meaning given such term in paragraph 

10 (7)(C)(i). 

11 ‘‘(ii) The term ‘otherwise applicable 

12 resident limit’ means, with respect to a 

13 hospital, the limit otherwise applicable 

14 under subparagraphs (F)(i) and (H) of 

15 paragraph (4) on the resident level for the 

16 hospital determined without regard to this 

17 paragraph but taking into account para18 graph (7)(A). 

19 ‘‘(D) MAINTENANCE OF PRIMARY CARE

20 RESIDENT LEVEL.—In carrying out this para21 graph, the Secretary shall require hospitals that 

22 receive additional resident positions under sub23 paragraph (B)— 

24 ‘‘(i) to maintain records, and periodi25 cally report to the Secretary, on the numVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01724 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ber of primary care residents in its resi2 dency training programs; and 

3 ‘‘(ii) as a condition of payment for a 

4 cost reporting period under this subsection 

5 for such positions, to maintain the level of 

6 such positions at not less than the sum 

7 of— 

8 ‘‘(I) the base level of primary 

9 care resident positions (as determined 

10 under subparagraph (B)(ii)(I)) before 

11 receiving such additional positions; 

12 and 

13 ‘‘(II) the number of such addi14 tional positions.’’. 

15 (b) IME.— 

16 (1) IN GENERAL.—Section 1886(d)(5)(B)(v) of 

17 the Social Security Act (42 U.S.C. 

18 1395ww(d)(5)(B)(v)), in the second sentence, is 

19 amended— 

20 (A) by striking ‘‘subsection (h)(7)’’ and in21 serting ‘‘subsections (h)(7) and (h)(8)’’; and 

22 (B) by striking ‘‘it applies’’ and inserting 

23 ‘‘they apply’’. 

24 (2) CONFORMING PROVISION.—Section 

25 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 


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1 1395ww(d)(5)(B)) is amended by adding at the end 

2 the following clause: 

3 ‘‘(x) For discharges occurring on or after July 1, 

4 2011, insofar as an additional payment amount under this 

5 subparagraph is attributable to resident positions distrib6 uted to a hospital under subsection (h)(8)(B), the indirect 

7 teaching adjustment factor shall be computed in the same 

8 manner as provided under clause (ii) with respect to such 

9 resident positions.’’. 

10 (c) CONFORMING AMENDMENT.—Section 422(b)(2) 

11 of the Medicare Prescription Drug, Improvement, and 

12 Modernization Act of 2003 (Public Law 108–173) is 

13 amended by striking ‘‘section 1886(h)(7)’’ and all that fol14 lows and inserting ‘‘paragraphs (7) and (8) of subsection 

15 (h) of section 1886 of the Social Security Act’’. 

16 SEC. 1502. INCREASING TRAINING IN NONPROVIDER SET17 TINGS. 

18 (a) DIRECT GME.—Section 1886(h)(4)(E) of the So19 cial Security Act (42 U.S.C. 1395ww(h)) is amended— 

20 (1) by designating the first sentence as a clause 

21 (i) with the heading ‘‘IN GENERAL’’ and appropriate 

22 indentation; 

23 (2) by striking ‘‘shall be counted and that all 

24 the time’’ and inserting ‘‘shall be counted and 

25 that— 


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1 ‘‘(I) effective for cost reporting 

2 periods beginning before July 1, 2009, 

3 all the time’’; 

4 (3) in subclause (I), as inserted by paragraph 

5 (1), by striking the period at the end and inserting 

6 ‘‘; and’’; and 

7 (A) by inserting after subclause (I), as so 

8 inserted, the following: 

9 ‘‘(II) effective for cost reporting 

10 periods beginning on or after July 1, 

11 2009, all the time so spent by a resi12 dent shall be counted towards the de13 termination of full-time equivalency, 

14 without regard to the setting in which 

15 the activities are performed, if the 

16 hospital incurs the costs of the sti17 pends and fringe benefits of the resi18 dent during the time the resident 

19 spends in that setting. 

20 Any hospital claiming under this subpara21 graph for time spent in a nonprovider set22 ting shall maintain and make available to 

23 the Secretary records regarding the 

24 amount of such time and such amount in 

25 comparison with amounts of such time in 


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1 such base year as the Secretary shall speci2 fy.’’. 

3 (b) IME.—Section 1886(d)(5)(B)(iv) of the Social 

4 Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amend5 ed— 

6 (1) by striking ‘‘(iv) Effective for discharges oc7 curring on or after October 1, 1997’’ and inserting 

8 ‘‘(iv)(I) Effective for discharges occurring on or 

9 after October 1, 1997, and before July 1, 2009’’; 

10 and 

11 (2) by inserting after subclause (I), as inserted 

12 by paragraph (1), the following new subclause: 

13 ‘‘(II) Effective for discharges occurring on or 

14 after July 1, 2009, all the time spent by an intern 

15 or resident in patient care activities at an entity in 

16 a nonprovider setting shall be counted towards the 

17 determination of full-time equivalency if the hospital 

18 incurs the costs of the stipends and fringe benefits 

19 of the intern or resident during the time the intern 

20 or resident spends in that setting.’’. 

21 (c) OIG STUDY ON IMPACT ON TRAINING.—The In22 spector General of the Department of Health and Human 

23 Services shall analyze the data collected by the Secretary 

24 of Health and Human Services from the records made 

25 available to the Secretary under section 1886(h)(4)(E) of 


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

2 order to assess the extent to which there is an increase 

3 in time spent by medical residents in training in nonpro4 vider settings as a result of the amendments made by this 

5 section. Not later than 4 years after the date of the enact6 ment of this Act, the Inspector General shall submit a re7 port to Congress on such analysis and assessment. 

8 (d) DEMONSTRATION PROJECT FOR APPROVED

9 TEACHING HEALTH CENTERS.— 

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

11 Human Services shall conduct a demonstration 

12 project under which an approved teaching health 

13 center (as defined in paragraph (3)) would be eligi14 ble for payment under subsections (h) and (k) of 

15 section 1886 of the Social Security Act (42 U.S.C. 

16 1395ww) of amounts for its own direct costs of 

17 graduate medical education activities for primary 

18 care residents, as well as for the direct costs of grad19 uate medical education activities of its contracting 

20 hospital for such residents, in a manner similar to 

21 the manner in which such payments would be made 

22 to a hospital if the hospital were to operate such a 

23 program. 

24 (2) CONDITIONS.—Under the demonstration 

25 project— 


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1 (A) an approved teaching health center 

2 shall contract with an accredited teaching hos3 pital to carry out the inpatient responsibilities 

4 of the primary care residency program of the 

5 hospital involved and is responsible for payment 

6 to the hospital for the hospital’s costs of the 

7 salary and fringe benefits for residents in the 

8 program; 

9 (B) the number of primary care residents 

10 of the center shall not count against the con11 tracting hospital’s resident limit; and 

12 (C) the contracting hospital shall agree not 

13 to diminish the number of residents in its pri14 mary care residency training program. 

15 (3) APPROVED TEACHING HEALTH CENTER DE16 FINED.—In this subsection, the term ‘‘approved 

17 teaching health center’’ means a nonprovider setting, 

18 such as a Federally qualified health center or rural 

19 health clinic (as defined in section 1861(aa) of the 

20 Social Security Act), that develops and operates an 

21 accredited primary care residency program for which 

22 funding would be available if it were operated by a 

23 hospital. 


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1 SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI2 DACTIC AND SCHOLARLY ACTIVITIES AND 

3 OTHER ACTIVITIES. 

4 (a) DIRECT GME.—Section 1886(h) of the Social Se5 curity Act (42 U.S.C. 1395ww(h)) is amended— 

6 (1) in paragraph (4)(E), as amended by section 

7 1502(a)— 

8 (A) in clause (i), by striking ‘‘Such rules’’ 

9 and inserting ‘‘Subject to clause (ii), such 

10 rules’’; and 

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

12 clause: 

13 ‘‘(ii) TREATMENT OF CERTAIN NON14 PROVIDER AND DIDACTIC ACTIVITIES.— 

15 Such rules shall provide that all time spent 

16 by an intern or resident in an approved 

17 medical residency training program in a 

18 nonprovider setting that is primarily en19 gaged in furnishing patient care (as de20 fined in paragraph (5)(K)) in nonpatient 

21 care activities, such as didactic conferences 

22 and seminars, but not including research 

23 not associated with the treatment or diag24 nosis of a particular patient, as such time 

25 and activities are defined by the Secretary, 


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1 shall be counted toward the determination 

2 of full-time equivalency.’’; 

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

4 following new subparagraph: 

5 ‘‘(I) In determining the hospital’s number 

6 of full-time equivalent residents for purposes of 

7 this subsection, all the time that is spent by an 

8 intern or resident in an approved medical resi9 dency training program on vacation, sick leave, 

10 or other approved leave, as such time is defined 

11 by the Secretary, and that does not prolong the 

12 total time the resident is participating in the 

13 approved program beyond the normal duration 

14 of the program shall be counted toward the de15 termination of full-time equivalency.’’; and 

16 (3) in paragraph (5), by adding at the end the 

17 following new subparagraph: 

18 ‘‘(K) NONPROVIDER SETTING THAT IS PRI19 MARILY ENGAGED IN FURNISHING PATIENT

20 CARE.—The term ‘nonprovider setting that is 

21 primarily engaged in furnishing patient care’ 

22 means a nonprovider setting in which the pri23 mary activity is the care and treatment of pa24 tients, as defined by the Secretary.’’. 


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1 (b) IME DETERMINATIONS.—Section 1886(d)(5)(B) 

2 of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by 

3 section 1501(b), is amended by adding at the end the fol4 lowing new clause: 

5 ‘‘(xi)(I) The provisions of subparagraph (I) of sub6 section (h)(4) shall apply under this subparagraph in the 

7 same manner as they apply under such subsection. 

8 ‘‘(II) In determining the hospital’s number of full9 time equivalent residents for purposes of this subpara10 graph, all the time spent by an intern or resident in an 

11 approved medical residency training program in non12 patient care activities, such as didactic conferences and 

13 seminars, as such time and activities are defined by the 

14 Secretary, that occurs in the hospital shall be counted to15 ward the determination of full-time equivalency if the hos16 pital— 

17 ‘‘(aa) is recognized as a subsection (d) hospital; 

18 ‘‘(bb) is recognized as a subsection (d) Puerto 

19 Rico hospital; 

20 ‘‘(cc) is reimbursed under a reimbursement sys21 tem authorized under section 1814(b)(3); or 

22 ‘‘(dd) is a provider-based hospital outpatient de23 partment. 

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1 graph, all the time spent by an intern or resident in an 

2 approved medical residency training program in research 

3 activities that are not associated with the treatment or di4 agnosis of a particular patient, as such time and activities 

5 are defined by the Secretary, shall not be counted toward 

6 the determination of full-time equivalency.’’. 

7 (c) EFFECTIVE DATES; APPLICATION.— 

8 (1) IN GENERAL.—Except as otherwise pro9 vided, the Secretary of Health and Human Services 

10 shall implement the amendments made by this sec11 tion in a manner so as to apply to cost reporting pe12 riods beginning on or after January 1, 1983. 

13 (2) DIRECT GME.—Section 1886(h)(4)(E)(ii) of 

14 the Social Security Act, as added by subsection 

15 (a)(1)(B), shall apply to cost reporting periods be16 ginning on or after July 1, 2008. 

17 (3) IME.—Section 1886(d)(5)(B)(x)(III) of the 

18 Social Security Act, as added by subsection (b), shall 

19 apply to cost reporting periods beginning on or after 

20 October 1, 2001. Such section, as so added, shall 

21 not give rise to any inference on how the law in ef22 fect prior to such date should be interpreted. 

23 (4) APPLICATION.—The amendments made by 

24 this section shall not be applied in a manner that re25 quires reopening of any settled hospital cost reports 


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1 as to which there is not a jurisdictionally proper ap2 peal pending as of the date of the enactment of this 

3 Act on the issue of payment for indirect costs of 

4 medical education under section 1886(d)(5)(B) of 

5 the Social Security Act or for direct graduate med6 ical education costs under section 1886(h) of such 

7 Act. 

8 SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS 

9 FROM CLOSED HOSPITALS. 

10 (a) DIRECT GME.—Section 1886(h)(4)(H) of the So11 cial Security Act (42 U.S.C. Section 1395ww(h)(4)(H)) 

12 is amended by adding at the end the following new clause: 

13 ‘‘(vi) REDISTRIBUTION OF RESIDENCY

14 SLOTS AFTER A HOSPITAL CLOSES.— 

15 ‘‘(I) IN GENERAL.—The Sec16 retary shall, by regulation, establish a 

17 process consistent with subclauses (II) 

18 and (III) under which, in the case 

19 where a hospital (other than a hos20 pital described in clause (v)) with an 

21 approved medical residency program 

22 in a State closes on or after the date 

23 that is 2 years before the date of the 

24 enactment of this clause, the Sec25 retary shall increase the otherwise apVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01735 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plicable resident limit under this para2 graph for other hospitals in the State 

3 in accordance with this clause. 

4 ‘‘(II) PROCESS FOR HOSPITALS

5 IN CERTAIN AREAS.—In determining 

6 for which hospitals the increase in the 

7 otherwise applicable resident limit de8 scribed in subclause (I) is provided, 

9 the Secretary shall establish a process 

10 to provide for such increase to one or 

11 more hospitals located in the State. 

12 Such process shall take into consider13 ation the recommendations submitted 

14 to the Secretary by the senior health 

15 official (as designated by the chief ex16 ecutive officer of such State) if such 

17 recommendations are submitted not 

18 later than 180 days after the date of 

19 the hospital closure involved (or, in 

20 the case of a hospital that closed after 

21 the date that is 2 years before the 

22 date of the enactment of this clause, 

23 180 days after such date of enact24 ment). 


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1 ‘‘(III) LIMITATION.—The esti2 mated aggregate number of increases 

3 in the otherwise applicable resident 

4 limits for hospitals under this clause 

5 shall be equal to the estimated num6 ber of resident positions in the ap7 proved medical residency programs 

8 that closed on or after the date de9 scribed in subclause (I).’’. 

10 (b) NO EFFECT ON TEMPORARY FTE CAP ADJUST11 MENTS.—The amendments made by this section shall not 

12 effect any temporary adjustment to a hospital’s FTE cap 

13 under section 413.79(h) of title 42, Code of Federal Regu14 lations (as in effect on the date of enactment of this Act) 

15 and shall not affect the application of section 

16 1886(h)(4)(H)(v) of the Social Security Act. 

17 (c) CONFORMING AMENDMENTS.— 

18 (1) Section 422(b)(2) of the Medicare Prescrip19 tion Drug, Improvement, and Modernization Act of 

20 2003 (Public Law 108–173), as amended by section 

21 1501(c), is amended by striking ‘‘(7) and’’ and in22 serting ‘‘(4)(H)(vi), (7), and’’. 

23 (2) Section 1886(h)(7)(E) of the Social Secu24 rity Act (42 U.S.C. 1395ww(h)(7)(E)) is amended 


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1 by inserting ‘‘or under paragraph (4)(H)(vi)’’ after 

2 ‘‘under this paragraph’’. 

3 SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED 

4 MEDICAL RESIDENCY TRAINING. 

5 (a) SPECIFICATION OF GOALS FOR APPROVED MED6 ICAL RESIDENCY TRAINING PROGRAMS.—Section 

7 1886(h)(1) of the Social Security Act (42 U.S.C. 

8 1395ww(h)(1)) is amended— 

9 (1) by designating the matter beginning with 

10 ‘‘Notwithstanding’’ as a subparagraph (A) with the 

11 heading ‘‘IN GENERAL.—’’ and with appropriate in12 dentation; and 

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

14 paragraph: 

15 ‘‘(B) GOALS AND ACCOUNTABILITY FOR

16 APPROVED MEDICAL RESIDENCY TRAINING PRO17 GRAMS.—The goals of medical residency train18 ing programs are to foster a physician work19 force so that physicians are trained to be able 

20 to do the following: 

21 ‘‘(i) Work effectively in various health 

22 care delivery settings, such as nonprovider 

23 settings. 


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1 ‘‘(ii) Coordinate patient care within 

2 and across settings relevant to their spe3 cialties. 

4 ‘‘(iii) Understand the relevant cost 

5 and value of various diagnostic and treat6 ment options. 

7 ‘‘(iv) Work in inter-professional teams 

8 and multi-disciplinary team-based models 

9 in provider and nonprovider settings to en10 hance safety and improve quality of patient 

11 care. 

12 ‘‘(v) Be knowledgeable in methods of 

13 identifying systematic errors in health care 

14 delivery and in implementing systematic 

15 solutions in case of such errors, including 

16 experience and participation in continuous 

17 quality improvement projects to improve 

18 health outcomes of the population the phy19 sicians serve. 

20 ‘‘(vi) Be meaningful EHR users (as 

21 determined under section 1848(o)(2)) in 

22 the delivery of care and in improving the 

23 quality of the health of the community and 

24 the individuals that the hospital serves.’’ 


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1 (b) GAO STUDY ON EVALUATION OF TRAINING PRO2 GRAMS.— 

3 (1) IN GENERAL.—The Comptroller General of 

4 the United States shall conduct a study to evaluate 

5 the extent to which medical residency training pro6 grams— 

7 (A) are meeting the goals described in sec8 tion 1886(h)(1)(B) of the Social Security Act, 

9 as added by subsection (a), in a range of resi10 dency programs, including primary care and 

11 other specialties; and 

12 (B) have the appropriate faculty expertise 

13 to teach the topics required to achieve such 

14 goals. 

15 (2) REPORT.—Not later than 18 months after 

16 the date of the enactment of this Act, the Comp17 troller General shall submit to Congress a report on 

18 such study and shall include in such report rec19 ommendations as to how medical residency training 

20 programs could be further encouraged to meet such 

21 goals through means such as— 

22 (A) development of curriculum require23 ments; and 

24 (B) assessment of the accreditation proc25 esses of the Accreditation Council for Graduate 


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1 Medical Education and the American Osteo2 pathic Association and effectiveness of those 

3 processes in accrediting medical residency pro4 grams that meet the goals referred to in para5 graph (1)(A). 

6 TITLE N—PROGRAM INTEGRITY 

7 Subtitle A—Increased Funding To 

8 Fight Waste, Fraud, and Abuse 

9 SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO 

10 FIGHT FRAUD AND ABUSE. 

11 (a) IN GENERAL.—Section 1817(k) of the Social Se12 curity Act (42 U.S.C. 1395i(k)) is amended— 

13 (1) by adding at the end the following new 

14 paragraph: 

15 ‘‘(7) ADDITIONAL FUNDING.—In addition to the 

16 funds otherwise appropriated to the Account from 

17 the Trust Fund under paragraphs (3) and (4) and 

18 for purposes described in paragraphs (3)(C) and 

19 (4)(A), there are hereby appropriated an additional 

20 $100,000,000 to such Account from such Trust 

21 Fund for each fiscal year beginning with 2011. The 

22 funds appropriated under this paragraph shall be al23 located in the same proportion as the total funding 

24 appropriated with respect to paragraphs (3)(A) and 

25 (4)(A) was allocated with respect to fiscal year 


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1 2010, and shall be available without further appro2 priation until expended.’’. 

3 (2) in paragraph (4)(A)— 

4 (A) by inserting ‘‘for activities described in 

5 paragraph (3)(C) and’’ after ‘‘necessary’’; and 

6 (B) by inserting ‘‘until expended’’ after 

7 ‘‘appropriation’’. 

8 (b) FLEXIBILITY IN PURSUING FRAUD AND

9 ABUSE.—Section 1893(a) of the Social Security Act (42 

10 U.S.C. 1395ddd(a)) is amended by inserting ‘‘, or other11 wise,’’ after ‘‘entities’’. 

12 Subtitle B—Enhanced Penalties for 

13 Fraud and Abuse 

14 SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS 

15 ON PROVIDER OR SUPPLIER ENROLLMENT 

16 APPLICATIONS. 

17 (a) IN GENERAL.—Section 1128A(a) of the Social 

18 Security Act (42 U.S.C. 1320a–7a(a)) is amended— 

19 (1) in paragraph (1)(D), by striking all that fol20 lows ‘‘in which the person was excluded’’ and insert21 ing ‘‘under Federal law from the Federal health care 

22 program under which the claim was made, or’’; 

23 (2) by striking ‘‘or’’ at the end of paragraph 

24 (6); 


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1 (3) in paragraph (7), by inserting at the end 

2 ‘‘or’’; 

3 (4) by inserting after paragraph (7) the fol4 lowing new paragraph: 

5 ‘‘(8) knowingly makes or causes to be made any 

6 false statement, omission, or misrepresentation of a 

7 material fact in any application, agreement, bid, or 

8 contract to participate or enroll as a provider of 

9 services or supplier under a Federal health care pro10 gram, including managed care organizations under 

11 title XIX, Medicare Advantage organizations under 

12 part C of title XVIII, prescription drug plan spon13 sors under part D of title XVIII, and entities that 

14 apply to participate as providers of services or sup15 pliers in such managed care organizations and such 

16 plans;’’; 

17 (5) in the matter following paragraph (8), as 

18 inserted by paragraph (4), by striking ‘‘or in cases 

19 under paragraph (7), $50,000 for each such act)’’ 

20 and inserting ‘‘in cases under paragraph (7), 

21 $50,000 for each such act, or in cases under para22 graph (8), $50,000 for each false statement, omis23 sion, or misrepresentation of a material fact)’’; and 

24 (6) in the second sentence, by striking ‘‘for a 

25 lawful purpose)’’ and inserting ‘‘for a lawful purVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01743 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 pose, or in cases under paragraph (8), an assess2 ment of not more than 3 times the amount claimed 

3 as the result of the false statement, omission, or 

4 misrepresentation of material fact claimed by a pro5 vider of services or supplier whose application to 

6 participate contained such false statement, omission, 

7 or misrepresentation)’’. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 subsection (a) shall apply to acts committed on or after 

10 January 1, 2010. 

11 SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF 

12 FALSE STATEMENTS MATERIAL TO A FALSE 

13 CLAIM. 

14 (a) IN GENERAL.—Section 1128A(a) of the Social 

15 Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec16 tion 1611, is further amended— 

17 (1) in paragraph (7), by striking ‘‘or’’ at the 

18 end; 

19 (2) in paragraph (8), by inserting ‘‘or’’ at the 

20 end; and 

21 (3) by inserting after paragraph (8), the fol22 lowing new paragraph: 

23 ‘‘(9) knowingly makes, uses, or causes to be 

24 made or used, a false record or statement material 

25 to a false or fraudulent claim for payment for items 


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1 and services furnished under a Federal health care 

2 program;’’; and 

3 (4) in the matter following paragraph (9), as 

4 inserted by paragraph (3)— 

5 (A) by striking ‘‘or in cases under para6 graph (8)’’ and inserting ‘‘in cases under para7 graph (8)’’; and 

8 (B) by striking ‘‘a material fact)’’ and in9 serting ‘‘a material fact, in cases under para10 graph (9), $50,000 for each false record or 

11 statement)’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to acts committed on or after 

14 January 1, 2010. 

15 SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPEC16 TIONS. 

17 (a) IN GENERAL.—Section 1128A(a) of the Social 

18 Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec19 tions 1611 and 1612, is further amended— 

20 (1) in paragraph (8), by striking ‘‘or’’ at the 

21 end; 

22 (2) in paragraph (9), by inserting ‘‘or’’ at the 

23 end; 

24 (3) by inserting after paragraph (9) the fol25 lowing new paragraph: 


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1 ‘‘(10) fails to grant timely access, upon reason2 able request (as defined by the Secretary in regula3 tions), to the Inspector General of the Department 

4 of Health and Human Services, for the purpose of 

5 audits, investigations, evaluations, or other statutory 

6 functions of the Inspector General of the Depart7 ment of Health and Human Services;’’; and 

8 (4) in the matter following paragraph (10), as 

9 inserted by paragraph (3)— 

10 (A) by striking ‘‘or’’ after ‘‘$50,000 for 

11 each such act,’’; and 

12 (B) by inserting ‘‘, or in cases under para13 graph (10), $15,000 for each day of the failure 

14 described in such paragraph’’ after ‘‘false 

15 record or statement’’. 

16 (b) ENSURING TIMELY INSPECTIONS RELATING TO

17 CONTRACTS WITH MA ORGANIZATIONS.—Section 

18 1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is 

19 amended— 

20 (1) in subparagraph (A), by inserting ‘‘timely’’ 

21 before ‘‘inspect’’; and 

22 (2) in subparagraph (B), by inserting ‘‘timely’’ 

23 before ‘‘audit and inspect’’. 


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

2 subsection (a) shall apply to violations committed on or 

3 after January 1, 2010. 

4 SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS. 

5 (a) MEDICARE.—Part A of title XVIII of the Social 

6 Security Act is amended by inserting after section 1819 

7 the following new section: 

8 ‘‘SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE 

9 CARE. 

10 ‘‘(a) IN GENERAL.—If the Secretary determines on 

11 the basis of a survey or otherwise, that a hospice program 

12 that is certified for participation under this title has dem13 onstrated a substandard quality of care and failed to meet 

14 such other requirements as the Secretary may find nec15 essary in the interest of the health and safety of the indi16 viduals who are provided care and services by the agency 

17 or organization involved and determines— 

18 ‘‘(1) that the deficiencies involved immediately 

19 jeopardize the health and safety of the individuals to 

20 whom the program furnishes items and services, the 

21 Secretary shall take immediate action to remove the 

22 jeopardy and correct the deficiencies through the 

23 remedy specified in subsection (b)(2)(A)(iii) or ter24 minate the certification of the program, and may 


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1 provide, in addition, for 1 or more of the other rem2 edies described in subsection (b)(2)(A); or 

3 ‘‘(2) that the deficiencies involved do not imme4 diately jeopardize the health and safety of the indi5 viduals to whom the program furnishes items and 

6 services, the Secretary may— 

7 ‘‘(A) impose intermediate sanctions devel8 oped pursuant to subsection (b), in lieu of ter9 minating the certification of the program; and 

10 ‘‘(B) if, after such a period of intermediate 

11 sanctions, the program is still not in compliance 

12 with such requirements, the Secretary shall ter13 minate the certification of the program. 

14 If the Secretary determines that a hospice program 

15 that is certified for participation under this title is 

16 in compliance with such requirements but, as of a 

17 previous period, was not in compliance with such re18 quirements, the Secretary may provide for a civil 

19 money penalty under subsection (b)(2)(A)(i) for the 

20 days in which it finds that the program was not in 

21 compliance with such requirements. 

22 ‘‘(b) INTERMEDIATE SANCTIONS.— 

23 ‘‘(1) DEVELOPMENT AND IMPLEMENTATION.— 

24 The Secretary shall develop and implement, by not 

25 later than July 1, 2012— 


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1 ‘‘(A) a range of intermediate sanctions to 

2 apply to hospice programs under the conditions 

3 described in subsection (a), and 

4 ‘‘(B) appropriate procedures for appealing 

5 determinations relating to the imposition of 

6 such sanctions. 

7 ‘‘(2) SPECIFIED SANCTIONS.— 

8 ‘‘(A) IN GENERAL.—The intermediate 

9 sanctions developed under paragraph (1) may 

10 include— 

11 ‘‘(i) civil money penalties in an 

12 amount not to exceed $10,000 for each day 

13 of noncompliance or, in the case of a per 

14 instance penalty applied by the Secretary, 

15 not to exceed $25,000, 

16 ‘‘(ii) denial of all or part of the pay17 ments to which a hospice program would 

18 otherwise be entitled under this title with 

19 respect to items and services furnished by 

20 a hospice program on or after the date on 

21 which the Secretary determines that inter22 mediate sanctions should be imposed pur23 suant to subsection (a)(2), 

24 ‘‘(iii) the appointment of temporary 

25 management to oversee the operation of 


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1 the hospice program and to protect and as2 sure the health and safety of the individ3 uals under the care of the program while 

4 improvements are made, 

5 ‘‘(iv) corrective action plans, and 

6 ‘‘(v) in-service training for staff. 

7 The provisions of section 1128A (other than 

8 subsections (a) and (b)) shall apply to a civil 

9 money penalty under clause (i) in the same 

10 manner as such provisions apply to a penalty or 

11 proceeding under section 1128A(a). The tem12 porary management under clause (iii) shall not 

13 be terminated until the Secretary has deter14 mined that the program has the management 

15 capability to ensure continued compliance with 

16 all requirements referred to in that clause. 

17 ‘‘(B) CLARIFICATION.—The sanctions 

18 specified in subparagraph (A) are in addition to 

19 sanctions otherwise available under State or 

20 Federal law and shall not be construed as lim21 iting other remedies, including any remedy 

22 available to an individual at common law. 

23 ‘‘(C) COMMENCEMENT OF PAYMENT.—A 

24 denial of payment under subparagraph (A)(ii) 

25 shall terminate when the Secretary determines 


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1 that the hospice program no longer dem2 onstrates a substandard quality of care and 

3 meets such other requirements as the Secretary 

4 may find necessary in the interest of the health 

5 and safety of the individuals who are provided 

6 care and services by the agency or organization 

7 involved. 

8 ‘‘(3) SECRETARIAL AUTHORITY.—The Secretary 

9 shall develop and implement, by not later than July 

10 1, 2011, specific procedures with respect to the con11 ditions under which each of the intermediate sanc12 tions developed under paragraph (1) is to be applied, 

13 including the amount of any fines and the severity 

14 of each of these sanctions. Such procedures shall be 

15 designed so as to minimize the time between identi16 fication of deficiencies and imposition of these sanc17 tions and shall provide for the imposition of incre18 mentally more severe fines for repeated or uncor19 rected deficiencies.’’. 

20 (b) APPLICATION TO MEDICAID.—Section 1905(o) of 

21 the Social Security Act (42 U.S.C. 1396d(o)) is amended 

22 by adding at the end the following new paragraph: 

23 ‘‘(4) The provisions of section 1819A shall apply to 

24 a hospice program providing hospice care under this title 


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1 in the same manner as such provisions apply to a hospice 

2 program providing hospice care under title XVIII.’’. 

3 (c) APPLICATION TO CHIP.—Title XXI of the Social 

4 Security Act is amended by adding at the end the fol5 lowing new section: 

6 ‘‘SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE. 

7 ‘‘The provisions of section 1819A shall apply to a 

8 hospice program providing hospice care under this title in 

9 the same manner such provisions apply to a hospice pro10 gram providing hospice care under title XVIII.’’. 

11 SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EX12 CLUDED FROM PROGRAM PARTICIPATION. 

13 (a) IN GENERAL.—Section 1128A(a) of the Social 

14 Security Act (42 U.S.C. 1320a–7a(a)), as amended by the 

15 previous sections, is further amended— 

16 (1) by striking ‘‘or’’ at the end of paragraph 

17 (9); 

18 (2) by inserting ‘‘or’’ at the end of paragraph 

19 (10); 

20 (3) by inserting after paragraph (10) the fol21 lowing new paragraph: 

22 ‘‘(11) orders or prescribes an item or service, 

23 including without limitation home health care, diag24 nostic and clinical lab tests, prescription drugs, du25 rable medical equipment, ambulance services, physVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01752 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ical or occupational therapy, or any other item or 

2 service, during a period when the person has been 

3 excluded from participation in a Federal health care 

4 program, and the person knows or should know that 

5 a claim for such item or service will be presented to 

6 such a program;’’; and 

7 (4) in the matter following paragraph (11), as 

8 inserted by paragraph (2), by striking ‘‘$15,000 for 

9 each day of the failure described in such paragraph’’ 

10 and inserting ‘‘$15,000 for each day of the failure 

11 described in such paragraph, or in cases under para12 graph (11), $50,000 for each order or prescription 

13 for an item or service by an excluded individual’’. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 subsection (a) shall apply to violations committed on or 

16 after January 1, 2010. 

17 SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF 

18 FALSE INFORMATION BY MEDICARE ADVAN19 TAGE AND PART D PLANS. 

20 (a) IN GENERAL.—Section 1857(g)(2)(A) of the So21 cial Security Act (42 U.S.C. 1395w–27(g)(2)(A)) is 

22 amended by inserting ‘‘except with respect to a determina23 tion under subparagraph (E), an assessment of not more 

24 than 3 times the amount claimed by such plan or plan 


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1 sponsor based upon the misrepresentation or falsified in2 formation involved,’’ after ‘‘for each such determination,’’. 

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

4 subsection (a) shall apply to violations committed on or 

5 after January 1, 2010. 

6 SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVAN7 TAGE AND PART D MARKETING VIOLATIONS. 

8 (a) IN GENERAL.—Section 1857(g)(1) of the Social 

9 Security Act (42 U.S.C. 1395w–27(g)(1)), as amended by 

10 section 1221(b), is amended— 

11 (1) in subparagraph (G), by striking ‘‘or’’ at 

12 the end; 

13 (2) by inserting after subparagraph (H) the fol14 lowing new subparagraphs: 

15 ‘‘(I) except as provided under subpara16 graph (C) or (D) of section 1860D–1(b)(1), en17 rolls an individual in any plan under this part 

18 without the prior consent of the individual or 

19 the designee of the individual; 

20 ‘‘(J) transfers an individual enrolled under 

21 this part from one plan to another without the 

22 prior consent of the individual or the designee 

23 of the individual or solely for the purpose of 

24 earning a commission; 


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1 ‘‘(K) fails to comply with marketing re2 strictions described in subsections (h) and (j) of 

3 section 1851 or applicable implementing regula4 tions or guidance; or 

5 ‘‘(L) employs or contracts with any indi6 vidual or entity who engages in the conduct de7 scribed in subparagraphs (A) through (K) of 

8 this paragraph;’’; and 

9 (3) by adding at the end the following new sen10 tence: ‘‘The Secretary may provide, in addition to 

11 any other remedies authorized by law, for any of the 

12 remedies described in paragraph (2), if the Secretary 

13 determines that any employee or agent of such orga14 nization, or any provider or supplier who contracts 

15 with such organization, has engaged in any conduct 

16 described in subparagraphs (A) through (L) of this 

17 paragraph.’’ 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 subsection (a) shall apply to violations committed on or 

20 after January 1, 2010. 

21 SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF 

22 PROGRAM AUDITS. 

23 (a) IN GENERAL.—Section 1128(b)(2) of the Social 

24 Security Act (42 U.S.C. 1320a–7(b)(2)) is amended— 


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1 (1) in the heading, by inserting ‘‘OR AUDIT’’ 

2 after ‘‘INVESTIGATION’’; and 

3 (2) by striking ‘‘investigation into’’ and all that 

4 follows through the period and inserting ‘‘investiga5 tion or audit related to—’’ 

6 ‘‘(i) any offense described in para7 graph (1) or in subsection (a); or 

8 ‘‘(ii) the use of funds received, directly 

9 or indirectly, from any Federal health care 

10 program (as defined in section 

11 1128B(f)).’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 subsection (a) shall apply to violations committed on or 

14 after January 1, 2010. 

15 SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND EN16 TITIES FROM PARTICIPATION IN MEDICARE 

17 AND STATE HEALTH CARE PROGRAMS. 

18 (a) IN GENERAL.—Section 1128(c) of the Social Se19 curity Act, as previously amended by this subdivision, is 

20 further amended— 

21 (1) in the heading, by striking ‘‘AND PERIOD’’ 

22 and inserting ‘‘, PERIOD, AND EFFECT’’; and 

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

24 paragraph: 


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1 ‘‘(4)(A) For purposes of this Act, subject to 

2 subparagraph (C), the effect of exclusion is that no 

3 payment may be made by any Federal health care 

4 program (as defined in section 1128B(f)) with re5 spect to any item or service furnished— 

6 ‘‘(i) by an excluded individual or entity; or 

7 ‘‘(ii) at the medical direction or on the pre8 scription of a physician or other authorized in9 dividual when the person submitting a claim for 

10 such item or service knew or had reason to 

11 know of the exclusion of such individual. 

12 ‘‘(B) For purposes of this section and sections 

13 1128A and 1128B, subject to subparagraph (C), an 

14 item or service has been furnished by an individual 

15 or entity if the individual or entity directly or indi16 rectly provided, ordered, manufactured, distributed, 

17 prescribed, or otherwise supplied the item or service 

18 regardless of how the item or service was paid for 

19 by a Federal health care program or to whom such 

20 payment was made. 

21 ‘‘(C)(i) Payment may be made under a Federal 

22 health care program for emergency items or services 

23 (not including items or services furnished in an 

24 emergency room of a hospital) furnished by an ex25 cluded individual or entity, or at the medical direcVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01757 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion or on the prescription of an excluded physician 

2 or other authorized individual during the period of 

3 such individual’s exclusion. 

4 ‘‘(ii) In the case that an individual eligible for 

5 benefits under title XVIII or XIX submits a claim 

6 for payment for items or services furnished by an ex7 cluded individual or entity, and such individual eligi8 ble for such benefits did not know or have reason to 

9 know that such excluded individual or entity was so 

10 excluded, then, notwithstanding such exclusion, pay11 ment shall be made for such items or services. In 

12 such case the Secretary shall notify such individual 

13 eligible for such benefits of the exclusion of the indi14 vidual or entity furnishing the items or services. 

15 Payment shall not be made for items or services fur16 nished by an excluded individual or entity to an indi17 vidual eligible for such benefits after a reasonable 

18 time (as determined by the Secretary in regulations) 

19 after the Secretary has notified the individual eligi20 ble for such benefits of the exclusion of the indi21 vidual or entity furnishing the items or services. 

22 ‘‘(iii) In the case that a claim for payment for 

23 items or services furnished by an excluded individual 

24 or entity is submitted by an individual or entity 

25 other than an individual eligible for benefits under 


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1 title XVIII or XIX or the excluded individual or en2 tity, and the Secretary determines that the indi3 vidual or entity that submitted the claim took rea4 sonable steps to learn of the exclusion and reason5 ably relied upon inaccurate or misleading informa6 tion from the relevant Federal health care program 

7 or its contractor, the Secretary may waive repay8 ment of the amount paid in violation of the exclusion 

9 to the individual or entity that submitted the claim 

10 for the items or services furnished by the excluded 

11 individual or entity. If a Federal health care pro12 gram contractor provided inaccurate or misleading 

13 information that resulted in the waiver of an over14 payment under this clause, the Secretary shall take 

15 appropriate action to recover the improperly paid 

16 amount from the contractor.’’. 

17 Subtitle C—Enhanced Program 

18 and Provider Protections 

19 SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AU20 THORITY. 

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

22 (42 U.S.C. 1301 et seq.) is amended by inserting after 

23 section 1128F the following new section: 


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1 ‘‘SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PRO2 TECTIONS IN THE MEDICARE, MEDICAID, AND 

3 CHIP PROGRAMS. 

4 ‘‘(a) CERTAIN AUTHORIZED SCREENING, ENHANCED

5 OVERSIGHT PERIODS, AND ENROLLMENT MORATORIA.— 

6 ‘‘(1) IN GENERAL.—For periods beginning after 

7 January 1, 2011, in the case that the Secretary de8 termines there is a significant risk of fraudulent ac9 tivity (as determined by the Secretary based on rel10 evant complaints, reports, referrals by law enforce11 ment or other sources, data analysis, trending infor12 mation, or claims submissions by providers of serv13 ices and suppliers) with respect to a category of pro14 vider of services or supplier of items or services, in15 cluding a category within a geographic area, under 

16 title XVIII, XIX, or XXI, the Secretary may impose 

17 any of the following requirements with respect to a 

18 provider of services or a supplier (whether such pro19 vider or supplier is initially enrolling in the program 

20 or is renewing such enrollment): 

21 ‘‘(A) Screening under paragraph (2). 

22 ‘‘(B) Enhanced oversight periods under 

23 paragraph (3). 

24 ‘‘(C) Enrollment moratoria under para25 graph (4). 


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1 In applying this subsection for purposes of title XIX 

2 and XXI the Secretary may require a State to carry 

3 out the provisions of this subsection as a require4 ment of the State plan under title XIX or the child 

5 health plan under title XXI. Actions taken and de6 terminations made under this subsection shall not be 

7 subject to review by a judicial tribunal. 

8 ‘‘(2) SCREENING.—For purposes of paragraph 

9 (1), the Secretary shall establish procedures under 

10 which screening is conducted with respect to pro11 viders of services and suppliers described in such 

12 paragraph. Such screening may include— 

13 ‘‘(A) licensing board checks; 

14 ‘‘(B) screening against the list of individ15 uals and entities excluded from the program 

16 under title XVIII, XIX, or XXI; 

17 ‘‘(C) the excluded provider list system; 

18 ‘‘(D) background checks; and 

19 ‘‘(E) unannounced pre-enrollment or other 

20 site visits. 

21 ‘‘(3) ENHANCED OVERSIGHT PERIOD.—For 

22 purposes of paragraph (1), the Secretary shall estab23 lish procedures to provide for a period of not less 

24 than 30 days and not more than 365 days during 

25 which providers of services and suppliers described 


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1 in such paragraph, as the Secretary determines ap2 propriate, would be subject to enhanced oversight, 

3 such as required or unannounced (or required and 

4 unannounced) site visits or inspections, prepayment 

5 review, enhanced review of claims, and such other 

6 actions as specified by the Secretary, under the pro7 grams under titles XVIII, XIX, and XXI. Under 

8 such procedures, the Secretary may extend such pe9 riod for more than 365 days if the Secretary deter10 mines that after the initial period such additional 

11 period of oversight is necessary. 

12 ‘‘(4) MORATORIUM ON ENROLLMENT OF PRO13 VIDERS AND SUPPLIERS.—For purposes of para14 graph (1), the Secretary, based upon a finding of a 

15 risk of serious ongoing fraud within a program 

16 under title XVIII, XIX, or XXI, may impose a mor17 atorium on the enrollment of providers of services 

18 and suppliers within a category of providers of serv19 ices and suppliers (including a category within a spe20 cific geographic area) under such title. Such a mora21 torium may only be imposed if the Secretary makes 

22 a determination that the moratorium would not ad23 versely impact access of individuals to care under 

24 such program. 


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1 ‘‘(5) CLARIFICATION.—Nothing in this sub2 section shall be interpreted to preclude or limit the 

3 ability of a State to engage in provider screening or 

4 enhanced provider oversight activities beyond those 

5 required by the Secretary.’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) MEDICAID.—Section 1902(a) of the Social 

8 Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is 

9 amended— 

10 (A) in paragraph (23), by inserting before 

11 the semicolon at the end the following: ‘‘or by 

12 a person to whom or entity to which a morato13 rium under section 1128G(a)(4) is applied dur14 ing the period of such moratorium’’; 

15 (B) in paragraph (72); by striking at the 

16 end ‘‘and’’; 

17 (C) in paragraph (73), by striking the pe18 riod at the end and inserting ‘‘and’’; and 

19 (D) by adding after paragraph (73) the 

20 following new paragraph: 

21 ‘‘(74) provide that the State will enforce any 

22 determination made by the Secretary under sub23 section (a) of section 1128G (relating to a signifi24 cant risk of fraudulent activity with respect to a cat25 egory of provider or supplier described in such subVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01763 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 section (a) through use of the appropriate proce2 dures described in such subsection (a)), and that the 

3 State will carry out any activities as required by the 

4 Secretary for purposes of such subsection (a).’’. 

5 (2) CHIP.—Section 2102 of such Act (42 

6 U.S.C. 1397bb) is amended by adding at the end the 

7 following new subsection: 

8 ‘‘(d) PROGRAM INTEGRITY.—A State child health 

9 plan shall include a description of the procedures to be 

10 used by the State— 

11 ‘‘(1) to enforce any determination made by the 

12 Secretary under subsection (a) of section 1128G (re13 lating to a significant risk of fraudulent activity with 

14 respect to a category of provider or supplier de15 scribed in such subsection through use of the appro16 priate procedures described in such subsection); and 

17 ‘‘(2) to carry out any activities as required by 

18 the Secretary for purposes of such subsection.’’. 

19 (3) MEDICARE.—Section 1866(j) of such Act 

20 (42 U.S.C. 1395cc(j)) is amended by adding at the 

21 end the following new paragraph: 

22 ‘‘(3) PROGRAM INTEGRITY.—The provisions of 

23 section 1128G(a) apply to enrollments and renewals 

24 of enrollments of providers of services and suppliers 

25 under this title.’’. 


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1 SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP 

2 PROGRAM DISCLOSURE REQUIREMENTS RE3 LATING TO PREVIOUS AFFILIATIONS. 

4 (a) IN GENERAL.—Section 1128G of the Social Secu5 rity Act, as inserted by section 1631, is amended by add6 ing at the end the following new subsection: 

7 ‘‘(b) ENHANCED PROGRAM DISCLOSURE REQUIRE8 MENTS.— 

9 ‘‘(1) DISCLOSURE.—A provider of services or 

10 supplier who submits on or after July 1, 2011, an 

11 application for enrollment and renewing enrollment 

12 in a program under title XVIII, XIX, or XXI shall 

13 disclose (in a form and manner determined by the 

14 Secretary) any current affiliation or affiliation with15 in the previous 10-year period with a provider of 

16 services or supplier that has uncollected debt or with 

17 a person or entity that has been suspended or ex18 cluded under such program, subject to a payment 

19 suspension, or has had its billing privileges revoked. 

20 ‘‘(2) ENHANCED SAFEGUARDS.—If the Sec21 retary determines that such previous affiliation of 

22 such provider or supplier poses a risk of fraud, 

23 waste, or abuse, the Secretary may apply such en24 hanced safeguards as the Secretary determines nec25 essary to reduce such risk associated with such pro26 vider or supplier enrolling or participating in the 


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1 program under title XVIII, XIX, or XXI. Such safe2 guards may include enhanced oversight, such as en3 hanced screening of claims, required or unannounced 

4 (or required and unannounced) site visits or inspec5 tions, additional information reporting requirements, 

6 and conditioning such enrollment on the provision of 

7 a surety bond. 

8 ‘‘(3) AUTHORITY TO DENY PARTICIPATION.—If 

9 the Secretary determines that there has been at 

10 least one such affiliation and that such affiliation or 

11 affiliations, as applicable, of such provider or sup12 plier poses a serious risk of fraud, waste, or abuse, 

13 the Secretary may deny the application of such pro14 vider or supplier.’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) MEDICAID.—Paragraph (74) of section 

17 1902(a) of such Act (42 U.S.C. 1396a(a)), as added 

18 by section 1631(b)(1), is amended— 

19 (A) by inserting ‘‘or subsection (b) of such 

20 section (relating to disclosure requirements)’’ 

21 before ‘‘, and that the State’’; and 

22 (B) by inserting before the period the fol23 lowing: ‘‘and apply any enhanced safeguards, 

24 with respect to a provider or supplier described 


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1 in such subsection (b), as the Secretary deter2 mines necessary under such subsection (b)’’. 

3 (2) CHIP.—Subsection (d) of section 2102 of 

4 such Act (42 U.S.C. 1397bb), as added by section 

5 1631(b)(2), is amended— 

6 (A) in paragraph (1), by striking at the 

7 end ‘‘and’’; 

8 (B) in paragraph (2) by striking the period 

9 at the end and inserting ‘‘; and’’ and 

10 (C) by adding at the end the following new 

11 paragraph: 

12 ‘‘(3) to enforce any determination made by the 

13 Secretary under subsection (b) of section 1128G (re14 lating to disclosure requirements) and to apply any 

15 enhanced safeguards, with respect to a provider or 

16 supplier described in such subsection, as the Sec17 retary determines necessary under such subsection.’’. 

18 SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER 

19 FOR CERTAIN EVALUATION AND MANAGE20 MENT SERVICES. 

21 Section 1848 of the Social Security Act (42 U.S.C. 

22 1395w–4), as amended by section 4101 of the HITECH 

23 Act (Public Law 111–5), is amended by adding at the end 

24 the following new subsection: 


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1 ‘‘(p) PAYMENT MODIFIER FOR CERTAIN EVALUA2 TION AND MANAGEMENT SERVICES.—The Secretary shall 

3 establish a payment modifier under the fee schedule under 

4 this section for evaluation and management services (as 

5 specified in section 1842(b)(16)(B)(ii)) that result in the 

6 ordering of additional services (such as lab tests), the pre7 scription of drugs, the furnishing or ordering of durable 

8 medical equipment in order to enable better monitoring 

9 of claims for payment for such additional services under 

10 this title, or the ordering, furnishing, or prescribing of 

11 other items and services determined by the Secretary to 

12 pose a high risk of waste, fraud, and abuse. The Secretary 

13 may require providers of services or suppliers to report 

14 such modifier in claims submitted for payment.’’. 

15 SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER 

16 MEDICARE INTEGRITY PROGRAM. 

17 (a) IN GENERAL.—Section 1893(c) of the Social Se18 curity Act (42 U.S.C. 1395ddd(c)) is amended— 

19 (1) in paragraph (3), by striking at the end 

20 ‘‘and’’; 

21 (2) by redesignating paragraph (4) as para22 graph (5); and 

23 (3) by inserting after paragraph (3) the fol24 lowing new paragraph: 


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1 ‘‘(4) for the contract year beginning in 2011 

2 and each subsequent contract year, the entity pro3 vides assurances to the satisfaction of the Secretary 

4 that the entity will conduct periodic evaluations of 

5 the effectiveness of the activities carried out by such 

6 entity under the Program and will submit to the 

7 Secretary an annual report on such activities; and’’. 

8 (b) REFERENCE TO MEDICAID INTEGRITY PRO9 GRAM.—For a similar provision with respect to the Med10 icaid Integrity Program, see section 1752. 

11 SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO 

12 ADOPT PROGRAMS TO REDUCE WASTE, 

13 FRAUD, AND ABUSE. 

14 (a) IN GENERAL.—Section 1874 of the Social Secu15 rity Act (42 U.S.C. 42 U.S.C. 1395kk) is amended by 

16 adding at the end the following new subsection: 

17 ‘‘(d) COMPLIANCE PROGRAMS FOR PROVIDERS OF

18 SERVICES AND SUPPLIERS.— 

19 ‘‘(1) IN GENERAL.—The Secretary may 

20 disenroll a provider of services or a supplier (other 

21 than a physician or a skilled nursing facility) under 

22 this title (or may impose any civil monetary penalty 

23 or other intermediate sanction under paragraph (4)) 

24 if such provider of services or supplier fails to, sub25 ject to paragraph (5), establish a compliance proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01769 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gram that contains the core elements established 

2 under paragraph (2). 

3 ‘‘(2) ESTABLISHMENT OF CORE ELEMENTS.— 

4 The Secretary, in consultation with the Inspector 

5 General of the Department of Health and Human 

6 Services, shall establish core elements for a compli7 ance program under paragraph (1). Such elements 

8 may include written policies, procedures, and stand9 ards of conduct, a designated compliance officer and 

10 a compliance committee; effective training and edu11 cation pertaining to fraud, waste, and abuse for the 

12 organization’s employees and contractors; a con13 fidential or anonymous mechanism, such as a hot14 line, to receive compliance questions and reports of 

15 fraud, waste, or abuse; disciplinary guidelines for en16 forcement of standards; internal monitoring and au17 diting procedures, including monitoring and auditing 

18 of contractors; procedures for ensuring prompt re19 sponses to detected offenses and development of cor20 rective action initiatives, including responses to po21 tential offenses; and procedures to return all identi22 fied overpayments to the programs under this title, 

23 title XIX, and title XXI. 

24 ‘‘(3) TIMELINE FOR IMPLEMENTATION.—The 

25 Secretary shall determine a timeline for the estabVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01770 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 lishment of the core elements under paragraph (2) 

2 and the date on which a provider of services and 

3 suppliers (other than physicians) shall be required to 

4 have established such a program for purposes of this 

5 subsection. 

6 ‘‘(4) CMS ENFORCEMENT AUTHORITY.—The 

7 Administrator for the Centers of Medicare & Med8 icaid Services shall have the authority to determine 

9 whether a provider of services or supplier described 

10 in subparagraph (3) has met the requirement of this 

11 subsection and to impose a civil monetary penalty 

12 not to exceed $50,000 for each violation. The Sec13 retary may also impose other intermediate sanctions, 

14 including corrective action plans and additional mon15 itoring in the case of a violation of this subsection. 

16 ‘‘(5) PILOT PROGRAM.—The Secretary may 

17 conduct a pilot program on the application of this 

18 subsection with respect to a category of providers of 

19 services or suppliers (other than physicians) that the 

20 Secretary determines to be a category which is at 

21 high risk for waste, fraud, and abuse before imple22 menting the requirements of this subsection to all 

23 providers of services and suppliers described in para24 graph (3).’’. 


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1 (b) REFERENCE TO SIMILAR MEDICAID PROVI2 SION.—For a similar provision with respect to the Med3 icaid program under title XIX of the Social Security Act, 

4 see section 1753. 

5 SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDI6 CARE CLAIMS REDUCED TO NOT MORE THAN 

7 12 MONTHS. 

8 (a) PURPOSE.—In general, the 36-month period cur9 rently allowed for claims filing under parts A, B, C, and, 

10 D of title XVIII of the Social Security Act presents oppor11 tunities for fraud schemes in which processing patterns 

12 of the Centers for Medicare & Medicaid Services can be 

13 observed and exploited. Narrowing the window for claims 

14 processing will not overburden providers and will reduce 

15 fraud and abuse. 

16 (b) REDUCING MAXIMUM PERIOD FOR SUBMIS17 SION.— 

18 (1) PART A.—Section 1814(a) of the Social Se19 curity Act (42 U.S.C. 1395f(a)) is amended— 

20 (A) in paragraph (1), by striking ‘‘period 

21 of 3 calendar years’’ and all that follows and in22 serting ‘‘period of 1 calendar year from which 

23 such services are furnished; and’’; and 

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

25 sentence: ‘‘In applying paragraph (1), the SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01772 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary may specify exceptions to the 1 calendar 

2 year period specified in such paragraph.’’. 

3 (2) PART B.—Section 1835(a) of such Act (42 

4 U.S.C. 1395n(a)) is amended— 

5 (A) in paragraph (1), by striking ‘‘period 

6 of 3 calendar years’’ and all that follows and in7 serting ‘‘period of 1 calendar year from which 

8 such services are furnished; and’’; and 

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

10 sentence: ‘‘In applying paragraph (1), the Sec11 retary may specify exceptions to the 1 calendar 

12 year period specified in such paragraph.’’. 

13 (3) PARTS C AND D.—Section 1857(d) of such 

14 Act is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(7) PERIOD FOR SUBMISSION OF CLAIMS.— 

17 The contract shall require an MA organization or 

18 PDP sponsor to require any provider of services 

19 under contract with, in partnership with, or affili20 ated with such organization or sponsor to ensure 

21 that, with respect to items and services furnished by 

22 such provider to an enrollee of such organization, 

23 written request, signed by such enrollee, except in 

24 cases in which the Secretary finds it impracticable 

25 for the enrollee to do so, is filed for payment for 


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1 such items and services in such form, in such man2 ner, and by such person or persons as the Secretary 

3 may by regulation prescribe, no later than the close 

4 of the 1 calendar year period after such items and 

5 services are furnished. In applying the previous sen6 tence, the Secretary may specify exceptions to the 1 

7 calendar year period specified.’’. 

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

9 subsection (b) shall be effective for items and services fur10 nished on or after January 1, 2011. 

11 SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL 

12 EQUIPMENT OR HOME HEALTH SERVICES RE13 QUIRED TO BE MEDICARE ENROLLED PHYSI14 CIANS OR ELIGIBLE PROFESSIONALS. 

15 (a) DME.—Section 1834(a)(11)(B) of the Social Se16 curity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

17 striking ‘‘physician’’ and inserting ‘‘physician enrolled 

18 under section 1866(j) or an eligible professional under sec19 tion 1848(k)(3)(B)’’. 

20 (b) HOME HEALTH SERVICES.— 

21 (1) PART A.—Section 1814(a)(2) of such Act 

22 (42 U.S.C. 1395(a)(2)) is amended in the matter 

23 preceding subparagraph (A) by inserting ‘‘in the 

24 case of services described in subparagraph (C), a 

25 physician enrolled under section 1866(j) or an eligiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01774 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ble professional under section 1848(k)(3)(B),’’ be2 fore ‘‘or, in the case of services’’. 

3 (2) PART B.—Section 1835(a)(2) of such Act 

4 (42 U.S.C. 1395n(a)(2)) is amended in the matter 

5 preceding subparagraph (A) by inserting ‘‘, or in the 

6 case of services described in subparagraph (A), a 

7 physician enrolled under section 1866(j) or an eligi8 ble professional under section 1848(k)(3)(B),’’ after 

9 ‘‘a physician’’. 

10 (c) DISCRETION TO EXPAND APPLICATION.—The 

11 Secretary may extend the requirement applied by the 

12 amendments made by subsections (a) and (b) to durable 

13 medical equipment and home health services (relating to 

14 requiring certifications and written orders to be made by 

15 enrolled physicians and health professions) to other cat16 egories of items or services under this title, including cov17 ered part D drugs as defined in section 1860D–2(e), if 

18 the Secretary determines that such application would help 

19 to reduce the risk of waste, fraud, and abuse with respect 

20 to such other categories under title XVIII of the Social 

21 Security Act. 

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

23 this section shall apply to written orders and certifications 

24 made on or after July 1, 2010. 


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1 SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE 

2 DOCUMENTATION ON REFERRALS TO PRO3 GRAMS AT HIGH RISK OF WASTE AND ABUSE. 

4 (a) PHYSICIANS AND OTHER SUPPLIERS.—Section 

5 1842(h) of the Social Security Act, as amended by section 

6 1635, is further amended by adding at the end the fol7 lowing new paragraph: 

8 ‘‘(10) The Secretary may disenroll, for a period of 

9 not more than one year for each act, a physician or sup10 plier under section 1866(j) if such physician or supplier 

11 fails to maintain and, upon request of the Secretary, pro12 vide access to documentation relating to written orders or 

13 requests for payment for durable medical equipment, cer14 tifications for home health services, or referrals for other 

15 items or services written or ordered by such physician or 

16 supplier under this title, as specified by the Secretary.’’. 

17 (b) PROVIDERS OF SERVICES.—Section 1866(a)(1) 

18 of such Act (42 U.S.C. 1395cc), as amended by section 

19 1635, is further amended— 

20 (1) in subparagraph (V), by striking at the end 

21 ‘‘and’’; 

22 (2) in subparagraph (W), by striking the period 

23 at the end and adding ‘‘; and’’; and 

24 (3) by adding at the end the following new sub25 paragraph: 


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1 ‘‘(X) maintain and, upon request of the 

2 Secretary, provide access to documentation re3 lating to written orders or requests for payment 

4 for durable medical equipment, certifications for 

5 home health services, or referrals for other 

6 items or services written or ordered by the pro7 vider under this title, as specified by the Sec8 retary.’’. 

9 (c) OIG PERMISSIVE EXCLUSION AUTHORITY.—Sec10 tion 1128(b)(11) of the Social Security Act (42 U.S.C. 

11 1320a–7(b)(11)) is amended by inserting ‘‘, ordering, re12 ferring for furnishing, or certifying the need for’’ after 

13 ‘‘furnishing’’. 

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

15 this section shall apply to orders, certifications, and refer16 rals made on or after January 1, 2010. 

17 SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT RE18 QUIRED BEFORE PHYSICIANS MAY CERTIFY 

19 ELIGIBILITY FOR HOME HEALTH SERVICES 

20 OR DURABLE MEDICAL EQUIPMENT UNDER 

21 MEDICARE. 

22 (a) CONDITION OF PAYMENT FOR HOME HEALTH

23 SERVICES.— 

24 (1) PART A.—Section 1814(a)(2)(C) of such 

25 Act is amended— 


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1 (A) by striking ‘‘and such services’’ and in2 serting ‘‘such services’’; and 

3 (B) by inserting after ‘‘care of a physi4 cian’’ the following: ‘‘, and, in the case of a cer5 tification or recertification made by a physician 

6 after January 1, 2010, prior to making such 

7 certification the physician must document that 

8 the physician has had a face-to-face encounter 

9 (including through use of telehealth and other 

10 than with respect to encounters that are inci11 dent to services involved) with the individual 

12 during the 6-month period preceding such cer13 tification, or other reasonable timeframe as de14 termined by the Secretary’’. 

15 (2) PART B.—Section 1835(a)(2)(A) of the So16 cial Security Act is amended— 

17 (A) by striking ‘‘and’’ before ‘‘(iii)’’; and 

18 (B) by inserting after ‘‘care of a physi19 cian’’ the following: ‘‘, and (iv) in the case of 

20 a certification or recertification after January 

21 1, 2010, prior to making such certification the 

22 physician must document that the physician has 

23 had a face-to-face encounter (including through 

24 use of telehealth and other than with respect to 

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1 volved) with the individual during the 6-month 

2 period preceding such certification or recertifi3 cation, or other reasonable timeframe as deter4 mined by the Secretary’’. 

5 (b) CONDITION OF PAYMENT FOR DURABLE MED6 ICAL EQUIPMENT.—Section 1834(a)(11)(B) of the Social 

7 Security Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

8 adding at the end the following: ‘‘and shall require that 

9 such an order be written pursuant to the physician docu10 menting that the physician has had a face-to-face encoun11 ter (including through use of telehealth and other than 

12 with respect to encounters that are incident to services in13 volved) with the individual involved during the 6-month 

14 period preceding such written order, or other reasonable 

15 timeframe as determined by the Secretary’’. 

16 (c) APPLICATION TO OTHER AREAS UNDER MEDI17 CARE.—The Secretary may apply the face-to-face encoun18 ter requirement described in the amendments made by 

19 subsections (a) and (b) to other items and services for 

20 which payment is provided under title XVIII of the Social 

21 Security Act based upon a finding that such an decision 

22 would reduce the risk of waste, fraud, or abuse. 

23 (d) APPLICATION TO MEDICAID AND CHIP.—The re24 quirements pursuant to the amendments made by sub25 sections (a) and (b) shall apply in the case of physicians 


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1 making certifications for home health services under title 

2 XIX or XXI of the Social Security Act, in the same man3 ner and to the same extent as such requirements apply 

4 in the case of physicians making such certifications under 

5 title XVIII of such Act. 

6 SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AU7 THORITY TO PROGRAM EXCLUSION INVES8 TIGATIONS. 

9 (a) IN GENERAL.—Section 1128(f) of the Social Se10 curity Act (42 U.S.C. 1320a–7(f)) is amended by adding 

11 at the end the following new paragraph: 

12 ‘‘(4) The provisions of subsections (d) and (e) of sec13 tion 205 shall apply with respect to this section to the 

14 same extent as they are applicable with respect to title 

15 II. The Secretary may delegate the authority granted by 

16 section 205(d) (as made applicable to this section) to the 

17 Inspector General of the Department of Health and 

18 Human Services or the Administrator of the Centers for 

19 Medicare & Medicaid Services for purposes of any inves20 tigation under this section.’’. 

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

22 subsection (a) shall apply to investigations beginning on 

23 or after January 1, 2010. 


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1 SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND 

2 MEDICAID OVERPAYMENTS. 

3 Section 1128G of the Social Security Act, as inserted 

4 by section 1631 and amended by section 1632, is further 

5 amended by adding at the end the following new sub6 section: 

7 ‘‘(c) REPORTS ON AND REPAYMENT OF OVERPAY8 MENTS IDENTIFIED THROUGH INTERNAL AUDITS AND

9 REVIEWS.— 

10 ‘‘(1) REPORTING AND RETURNING OVERPAY11 MENTS.—If a person knows of an overpayment, the 

12 person must— 

13 ‘‘(A) report and return the overpayment to 

14 the Secretary, the State, an intermediary, a 

15 carrier, or a contractor, as appropriate, at the 

16 correct address, and 

17 ‘‘(B) notify the Secretary, the State, inter18 mediary, carrier, or contractor to whom the 

19 overpayment was returned in writing of the rea20 son for the overpayment. 

21 ‘‘(2) TIMING.—An overpayment must be re22 ported and returned under paragraph (1)(A) by not 

23 later than the date that is 60 days after the date the 

24 person knows of the overpayment. 

25 Any known overpayment retained later than the ap26 plicable date specified in this paragraph creates an 


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1 obligation as defined in section 3729(b)(3) of title 

2 31 of the United States Code. 

3 ‘‘(3) CLARIFICATION.—Repayment of any over4 payments (or refunding by withholding of future 

5 payments) by a provider of services or supplier does 

6 not otherwise limit the provider or supplier’s poten7 tial liability for administrative obligations such as 

8 applicable interests, fines, and specialties or civil or 

9 criminal sanctions involving the same claim if it is 

10 determined later that the reason for the overpay11 ment was related to fraud by the provider or sup12 plier or the employees or agents of such provider or 

13 supplier. 

14 ‘‘(4) DEFINITIONS.—In this subsection: 

15 ‘‘(A) KNOWS.—The term ‘knows’ has the 

16 meaning given the terms ‘knowing’ and ‘know17 ingly’ in section 3729(b) of title 31 of the 

18 United States Code. 

19 ‘‘(B) OVERPAYMENT.—The term ‘‘overpay20 ment’’ means any finally determined funds that 

21 a person receives or retains under title XVIII, 

22 XIX, or XXI to which the person, after applica23 ble reconciliation, is not entitled under such 

24 title. 


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1 ‘‘(C) PERSON.—The term ‘person’ means a 

2 provider of services, supplier, Medicaid man3 aged care organization (as defined in section 

4 1903(m)(1)(A)), Medicare Advantage organiza5 tion (as defined in section 1859(a)(1)), or PDP 

6 sponsor (as defined in section 1860D– 

7 41(a)(13)), but excluding a beneficiary.’’. 

8 SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIV9 ERS FOR OIG EXCLUSIONS TO BENE10 FICIARIES OF ANY FEDERAL HEALTH CARE 

11 PROGRAM. 

12 Section 1128(c)(3)(B) of the Social Security Act (42 

13 U.S.C. 1320a–7(c)(3)(B)) is amended by striking ‘‘indi14 viduals entitled to benefits under part A of title XVIII 

15 or enrolled under part B of such title, or both’’ and insert16 ing ‘‘beneficiaries (as defined in section 1128A(i)(5)) of 

17 that program’’. 

18 SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL 

19 DIALYSIS FACILITIES. 

20 Section 1881(b) of the Social Security Act (42 U.S.C. 

21 1395rr(b)) is amended by adding at the end the following 

22 new paragraph: 

23 ‘‘(15) For purposes of evaluating or auditing pay24 ments made to renal dialysis facilities for items and serv25 ices under this section under paragraph (1), each such 


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1 renal dialysis facility, upon the request of the Secretary, 

2 shall provide to the Secretary access to information relat3 ing to any ownership or compensation arrangement be4 tween such facility and the medical director of such facility 

5 or between such facility and any physician.’’. 

6 SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

7 ALTERNATE PAYEES REQUIRED TO REG8 ISTER UNDER MEDICARE. 

9 (a) MEDICARE.—Section 1866(j)(1) of the Social Se10 curity Act (42 U.S.C. 1395cc(j)(1)) is amended by adding 

11 at the end the following new subparagraph: 

12 ‘‘(D) BILLING AGENTS AND CLEARING13 HOUSES REQUIRED TO BE REGISTER UNDER

14 MEDICARE.—Any agent, clearinghouse, or other 

15 alternate payee that submits claims on behalf of 

16 a health care provider must be registered with 

17 the Secretary in a form and manner specified 

18 by the Secretary.’’. 

19 (b) MEDICAID.—For a similar provision with respect 

20 to the Medicaid program under title XIX of the Social Se21 curity Act, see section 1759. 

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

23 subsection (a) shall apply to claims submitted on or after 

24 January 1, 2012. 


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1 SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO 

2 FALSE CLAIMS ACT AMENDMENTS. 

3 Section 1128A of the Social Security Act, as amended 

4 by sections 1611, 1612, 1613, and 1615, is further 

5 amended— 

6 (1) in subsection (a)— 

7 (A) in paragraph (1), by striking ‘‘to an 

8 officer, employee, or agent of the United States, 

9 or of any department or agency thereof, or of 

10 any State agency (as defined in subsection 

11 (i)(1))’’; 

12 (B) in paragraph (4)— 

13 (i) by striking ‘‘participating in a pro14 gram under title XVIII or a State health 

15 care program’’ and inserting ‘‘participating 

16 in a Federal health care program (as de17 fined in section 1128B(f))’’; and 

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

19 ‘‘title XVIII or a State health care pro20 gram’’ and inserting ‘‘a Federal health 

21 care program (as defined in section 

22 1128B(f))’’; 

23 (C) by striking ‘‘or’’ at the end of para24 graph (10); 

25 (D) by inserting after paragraph (11) the 

26 following new paragraphs: 


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1 ‘‘(12) conspires to commit a violation of this 

2 section; or 

3 ‘‘(13) knowingly makes, uses, or causes to be 

4 made or used, a false record or statement material 

5 to an obligation to pay or transmit money or prop6 erty to a Federal health care program, or knowingly 

7 conceals or knowingly and improperly avoids or de8 creases an obligation to pay or transmit money or 

9 property to a Federal health care program;’’; and 

10 (E) in the matter following paragraph 

11 (13), as inserted by subparagraph (D), by strik12 ing ‘‘or in cases under paragraph (11), $50,000 

13 for each such violation’’ and inserting ‘‘in cases 

14 under paragraph (11), $50,000 for each such 

15 violation, in cases under paragraph (12), 

16 $50,000 for any violation described in this sec17 tion committed in furtherance of the conspiracy 

18 involved; or in cases under paragraph (13), 

19 $50,000 for each false record or statement, or 

20 concealment, avoidance, or decrease’’; and 

21 (F) in the second sentence, by striking 

22 ‘‘such false statement or misrepresentation)’’ 

23 and inserting ‘‘such false statement or mis24 representation, in cases under paragraph (12), 

25 an assessment of not more than 3 times the 


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1 total amount that would otherwise apply for 

2 any violation described in this section com3 mitted in furtherance of the conspiracy in4 volved, or in cases under paragraph (13), an as5 sessment of not more than 3 times the total 

6 amount of the obligation to which the false 

7 record or statement was material or that was 

8 avoided or decreased)’’. 

9 (2) in subsection (c)(1), by striking ‘‘six years’’ 

10 and inserting ‘‘10 years’’; and 

11 (3) in subsection (i)— 

12 (A) by amending paragraph (2) to read as 

13 follows: 

14 ‘‘(2) The term ‘‘claim’’ means any application, 

15 request, or demand, whether under contract, or oth16 erwise, for money or property for items and services 

17 under a Federal health care program (as defined in 

18 section 1128B(f)), whether or not the United States 

19 or a State agency has title to the money or property, 

20 that— 

21 ‘‘(A) is presented or caused to be pre22 sented to an officer, employee, or agent of the 

23 United States, or of any department or agency 

24 thereof, or of any State agency (as defined in 

25 subsection (i)(1)); or 


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1 ‘‘(B) is made to a contractor, grantee, or 

2 other recipient if the money or property is to be 

3 spent or used on the Federal health care pro4 gram’s behalf or to advance a Federal health 

5 care program interest, and if the Federal health 

6 care program— 

7 ‘‘(i) provides or has provided any por8 tion of the money or property requested or 

9 demanded; or 

10 ‘‘(ii) will reimburse such contractor, 

11 grantee, or other recipient for any portion 

12 of the money or property which is re13 quested or demanded.’’; 

14 (B) by amending paragraph (3) to read as 

15 follows: 

16 ‘‘(3) The term ‘item or service’ means, without 

17 limitation, any medical, social, management, admin18 istrative, or other item or service used in connection 

19 with or directly or indirectly related to a Federal 

20 health care program.’’; 

21 (C) in paragraph (6)— 

22 (i) in subparagraph (C), by striking at 

23 the end ‘‘or’’; 


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1 (ii) in the first subparagraph (D), by 

2 striking at the end the period and inserting 

3 ‘‘; or’’; and 

4 (iii) by redesignating the second sub5 paragraph (D) as a subparagraph (E); 

6 (D) by amending paragraph (7) to read as 

7 follows: 

8 ‘‘(7) The terms ‘knowing’, ‘knowingly’, and 

9 ‘should know’ mean that a person, with respect to 

10 information— 

11 ‘‘(A) has actual knowledge of the informa12 tion; 

13 ‘‘(B) acts in deliberate ignorance of the 

14 truth or falsity of the information; or 

15 ‘‘(C) acts in reckless disregard of the truth 

16 or falsity of the information; 

17 and require no proof of specific intent to defraud.’’; 

18 and 

19 (E) by adding at the end the following new 

20 paragraphs: 

21 ‘‘(8) The term ‘obligation’ means an established 

22 duty, whether or not fixed, arising from an express 

23 or implied contractual, grantor-grantee, or licensor24 licensee relationship, from a fee-based or similar reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01789 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 lationship, from statute or regulation, or from the 

2 retention of any overpayment. 

3 ‘‘(9) The term ‘material’ means having a nat4 ural tendency to influence, or be capable of influ5 encing, the payment or receipt of money or prop6 erty.’’. 

7 Subtitle D—Access to Information 

8 Needed To Prevent Fraud, 

9 Waste, and Abuse 

10 SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDEN11 TIFY FRAUD, WASTE, AND ABUSE. 

12 Section 1128G of the Social Security Act, as added 

13 by section 1631 and amended by sections 1632 and 1641, 

14 is further amended by adding at the end the following new 

15 subsection; 

16 ‘‘(d) ACCESS TO INFORMATION NECESSARY TO

17 IDENTIFY FRAUD, WASTE, AND ABUSE.—For purposes of 

18 law enforcement activity, and to the extent consistent with 

19 applicable disclosure, privacy, and security laws, including 

20 the Health Insurance Portability and Accountability Act 

21 of 1996 and the Privacy Act of 1974, and subject to any 

22 information systems security requirements enacted by law 

23 or otherwise required by the Secretary, the Attorney Gen24 eral shall have access, facilitation by the Inspector General 

25 of the Department of Health and Human Services, to 


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1 claims and payment data relating to titles XVIII and XIX, 

2 in consultation with the Centers for Medicare & Medicaid 

3 Services or the owner of such data.’’. 

4 SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE 

5 HEALTHCARE INTEGRITY AND PROTECTION 

6 DATA BANK AND THE NATIONAL PRACTI7 TIONER DATA BANK. 

8 (a) IN GENERAL.—To eliminate duplication between 

9 the Healthcare Integrity and Protection Data Bank 

10 (HIPDB) established under section 1128E of the Social 

11 Security Act and the National Practitioner Data Bank 

12 (NPBD) established under the Health Care Quality Im13 provement Act of 1986, section 1128E of the Social Secu14 rity Act (42 U.S.C. 1320a–7e) is amended— 

15 (1) in subsection (a), by striking ‘‘Not later 

16 than’’ and inserting ‘‘Subject to subsection (h), not 

17 later than’’; 

18 (2) in the first sentence of subsection (d)(2), by 

19 striking ‘‘(other than with respect to requests by 

20 Federal agencies)’’; and 

21 (3) by adding at the end the following new sub22 section: 

23 ‘‘(h) SUNSET OF THE HEALTHCARE INTEGRITY AND

24 PROTECTION DATA BANK; TRANSITION PROCESS.—Ef25 fective upon the enactment of this subsection, the SecVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01791 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 retary shall implement a process to eliminate duplication 

2 between the Healthcare Integrity and Protection Data 

3 Bank (in this subsection referred to as the ‘HIPDB’ es4 tablished pursuant to subsection (a) and the National 

5 Practitioner Data Bank (in this subsection referred to as 

6 the ‘NPDB’) as implemented under the Health Care Qual7 ity Improvement Act of 1986 and section 1921 of this Act, 

8 including systems testing necessary to ensure that infor9 mation formerly collected in the HIPDB will be accessible 

10 through the NPDB, and other activities necessary to 

11 eliminate duplication between the two data banks. Upon 

12 the completion of such process, notwithstanding any other 

13 provision of law, the Secretary shall cease the operation 

14 of the HIPDB and shall collect information required to 

15 be reported under the preceding provisions of this section 

16 in the NPDB. Except as otherwise provided in this sub17 section, the provisions of subsections (a) through (g) shall 

18 continue to apply with respect to the reporting of (or fail19 ure to report), access to, and other treatment of the infor20 mation specified in this section.’’. 

21 (b) ELIMINATION OF THE RESPONSIBILITY OF THE

22 HHS OFFICE OF THE INSPECTOR GENERAL.—Section 

23 1128C(a)(1) of the Social Security Act (42 U.S.C. 1320a– 

24 7c(a)(1)) is amended— 


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1 (1) in subparagraph (C), by adding at the end 

2 ‘‘and’’; 

3 (2) in subparagraph (D), by striking at the end 

4 ‘‘, and’’ and inserting a period; and 

5 (3) by striking subparagraph (E). 

6 (c) SPECIAL PROVISION FOR ACCESS TO THE NA7 TIONAL PRACTITIONER DATA BANK BY THE DEPART8 MENT OF VETERANS AFFAIRS.— 

9 (1) IN GENERAL.—Notwithstanding any other 

10 provision of law, during the one year period that be11 gins on the effective date specified in subsection 

12 (e)(1), the information described in paragraph (2) 

13 shall be available from the National Practitioner 

14 Data Bank (described in section 1921 of the Social 

15 Security Act) to the Secretary of Veterans Affairs 

16 without charge. 

17 (2) INFORMATION DESCRIBED.—For purposes 

18 of paragraph (1), the information described in this 

19 paragraph is the information that would, but for the 

20 amendments made by this section, have been avail21 able to the Secretary of Veterans Affairs from the 

22 Healthcare Integrity and Protection Data Bank. 

23 (d) FUNDING.—Notwithstanding any provisions of 

24 this Act, sections 1128E(d)(2) and 1817(k)(3) of the So25 cial Security Act, or any other provision of law, there shall 


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1 be available for carrying out the transition process under 

2 section 1128E(h) of the Social Security Act over the pe3 riod required to complete such process, and for operation 

4 of the National Practitioner Data Bank until such process 

5 is completed, without fiscal year limitation— 

6 (1) any fees collected pursuant to section 

7 1128E(d)(2) of such Act; and 

8 (2) such additional amounts as necessary, from 

9 appropriations available to the Secretary and to the 

10 Office of the Inspector General of the Department of 

11 Health and Human Services under clauses (i) and 

12 (ii), respectively, of section 1817(k)(3)(A) of such 

13 Act, for costs of such activities during the first 12 

14 months following the date of the enactment of this 

15 Act. 

16 (e) EFFECTIVE DATE.—The amendments made— 

17 (1) by subsection (a)(2) shall take effect on the 

18 first day after the Secretary of Health and Human 

19 Services certifies that the process implemented pur20 suant to section 1128E(h) of the Social Security Act 

21 (as added by subsection (a)(3)) is complete; and 

22 (2) by subsection (b) shall take effect on the 

23 earlier of the date specified in paragraph (1) or the 

24 first day of the second succeeding fiscal year after 

25 the fiscal year during which this Act is enacted. 


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1 SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECU2 RITY STANDARDS. 

3 The provisions of sections 262(a) and 264 of the 

4 Health Insurance Portability and Accountability Act of 

5 1996 (and standards promulgated pursuant to such sec6 tions) and the Privacy Act of 1974 shall apply with respect 

7 to the provisions of this subtitle and amendments made 

8 by this subtitle. 

9 TITLE O—MEDICAID AND CHIP 

10 Subtitle A—Medicaid and Health 

11 Reform 

12 SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME 

BELOW 1331 13 ⁄3 PERCENT OF THE FEDERAL 

14 POVERTY LEVEL. 

15 (a) ELIGIBILITY FOR NON-TRADITIONAL INDIVID16 UALS WITH INCOME BELOW 133 PERCENT OF THE FED17 ERAL POVERTY LEVEL.— 

18 (1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 

19 the Social Security Act (42 U.S.C. 

20 1396b(a)(10)(A)(i) is amended— 

21 (A) by striking ‘‘or’’ at the end of sub22 clause (VI); 

23 (B) by adding ‘‘or’’ at the end of subclause 

24 (VII); and 

25 (C) by adding at the end the following new 

26 subclause: 


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1 ‘‘(VIII) who are under 65 years 

2 of age, who are not described in a pre3 vious subclause of this clause, and 

4 who are in families whose income (de5 termined using methodologies and 

6 procedures specified by the Secretary 

7 in consultation with the Health 

8 Choices Commissioner) does not exceed 1331 9 ⁄3 percent of the income offi10 cial poverty line (as defined by the Of11 fice of Management and Budget, and 

12 revised annually in accordance with 

13 section 673(2) of the Omnibus Budget 

14 Reconciliation Act of 1981) applicable 

15 to a family of the size involved;’’. 

16 (2) 100% FMAP FOR NON-TRADITIONAL MED17 ICAID ELIGIBLE INDIVIDUALS.—Section 1905 of 

18 such Act (42 U.S.C. 1396d) is amended— 

19 (A) in the third sentence of subsection (b) 

20 by inserting before the period at the end the 

21 following: ‘‘and with respect to amounts de22 scribed in subsection (y)’’; and 

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

24 subsection: 


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1 ‘‘(y) ADDITIONAL EXPENDITURES SUBJECT TO

2 100% FMAP.—For purposes of section 1905(b), the 

3 amounts described in this subsection are the following: 

4 ‘‘(1) Amounts expended for medical assistance 

5 for individuals described in subclause (VIII) of sec6 tion 1902(a)(10)(A)(i).’’. 

7 (3) CONSTRUCTION.—Nothing in this sub8 section shall be construed as not providing for cov9 erage under subclause (VIII) of section 

10 1902(a)(10)(A)(i) of the Social Security Act, as 

11 added by paragraph (1) of, and an increased FMAP 

12 under the amendment made by paragraph (2) for, 

13 an individual who has been provided medical assist14 ance under title XIX of the Act under a demonstra15 tion waiver approved under section 1115 of such Act 

16 or with State funds. 

17 (4) CONFORMING AMENDMENT.—Section 

18 1903(f)(4) of the Social Security Act (42 U.S.C. 

19 1396b(f)(4)) is amended by inserting 

20 ‘‘1902(a)(10)(A)(i)(VIII),’’ after 

21 ‘‘1902(a)(10)(A)(i)(VII),’’. 

22 (b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELI23 GIBLE INDIVIDUALS WITH INCOME NOT EXCEEDING

1331 24 ⁄3 PERCENT OF THE FEDERAL POVERTY LEVEL.— 


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1 (1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 

2 the Social Security Act (42 U.S.C. 

3 1396b(a)(10)(A)(i)), as amended by subsection (a), 

4 is amended— 

5 (A) by striking ‘‘or’’ at the end of sub6 clause (VII); 

7 (B) by adding ‘‘or’’ at the end of subclause 

8 (VIII); and 

9 (C) by adding at the end the following new 

10 subclause: 

11 ‘‘(IX) who are under 65 years of 

12 age, who would be eligible for medical 

13 assistance under the State plan under 

14 one of subclauses (I) through (VII) 

15 (based on the income standards, 

16 methodologies, and procedures in ef17 fect as of June 16, 2009) but for in18 come and who are in families whose 

income does not exceed 1331 19 ⁄3 percent 

20 of the income official poverty line (as 

21 defined by the Office of Management 

22 and Budget, and revised annually in 

23 accordance with section 673(2) of the 

24 Omnibus Budget Reconciliation Act of 


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1 1981) applicable to a family of the 

2 size involved;’’. 

3 (2) 100% FMAP FOR CERTAIN TRADITIONAL

4 MEDICAID ELIGIBLE INDIVIDUALS.—Section 1905(y) 

5 of such Act (42 U.S.C. 1396d(b)), as added by sub6 section (a)(2)(B), is amended by inserting ‘‘or (IX)’’ 

7 after ‘‘(VIII)’’. 

8 (3) CONSTRUCTION.—Nothing in this sub9 section shall be construed as not providing for cov10 erage under subclause (IX) of section 

11 1902(a)(10)(A)(i) of the Social Security Act, as 

12 added by paragraph (1) of, and an increased FMAP 

13 under the amendment made by paragraph (2) for, 

14 an individual who has been provided medical assist15 ance under title XIX of the Act under a demonstra16 tion waiver approved under section 1115 of such Act 

17 or with State funds. 

18 (4) CONFORMING AMENDMENT.—Section 

19 1903(f)(4) of the Social Security Act (42 U.S.C. 

20 1396b(f)(4)), as amended by subsection (a)(4), is 

21 amended by inserting ‘‘1902(a)(10)(A)(i)(IX),’’ after 

22 ‘‘1902(a)(10)(A)(i)(VIII),’’. 

23 (c) 100% MATCHING RATE FOR TEMPORARY COV24 ERAGE OF CERTAIN NEWBORNS.—Section 1905(y) of 

25 such Act, as added by subsection (a)(2)(B), is amended— 


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1 (1) in paragraph (1), by inserting before the pe2 riod at the end the following: ‘‘, and who is not pro3 vided medical assistance under section 1943(b)(2) of 

4 this title or section 205(d)(1)(B) of the America’s 

5 Affordable Health Choices Act of 2009’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(2) Amounts expended for medical assistance 

8 for children described in section 203(d)(1)(A) of the 

9 America’s Affordable Health Choices Act of 2009 

10 during the time period specified in such section.’’. 

11 (d) NETWORK ADEQUACY.—Section 1932(a)(2) of 

12 the Social Security Act (42 U.S.C. 1396u–2(a)(2)) is 

13 amended by adding at the end the following new subpara14 graph: 

15 ‘‘(D) ENROLLMENT OF NON-TRADITIONAL

16 MEDICAID ELIGIBLES.—A State may not re17 quire under paragraph (1) the enrollment in a 

18 managed care entity of an individual described 

19 in section 1902(a)(10)(A)(i)(VIII) unless the 

20 State demonstrates, to the satisfaction of the 

21 Secretary, that the entity, through its provider 

22 network and other arrangements, has the ca23 pacity to meet the health, mental health, and 

24 substance abuse needs of such individuals.’’. 


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect on the first day of Y1, and 

3 shall apply with respect to items and services furnished 

4 on or after such date. 

5 SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER6 TAIN MEDICAID ELIGIBLE INDIVIDUALS. 

7 (a) IN GENERAL.—Title XIX of the Social Security 

8 Act is amended by adding at the end the following new 

9 section: 

10 ‘‘REQUIREMENTS AND SPECIAL RULES FOR CERTAIN

11 MEDICAID ELIGIBLE INDIVIDUALS

12 ‘‘SEC. 1943. (a) COORDINATION WITH NHI EX13 CHANGE THROUGH MEMORANDUM OF UNDER14 STANDING.— 

15 ‘‘(1) IN GENERAL.—The State shall enter into 

16 a Medicaid memorandum of understanding described 

17 in section 204(e)(4) of the America’s Affordable 

18 Health Choices Act of 2009 with the Health Choices 

19 Commissioner, acting in consultation with the Sec20 retary, with respect to coordinating the implementa21 tion of the provisions of subdivision A of such Act 

22 with the State plan under this title in order to en23 sure the enrollment of Medicaid eligible individuals 

24 in acceptable coverage. Nothing in this section shall 

25 be construed as permitting such memorandum to 


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1 modify or vitiate any requirement of a State plan 

2 under this title. 

3 ‘‘(2) ENROLLMENT OF EXCHANGE-REFERRED

4 INDIVIDUALS.— 

5 ‘‘(A) NON-TRADITIONAL INDIVIDUALS.— 

6 Pursuant to such memorandum the State shall 

7 accept without further determination the enroll8 ment under this title of an individual deter9 mined by the Commissioner to be a non-tradi10 tional Medicaid eligible individual. The State 

11 shall not do any redeterminations of eligibility 

12 for such individuals unless the periodicity of 

13 such redeterminations is consistent with the pe14 riodicity for redeterminations by the Commis15 sioner of eligibility for affordability credits 

16 under subtitle C of title II of subdivision A of 

17 the America’s Affordable Health Choices Act of 

18 2009, as specified under such memorandum. 

19 ‘‘(B) TRADITIONAL INDIVIDUALS.— 

20 ‘‘(i) REGULAR ENROLLMENT OP21 TION.—Pursuant to such memorandum, 

22 insofar as the memorandum has selected 

23 the option described in section 

24 205(e)(3)(A) of the America’s Affordable 

25 Health Choices Act of 2009, the State 


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1 shall accept without further determination 

2 the enrollment under this title of an indi3 vidual determined by the Commissioner to 

4 be a traditional Medicaid eligible indi5 vidual. The State may do redeterminations 

6 of eligibility of such individual consistent 

7 with such section and the memorandum. 

8 ‘‘(ii) PRESUMPTIVE ELIGIBILITY OP9 TION.—Pursuant to such memorandum, 

10 insofar as the memorandum has selected 

11 the option described in section 

12 205(e)(3)(B) of the America’s Affordable 

13 Health Choices Act of 2009, the State 

14 shall provide for making medical assistance 

15 available during the presumptive eligibility 

16 period and shall, upon application of the 

17 individual for medical assistance under this 

18 title, promptly make a determination (and 

19 subsequent redeterminations) of eligibility 

20 in the same manner as if the individual 

21 had applied directly to the State for such 

22 assistance except that the State shall use 

23 the income-related information used by the 

24 Commissioner and provided to the State 

25 under the memorandum in making the preVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01803 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sumptive eligibility determination to the 

2 maximum extent feasible. 

3 ‘‘(3) DETERMINATIONS OF ELIGIBILITY FOR

4 AFFORDABILITY CREDITS.—If the Commissioner de5 termines that a State Medicaid agency has the ca6 pacity to make determinations of eligibility for af7 fordability credits under subtitle C of title II of sub8 division A of the America’s Affordable Health 

9 Choices Act of 2009, under such memorandum— 

10 ‘‘(A) the State Medicaid agency shall con11 duct such determinations for any Exchange-eli12 gible individual who requests such a determina13 tion; 

14 ‘‘(B) in the case that a State Medicaid 

15 agency determines that an Exchange-eligible in16 dividual is not eligible for affordability credits, 

17 the agency shall forward the information on the 

18 basis of which such determination was made to 

19 the Commissioner; and 

20 ‘‘(C) the Commissioner shall reimburse the 

21 State Medicaid agency for the costs of con22 ducting such determinations. 

23 ‘‘(b) TREATMENT OF CERTAIN NEWBORNS.— 

24 ‘‘(1) IN GENERAL.—In the case of a child who 

25 is deemed under section 205(d)(1) of the America’s 


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1 Affordable Health Choices Act of 2009 to be a non2 traditional Medicaid eligible individual and enrolled 

3 under this title pursuant to such section, the State 

4 shall provide for a determination, by not later than 

5 the end of the period referred to in subparagraph 

6 (A) of such section, of the child’s eligibility for med7 ical assistance under this title. 

8 ‘‘(2) EXTENDED TREATMENT AS TRADITIONAL

9 MEDICAID ELIGIBLE INDIVIDUAL.—In accordance 

10 with subparagraph (B) of section 205(d)(1) of the 

11 America’s Affordable Health Choices Act of 2009, in 

12 the case of a child described in subparagraph (A) of 

13 such section who at the end of the period referred 

14 to in such subparagraph is not otherwise covered 

15 under acceptable coverage, the child shall be deemed 

16 (until such time as the child obtains such coverage 

17 or the State otherwise makes a determination of the 

18 child’s eligibility for medical assistance under its 

19 plan under this title pursuant to paragraph (1)) to 

20 be a traditional Medicaid eligible individual de21 scribed in section 1902(l)(1)(B). 

22 ‘‘(c) DEFINITIONS .—In this section: 

23 ‘‘(1) MEDICAID ELIGIBLE INDIVIDUALS.—In 

24 this section, the terms ‘Medicaid eligible individual’, 

25 ‘traditional Medicaid eligible individual’, and ‘nonVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01805 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 traditional Medicaid eligible individual’ have the 

2 meanings given such terms in section 205(e)(5) of 

3 the America’s Affordable Health Choices Act of 

4 2009. 

5 ‘‘(2) MEMORANDUM.—The term ‘memorandum’ 

6 means a Medicaid memorandum of understanding 

7 under section 205(e)(4) of the America’s Affordable 

8 Health Choices Act of 2009. 

9 ‘‘(3) Y1.—The term ‘Y1’ has the meaning given 

10 such term in section 100(c) of the America’s Afford11 able Health Choices Act of 2009.’’. 

12 (b) CONFORMING AMENDMENTS TO ERROR RATE.— 

13 (1) Section 1903(u)(1)(D) of the Social Secu14 rity Act (42 U.S.C. 1396b(u)(1)(D)) is amended by 

15 adding at the end the following new clause: 

16 ‘‘(vi) In determining the amount of erroneous excess 

17 payments, there shall not be included any erroneous pay18 ments made that are attributable to an error in an eligi19 bility determination under subtitle C of title II of subdivi20 sion A of the America’s Affordable Health Choices Act of 

21 2009.’’. 

22 (2) Section 2105(c)(11) of such Act (42 U.S.C. 

23 1397ee(c)(11)) is amended by adding at the end the 

24 following new sentence: ‘‘Clause (vi) of section 

25 1903(u)(1)(D) shall apply with respect to the appliVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01806 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cation of such requirements under this title and title 

2 XIX.’’. 

3 SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT. 

4 (a) CHIP MAINTENANCE OF EFFORT.—Section 

5 1902 of the Social Security Act (42 U.S.C. 1396a) is 

6 amended— 

7 (1) in subsection (a), as amended by section 

8 1631(b)(1)(D)— 

9 (A) by striking ‘‘and’’ at the end of para10 graph (72); 

11 (B) by striking the period at the end of 

12 paragraph (73) and inserting ‘‘; and’’; and 

13 (C) by inserting after paragraph (74) the 

14 following new paragraph: 

15 ‘‘(75) provide for maintenance of effort under 

16 the State child health plan under title XXI in ac17 cordance with subsection (gg).’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(gg) CHIP MAINTENANCE OF EFFORT REQUIRE21 MENT.— 

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

23 as a condition of its State plan under this title under 

24 subsection (a)(75) and receipt of any Federal finan25 cial assistance under section 1903(a) for calendar 


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1 quarters beginning after the date of the enactment 

2 of this subsection and before CHIP MOE termi3 nation date specified in paragraph (3), a State shall 

4 not have in effect eligibility standards, methodolo5 gies, or procedures under its State child health plan 

6 under title XXI (including any waiver under such 

7 title or under section 1115 that is permitted to con8 tinue effect) that are more restrictive than the eligi9 bility standards, methodologies, or procedures, re10 spectively, under such plan (or waiver) as in effect 

11 on June 16, 2009. 

12 ‘‘(2) LIMITATION.—Paragraph (1) shall not be 

13 construed as preventing a State from imposing a 

14 limitation described in section 2110(b)(5)(C)(i)(II) 

15 for a fiscal year in order to limit expenditures under 

16 its State child health plan under title XXI to those 

17 for which Federal financial participation is available 

18 under section 2105 for the fiscal year. 

19 ‘‘(3) CHIP MOE TERMINATION DATE.—In para20 graph (1), the ‘CHIP MOE termination date’ for a 

21 State is the date that is the first day of Y1 (as de22 fined in section 100(c) of the America’s Affordable 

23 Health Choices Act of 2009) or, if later, the first 

24 day after such date that both of the following deter25 minations have been made: 


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1 ‘‘(A) The Health Choices Commissioner 

2 has determined that the Health Insurance Ex3 change has the capacity to support the partici4 pation of CHIP enrollees who are Exchange-eli5 gible individuals (as defined in section 202(b) of 

6 the America’s Affordable Health Choices Act of 

7 2009), 

8 ‘‘(B) The Secretary has determined that 

9 such Exchange, the State, and employers have 

10 procedures in effect to ensure the timely transi11 tion without interruption of coverage of CHIP 

12 enrollees from assistance under title XXI to ac13 ceptable coverage (as defined for purposes of 

14 such Act). 

15 In this paragraph, the term ‘CHIP enrollee’ means 

16 a targeted low-income child or (if the State has 

17 elected the option under section 2112, a targeted 

18 low-income pregnant woman) who is or otherwise 

19 would be (but for acceptable coverage) eligible for 

20 child health assistance or pregnancy-related assist21 ance, respectively, under the State child health plan 

22 referred to in paragraph (1).’’. 

23 (b) MEDICAID MAINTENANCE OF EFFORT; SIMPLI24 FYING AND COORDINATING ELIGIBILITY RULES BE25 TWEEN EXCHANGE AND MEDICAID.— 


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1 (1) IN GENERAL.—Section 1903 of such Act 

2 (42 U.S.C. 1396b) is amended by adding at the end 

3 the following new subsection: 

4 ‘‘(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI5 FYING AND COORDINATING ELIGIBILITY RULES BE6 TWEEN HEALTH INSURANCE EXCHANGE AND MED7 ICAID.— 

8 ‘‘(1) MAINTENANCE OF EFFORT.—A State is 

9 not eligible for payment under subsection (a) for a 

10 calendar quarter beginning after the date of the en11 actment of this subsection if eligibility standards, 

12 methodologies, or procedures under its plan under 

13 this title (including any waiver under this title or 

14 under section 1115 that is permitted to continue ef15 fect) that are more restrictive than the eligibility 

16 standards, methodologies, or procedures, respec17 tively, under such plan (or waiver) as in effect on 

18 June 16, 2009. The Secretary shall extend such a 

19 waiver (including the availability of Federal financial 

20 participation under such waiver) for such period as 

21 may be required for a State to meet the requirement 

22 of the previous sentence. 

23 ‘‘(2) REMOVAL OF ASSET TEST FOR CERTAIN

24 ELIGIBILITY CATEGORIES.— 


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1 ‘‘(A) IN GENERAL.—A State is not eligible 

2 for payment under subsection (a) for a calendar 

3 quarter beginning on or after the first day of 

4 Y1 (as defined in section 100(c) of the Amer5 ica’s Affordable Health Choices Act of 2009), if 

6 the State applies any asset or resource test in 

7 determining (or redetermining) eligibility of any 

8 individual on or after such first day under any 

9 of the following: 

10 ‘‘(i) Subclause (I), (III), (IV), or (VI) 

11 of section 1902(a)(10)(A)(i). 

12 ‘‘(ii) Subclause (II), (IX), (XIV) or 

13 (XVII) of section 1902(a)(10)(A)(ii). 

14 ‘‘(iii) Section 1931(b). 

15 ‘‘(B) OVERRIDING CONTRARY PROVISIONS; 

16 REFERENCES.—The provisions of this title that 

17 prevent the waiver of an asset or resource test 

18 described in subparagraph (A) are hereby 

19 waived. 

20 ‘‘(C) REFERENCES.—Any reference to a 

21 provision described in a provision in subpara22 graph (A) shall be deemed to be a reference to 

23 such provision as modified through the applica24 tion of subparagraphs (A) and (B).’’. 


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1 (2) CONFORMING AMENDMENTS.—(A) Section 

2 1902(a)(10)(A) of such Act (42 U.S.C. 

3 1396a(a)(10)(A)) is amended, in the matter before 

4 clause (i), by inserting ‘‘subject to section 

5 1903(aa)(2),’’ after ‘‘(A)’’. 

6 (B) Section 1931(b)(2) of such Act (42 U.S.C. 

7 1396u–1(b)(1)) is amended by inserting ‘‘subject to 

8 section 1903(aa)(2)’’ after ‘‘and (3)’’. 

9 (c) STANDARDS FOR BENCHMARK PACKAGES.—Sec10 tion 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is 

11 amended— 

12 (1) in paragraph (1), by inserting ‘‘subject to 

13 paragraph (5)’’; and 

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

15 paragraph: 

16 ‘‘(5) MINIMUM STANDARDS.—Effective January 

17 1, 2013, any benchmark benefit package (or bench18 mark equivalent coverage under paragraph (2)) 

19 must meet the minimum benefits and cost-sharing 

20 standards of a basic plan offered through the Health 

21 Insurance Exchange.’’. 

22 SEC. 1704. REDUCTION IN MEDICAID DSH. 

23 (a) REPORT.— 

24 (1) IN GENERAL.—Not later than January 1, 

25 2016, the Secretary of Health and Human Services 


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1 (in this title referred to as the ‘‘Secretary’’) shall 

2 submit to Congress a report concerning the extent to 

3 which, based upon the impact of the health care re4 forms carried out under subdivision A in reducing 

5 the number of uninsured individuals, there is a con6 tinued role for Medicaid DSH. In preparing the re7 port, the Secretary shall consult with community8 based health care networks serving low-income bene9 ficiaries. 

10 (2) MATTERS TO BE INCLUDED.—The report 

11 shall include the following: 

12 (A) RECOMMENDATIONS.—Recommenda13 tions regarding— 

14 (i) the appropriate targeting of Med15 icaid DSH within States; and 

16 (ii) the distribution of Medicaid DSH 

17 among the States. 

18 (B) SPECIFICATION OF DSH HEALTH RE19 FORM METHODOLOGY.—The DSH Health Re20 form methodology described in paragraph (2) of 

21 subsection (b) for purposes of implementing the 

22 requirements of such subsection. 

23 (3) COORDINATION WITH MEDICARE DSH RE24 PORT.—The Secretary shall coordinate the report 


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1 under this subsection with the report on Medicare 

2 DSH under section 1112. 

3 (4) MEDICAID DSH.—In this section, the term 

4 ‘‘Medicaid DSH’’ means adjustments in payments 

5 under section 1923 of the Social Security Act for in6 patient hospital services furnished by dispropor7 tionate share hospitals. 

8 (b) MEDICAID DSH REDUCTIONS.— 

9 (1) IN GENERAL.—The Secretary shall reduce 

10 Medicaid DSH so as to reduce total Federal pay11 ments to all States for such purpose by 

12 $1,500,000,000 in fiscal year 2017, $2,500,000,000 

13 in fiscal year 2018, and $6,000,000,000 in fiscal 

14 year 2019. 

15 (2) DSH HEALTH REFORM METHODOLOGY.— 

16 The Secretary shall carry out paragraph (1) through 

17 use of a DSH Health Reform methodology issued by 

18 the Secretary that imposes the largest percentage re19 ductions on the States that— 

20 (A) have the lowest percentages of unin21 sured individuals (determined on the basis of 

22 audited hospital cost reports) during the most 

23 recent year for which such data are available; 

24 or 


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1 (B) do not target their DSH payments 

2 on— 

3 (i) hospitals with high volumes of 

4 Medicaid inpatients (as defined in section 

5 1923(b)(1)(A) of the Social Security Act 

6 (42 U.S.C. 1396r–4(b)(1)(A)); and 

7 (ii) hospitals that have high levels of 

8 uncompensated care (excluding bad debt). 

9 (3) DSH ALLOTMENT PUBLICATIONS.— 

10 (A) IN GENERAL.—Not later than the pub11 lication deadline specified in subparagraph (B), 

12 the Secretary shall publish in the Federal Reg13 ister a notice specifying the DSH allotment to 

14 each State under 1923(f) of the Social Security 

15 Act for the respective fiscal year specified in 

16 such subparagraph, consistent with the applica17 tion of the DSH Health Reform methodology 

18 described in paragraph (2). 

19 (B) PUBLICATION DEADLINE.—The publi20 cation deadline specified in this subparagraph 

21 is— 

22 (i) January 1, 2016, with respect to 

23 DSH allotments described in subparagraph 

24 (A) for fiscal year 2017; 


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1 (ii) January 1, 2017, with respect to 

2 DSH allotments described in subparagraph 

3 (A) for fiscal year 2018; and 

4 (iii) January 1, 2018, with respect to 

5 DSH allotments described in subparagraph 

6 (A) for fiscal year 2019. 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) Section 1923(f) of the Social Security Act 

9 (42 U.S.C. 1396r–4(f)) is amended— 

10 (A) by redesignating paragraph (7) as 

11 paragraph (8); and 

12 (B) by inserting after paragraph (6) the 

13 following new paragraph: 

14 ‘‘(7) SPECIAL RULE FOR FISCAL YEARS 2017, 

15 2018, AND 2019.— 

16 ‘‘(A) FISCAL YEAR 2017.—Notwithstanding 

17 paragraph (2), the total DSH allotments for all 

18 States for— 

19 ‘‘(i) fiscal year 2017, shall be the total 

20 DSH allotments that would otherwise be 

21 determined under this subsection for such 

22 fiscal year decreased by $1,500,000,000; 

23 ‘‘(ii) fiscal year 2018, shall be the 

24 total DSH allotments that would otherwise 

25 be determined under this subsection for 


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1 such fiscal year decreased by 

2 $2,500,000,000; and 

3 ‘‘(iii) fiscal year 2019, shall be the 

4 total DSH allotments that would otherwise 

5 be determined under this subsection for 

6 such fiscal year decreased by 

7 $6,000,000,000.’’. 

8 (2) Section 1923(b)(4) of such Act (42 U.S.C. 

9 1396r–4(b)(4)) is amended by adding before the pe10 riod the following: ‘‘or to affect the authority of the 

11 Secretary to issue and implement the DSH Health 

12 Reform methodology under section 1704(b)(2) of the 

13 America’s Health Choices Act of 2009’’. 

14 (d) DISPROPORTIONATE SHARE HOSPITALS (DSH) 

15 AND ESSENTIAL ACCESS HOSPITAL (EAH) NON-DIS16 CRIMINATION.— 

17 (1) IN GENERAL.—Section 1923(d) of the So18 cial Security Act (42 U.S.C. 1396r-4) is amended by 

19 adding at the end the following new paragraph: 

20 ‘‘(4) No hospital may be defined or deemed as 

21 a disproportionate share hospital, or as an essential 

22 access hospital (for purposes of subsection 

23 (f)(6)(A)(iv), under a State plan under this title or 

24 subsection (b) of this section (including any waiver 

25 under section 1115) unless the hospital— 


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1 ‘‘(A) provides services to beneficiaries 

2 under this title without discrimination on the 

3 ground of race, color, national origin, creed, 

4 source of payment, status as a beneficiary 

5 under this title, or any other ground unrelated 

6 to such beneficiary’s need for the services or the 

7 availability of the needed services in the hos8 pital; and 

9 ‘‘(B) makes arrangements for, and accepts, 

10 reimbursement under this title for services pro11 vided to eligible beneficiaries under this title.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by subsection (a) shall be apply to expenditures 

14 made on or after July 1, 2010. 

15 SEC. 1705. EXPANDED OUTSTATIONING. 

16 (a) IN GENERAL.—Section 1902(a)(55) of the Social 

17 Security Act (42 U.S.C. 1396a(a)(55)) is amended by 

18 striking ‘‘under subsection (a)(10)(A)(i)(IV), 

19 (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

20 (a)(10)(A)(ii)(IX)’’ and inserting ‘‘(including receipt and 

21 processing of applications of individuals for affordability 

22 credits under subtitle C of title II of subdivision A of the 

23 America’s Affordable Health Choices Act of 2009 pursu24 ant to a Medicaid memorandum of understanding under 

25 section 1943(a)(1))’’. 


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1 (b) EFFECTIVE DATE.— 

2 (1) Except as provided in paragraph (2), the 

3 amendment made by subsection (a) shall apply to 

4 services furnished on or after July 1, 2010, without 

5 regard to whether or not final regulations to carry 

6 out such amendment have been promulgated by such 

7 date. 

8 (2) In the case of a State plan for medical as9 sistance under title XIX of the Social Security Act 

10 which the Secretary of Health and Human Services 

11 determines requires State legislation (other than leg12 islation appropriating funds) in order for the plan to 

13 meet the additional requirement imposed by the 

14 amendment made by this section, the State plan 

15 shall not be regarded as failing to comply with the 

16 requirements of such title solely on the basis of its 

17 failure to meet this additional requirement before 

18 the first day of the first calendar quarter beginning 

19 after the close of the first regular session of the 

20 State legislature that begins after the date of the en21 actment of this Act. For purposes of the previous 

22 sentence, in the case of a State that has a 2-year 

23 legislative session, each year of such session shall be 

24 deemed to be a separate regular session of the State 

25 legislature. 


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1 Subtitle B—Prevention 

2 SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERV3 ICES. 

4 (a) COVERAGE.—Section 1905 of the Social Security 

5 Act (42 U.S.C. 1396d), as amended by section 

6 1701(a)(2)(B), is amended— 

7 (1) in subsection (a)(4)— 

8 (A) by striking ‘‘and’’ before ‘‘(C)’’; and 

9 (B) by inserting before the semicolon at 

10 the end the following: ‘‘and (D) preventive serv11 ices described in subsection (z)’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(z) PREVENTIVE SERVICES.—The preventive serv15 ices described in this subsection are services not otherwise 

16 described in subsection (a) or (r) that the Secretary deter17 mines are— 

18 ‘‘(1)(A) recommended with a grade of A or B 

19 by the Task Force for Clinical Preventive Services; 

20 or 

21 ‘‘(B) vaccines recommended for use as appro22 priate by the Director of the Centers for Disease 

23 Control and Prevention; and 

24 ‘‘(2) appropriate for individuals entitled to med25 ical assistance under this title.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 1928 of 

2 such Act (42 U.S.C. 1396s) is amended— 

3 (1) in subsection (c)(2)(B)(i), by striking ‘‘the 

4 advisory committee referred to in subsection (e)’’ 

5 and inserting ‘‘the Director of the Centers for Dis6 ease Control and Prevention’’; 

7 (2) in subsection (e), by striking ‘‘Advisory 

8 Committee’’ and all that follows and inserting ‘‘Di9 rector of the Centers for Disease Control and Pre10 vention.’’; and 

11 (3) by striking subsection (g). 

12 (c) EFFECTIVE DATE.— 

13 (1) Except as provided in paragraph (2), the 

14 amendments made by this section shall apply to 

15 services furnished on or after July 1, 2010, without 

16 regard to whether or not final regulations to carry 

17 out such amendments have been promulgated by 

18 such date. 

19 (2) In the case of a State plan for medical as20 sistance under title XIX of the Social Security Act 

21 which the Secretary of Health and Human Services 

22 determines requires State legislation (other than leg23 islation appropriating funds) in order for the plan to 

24 meet the additional requirements imposed by the 

25 amendments made by this section, the State plan 


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1 shall not be regarded as failing to comply with the 

2 requirements of such title solely on the basis of its 

3 failure to meet these additional requirements before 

4 the first day of the first calendar quarter beginning 

5 after the close of the first regular session of the 

6 State legislature that begins after the date of the en7 actment of this Act. For purposes of the previous 

8 sentence, in the case of a State that has a 2-year 

9 legislative session, each year of such session shall be 

10 deemed to be a separate regular session of the State 

11 legislature. 

12 SEC. 1712. TOBACCO CESSATION. 

13 (a) DROPPING TOBACCO CESSATION EXCLUSION

14 FROM COVERED OUTPATIENT DRUGS.—Section 

15 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r– 

16 8(d)(2)) is amended— 

17 (1) by striking subparagraph (E); 

18 (2) in subparagraph (G), by inserting before the 

19 period at the end the following: ‘‘, except agents ap20 proved by the Food and Drug Administration for 

21 purposes of promoting, and when used to promote, 

22 tobacco cessation’’; and 

23 (3) by redesignating subparagraphs (F) 

24 through (K) as subparagraphs (E) through (J), re25 spectively. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to drugs and services furnished 

3 on or after January 1, 2010. 

4 SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITA5 TION SERVICES. 

6 (a) IN GENERAL.—Section 1905 of the Social Secu7 rity Act (42 U.S.C. 1396d), as amended by sections 

8 1701(a)(2) and 1711(a), is amended— 

9 (1) in subsection (a)— 

10 (A) in paragraph (27), by striking ‘‘and’’ 

11 at the end; 

12 (B) by redesignating paragraph (28) as 

13 paragraph (29); and 

14 (C) by inserting after paragraph (27) the 

15 following new paragraph: 

16 ‘‘(28) nurse home visitation services (as defined 

17 in subsection (aa)); and’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(aa) The term ‘nurse home visitation services’ 

21 means home visits by trained nurses to families with a 

22 first-time pregnant woman, or a child (under 2 years of 

23 age), who is eligible for medical assistance under this title, 

24 but only, to the extent determined by the Secretary based 


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1 upon evidence, that such services are effective in one or 

2 more of the following: 

3 ‘‘(1) Improving maternal or child health and 

4 pregnancy outcomes or increasing birth intervals be5 tween pregnancies. 

6 ‘‘(2) Reducing the incidence of child abuse, ne7 glect, and injury, improving family stability (includ8 ing reduction in the incidence of intimate partner vi9 olence), or reducing maternal and child involvement 

10 in the criminal justice system. 

11 ‘‘(3) Increasing economic self-sufficiency, em12 ployment advancement, school-readiness, and edu13 cational achievement, or reducing dependence on 

14 public assistance.’’. 

15 (b) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to services furnished on or after 

17 January 1, 2010. 

18 (c) CONSTRUCTION.—Nothing in the amendments 

19 made by this section shall be construed as affecting the 

20 ability of a State under title XIX or XXI of the Social 

21 Security Act to provide nurse home visitation services as 

22 part of another class of items and services falling within 

23 the definition of medical assistance or child health assist24 ance under the respective title, or as an administrative ex25 penditure for which payment is made under section 


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1 1903(a) or 2105(a) of such Act, respectively, on or after 

2 the date of the enactment of this Act. 

3 SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLAN4 NING SERVICES. 

5 (a) COVERAGE AS OPTIONAL CATEGORICALLY

6 NEEDY GROUP.— 

7 (1) IN GENERAL.—Section 1902(a)(10)(A)(ii) 

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

9 1396a(a)(10)(A)(ii)) is amended— 

10 (A) in subclause (XVIII), by striking ‘‘or’’ 

11 at the end; 

12 (B) in subclause (XIX), by adding ‘‘or’’ at 

13 the end; and 

14 (C) by adding at the end the following new 

15 subclause: 

16 ‘‘(XX) who are described in subsection (hh) (re17 lating to individuals who meet certain income stand18 ards);’’. 

19 (2) GROUP DESCRIBED.—Section 1902 of such 

20 Act (42 U.S.C. 1396a), as amended by section 1703, 

21 is amended by adding at the end the following new 

22 subsection: 

23 ‘‘(hh)(1) Individuals described in this subsection are 

24 individuals— 


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1 ‘‘(A) whose income does not exceed an in2 come eligibility level established by the State 

3 that does not exceed the highest income eligi4 bility level established under the State plan 

5 under this title (or under its State child health 

6 plan under title XXI) for pregnant women; and 

7 ‘‘(B) who are not pregnant. 

8 ‘‘(2) At the option of a State, individuals de9 scribed in this subsection may include individuals 

10 who, had individuals applied on or before January 1, 

11 2007, would have been made eligible pursuant to the 

12 standards and processes imposed by that State for 

13 benefits described in clause (XV) of the matter fol14 lowing subparagraph (G) of section subsection 

15 (a)(10) pursuant to a waiver granted under section 

16 1115. 

17 ‘‘(3) At the option of a State, for purposes of 

18 subsection (a)(17)(B), in determining eligibility for 

19 services under this subsection, the State may con20 sider only the income of the applicant or recipient.’’. 

21 (3) LIMITATION ON BENEFITS.—Section 

22 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) 

23 is amended in the matter following subparagraph 

24 (G)— 


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1 (A) by striking ‘‘and (XIV)’’ and inserting 

2 ‘‘(XIV)’’; and 

3 (B) by inserting ‘‘, and (XV) the medical 

4 assistance made available to an individual de5 scribed in subsection (hh) shall be limited to 

6 family planning services and supplies described 

7 in section 1905(a)(4)(C) including medical di8 agnosis and treatment services that are pro9 vided pursuant to a family planning service in 

10 a family planning setting’’ after ‘‘cervical can11 cer’’. 

12 (4) CONFORMING AMENDMENTS.—Section 

13 1905(a) of such Act (42 U.S.C. 1396d(a)), as 

14 amended by section 1731(c), is amended in the mat15 ter preceding paragraph (1)— 

16 (A) in clause (xiii), by striking ‘‘or’’ at the 

17 end; 

18 (B) in clause (xiv), by adding ‘‘or’’ at the 

19 end; and 

20 (C) by inserting after clause (xiv) the fol21 lowing: 

22 ‘‘(xv) individuals described in section 

23 1902(hh),’’. 

24 (b) PRESUMPTIVE ELIGIBILITY.— 


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1 (1) IN GENERAL.—Title XIX of the Social Se2 curity Act (42 U.S.C. 1396 et seq.) is amended by 

3 inserting after section 1920B the following: 

4 ‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING

5 SERVICES

6 ‘‘SEC. 1920C. (a) STATE OPTION.—State plan ap7 proved under section 1902 may provide for making med8 ical assistance available to an individual described in sec9 tion 1902(hh) (relating to individuals who meet certain 

10 income eligibility standard) during a presumptive eligi11 bility period. In the case of an individual described in sec12 tion 1902(hh), such medical assistance shall be limited to 

13 family planning services and supplies described in 

14 1905(a)(4)(C) and, at the State’s option, medical diag15 nosis and treatment services that are provided in conjunc16 tion with a family planning service in a family planning 

17 setting. 

18 ‘‘(b) DEFINITIONS.—For purposes of this section: 

19 ‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The 

20 term ‘presumptive eligibility period’ means, with re21 spect to an individual described in subsection (a), 

22 the period that— 

23 ‘‘(A) begins with the date on which a 

24 qualified entity determines, on the basis of pre25 liminary information, that the individual is de26 scribed in section 1902(hh); and 


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1 ‘‘(B) ends with (and includes) the earlier 

2 of— 

3 ‘‘(i) the day on which a determination 

4 is made with respect to the eligibility of 

5 such individual for services under the State 

6 plan; or 

7 ‘‘(ii) in the case of such an individual 

8 who does not file an application by the last 

9 day of the month following the month dur10 ing which the entity makes the determina11 tion referred to in subparagraph (A), such 

12 last day. 

13 ‘‘(2) QUALIFIED ENTITY.— 

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), the term ‘qualified entity’ means 

16 any entity that— 

17 ‘‘(i) is eligible for payments under a 

18 State plan approved under this title; and 

19 ‘‘(ii) is determined by the State agen20 cy to be capable of making determinations 

21 of the type described in paragraph (1)(A). 

22 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 

23 in this paragraph shall be construed as pre24 venting a State from limiting the classes of enVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01829 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tities that may become qualified entities in 

2 order to prevent fraud and abuse. 

3 ‘‘(c) ADMINISTRATION.— 

4 ‘‘(1) IN GENERAL.—The State agency shall pro5 vide qualified entities with— 

6 ‘‘(A) such forms as are necessary for an 

7 application to be made by an individual de8 scribed in subsection (a) for medical assistance 

9 under the State plan; and 

10 ‘‘(B) information on how to assist such in11 dividuals in completing and filing such forms. 

12 ‘‘(2) NOTIFICATION REQUIREMENTS.—A quali13 fied entity that determines under subsection 

14 (b)(1)(A) that an individual described in subsection 

15 (a) is presumptively eligible for medical assistance 

16 under a State plan shall— 

17 ‘‘(A) notify the State agency of the deter18 mination within 5 working days after the date 

19 on which determination is made; and 

20 ‘‘(B) inform such individual at the time 

21 the determination is made that an application 

22 for medical assistance is required to be made by 

23 not later than the last day of the month fol24 lowing the month during which the determina25 tion is made. 


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1 ‘‘(3) APPLICATION FOR MEDICAL ASSIST2 ANCE.—In the case of an individual described in 

3 subsection (a) who is determined by a qualified enti4 ty to be presumptively eligible for medical assistance 

5 under a State plan, the individual shall apply for 

6 medical assistance by not later than the last day of 

7 the month following the month during which the de8 termination is made. 

9 ‘‘(d) PAYMENT.—Notwithstanding any other provi10 sion of law, medical assistance that— 

11 ‘‘(1) is furnished to an individual described in 

12 subsection (a)— 

13 ‘‘(A) during a presumptive eligibility pe14 riod; 

15 ‘‘(B) by a entity that is eligible for pay16 ments under the State plan; and 

17 ‘‘(2) is included in the care and services covered 

18 by the State plan, 

19 shall be treated as medical assistance provided by such 

20 plan for purposes of clause (4) of the first sentence of 

21 section 1905(b).’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Section 1902(a)(47) of the Social Se24 curity Act (42 U.S.C. 1396a(a)(47)) is amend25 ed by inserting before the semicolon at the end 


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1 the following: ‘‘and provide for making medical 

2 assistance available to individuals described in 

3 subsection (a) of section 1920C during a pre4 sumptive eligibility period in accordance with 

5 such section’’. 

6 (B) Section 1903(u)(1)(D)(v) of such Act 

7 (42 U.S.C. 1396b(u)(1)(D)(v)) is amended— 

8 (i) by striking ‘‘or for’’ and inserting 

9 ‘‘for’’; and 

10 (ii) by inserting before the period the 

11 following: ‘‘, or for medical assistance pro12 vided to an individual described in sub13 section (a) of section 1920C during a pre14 sumptive eligibility period under such sec15 tion’’. 

16 (c) CLARIFICATION OF COVERAGE OF FAMILY PLAN17 NING SERVICES AND SUPPLIES.—Section 1937(b) of the 

18 Social Security Act (42 U.S.C. 1396u–7(b)) is amended 

19 by adding at the end the following: 

20 ‘‘(5) COVERAGE OF FAMILY PLANNING SERV21 ICES AND SUPPLIES.—Notwithstanding the previous 

22 provisions of this section, a State may not provide 

23 for medical assistance through enrollment of an indi24 vidual with benchmark coverage or benchmark-equiv25 alent coverage under this section unless such covVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01832 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 erage includes for any individual described in section 

2 1905(a)(4)(C), medical assistance for family plan3 ning services and supplies in accordance with such 

4 section.’’. 

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

6 this section take effect on the date of the enactment of 

7 this Act and shall apply to items and services furnished 

8 on or after such date. 

9 Subtitle C—Access 

10 SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS. 

11 (a) IN GENERAL.— 

12 (1) FEE-FOR-SERVICE PAYMENTS.—Section 

13 1902(a)(13) of the Social Security Act (42 U.S.C. 

14 1396b(a)(13)) is amended— 

15 (A) by striking ‘‘and’’ at the end of sub16 paragraph (A); 

17 (B) by adding ‘‘and’’ at the end of sub18 paragraph (B); and 

19 (C) by adding at the end the following new 

20 subparagraph: 

21 ‘‘(C) payment for primary care services (as 

22 defined in section 1848(j)(5)(A), but applied 

23 without regard to clause (ii) thereof) furnished 

24 by physicians (or for services furnished by other 

25 health care professionals that would be primary 


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1 care services under such section if furnished by 

2 a physician) at a rate not less than 80 percent 

3 of the payment rate applicable to such services 

4 and physicians or professionals (as the case 

5 may be) under part B of title XVIII for services 

6 furnished in 2010, 90 percent of such rate for 

7 services and physicians (or professionals) fur8 nished in 2011, and 100 percent of such pay9 ment rate for services and physicians (or pro10 fessionals) furnished in 2012 or a subsequent 

11 year;’’. 

12 (2) UNDER MEDICAID MANAGED CARE

13 PLANS.—Section 1923(f) of such Act (42 U.S.C. 

14 1396u–2(f)) is amended— 

15 (A) in the heading, by adding at the end 

16 the following: ‘‘; ADEQUACY OF PAYMENT FOR

17 PRIMARY CARE SERVICES’’; and 

18 (B) by inserting before the period at the 

19 end the following: ‘‘and, in the case of primary 

20 care services described in section 

21 1902(a)(13)(C), consistent with the minimum 

22 payment rates specified in such section (regard23 less of the manner in which such payments are 

24 made, including in the form of capitation or 

25 partial capitation)’’. 


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1 (b) INCREASE IN PAYMENT USING 100% FMAP.— 

2 Section 1905(y), as added by section 1701(a)(2)(B) and 

3 as amended by section 1701(c)(2), is amended by adding 

4 at the end the following: 

5 ‘‘(3)(A) The portion of the amounts expended 

6 for medical assistance for services described in sec7 tion 1902(a)(13)(C) furnished on or after January 

8 1, 2010, that is attributable to the amount by which 

9 the minimum payment rate required under such sec10 tion (or, by application, section 1932(f)) exceeds the 

11 payment rate applicable to such services under the 

12 State plan as of June 16, 2009. 

13 ‘‘(B) Subparagraphs (A) shall not be construed 

14 as preventing the payment of Federal financial par15 ticipation based on the Federal medical assistance 

16 percentage for amounts in excess of those specified 

17 under such subparagraphs.’’. 

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

19 this section shall apply to services furnished on or after 

20 January 1, 2010. 

21 SEC. 1722. MEDICAL HOME PILOT PROGRAM. 

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

23 Human Services shall establish under this section a med24 ical home pilot program under which a State may apply 

25 to the Secretary for approval of a medical home pilot 


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1 project described in subsection (b) (in this section referred 

2 to as a ‘‘pilot project’’) for the application of the medical 

3 home concept under title XIX of the Social Security Act. 

4 The pilot program shall operate for a period of up to 5 

5 years. 

6 (b) PILOT PROJECT DESCRIBED.— 

7 (1) IN GENERAL.—A pilot project is a project 

8 that applies one or more of the medical home models 

9 described in section 1866E(a)(3) of the Social Secu10 rity Act (as inserted by section 1302(a)) or such 

11 other model as the Secretary may approve, to high 

12 need beneficiaries (including medically fragile chil13 dren and high-risk pregnant women) who are eligible 

14 for medical assistance under title XIX of the Social 

15 Security Act. The Secretary shall provide for appro16 priate coordination of the pilot program under this 

17 section with the medical home pilot program under 

18 section 1866E of such Act. 

19 (2) LIMITATION.—A pilot project shall be for a 

20 duration of not more than 5 years. 

21 (c) ADDITIONAL INCENTIVES.—In the case of a pilot 

22 project, the Secretary may— 

23 (1) waive the requirements of section 

24 1902(a)(1) of the Social Security Act (relating to 


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1 statewideness) and section 1902(a)(10)(B) of such 

2 Act (relating to comparability); and 

3 (2) increase to up to 90 percent (for the first 

4 2 years of the pilot program) or 75 percent (for the 

5 next 3 years) the matching percentage for adminis6 trative expenditures (such as those for community 

7 care workers). 

8 (d) MEDICALLY FRAGILE CHILDREN.—In the case of 

9 a model involving medically fragile children, the model 

10 shall ensure that the patient-centered medical home serv11 ices received by each child, in addition to fulfilling the re12 quirements under 1866E(b)(1) of the Social Security Act, 

13 provide for continuous involvement and education of the 

14 parent or caregiver and for assistance to the child in ob15 taining necessary transitional care if a child’s enrollment 

16 ceases for any reason. 

17 (e) EVALUATION; REPORT.— 

18 (1) EVALUATION.—The Secretary, using the 

19 criteria described in section 1866E(g)(1) of the So20 cial Security Act (as inserted by section 1123), shall 

21 conduct an evaluation of the pilot program under 

22 this section. 

23 (2) REPORT.—Not later than 60 days after the 

24 date of completion of the evaluation under para25 graph (1), the Secretary shall submit to Congress 


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1 and make available to the public a report on the 

2 findings of the evaluation under such paragraph. 

3 (f) FUNDING.—The additional Federal financial par4 ticipation resulting from the implementation of the pilot 

5 program under this section may not exceed in the aggre6 gate $1,235,000,000 over the 5-year period of the pro7 gram. 

8 SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES. 

9 (a) IN GENERAL.—Section 1903(a)(2)(E) of the So10 cial Security Act (42 U.S.C. 1396b(a)(2)), as added by 

11 section 201(b)(2)(A) of the Children’s Health Insurance 

12 Program Reauthorization Act of 2009 (Public Law 111– 

13 3), is amended by inserting ‘‘and other individuals’’ after 

14 ‘‘children of families’’. 

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

16 subsection (a) shall apply to payment for translation or 

17 interpretation services furnished on or after January 1, 

18 2010. 

19 SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING 

20 BIRTH CENTER SERVICES. 

21 (a) IN GENERAL.—Section 1905 of the Social Secu22 rity Act (42 U.S.C. 1396d), as amended by section 

23 1713(a), is amended— 

24 (1) in subsection (a)— 


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1 (A) by redesignating paragraph (29) as 

2 paragraph (30); 

3 (B) in paragraph (28), by striking at the 

4 end ‘‘and’’; and 

5 (C) by inserting after paragraph (28) the 

6 following new paragraph: 

7 ‘‘(29) freestanding birth center services (as de8 fined in subsection (l)(3)(A)) and other ambulatory 

9 services that are offered by a freestanding birth cen10 ter (as defined in subsection (l)(3)(B)) and that are 

11 otherwise included in the plan; and’’; and 

12 (2) in subsection (l), by adding at the end the 

13 following new paragraph: 

14 ‘‘(3)(A) The term ‘freestanding birth center services’ 

15 means services furnished to an individual at a freestanding 

16 birth center (as defined in subparagraph (B)), including 

17 by a licensed birth attendant (as defined in subparagraph 

18 (C)) at such center. 

19 ‘‘(B) The term ‘freestanding birth center’ means a 

20 health facility— 

21 ‘‘(i) that is not a hospital; and 

22 ‘‘(ii) where childbirth is planned to occur away 

23 from the pregnant woman’s residence. 

24 ‘‘(C) The term ‘licensed birth attendant’ means an 

25 individual who is licensed or registered by the State inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01839 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 volved to provide health care at childbirth and who pro2 vides such care within the scope of practice under which 

3 the individual is legally authorized to perform such care 

4 under State law (or the State regulatory mechanism pro5 vided by State law), regardless of whether the individual 

6 is under the supervision of, or associated with, a physician 

7 or other health care provider. Nothing in this subpara8 graph shall be construed as changing State law require9 ments applicable to a licensed birth attendant.’’. 

10 (b) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to items and services furnished on 

12 or after the date of the enactment of this Act. 

13 SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER 

14 THE VACCINES FOR CHILDREN PROGRAM. 

15 Section 1928(b)(2)(A)(iii)(I) of the Social Security 

16 Act (42 U.S.C. 1396s(b)(2)(A)(iii)(I)) is amended— 

17 (1) by striking ‘‘or a rural health clinic’’ and in18 serting ‘‘, a rural health clinic’’; and 

19 (2) by inserting ‘‘or a public health clinic,’’ 

20 after ‘‘‘1905(l)(1)),’’. 


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1 Subtitle D—Coverage 

2 SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-IN3 COME HIV-INFECTED INDIVIDUALS. 

4 (a) IN GENERAL.—Section 1902 of the Social Secu5 rity Act (42 U.S.C. 1396a), as amended by section 

6 1714(a)(1), is amended— 

7 (1) in subsection (a)(10)(A)(ii)— 

8 (A) by striking ‘‘or’’ at the end of sub9 clause (XIX); 

10 (B) by adding ‘‘or’’ at the end of subclause 

11 (XX); and 

12 (C) by adding at the end the following: 

13 ‘‘(XXI) who are described in subsection (ii) (re14 lating to HIV-infected individuals);’’; and 

15 (2) by adding at the end, as amended by sec16 tions 1703 and 1714(a), the following: 

17 ‘‘(ii) individuals described in this subsection are indi18 viduals not described in subsection (a)(10)(A)(i)— 

19 ‘‘(1) who have HIV infection; 

20 ‘‘(2) whose income (as determined under the 

21 State plan under this title with respect to disabled 

22 individuals) does not exceed the maximum amount 

23 of income a disabled individual described in sub24 section (a)(10)(A)(i) may have and obtain medical 

25 assistance under the plan; and 


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1 ‘‘(3) whose resources (as determined under the 

2 State plan under this title with respect to disabled 

3 individuals) do not exceed the maximum amount of 

4 resources a disabled individual described in sub5 section (a)(10)(A)(i) may have and obtain medical 

6 assistance under the plan.’’. 

7 (b) ENHANCED MATCH.—The first sentence of sec8 tion 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended 

9 by striking ‘‘section 1902(a)(10)(A)(ii)(XVIII)’’ and in10 serting ‘‘subclause (XVIII) or (XX) of section 

11 1902(a)(10)(A)(ii)’’. 

12 (c) CONFORMING AMENDMENTS.—Section 1905(a) of 

13 such Act (42 U.S.C. 1396d(a)) is amended, in the matter 

14 preceding paragraph (1)— 

15 (1) by striking ‘‘or’’ at the end of clause (xii); 

16 (2) by adding ‘‘or’’ at the end of clause (xiii); 

17 and 

18 (3) by inserting after clause (xiii) the following: 

19 ‘‘(xiv) individuals described in section 

20 1902(ii),’’. 

21 (d) EXEMPTION FROM FUNDING LIMITATION FOR

22 TERRITORIES.—Section 1108(g) of the Social Security 

23 Act (42 U.S.C. 1308(g)) is amended by adding at the end 

24 the following: 


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1 ‘‘(5) DISREGARDING MEDICAL ASSISTANCE FOR

2 OPTIONAL LOW-INCOME HIV-INFECTED INDIVID3 UALS.—The limitations under subsection (f) and the 

4 previous provisions of this subsection shall not apply 

5 to amounts expended for medical assistance for indi6 viduals described in section 1902(ii) who are only el7 igible for such assistance on the basis of section 

8 1902(a)(10)(A)(ii)(XX).’’. 

9 (e) EFFECTIVE DATE; SUNSET.—The amendments 

10 made by this section shall apply to expenditures for cal11 endar quarters beginning on or after the date of the enact12 ment of this Act, and before January 1, 2013, without 

13 regard to whether or not final regulations to carry out 

14 such amendments have been promulgated by such date. 

15 SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSIST16 ANCE (TMA). 

17 Sections 1902(e)(1)(B) and 1925(f) of the Social Se18 curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)), as 

19 amended by section 5004(a)(1) of the American Recovery 

20 and Reinvestment Act of 2009 (Public Law 111–5), are 

21 each amended by striking ‘‘December 31, 2010’’ and in22 serting ‘‘December 31, 2012’’. 


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1 SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COV2 ERAGE UNDER CERTAIN CHIP PROGRAMS. 

3 (a) IN GENERAL.—Section 2102(b) of the Social Se4 curity Act (42 U.S.C. 1397bb(b)) is amended by adding 

5 at the end the following new paragraph: 

6 ‘‘(6) REQUIREMENT FOR 12-MONTH CONTIN7 UOUS ELIGIBILITY.—In the case of a State child 

8 health plan that provides child health assistance 

9 under this title through a means other than de10 scribed in section 2101(a)(2), the plan shall provide 

11 for implementation under this title of the 12-month 

12 continuous eligibility option described in section 

13 1902(e)(12) for targeted low-income children whose 

14 family income is below 200 percent of the poverty 

15 line.’’. 

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

17 subsection (a) shall apply to determinations (and redeter18 minations) of eligibility made on or after January 1, 2010. 

19 Subtitle E—Financing 

20 SEC. 1741. PAYMENTS TO PHARMACISTS. 

21 (a) PHARMACY REIMBURSEMENT LIMITS.— 

22 (1) IN GENERAL.—Section 1927(e) of the So23 cial Security Act (42 U.S.C. 1396r–8(e)) is amend24 ed— 

25 (A) by striking paragraph (5) and insert26 ing the following: 


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1 ‘‘(5) USE OF AMP IN UPPER PAYMENT LIM2 ITS.—The Secretary shall calculate the Federal 

3 upper reimbursement limit established under para4 graph (4) as 130 percent of the weighted average 

5 (determined on the basis of manufacturer utiliza6 tion) of monthly average manufacturer prices.’’. 

7 (2) DEFINITION OF AMP.—Section 

8 1927(k)(1)(B) of such Act (42 U.S.C. 1396r– 

9 8(k)(1)(B)) is amended— 

10 (B) in the heading, by striking ‘‘EX11 TENDED TO WHOLESALERS’’ and inserting 

12 ‘‘AND OTHER PAYMENTS’’; and 

13 (C) by striking ‘‘regard to’’ and all that 

14 follows through the period and inserting the fol15 lowing: ‘‘regard to— 

16 ‘‘(i) customary prompt pay discounts 

17 extended to wholesalers; 

18 ‘‘(ii) bona fide service fees paid by 

19 manufacturers; 

20 ‘‘(iii) reimbursement by manufactur21 ers for recalled, damaged, expired, or oth22 erwise unsalable returned goods, including 

23 reimbursement for the cost of the goods 

24 and any reimbursement of costs associated 


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1 with return goods handling and processing, 

2 reverse logistics, and drug destruction; 

3 ‘‘(iv) sales directly to, or rebates, dis4 counts, or other price concessions provided 

5 to, pharmacy benefit managers, managed 

6 care organizations, health maintenance or7 ganizations, insurers, mail order phar8 macies that are not open to all members of 

9 the public, or long term care providers, 

10 provided that these rebates, discounts, or 

11 price concessions are not passed through to 

12 retail pharmacies; 

13 ‘‘(v) sales directly to, or rebates, dis14 counts, or other price concessions provided 

15 to, hospitals, clinics, and physicians, unless 

16 the drug is an inhalation, infusion, or 

17 injectable drug, or unless the Secretary de18 termines, as allowed for in Agency admin19 istrative procedures, that it is necessary to 

20 include such sales, rebates, discounts, and 

21 price concessions in order to obtain an ac22 curate AMP for the drug. Such a deter23 mination shall not be subject to judicial re24 view; or 


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1 ‘‘(vi) rebates, discounts, and other 

2 price concessions required to be provided 

3 under agreements under subsections (f) 

4 and (g) of section 1860D–2(f).’’. 

5 (3) MANUFACTURER REPORTING REQUIRE6 MENTS.—Section 1927(b)(3) of such Act (42 U.S.C. 

7 1396r–8(b)(3)) is amended— 

8 (A) in subparagraph (A), by adding at the 

9 end the following new clause: 

10 ‘‘(iv) not later than 30 days after the 

11 last day of each month of a rebate period 

12 under the agreement, on the manufactur13 er’s total number of units that are used to 

14 calculate the monthly average manufac15 turer price for each covered outpatient 

16 drug.’’. 

17 (4) AUTHORITY TO PROMULGATE REGULA18 TION.—The Secretary of Health and Human Serv19 ices may promulgate regulations to clarify the re20 quirements for upper payment limits and for the de21 termination of the average manufacturer price in an 

22 expedited manner. Such regulations may become ef23 fective on an interim final basis, pending oppor24 tunity for public comment. 


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1 (5) PHARMACY REIMBURSEMENTS THROUGH

2 DECEMBER 31, 2010.—The specific upper limit under 

3 section 447.332 of title 42, Code of Federal Regula4 tions (as in effect on December 31, 2006) applicable 

5 to payments made by a State for multiple source 

6 drugs under a State Medicaid plan shall continue to 

7 apply through December 31, 2010, for purposes of 

8 the availability of Federal financial participation for 

9 such payments. 

10 (b) DISCLOSURE OF PRICE INFORMATION TO THE

11 PUBLIC.—Section 1927(b)(3) of such Act (42 U.S.C. 

12 1396r–8(b)(3)) is amended— 

13 (1) in subparagraph (A)— 

14 (A) in clause (i), in the matter preceding 

15 subclause (I), by inserting ‘‘month of a’’ after 

16 ‘‘each’’; and 

17 (B) in the last sentence, by striking ‘‘and 

18 shall,’’ and all that follows through the period; 

19 and 

20 (2) in subparagraph (D)(v), by inserting 

21 ‘‘weighted’’ before ‘‘average manufacturer prices’’. 

22 SEC. 1742. PRESCRIPTION DRUG REBATES. 

23 (a) ADDITIONAL REBATE FOR NEW FORMULATIONS

24 OF EXISTING DRUGS.— 


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1 (1) IN GENERAL.—Section 1927(c)(2) of the 

2 Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 

3 amended by adding at the end the following new 

4 subparagraph: 

5 ‘‘(C) TREATMENT OF NEW FORMULA6 TIONS.—In the case of a drug that is a line ex7 tension of a single source drug or an innovator 

8 multiple source drug that is an oral solid dos9 age form, the rebate obligation with respect to 

10 such drug under this section shall be the 

11 amount computed under this section for such 

12 new drug or, if greater, the product of— 

13 ‘‘(i) the average manufacturer price of 

14 the line extension of a single source drug 

15 or an innovator multiple source drug that 

16 is an oral solid dosage form; 

17 ‘‘(ii) the highest additional rebate 

18 (calculated as a percentage of average 

19 manufacturer price) under this section for 

20 any strength of the original single source 

21 drug or innovator multiple source drug; 

22 and 

23 ‘‘(iii) the total number of units of 

24 each dosage form and strength of the line 

25 extension product paid for under the State 


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1 plan in the rebate period (as reported by 

2 the State). 

3 In this subparagraph, the term ‘line extension’ 

4 means, with respect to a drug, an extended re5 lease formulation of the drug.’’. 

6 (2) EFFECTIVE DATE.—The amendment made 

7 by paragraph (1) shall apply to drugs dispensed 

8 after December 31, 2009. 

9 (b) INCREASE MINIMUM REBATE PERCENTAGE FOR

10 SINGLE SOURCE DRUGS.—Section 1927(c)(1)(B)(i) of the 

11 Social Security Act (42 U.S.C. 1396r–8(c)(1)(B)(i)) is 

12 amended— 

13 (1) in subclause (IV), by striking ‘‘and’’ at the 

14 end; 

15 (2) in subclause (V)— 

16 (A) by inserting ‘‘and before January 1, 

17 2010’’ after ‘‘December 31, 1995,’’; and 

18 (B) by striking the period at the end and 

19 inserting ‘‘; and’’; and 

20 (3) by adding at the end the following new sub21 clause: 

22 ‘‘(VI) after December 31, 2009, 

23 is 22.1 percent.’’. 


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1 SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DIS2 COUNTS TO ENROLLEES OF MEDICAID MAN3 AGED CARE ORGANIZATIONS. 

4 (a) IN GENERAL.—Section 1903(m)(2)(A) of the So5 cial Security Act (42 U.S.C. 1396b(m)(2)(A)) is amend6 ed— 

7 (1) in clause (xi), by striking ‘‘and’’ at the end; 

8 (2) in clause (xii), by striking the period at the 

9 end and inserting ‘‘; and’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(xiii) such contract provides that the entity 

12 shall report to the State such information, on such 

13 timely and periodic basis as specified by the Sec14 retary, as the State may require in order to include, 

15 in the information submitted by the State to a man16 ufacturer under section 1927(b)(2)(A), information 

17 on covered outpatient drugs dispensed to individuals 

18 eligible for medical assistance who are enrolled with 

19 the entity and for which the entity is responsible for 

20 coverage of such drugs under this subsection.’’. 

21 (b) CONFORMING AMENDMENTS.—Section 1927 of 

22 such Act (42 U.S.C. 1396r-8) is amended—— 

23 (1) in the first sentence of subsection (b)(1)(A), 

24 by inserting before the period at the end the fol25 lowing: ‘‘, including such drugs dispensed to individ26 uals enrolled with a medicaid managed care organiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01851 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 zation if the organization is responsible for coverage 

2 of such drugs’’; 

3 (2) in subsection (b)(2), by adding at the end 

4 the following new subparagraph: 

5 ‘‘(C) REPORTING ON MMCO DRUGS.—On a 

6 quarterly basis, each State shall report to the 

7 Secretary the total amount of rebates in dollars 

8 received from pharmacy manufacturers for 

9 drugs provided to individuals enrolled with 

10 Medicaid managed care organizations that con11 tract under section 1903(m).’’; and 

12 (3) in subsection (j)— 

13 (A) in the heading by striking ‘‘EXEMP14 TION’’ and inserting ‘‘SPECIAL RULES’’; and 

15 (B) in paragraph (1), by striking ‘‘not’’. 

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

17 this section take effect on July 1, 2010, and shall apply 

18 to drugs dispensed on or after such date, without regard 

19 to whether or not final regulations to carry out such 

20 amendments have been promulgated by such date. 

21 SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDU22 CATION. 

23 (a) IN GENERAL.—Section 1905 of the Social Secu24 rity Act (42 U.S.C. 1396d), as amended by sections 


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1 1701(a)(2), 1711(a), and 1713(a), is amended by adding 

2 at the end the following new subsection: 

3 ‘‘(bb) PAYMENT FOR GRADUATE MEDICAL EDU4 CATION.— 

5 ‘‘(1) IN GENERAL.—The term ‘medical assist6 ance’ includes payment for costs of graduate medical 

7 education consistent with this subsection, whether 

8 provided in or outside of a hospital. 

9 ‘‘(2) SUBMISSION OF INFORMATION.—For pur10 poses of paragraph (1) and section 

11 1902(a)(13)(A)(v), payment for such costs is not 

12 consistent with this subsection unless— 

13 ‘‘(A) the State submits to the Secretary, in 

14 a timely manner and on an annual basis speci15 fied by the Secretary, information on total pay16 ments for graduate medical education and how 

17 such payments are being used for graduate 

18 medical education, including— 

19 ‘‘(i) the institutions and programs eli20 gible for receiving the funding; 

21 ‘‘(ii) the manner in which such pay22 ments are calculated; 

23 ‘‘(iii) the types and fields of education 

24 being supported; 


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1 ‘‘(iv) the workforce or other goals to 

2 which the funding is being applied; 

3 ‘‘(v) State progress in meeting such 

4 goals; and 

5 ‘‘(vi) such other information as the 

6 Secretary determines will assist in carrying 

7 out paragraphs (3) and (4); and 

8 ‘‘(B) such expenditures are made con9 sistent with such goals and requirements as are 

10 established under paragraph (4). 

11 ‘‘(3) REVIEW OF INFORMATION.—The Secretary 

12 shall make the information submitted under para13 graph (2) available to the Advisory Committee on 

14 Health Workforce Evaluation and Assessment (es15 tablished under section 2261 of the Public Health 

16 Service Act). The Secretary and the Advisory Com17 mittee shall independently review the information 

18 submitted under paragraph (2), taking into account 

19 State and local workforce needs. 

20 ‘‘(4) SPECIFICATION OF GOALS AND REQUIRE21 MENTS.—The Secretary shall specify by rule, ini22 tially published by not later than December 31, 

23 2011— 

24 ‘‘(A) program goals for the use of funds 

25 described in paragraph (1), taking into account 


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1 recommendations of the such Advisory Com2 mittee and the goals for approved medical resi3 dency training programs described in section 

4 1886(h)(1)(B); and 

5 ‘‘(B) requirements for use of such funds 

6 consistent with such goals. 

7 Such rule may be effective on an interim basis pend8 ing revision after an opportunity for public com9 ment.’’. 

10 (b) CONFORMING AMENDMENT.—Section 

11 1902(a)(13)(A) of such Act (42 U.S.C. 1396a(a)(13)(A)) 

12 is amended— 

13 (1) by striking ‘‘and’’ at the end of clause (iii); 

14 (2) by striking ‘‘; and’’ and inserting ‘‘, and’’; 

15 and 

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

17 clause: 

18 ‘‘(v) in the case of hospitals and at 

19 the option of a State, such rates may in20 clude, to the extent consistent with section 

21 1905(bb), payment for graduate medical 

22 education; and’’. 

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

24 this section shall take effect on the date of the enactment 

25 of this Act. Nothing in this section shall be construed as 


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1 affecting payments made before such date under a State 

2 plan under title XIX of the Social Security Act for grad3 uate medical education. 

4 Subtitle F—Waste, Fraud, and 

5 Abuse 

6 SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS. 

7 (a) MEDICAID NON-PAYMENT FOR CERTAIN HEALTH

8 CARE-ACQUIRED CONDITIONS.—Section 1903(i) of the 

9 Social Security Act (42 U.S.C. 1396b(i)) is amended— 

10 (1) by striking ‘‘or’’ at the end of paragraph 

11 (23); 

12 (2) by striking the period at the end of para13 graph (24) and inserting ‘‘; or’’; and 

14 (3) by inserting after paragraph (24) the fol15 lowing new paragraph: 

16 ‘‘(25) with respect to amounts expended for 

17 services related to the presence of a condition that 

18 could be identified by a secondary diagnostic code 

19 described in section 1886(d)(4)(D)(iv) and for any 

20 health care acquired condition determined as a non21 covered service under title XVIII.’’. 

22 (b) APPLICATION TO CHIP.—Section 2107(e)(1)(G) 

23 of such Act (42 U.S.C. 1397gg(e)(1)(G)) is amended by 

24 striking ‘‘and (17)’’ and inserting ‘‘(17), and (25)’’. 


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1 (c) PERMISSION TO INCLUDE ADDITIONAL HEALTH

2 CARE-ACQUIRED CONDITIONS.—Nothing in this section 

3 shall prevent a State from including additional health 

4 care-acquired conditions for non-payment in its Medicaid 

5 program under title XIX of the Social Security Act. 

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

7 this section shall apply to discharges occurring on or after 

8 January 1, 2010. 

9 SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER 

10 MEDICAID INTEGRITY PROGRAM. 

11 Section 1936(c)(2)) of the Social Security Act (42 

12 U.S.C. 1396u–7(c)(2)) is amended— 

13 (1) by redesignating subparagraph (D) as sub14 paragraph (E); and 

15 (2) by inserting after subparagraph (C) the fol16 lowing new subparagraph: 

17 ‘‘(D) For the contract year beginning in 

18 2011 and each subsequent contract year, the 

19 entity provides assurances to the satisfaction of 

20 the Secretary that the entity will conduct peri21 odic evaluations of the effectiveness of the ac22 tivities carried out by such entity under the 

23 Program and will submit to the Secretary an 

24 annual report on such activities.’’. 


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1 SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO 

2 ADOPT PROGRAMS TO REDUCE WASTE, 

3 FRAUD, AND ABUSE. 

4 Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 

5 1396a(a)), as amended by sections 1631(b)(1) and 1703, 

6 is further amended— 

7 (1) in paragraph (74), by striking at the end 

8 ‘‘and’’; 

9 (2) in paragraph (75), by striking at the end 

10 the period and inserting ‘‘; and’’; and 

11 (3) by inserting after paragraph (75) the fol12 lowing new paragraph: 

13 ‘‘(76) provide that any provider or supplier 

14 (other than a physician or nursing facility) providing 

15 services under such plan shall, subject to paragraph 

16 (5) of section 1874(d), establish a compliance pro17 gram described in paragraph (1) of such section in 

18 accordance with such section.’’. 

19 SEC. 1754. OVERPAYMENTS. 

20 (a) IN GENERAL.—Section 1903(d)(2)(C) of the So21 cial Security Act (42 U.S.C. 1396b(d)(2)(C)) is amended 

22 by inserting ‘‘(or 1 year in the case of overpayments due 

23 to fraud)’’ after ‘‘60 days’’. 

24 (b) EFFECTIVE DATE.—In the case overpayments 

25 discovered on or after the date of the enactment of this 

26 Act. 


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1 SEC. 1755. MANAGED CARE ORGANIZATIONS. 

2 (a) MINIMUM MEDICAL LOSS RATIO.— 

3 (1) MEDICAID.—Section 1903(m)(2)(A) of the 

4 Social Security Act (42 U.S.C. 1396b(m)(2)(A)), as 

5 amended by section 1743(a)(3), is amended— 

6 (A) by striking ‘‘and’’ at the end of clause 

7 (xii); 

8 (B) by striking the period at the end of 

9 clause (xiii) and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following new 

11 clause: 

12 ‘‘(xiv) such contract has a medical loss ratio, as 

13 determined in accordance with a methodology speci14 fied by the Secretary that is a percentage (not less 

15 than 85 percent) as specified by the Secretary.’’. 

16 (2) CHIP.—Section 2107(e)(1) of such Act (42 

17 U.S.C. 1397gg(e)(1)) is amended— 

18 (A) by redesignating subparagraphs (H) 

19 through (L) as subparagraphs (I) through (M); 

20 and 

21 (B) by inserting after subparagraph (G) 

22 the following new subparagraph: 

23 ‘‘(H) Section 1903(m)(2)(A)(xiv) (relating 

24 to application of minimum loss ratios), with re25 spect to comparable contracts under this title.’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to contracts entered 

3 into or renewed on or after July 1, 2010. 

4 (b) PATIENT ENCOUNTER DATA.— 

5 (1) IN GENERAL.—Section 1903(m)(2)(A)(xi) 

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

7 1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and 

8 for the provision of such data to the State at a fre9 quency and level of detail to be specified by the Sec10 retary’’ after ‘‘patients’’. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall apply with respect to contract 

13 years beginning on or after January 1, 2010. 

14 SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION 

15 UNDER MEDICAID AND CHIP IF TERMINATED 

16 UNDER MEDICARE OR OTHER STATE PLAN 

17 OR CHILD HEALTH PLAN. 

18 (a) STATE PLAN REQUIREMENT.—Section 

19 1902(a)(39) of the Social Security Act (42 U.S.C. 42 

20 U.S.C. 1396a(a)) is amended by inserting after ‘‘1128A,’’ 

21 the following: ‘‘terminate the participation of any indi22 vidual or entity in such program if (subject to such excep23 tions are permitted with respect to exclusion under sec24 tions 1128(b)(3)(C) and 1128(d)(3)(B)) participation of 

25 such individual or entity is terminated under title XVIII, 


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1 any other State plan under this title, or any child health 

2 plan under title XXI,’’. 

3 (b) APPLICATION TO CHIP.—Section 2107(e)(1)(A) 

4 of such Act (42 U.S.C. 1397gg(e)(1)(A)) is amended by 

5 inserting before the period at the end the following: ‘‘and 

6 section 1902(a)(39) (relating to exclusion and termination 

7 of participation)’’. 

8 (c) EFFECTIVE DATE.— 

9 (1) Except as provided in paragraph (2), the 

10 amendments made by this section shall apply to 

11 services furnished on or after January 1, 2011, 

12 without regard to whether or not final regulations to 

13 carry out such amendments have been promulgated 

14 by such date. 

15 (2) In the case of a State plan for medical as16 sistance under title XIX of the Social Security Act 

17 or a child health plan under title XXI of such Act 

18 which the Secretary of Health and Human Services 

19 determines requires State legislation (other than leg20 islation appropriating funds) in order for the plan to 

21 meet the additional requirement imposed by the 

22 amendments made by this section, the State plan or 

23 child health plan shall not be regarded as failing to 

24 comply with the requirements of such title solely on 

25 the basis of its failure to meet this additional reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01861 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 quirement before the first day of the first calendar 

2 quarter beginning after the close of the first regular 

3 session of the State legislature that begins after the 

4 date of the enactment of this Act. For purposes of 

5 the previous sentence, in the case of a State that has 

6 a 2-year legislative session, each year of such session 

7 shall be deemed to be a separate regular session of 

8 the State legislature. 

9 SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICI10 PATION RELATING TO CERTAIN OWNERSHIP, 

11 CONTROL, AND MANAGEMENT AFFILIATIONS. 

12 (a) STATE PLAN REQUIREMENT.—Section 1902(a) 

13 of the Social Security Act (42 U.S.C. 1396a(a)), as 

14 amended by sections 1631(b)(1), 1703, and 1753, is fur15 ther amended— 

16 (1) in paragraph (75), by striking at the end 

17 ‘‘and’’; 

18 (2) in paragraph (76), by striking at the end 

19 the period and inserting ‘‘; and’’; and 

20 (3) by inserting after paragraph (76) the fol21 lowing new paragraph: 

22 ‘‘(77) provide that the State agency described 

23 in paragraph (9) exclude, with respect to a period, 

24 any individual or entity from participation in the 

25 program under the State plan if such individual or 


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1 entity owns, controls, or manages an entity that (or 

2 if such entity is owned, controlled, or managed by an 

3 individual or entity that)— 

4 ‘‘(A) has unpaid overpayments under this 

5 title during such period determined by the Sec6 retary or the State agency to be delinquent; 

7 ‘‘(B) is suspended or excluded from par8 ticipation under or whose participation is termi9 nated under this title during such period; or 

10 ‘‘(C) is affiliated with an individual or enti11 ty that has been suspended or excluded from 

12 participation under this title or whose participa13 tion is terminated under this title during such 

14 period.’’. 

15 (b) CHILD HEALTH PLAN REQUIREMENT.—Section 

16 2107(e)(1)(A) of such Act (42 U.S.C. 1397gg(e)(1)(A)), 

17 as amended by section 1756(b), is amended by striking 

18 ‘‘section 1902(a)(39)’’ and inserting ‘‘sections 

19 1902(a)(39) and 1902(a)(77)’’. 

20 (c) EFFECTIVE DATE.— 

21 (1) Except as provided in paragraph (2), the 

22 amendments made by this section shall apply to 

23 services furnished on or after January 1, 2011, 

24 without regard to whether or not final regulations to 


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1 carry out such amendments have been promulgated 

2 by such date. 

3 (2) In the case of a State plan for medical as4 sistance under title XIX of the Social Security Act 

5 or a child health plan under title XXI of such Act 

6 which the Secretary of Health and Human Services 

7 determines requires State legislation (other than leg8 islation appropriating funds) in order for the plan to 

9 meet the additional requirement imposed by the 

10 amendments made by this section, the State plan or 

11 child health plan shall not be regarded as failing to 

12 comply with the requirements of such title solely on 

13 the basis of its failure to meet this additional re14 quirement before the first day of the first calendar 

15 quarter beginning after the close of the first regular 

16 session of the State legislature that begins after the 

17 date of the enactment of this Act. For purposes of 

18 the previous sentence, in the case of a State that has 

19 a 2-year legislative session, each year of such session 

20 shall be deemed to be a separate regular session of 

21 the State legislature. 


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1 SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF 

2 DATA ELEMENTS UNDER MMIS TO DETECT 

3 FRAUD AND ABUSE. 

4 Section 1903(r)(1)(F) of the Social Security Act (42 

5 U.S.C. 1396b(r)(1)(F)) is amended by inserting after 

6 ‘‘necessary’’ the following: ‘‘and including, for data sub7 mitted to the Secretary on or after July 1, 2010, data 

8 elements from the automated data system that the Sec9 retary determines to be necessary for detection of waste, 

10 fraud, and abuse’’. 

11 SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

12 ALTERNATE PAYEES REQUIRED TO REG13 ISTER UNDER MEDICAID. 

14 (a) IN GENERAL.—Section 1902(a) of the Social Se15 curity Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended 

16 by sections 1631(b), 1703, 1753, and 1757, is further 

17 amended— 

18 (1) in paragraph (76); by striking at the end 

19 ‘‘and’’; 

20 (2) in paragraph (77), by striking the period at 

21 the end and inserting ‘‘and’’; and 

22 (3) by inserting after paragraph (77) the fol23 lowing new paragraph: 

24 ‘‘(78) provide that any agent, clearinghouse, or 

25 other alternate payee that submits claims on behalf 

26 of a health care provider must register with the 


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1 State and the Secretary in a form and manner speci2 fied by the Secretary under section 1866(j)(1)(D).’’. 

3 (b) DENIAL OF PAYMENT.—Section 1903(i) of such 

4 Act (42 U.S.C. 1396b(i)), as amended by section 1753, 

5 is amended— 

6 (1) by striking ‘‘or’’ at the end of paragraph 

7 (24); 

8 (2) by striking the period at the end of para9 graph (25) and inserting ‘‘; or’’; and 

10 (3) by inserting after paragraph (25) the fol11 lowing new paragraph: 

12 ‘‘(26) with respect to any amount paid to a bill13 ing agent, clearinghouse, or other alternate payee 

14 that is not registered with the State and the Sec15 retary as required under section 1902(a)(78).’’. 

16 (c) EFFECTIVE DATE.— 

17 (1) Except as provided in paragraph (2), the 

18 amendments made by this section shall apply to 

19 claims submitted on or after January 1, 2012, with20 out regard to whether or not final regulations to 

21 carry out such amendments have been promulgated 

22 by such date. 

23 (2) In the case of a State plan for medical as24 sistance under title XIX of the Social Security Act 

25 which the Secretary of Health and Human Services 


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1 determines requires State legislation (other than leg2 islation appropriating funds) in order for the plan to 

3 meet the additional requirement imposed by the 

4 amendments made by this section, the State plan or 

5 child health plan shall not be regarded as failing to 

6 comply with the requirements of such title solely on 

7 the basis of its failure to meet this additional re8 quirement before the first day of the first calendar 

9 quarter beginning after the close of the first regular 

10 session of the State legislature that begins after the 

11 date of the enactment of this Act. For purposes of 

12 the previous sentence, in the case of a State that has 

13 a 2-year legislative session, each year of such session 

14 shall be deemed to be a separate regular session of 

15 the State legislature. 

16 SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RE17 LATED MISCONDUCT. 

18 (a) IN GENERAL.—Section 1903(i) of the Social Se19 curity Act (42 U.S.C. 1396b(i)), as previously amended 

20 is amended— 

21 (1) by striking ‘‘or’’ at the end of paragraph 

22 (25); 

23 (2) by striking the period at the end of para24 graph (26) and inserting a semicolon; and 


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1 (3) by inserting after paragraph (26) the fol2 lowing new paragraphs: 

3 ‘‘(27) with respect to any amount expended— 

4 ‘‘(A) on litigation in which a court imposes 

5 sanctions on the State, its employees, or its 

6 counsel for litigation-related misconduct; or 

7 ‘‘(B) to reimburse (or otherwise com8 pensate) a managed care entity for payment of 

9 legal expenses associated with any action in 

10 which a court imposes sanctions on the man11 aged care entity for litigation-related mis12 conduct.’’. 

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

14 subsection (a) shall apply to amounts expended on or after 

15 January 1, 2010. 

16 Subtitle G—Puerto Rico and the 

17 Territories 

18 SEC. 1771. PUERTO RICO AND TERRITORIES. 

19 (a) INCREASE IN CAP.— 

20 (1) IN GENERAL.—Section 1108(g) of the So21 cial Security Act (42 U.S.C. 1308(g)) is amended— 

22 (A) in paragraph (4) by striking ‘‘and (3)’’ 

23 and by inserting ‘‘(3), (6), and (7)’’; and 


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1 (B) by inserting after paragraph (5), as 

2 added by section 1731(d), the following new 

3 paragraph: 

4 ‘‘(6) FISCAL YEARS 2011 THROUGH 2019.—The 

5 amounts otherwise determined under this subsection 

6 for Puerto Rico, the Virgin Islands, Guam, the 

7 Northern Mariana Islands, and American Samoa for 

8 fiscal year 2011 and each succeeding fiscal year 

9 through fiscal year 2019 shall be increased by the 

10 percentage specified under section 1771(c) of the 

11 America’s Affordable Health Choices Act of 2009 

12 for purposes of this paragraph of the amounts other13 wise determined under this section (without regard 

14 to this paragraph). 

15 ‘‘(7) FISCAL YEAR 2020 AND SUBSEQUENT FIS16 CAL YEARS.—The amounts otherwise determined 

17 under this subsection for Puerto Rico, the Virgin Is18 lands, Guam, the Northern Mariana Islands, and 

19 American Samoa for fiscal year 2020 and each suc20 ceeding fiscal year shall be the amount provided in 

21 paragraph (6) or this paragraph for the preceding 

22 fiscal year for the respective territory increased by 

23 the percentage increase referred to in paragraph 

24 (1)(B), rounded to the nearest $10,000 (or 

25 $100,000 in the case of Puerto Rico).’’. 


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1 (2) COORDINATION WITH ARRA.—Section 

2 5001(d) of the American Recovery and Reinvestment 

3 Act of 2009 shall not apply during any period for 

4 which section 1108(g)(6) of the Social Security Act, 

5 as added by paragraph (1), applies. 

6 (b) INCREASE IN FMAP.— 

7 (1) IN GENERAL.—Section 1905(b)(2) of the 

8 Social Security Act (42 U.S.C. 1396d(b)(2)) is 

9 amended by striking ‘‘50 per centum’’ and inserting 

10 ‘‘for fiscal years 2011 through 2019, the percentage 

11 specified under section 1771(c) of the America’s Af12 fordable Health Choices Act of 2009 for purposes of 

13 this clause for such fiscal year and for subsequent 

14 fiscal years the percentage so specified for fiscal 

15 year 2019’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by subsection (a) shall apply to items and services 

18 furnished on or after October 1, 2010. 

19 (c) SPECIFICATION OF PERCENTAGES.—The Sec20 retary of Health and Human Services shall specify, before 

21 January 1, 2011, the percentages to be applied under sec22 tion 1108(g)(6) of the Social Security Act, as added by 

23 subsection (a)(1), and under section 1905(b)(2) of such 

24 Act, as amended by subsection (b)(1), in a manner so that 

25 for the period beginning with 2011 and ending with 2019 


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1 the total estimated additional Federal expenditures result2 ing from the application of such percentages will be equal 

3 to $10,350,000,000. 

4 Subtitle H—Miscellaneous 

5 SEC. 1781. TECHNICAL CORRECTIONS. 

6 (a) TECHNICAL CORRECTION TO SECTION 1144 OF

7 THE SOCIAL SECURITY ACT.—The first sentence of sec8 tion 1144(c)(3) of the Social Security Act (42 U.S.C. 

9 1320b—14(c)(3)) is amended— 

10 (1) by striking ‘‘transmittal’’; and 

11 (2) by inserting before the period the following: 

12 ‘‘as specified in section 1935(a)(4)’’. 

13 (b) CLARIFYING AMENDMENT TO SECTION 1935 OF

14 THE SOCIAL SECURITY ACT.—Section 1935(a)(4) of the 

15 Social Security Act (42 U.S.C. 1396u—5(a)(4)), as 

16 amended by section 113(b) of Public Law 110–275, is 

17 amended— 

18 (1) by striking the second sentence; 

19 (2) by redesignating the first sentence as a sub20 paragraph (A) with appropriate indentation and 

21 with the following heading: ‘‘IN GENERAL’’; 

22 (3) by adding at the end the following subpara23 graphs: 

24 ‘‘(B) FURNISHING MEDICAL ASSISTANCE

25 WITH REASONABLE PROMPTNESS.—For the 


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1 purpose of a State’s obligation under section 

2 1902(a)(8) to furnish medical assistance with 

3 reasonable promptness, the date of the elec4 tronic transmission of low-income subsidy pro5 gram data, as described in section 1144(c), 

6 from the Commissioner of Social Security to the 

7 State Medicaid Agency, shall constitute the date 

8 of filing of such application for benefits under 

9 the Medicare Savings Program. 

10 ‘‘(C) DETERMINING AVAILABILITY OF

11 MEDICAL ASSISTANCE.—For the purpose of de12 termining when medical assistance will be made 

13 available, the State shall consider the date of 

14 the individual’s application for the low income 

15 subsidy program to constitute the date of filing 

16 for benefits under the Medicare Savings Pro17 gram.’’. 

18 (c) EFFECTIVE DATE RELATING TO MEDICAID

19 AGENCY CONSIDERATION OF LOW-INCOME SUBSIDY AP20 PLICATION AND DATA TRANSMITTAL.—The amendments 

21 made by subsections (a) and (b) shall be effective as if 

22 included in the enactment of section 113(b) of Public Law 

23 110–275. 

24 (d) TECHNICAL CORRECTION TO SECTION 605 OF

25 CHIPRA.—Section 605 of the Children’s Health InsurVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01872 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ance Program Reauthorization Act of 2009 (Public Law 

2 111–3) is amended by striking ‘‘legal residents’’ and in3 serting ‘‘lawfully residing in the United States’’. 

4 (e) TECHNICAL CORRECTION TO SECTION 1905 OF

5 THE SOCIAL SECURITY ACT.—Section 1905(a) of the So6 cial Security Act (42 U.S.C. 1396d(a)) is amended by in7 serting ‘‘or the care and services themselves, or both’’ be8 fore ‘‘(if provided in or after’’. 

9 (f) CLARIFYING AMENDMENT TO SECTION 1115 OF

10 THE SOCIAL SECURITY ACT.—Section 1115(a) of the So11 cial Security Act (42 U.S.C. 1315(a)) is amended by add12 ing at the end the following: ‘‘If an experimental, pilot, 

13 or demonstration project that relates to title XIX is ap14 proved pursuant to any part of this subsection, such 

15 project shall be treated as part of the State plan, all med16 ical assistance provided on behalf of any individuals af17 fected by such project shall be medical assistance provided 

18 under the State plan, and all provisions of this Act not 

19 explicitly waived in approving such project shall remain 

20 fully applicable to all individuals receiving benefits under 

21 the State plan.’’. 

22 SEC. 1782. EXTENSION OF QI PROGRAM. 

23 (a) IN GENERAL.—Section 1902(a)(10)(E)(iv) of the 

24 Social Security Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is 

25 amended— 


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1 (1) by striking ‘‘sections 1933 and’’ and by in2 serting ‘‘section’’; and 

3 (2) by striking ‘‘December 2010’’ and inserting 

4 ‘‘December 2012’’. 

5 (b) ELIMINATION OF FUNDING LIMITATION.— 

6 (1) IN GENERAL.—Section 1933 of such Act 

7 (42 U.S.C. 1396u–3) is amended— 

8 (A) in subsection (a), by striking ‘‘who are 

9 selected to receive such assistance under sub10 section (b)’’; 

11 (B) by striking subsections (b), (c), (e), 

12 and (g); 

13 (C) in subsection (d), by striking ‘‘fur14 nished in a State’’ and all that follows and in15 serting ‘‘the Federal medical assistance percent16 age shall be equal to 100 percent.’’; and 

17 (D) by redesignating subsections (d) and 

18 (f) as subsections (b) and (c), respectively. 

19 (2) CONFORMING AMENDMENT.—Section 

20 1905(b) of such Act (42 U.S.C. 1396d(b)) is amend21 ed by striking ‘‘1933(d)’’ and inserting ‘‘1933(b)’’. 

22 (3) EFFECTIVE DATE.—The amendments made 

23 by paragraph (1) shall take effect on January 1, 

24 2011. 


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1 TITLE P—REVENUE-RELATED 

2 PROVISIONS 

3 SEC. 1801. DISCLOSURES TO FACILITATE IDENTIFICATION 

4 OF INDIVIDUALS LIKELY TO BE INELIGIBLE 

5 FOR THE LOW-INCOME ASSISTANCE UNDER 

6 THE MEDICARE PRESCRIPTION DRUG PRO7 GRAM TO ASSIST SOCIAL SECURITY ADMINIS8 TRATION’S OUTREACH TO ELIGIBLE INDIVID9 UALS. 

10 (a) IN GENERAL.—Paragraph (19) of section 6103(l) 

11 of the Internal Revenue Code of 1986 is amended to read 

12 as follows: 

13 ‘‘(19) DISCLOSURES TO FACILITATE IDENTI14 FICATION OF INDIVIDUALS LIKELY TO BE INELI15 GIBLE FOR LOW-INCOME SUBSIDIES UNDER MEDI16 CARE PRESCRIPTION DRUG PROGRAM TO ASSIST SO17 CIAL SECURITY ADMINISTRATION’S OUTREACH TO

18 ELIGIBLE INDIVIDUALS.— 

19 ‘‘(A) IN GENERAL.—Upon written request 

20 from the Commissioner of Social Security, the 

21 following return information (including such in22 formation disclosed to the Social Security Ad23 ministration under paragraph (1) or (5)) shall 

24 be disclosed to officers and employees of the So25 cial Security Administration, with respect to 


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1 any taxpayer identified by the Commissioner of 

2 Social Security— 

3 ‘‘(i) return information for the appli4 cable year from returns with respect to 

5 wages (as defined in section 3121(a) or 

6 3401(a)) and payments of retirement in7 come (as described in paragraph (1) of this 

8 subsection), 

9 ‘‘(ii) unearned income information 

10 and income information of the taxpayer 

11 from partnerships, trusts, estates, and sub12 chapter S corporations for the applicable 

13 year, 

14 ‘‘(iii) if the individual filed an income 

15 tax return for the applicable year, the fil16 ing status, number of dependents, income 

17 from farming, and income from self-em18 ployment, on such return, 

19 ‘‘(iv) if the individual is a married in20 dividual filing a separate return for the ap21 plicable year, the social security number (if 

22 reasonably available) of the spouse on such 

23 return, 

24 ‘‘(v) if the individual files a joint re25 turn for the applicable year, the social seVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01876 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 curity number, unearned income informa2 tion, and income information from partner3 ships, trusts, estates, and subchapter S 

4 corporations of the individual’s spouse on 

5 such return, and 

6 ‘‘(vi) such other return information 

7 relating to the individual (or the individ8 ual’s spouse in the case of a joint return) 

9 as is prescribed by the Secretary by regula10 tion as might indicate that the individual 

11 is likely to be ineligible for a low-income 

12 prescription drug subsidy under section 

13 1860D–14 of the Social Security Act. 

14 ‘‘(B) APPLICABLE YEAR.—For the pur15 poses of this paragraph, the term ‘applicable 

16 year’ means the most recent taxable year for 

17 which information is available in the Internal 

18 Revenue Service’s taxpayer information records. 

19 ‘‘(C) RESTRICTION ON INDIVIDUALS FOR

20 WHOM DISCLOSURE MAY BE REQUESTED.—The 

21 Commissioner of Social Security shall request 

22 information under this paragraph only with re23 spect to— 

24 ‘‘(i) individuals the Social Security 

25 Administration has identified, using all 


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1 other reasonably available information, as 

2 likely to be eligible for a low-income pre3 scription drug subsidy under section 

4 1860D–14 of the Social Security Act and 

5 who have not applied for such subsidy, and 

6 ‘‘(ii) any individual the Social Security 

7 Administration has identified as a spouse 

8 of an individual described in clause (i). 

9 ‘‘(D) RESTRICTION ON USE OF DISCLOSED

10 INFORMATION.—Return information disclosed 

11 under this paragraph may be used only by offi12 cers and employees of the Social Security Ad13 ministration solely for purposes of identifying 

14 individuals likely to be ineligible for a low-in15 come prescription drug subsidy under section 

16 1860D–14 of the Social Security Act for use in 

17 outreach efforts under section 1144 of the So18 cial Security Act.’’. 

19 (b) SAFEGUARDS.—Paragraph (4) of section 6103(p) 

20 of such Code is amended— 

21 (1) by striking ‘‘(l)(19)’’ each place it appears, 

22 and 

23 (2) by striking ‘‘or (17)’’ each place it appears 

24 and inserting ‘‘(17), or (19)’’. 


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1 (c) CONFORMING AMENDMENT.—Paragraph (3) of 

2 section 6103(a) of such Code is amended by striking 

3 ‘‘(19),’’. 

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

5 this section shall apply to disclosures made after the date 

6 which is 12 months after the date of the enactment of 

7 this Act. 

8 SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH 

9 TRUST FUND; FINANCING FOR TRUST FUND. 

10 (a) ESTABLISHMENT OF TRUST FUND.— 

11 (1) IN GENERAL.—Subchapter A of chapter 98 

12 of the Internal Revenue Code of 1986 (relating to 

13 trust fund code) is amended by adding at the end 

14 the following new section: 

15 ‘‘SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS 

16 RESEARCH TRUST FUND. 

17 ‘‘(a) CREATION OF TRUST FUND.—There is estab18 lished in the Treasury of the United States a trust fund 

19 to be known as the ‘Health Care Comparative Effective20 ness Research Trust Fund’ (hereinafter in this section re21 ferred to as the ‘CERTF’), consisting of such amounts 

22 as may be appropriated or credited to such Trust Fund 

23 as provided in this section and section 9602(b). 

24 ‘‘(b) TRANSFERS TO FUND.—There are hereby ap25 propriated to the Trust Fund the following: 


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1 ‘‘(1) For fiscal year 2010, $90,000,000. 

2 ‘‘(2) For fiscal year 2011, $100,000,000. 

3 ‘‘(3) For fiscal year 2012, $110,000,000. 

4 ‘‘(4) For each fiscal year beginning with fiscal 

5 year 2013— 

6 ‘‘(A) an amount equivalent to the net reve7 nues received in the Treasury from the fees im8 posed under subchapter B of chapter 34 (relat9 ing to fees on health insurance and self-insured 

10 plans) for such fiscal year; and 

11 ‘‘(B) subject to subsection (c)(2), amounts 

12 determined by the Secretary of Health and 

13 Human Services to be equivalent to the fair 

14 share per capita amount computed under sub15 section (c)(1) for the fiscal year multiplied by 

16 the average number of individuals entitled to 

17 benefits under part A, or enrolled under part B, 

18 of title XVIII of the Social Security Act during 

19 such fiscal year. 

20 The amounts appropriated under paragraphs (1), (2), (3), 

21 and (4)(B) shall be transferred from the Federal Hospital 

22 Insurance Trust Fund and from the Federal Supple23 mentary Medical Insurance Trust Fund (established 

24 under section 1841 of such Act), and from the Medicare 

25 Prescription Drug Account within such Trust Fund, in 


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1 proportion (as estimated by the Secretary) to the total ex2 penditures during such fiscal year that are made under 

3 title XVIII of such Act from the respective trust fund or 

4 account. 

5 ‘‘(c) FAIR SHARE PER CAPITA AMOUNT.— 

6 ‘‘(1) COMPUTATION.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), the fair share per capita amount 

9 under this paragraph for a fiscal year (begin10 ning with fiscal year 2013) is an amount com11 puted by the Secretary of Health and Human 

12 Services for such fiscal year that, when applied 

13 under this section and subchapter B of chapter 

14 34 of the Internal Revenue Code of 1986, will 

15 result in revenues to the CERTF of 

16 $375,000,000 for the fiscal year. 

17 ‘‘(B) ALTERNATIVE COMPUTATION.— 

18 ‘‘(i) IN GENERAL.—If the Secretary is 

19 unable to compute the fair share per capita 

20 amount under subparagraph (A) for a fis21 cal year, the fair share per capita amount 

22 under this paragraph for the fiscal year 

23 shall be the default amount determined 

24 under clause (ii) for the fiscal year. 


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1 ‘‘(ii) DEFAULT AMOUNT.—The default 

2 amount under this clause for— 

3 ‘‘(I) fiscal year 2013 is equal to 

4 $2; or 

5 ‘‘(II) a subsequent year is equal 

6 to the default amount under this 

7 clause for the preceding fiscal year in8 creased by the annual percentage in9 crease in the medical care component 

10 of the consumer price index (United 

11 States city average) for the 12-month 

12 period ending with April of the pre13 ceding fiscal year. 

14 Any amount determined under subclause 

15 (II) shall be rounded to the nearest penny. 

16 ‘‘(2) LIMITATION ON MEDICARE FUNDING.—In 

17 no case shall the amount transferred under sub18 section (b)(4)(B) for any fiscal year exceed 

19 $90,000,000. 

20 ‘‘(d) EXPENDITURES FROM FUND.— 

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

22 amounts in the CERTF are available, without the 

23 need for further appropriations and without fiscal 

24 year limitation, to the Secretary of Health and 


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1 Human Services for carrying out section 1181 of the 

2 Social Security Act. 

3 ‘‘(2) ALLOCATION FOR COMMISSION.—Not less 

4 than the following amounts in the CERTF for a fis5 cal year shall be available to carry out the activities 

6 of the Comparative Effectiveness Research Commis7 sion established under section 1181(b) of the Social 

8 Security Act for such fiscal year: 

9 ‘‘(A) For fiscal year 2010, $7,000,000. 

10 ‘‘(B) For fiscal year 2011, $9,000,000. 

11 ‘‘(C) For each fiscal year beginning with 

12 2012, $10,000,000. 

13 Nothing in this paragraph shall be construed as pre14 venting additional amounts in the CERTF from 

15 being made available to the Comparative Effective16 ness Research Commission for such activities. 

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

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

19 the Secretary based on the excess of— 

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

21 subchapter B of chapter 34, over 

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

23 1 resulting from the fees imposed by such sub24 chapter.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for such subchapter A is amended by adding 

3 at the end thereof the following new item: 

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

4 (b) FINANCING FOR FUND FROM FEES ON INSURED

5 AND SELF-INSURED HEALTH PLANS.— 

6 (1) GENERAL RULE.—Chapter 34 of the Inter7 nal Revenue Code of 1986 is amended by adding at 

8 the end the following new subchapter: 

9 ‘‘Subchapter B—Insured and Self-Insured 

10 Health Plans 

‘‘Sec. 4375. Health insurance. 

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

‘‘Sec. 4377. Definitions and special rules. 

11 ‘‘SEC. 4375. HEALTH INSURANCE. 

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

13 on each specified health insurance policy for each policy 

14 year a fee equal to the fair share per capita amount deter15 mined under section 9511(c)(1) multiplied by the average 

16 number of lives covered under the policy. 

17 ‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub18 section (a) shall be paid by the issuer of the policy. 

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

20 purposes of this section: 

21 ‘‘(1) IN GENERAL.—Except as otherwise pro22 vided in this section, the term ‘specified health in23 surance policy’ means any accident or health insurVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01884 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ance policy issued with respect to individuals resid2 ing in the United States. 

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

4 term ‘specified health insurance policy’ does not in5 clude any insurance if substantially all of its cov6 erage is of excepted benefits described in section 

7 9832(c). 

8 ‘‘(3) TREATMENT OF PREPAID HEALTH COV9 ERAGE ARRANGEMENTS.— 

10 ‘‘(A) IN GENERAL.—In the case of any ar11 rangement described in subparagraph (B)— 

12 ‘‘(i) such arrangement shall be treated 

13 as a specified health insurance policy, and 

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

15 subparagraph shall be treated as the 

16 issuer. 

17 ‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 

18 An arrangement is described in this subpara19 graph if under such arrangement fixed pay20 ments or premiums are received as consider21 ation for any person’s agreement to provide or 

22 arrange for the provision of accident or health 

23 coverage to residents of the United States, re24 gardless of how such coverage is provided or ar25 ranged to be provided. 


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

2 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli3 cable self-insured health plan for each plan year, there is 

4 hereby imposed a fee equal to the fair share per capita 

5 amount determined under section 9511(c)(1) multiplied by 

6 the average number of lives covered under the plan. 

7 ‘‘(b) LIABILITY FOR FEE.— 

8 ‘‘(1) IN GENERAL.—The fee imposed by sub9 section (a) shall be paid by the plan sponsor. 

10 ‘‘(2) PLAN SPONSOR.—For purposes of para11 graph (1) the term ‘plan sponsor’ means— 

12 ‘‘(A) the employer in the case of a plan es13 tablished or maintained by a single employer, 

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

15 of a plan established or maintained by an em16 ployee organization, 

17 ‘‘(C) in the case of— 

18 ‘‘(i) a plan established or maintained 

19 by 2 or more employers or jointly by 1 or 

20 more employers and 1 or more employee 

21 organizations, 

22 ‘‘(ii) a multiple employer welfare ar23 rangement, or 

24 ‘‘(iii) a voluntary employees’ bene25 ficiary association described in section 

26 501(c)(9), 


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1 the association, committee, joint board of trust2 ees, or other similar group of representatives of 

3 the parties who establish or maintain the plan, 

4 or 

5 ‘‘(D) the cooperative or association de6 scribed in subsection (c)(2)(F) in the case of a 

7 plan established or maintained by such a coop8 erative or association. 

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

10 For purposes of this section, the term ‘applicable self-in11 sured health plan’ means any plan for providing accident 

12 or health coverage if— 

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

14 other than through an insurance policy, and 

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

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

17 benefit of their employees or former employees, 

18 ‘‘(B) by one or more employee organiza19 tions for the benefit of their members or former 

20 members, 

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

22 or more employee organizations for the benefit 

23 of employees or former employees, 

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

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


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1 ‘‘(E) by any organization described in sec2 tion 501(c)(6), or 

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

4 the preceding subparagraphs, by a multiple em5 ployer welfare arrangement (as defined in sec6 tion 3(40) of Employee Retirement Income Se7 curity Act of 1974), a rural electric cooperative 

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

9 or a rural telephone cooperative association (as 

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

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

12 ‘‘(a) DEFINITIONS.—For purposes of this sub13 chapter— 

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

15 term ‘accident and health coverage’ means any cov16 erage which, if provided by an insurance policy, 

17 would cause such policy to be a specified health in18 surance policy (as defined in section 4375(c)). 

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

20 policy’ means any policy or other instrument where21 by a contract of insurance is issued, renewed, or ex22 tended. 

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

24 States’ includes any possession of the United States. 

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


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1 ‘‘(1) IN GENERAL.—For purposes of this sub2 chapter— 

3 ‘‘(A) the term ‘person’ includes any gov4 ernmental entity, and 

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

6 of law, governmental entities shall not be ex7 empt from the fees imposed by this subchapter 

8 except as provided in paragraph (2). 

9 ‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL

10 PROGRAMS.—In the case of an exempt governmental 

11 program, no fee shall be imposed under section 4375 

12 or section 4376 on any covered life under such pro13 gram. 

14 ‘‘(3) EXEMPT GOVERNMENTAL PROGRAM DE15 FINED.—For purposes of this subchapter, the term 

16 ‘exempt governmental program’ means— 

17 ‘‘(A) any insurance program established 

18 under title XVIII of the Social Security Act, 

19 ‘‘(B) the medical assistance program es20 tablished by title XIX or XXI of the Social Se21 curity Act, 

22 ‘‘(C) any program established by Federal 

23 law for providing medical care (other than 

24 through insurance policies) to individuals (or 


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1 the spouses and dependents thereof) by reason 

2 of such individuals being— 

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

4 the United States, or 

5 ‘‘(ii) veterans, and 

6 ‘‘(D) any program established by Federal 

7 law for providing medical care (other than 

8 through insurance policies) to members of In9 dian tribes (as defined in section 4(d) of the In10 dian Health Care Improvement Act). 

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

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

13 as if they were taxes. 

14 ‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith15 standing any other provision of law, no amount collected 

16 under this subchapter shall be covered over to any posses17 sion of the United States.’’. 

18 (2) CLERICAL AMENDMENTS.— 

19 (A) Chapter 34 of such Code is amended 

20 by striking the chapter heading and inserting 

21 the following: 

22 ‘‘CHAPTER 34—TAXES ON CERTAIN 

23 INSURANCE POLICIES 

‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS

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


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1 ‘‘Subchapter A—Policies Issued By Foreign 

2 Insurers’’. 

3 (B) The table of chapters for subtitle D of 

4 such Code is amended by striking the item re5 lating to chapter 34 and inserting the following 

6 new item: 

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

7 (3) EFFECTIVE DATE.—The amendments made 

8 by this subsection shall apply with respect to policies 

9 and plans for portions of policy or plan years begin10 ning on or after October 1, 2012. 

11 TITLE Q—MISCELLANEOUS 

12 PROVISIONS 

13 SEC. 1901. REPEAL OF TRIGGER PROVISION. 

14 Subtitle A of title VIII of the Medicare Prescription 

15 Drug, Improvement, and Modernization Act of 2003 (Pub16 lic Law 108–173) is repealed and the provisions of law 

17 amended by such subtitle are restored as if such subtitle 

18 had never been enacted. 

19 SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT 

20 (CCA) PROGRAM. 

21 Section 1860C–1 of the Social Security Act (42 

22 U.S.C. 1395w–29), as added by section 241(a) of the 

23 Medicare Prescription Drug, Improvement, and Mod24 ernization Act of 2003 (Public Law 108–173), is repealed. 


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1 SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION. 

2 (a) IN GENERAL.—Subsection (d)(3) of section 5007 

3 of the Deficit Reduction Act of 2005 (Public Law 109– 

4 171) is amended by inserting ‘‘(or September 30, 2011, 

5 in the case of a demonstration project in operation as of 

6 October 1, 2008)’’ after ‘‘December 31, 2009’’. 

7 (b) FUNDING.— 

8 (1) IN GENERAL.—Subsection (f)(1) of such 

9 section is amended by inserting ‘‘and for fiscal year 

10 2010, $1,600,000,’’ after ‘‘$6,000,000,’’. 

11 (2) AVAILABILITY.—Subsection (f)(2) of such 

12 section is amended by striking ‘‘2010’’ and inserting 

13 ‘‘2014 or until expended’’. 

14 (c) REPORTS.— 

15 (1) QUALITY IMPROVEMENT AND SAVINGS.— 

16 Subsection (e)(3) of such section is amended by 

17 striking ‘‘December 1, 2008’’ and inserting ‘‘March 

18 31, 2011’’. 

19 (2) FINAL REPORT.—Subsection (e)(4) of such 

20 section is amended by striking ‘‘May 1, 2010’’ and 

21 inserting ‘‘March 31, 2013’’. 


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1 SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITA2 TION PROGRAMS FOR FAMILIES WITH YOUNG 

3 CHILDREN AND FAMILIES EXPECTING CHIL4 DREN. 

5 Part B of title IV of the Social Security Act (42 

6 U.S.C. 621–629i) is amended by adding at the end the 

7 following: 

8 ‘‘Subpart 3—Support for Quality Home Visitation 

9 Programs 

10 ‘‘SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES 

11 WITH YOUNG CHILDREN AND FAMILIES EX12 PECTING CHILDREN. 

13 ‘‘(a) PURPOSE.—The purpose of this section is to im14 prove the well-being, health, and development of children 

15 by enabling the establishment and expansion of high qual16 ity programs providing voluntary home visitation for fami17 lies with young children and families expecting children. 

18 ‘‘(b) GRANT APPLICATION.—A State that desires to 

19 receive a grant under this section shall submit to the Sec20 retary for approval, at such time and in such manner as 

21 the Secretary may require, an application for the grant 

22 that includes the following: 

23 ‘‘(1) DESCRIPTION OF HOME VISITATION PRO24 GRAMS.—A description of the high quality programs 

25 of home visitation for families with young children 

26 and families expecting children that will be supVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01893 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ported by a grant made to the State under this sec2 tion, the outcomes the programs are intended to 

3 achieve, and the evidence supporting the effective4 ness of the programs. 

5 ‘‘(2) RESULTS OF NEEDS ASSESSMENT.—The 

6 results of a statewide needs assessment that de7 scribes— 

8 ‘‘(A) the number, quality, and capacity of 

9 home visitation programs for families with 

10 young children and families expecting children 

11 in the State; 

12 ‘‘(B) the number and types of families who 

13 are receiving services under the programs; 

14 ‘‘(C) the sources and amount of funding 

15 provided to the programs; 

16 ‘‘(D) the gaps in home visitation in the 

17 State, including identification of communities 

18 that are in high need of the services; and 

19 ‘‘(E) training and technical assistance ac20 tivities designed to achieve or support the goals 

21 of the programs. 

22 ‘‘(3) ASSURANCES.—Assurances from the State 

23 that— 

24 ‘‘(A) in supporting home visitation pro25 grams using funds provided under this section, 


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1 the State shall identify and prioritize serving 

2 communities that are in high need of such serv3 ices, especially communities with a high propor4 tion of low-income families or a high incidence 

5 of child maltreatment; 

6 ‘‘(B) the State will reserve 5 percent of the 

7 grant funds for training and technical assist8 ance to the home visitation programs using 

9 such funds; 

10 ‘‘(C) in supporting home visitation pro11 grams using funds provided under this section, 

12 the State will promote coordination and collabo13 ration with other home visitation programs (in14 cluding programs funded under title XIX) and 

15 with other child and family services, health 

16 services, income supports, and other related as17 sistance; 

18 ‘‘(D) home visitation programs supported 

19 using such funds will, when appropriate, pro20 vide referrals to other programs serving chil21 dren and families; and 

22 ‘‘(E) the State will comply with subsection 

23 (i), and cooperate with any evaluation con24 ducted under subsection (j). 


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1 ‘‘(4) OTHER INFORMATION.—Such other infor2 mation as the Secretary may require. 

3 ‘‘(c) ALLOTMENTS.— 

4 ‘‘(1) INDIAN TRIBES.—From the amount re5 served under subsection (l)(2) for a fiscal year, the 

6 Secretary shall allot to each Indian tribe that meets 

7 the requirement of subsection (d), if applicable, for 

8 the fiscal year the amount that bears the same ratio 

9 to the amount so reserved as the number of children 

10 in the Indian tribe whose families have income that 

11 does not exceed 200 percent of the poverty line bears 

12 to the total number of children in such Indian tribes 

13 whose families have income that does not exceed 200 

14 percent of the poverty line. 

15 ‘‘(2) STATES AND TERRITORIES.—From the 

16 amount appropriated under subsection (m) for a fis17 cal year that remains after making the reservations 

18 required by subsection (l), the Secretary shall allot 

19 to each State that is not an Indian tribe and that 

20 meets the requirement of subsection (d), if applica21 ble, for the fiscal year the amount that bears the 

22 same ratio to the remainder of the amount so appro23 priated as the number of children in the State whose 

24 families have income that does not exceed 200 per25 cent of the poverty line bears to the total number of 


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1 children in such States whose families have income 

2 that does not exceed 200 percent of the poverty line. 

3 ‘‘(3) REALLOTMENTS.—The amount of any al4 lotment to a State under a paragraph of this sub5 section for any fiscal year that the State certifies to 

6 the Secretary will not be expended by the State pur7 suant to this section shall be available for reallot8 ment using the allotment methodology specified in 

9 that paragraph. Any amount so reallotted to a State 

10 is deemed part of the allotment of the State under 

11 this subsection. 

12 ‘‘(d) MAINTENANCE OF EFFORT.—Beginning with 

13 fiscal year 2011, a State meets the requirement of this 

14 subsection for a fiscal year if the Secretary finds that the 

15 aggregate expenditures by the State from State and local 

16 sources for programs of home visitation for families with 

17 young children and families expecting children for the then 

18 preceding fiscal year was not less than 100 percent of such 

19 aggregate expenditures for the then 2nd preceding fiscal 

20 year. 

21 ‘‘(e) PAYMENT OF GRANT.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall make a 

23 grant to each State that meets the requirements of 

24 subsections (b) and (d), if applicable, for a fiscal 

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1 section (m), in an amount equal to the reimbursable 

2 percentage of the eligible expenditures of the State 

3 for the fiscal year, but not more than the amount 

4 allotted to the State under subsection (c) for the fis5 cal year. 

6 ‘‘(2) REIMBURSABLE PERCENTAGE DEFINED.— 

7 In paragraph (1), the term ‘reimbursable percent8 age’ means, with respect to a fiscal year— 

9 ‘‘(A) 85 percent, in the case of fiscal year 

10 2010; 

11 ‘‘(B) 80 percent, in the case of fiscal year 

12 2011; or 

13 ‘‘(C) 75 percent, in the case of fiscal year 

14 2012 and any succeeding fiscal year. 

15 ‘‘(f) ELIGIBLE EXPENDITURES.— 

16 ‘‘(1) IN GENERAL.—In this section, the term 

17 ‘eligible expenditures’— 

18 ‘‘(A) means expenditures to provide vol19 untary home visitation for as many families 

20 with young children (under the age of school 

21 entry) and families expecting children as prac22 ticable, through the implementation or expan23 sion of high quality home visitation programs 

24 that— 


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1 ‘‘(i) adhere to clear evidence-based 

2 models of home visitation that have dem3 onstrated positive effects on important pro4 gram-determined child and parenting out5 comes, such as reducing abuse and neglect 

6 and improving child health and develop7 ment; 

8 ‘‘(ii) employ well-trained and com9 petent staff, maintain high quality super10 vision, provide for ongoing training and 

11 professional development, and show strong 

12 organizational capacity to implement such 

13 a program; 

14 ‘‘(iii) establish appropriate linkages 

15 and referrals to other community resources 

16 and supports; 

17 ‘‘(iv) monitor fidelity of program im18 plementation to ensure that services are 

19 delivered according to the specified model; 

20 and 

21 ‘‘(v) provide parents with— 

22 ‘‘(I) knowledge of age-appro23 priate child development in cognitive, 

24 language, social, emotional, and motor 

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1 ond language acquisition, in the case 

2 of English language learners); 

3 ‘‘(II) knowledge of realistic ex4 pectations of age-appropriate child be5 haviors; 

6 ‘‘(III) knowledge of health and 

7 wellness issues for children and par8 ents; 

9 ‘‘(IV) modeling, consulting, and 

10 coaching on parenting practices; 

11 ‘‘(V) skills to interact with their 

12 child to enhance age-appropriate de13 velopment; 

14 ‘‘(VI) skills to recognize and seek 

15 help for issues related to health, devel16 opmental delays, and social, emo17 tional, and behavioral skills; and 

18 ‘‘(VII) activities designed to help 

19 parents become full partners in the 

20 education of their children; 

21 ‘‘(B) includes expenditures for training, 

22 technical assistance, and evaluations related to 

23 the programs; and 

24 ‘‘(C) does not include any expenditure with 

25 respect to which a State has submitted a claim 


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1 for payment under any other provision of Fed2 eral law. 

3 ‘‘(2) PRIORITY FUNDING FOR PROGRAMS WITH

4 STRONGEST EVIDENCE.— 

5 ‘‘(A) IN GENERAL.—The expenditures, de6 scribed in paragraph (1), of a State for a fiscal 

7 year that are attributable to the cost of pro8 grams that do not adhere to a model of home 

9 visitation with the strongest evidence of effec10 tiveness shall not be considered eligible expendi11 tures for the fiscal year to the extent that the 

12 total of the expenditures exceeds the applicable 

13 percentage for the fiscal year of the allotment 

14 of the State under subsection (c) for the fiscal 

15 year. 

16 ‘‘(B) APPLICABLE PERCENTAGE DE17 FINED.—In subparagraph (A), the term ‘appli18 cable percentage’ means, with respect to a fiscal 

19 year— 

20 ‘‘(i) 60 percent for fiscal year 2010; 

21 ‘‘(ii) 55 percent for fiscal year 2011; 

22 ‘‘(iii) 50 percent for fiscal year 2012; 

23 ‘‘(iv) 45 percent for fiscal year 2013; 

24 or 

25 ‘‘(v) 40 percent for fiscal year 2014. 


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1 ‘‘(g) NO USE OF OTHER FEDERAL FUNDS FOR

2 STATE MATCH.—A State to which a grant is made under 

3 this section may not expend any Federal funds to meet 

4 the State share of the cost of an eligible expenditure for 

5 which the State receives a payment under this section. 

6 ‘‘(h) WAIVER AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—The Secretary may waive 

8 or modify the application of any provision of this 

9 section, other than subsection (b) or (f), to an In10 dian tribe if the failure to do so would impose an 

11 undue burden on the Indian tribe. 

12 ‘‘(2) SPECIAL RULE.—An Indian tribe is 

13 deemed to meet the requirement of subsection (d) 

14 for purposes of subsections (c) and (e) if— 

15 ‘‘(A) the Secretary waives the requirement; 

16 or 

17 ‘‘(B) the Secretary modifies the require18 ment, and the Indian tribe meets the modified 

19 requirement. 

20 ‘‘(i) STATE REPORTS.—Each State to which a grant 

21 is made under this section shall submit to the Secretary 

22 an annual report on the progress made by the State in 

23 addressing the purposes of this section. Each such report 

24 shall include a description of— 


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1 ‘‘(1) the services delivered by the programs that 

2 received funds from the grant; 

3 ‘‘(2) the characteristics of each such program, 

4 including information on the service model used by 

5 the program and the performance of the program; 

6 ‘‘(3) the characteristics of the providers of serv7 ices through the program, including staff qualifica8 tions, work experience, and demographic characteris9 tics; 

10 ‘‘(4) the characteristics of the recipients of serv11 ices provided through the program, including the 

12 number of the recipients, the demographic charac13 teristics of the recipients, and family retention; 

14 ‘‘(5) the annual cost of implementing the pro15 gram, including the cost per family served under the 

16 program; 

17 ‘‘(6) the outcomes experienced by recipients of 

18 services through the program; 

19 ‘‘(7) the training and technical assistance pro20 vided to aid implementation of the program, and 

21 how the training and technical assistance contrib22 uted to the outcomes achieved through the program; 

23 ‘‘(8) the indicators and methods used to mon24 itor whether the program is being implemented as 

25 designed; and 


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1 ‘‘(9) other information as determined necessary 

2 by the Secretary. 

3 ‘‘(j) EVALUATION.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall, by 

5 grant or contract, provide for the conduct of an 

6 independent evaluation of the effectiveness of home 

7 visitation programs receiving funds provided under 

8 this section, which shall examine the following: 

9 ‘‘(A) The effect of home visitation pro10 grams on child and parent outcomes, including 

11 child maltreatment, child health and develop12 ment, school readiness, and links to community 

13 services. 

14 ‘‘(B) The effectiveness of home visitation 

15 programs on different populations, including 

16 the extent to which the ability of programs to 

17 improve outcomes varies across programs and 

18 populations. 

19 ‘‘(2) REPORTS TO THE CONGRESS.— 

20 ‘‘(A) INTERIM REPORT.—Within 3 years 

21 after the date of the enactment of this section, 

22 the Secretary shall submit to the Congress an 

23 interim report on the evaluation conducted pur24 suant to paragraph (1). 


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1 ‘‘(B) FINAL REPORT.—Within 5 years 

2 after the date of the enactment of this section, 

3 the Secretary shall submit to the Congress a 

4 final report on the evaluation conducted pursu5 ant to paragraph (1). 

6 ‘‘(k) ANNUAL REPORTS TO THE CONGRESS.—The 

7 Secretary shall submit annually to the Congress a report 

8 on the activities carried out using funds made available 

9 under this section, which shall include a description of the 

10 following: 

11 ‘‘(1) The high need communities targeted by 

12 States for programs carried out under this section. 

13 ‘‘(2) The service delivery models used in the 

14 programs receiving funds provided under this sec15 tion. 

16 ‘‘(3) The characteristics of the programs, in17 cluding— 

18 ‘‘(A) the qualifications and demographic 

19 characteristics of program staff; and 

20 ‘‘(B) recipient characteristics including the 

21 number of families served, the demographic 

22 characteristics of the families served, and fam23 ily retention and duration of services. 

24 ‘‘(4) The outcomes reported by the programs. 


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1 ‘‘(5) The research-based instruction, materials, 

2 and activities being used in the activities funded 

3 under the grant. 

4 ‘‘(6) The training and technical activities, in5 cluding on-going professional development, provided 

6 to the programs. 

7 ‘‘(7) The annual costs of implementing the pro8 grams, including the cost per family served under 

9 the programs. 

10 ‘‘(8) The indicators and methods used by States 

11 to monitor whether the programs are being been im12 plemented as designed. 

13 ‘‘(l) RESERVATIONS OF FUNDS.—From the amounts 

14 appropriated for a fiscal year under subsection (m), the 

15 Secretary shall reserve— 

16 ‘‘(1) an amount equal to 5 percent of the 

17 amounts to pay the cost of the evaluation provided 

18 for in subsection (j), and the provision to States of 

19 training and technical assistance, including the dis20 semination of best practices in early childhood home 

21 visitation; and 

22 ‘‘(2) after making the reservation required by 

23 paragraph (1), an amount equal to 3 percent of the 

24 amount so appropriated, to pay for grants to Indian 

25 tribes under this section. 


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1 ‘‘(m) APPROPRIATIONS.—Out of any money in the 

2 Treasury of the United States not otherwise appropriated, 

3 there is appropriated to the Secretary to carry out this 

4 section— 

5 ‘‘(1) $50,000,000 for fiscal year 2010; 

6 ‘‘(2) $100,000,000 for fiscal year 2011; 

7 ‘‘(3) $150,000,000 for fiscal year 2012; 

8 ‘‘(4) $200,000,000 for fiscal year 2013; and 

9 ‘‘(5) $250,000,000 for fiscal year 2014. 

10 ‘‘(n) INDIAN TRIBES TREATED AS STATES.—In this 

11 section, paragraphs (4), (5), and (6) of section 431(a) 

12 shall apply.’’. 

13 SEC. 1905. IMPROVED COORDINATION AND PROTECTION 

14 FOR DUAL ELIGIBLES. 

15 Title XI of the Social Security Act is amended by 

16 inserting after section 1150 the following new section: 

17 ‘‘IMPROVED COORDINATION AND PROTECTION FOR DUAL

18 ELIGIBLES

19 ‘‘SEC. 1150A. (a) IN GENERAL.—The Secretary shall 

20 provide, through an identifiable office or program within 

21 the Centers for Medicare & Medicaid Services, for a fo22 cused effort to provide for improved coordination between 

23 Medicare and Medicaid and protection in the case of dual 

24 eligibles (as defined in subsection (e)). The office or pro25 gram shall— 


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1 ‘‘(1) review Medicare and Medicaid policies re2 lated to enrollment, benefits, service delivery, pay3 ment, and grievance and appeals processes under 

4 parts A and B of title XVIII, under the Medicare 

5 Advantage program under part C of such title, and 

6 under title XIX; 

7 ‘‘(2) identify areas of such policies where better 

8 coordination and protection could improve care and 

9 costs; and 

10 ‘‘(3) issue guidance to States regarding improv11 ing such coordination and protection. 

12 ‘‘(b) ELEMENTS.—The improved coordination and 

13 protection under this section shall include efforts— 

14 ‘‘(1) to simplify access of dual eligibles to bene15 fits and services under Medicare and Medicaid; 

16 ‘‘(2) to improve care continuity for dual eligi17 bles and ensure safe and effective care transitions; 

18 ‘‘(3) to harmonize regulatory conflicts between 

19 Medicare and Medicaid rules with regard to dual eli20 gibles; and 

21 ‘‘(4) to improve total cost and quality perform22 ance under Medicare and Medicaid for dual eligibles. 

23 ‘‘(c) RESPONSIBILITIES.—In carrying out this sec24 tion, the Secretary shall provide for the following: 


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1 ‘‘(1) An examination of Medicare and Medicaid 

2 payment systems to develop strategies to foster more 

3 integrated and higher quality care. 

4 ‘‘(2) Development of methods to facilitate ac5 cess to post-acute and community-based services and 

6 to identify actions that could lead to better coordina7 tion of community-based care. 

8 ‘‘(3) A study of enrollment of dual eligibles in 

9 the Medicare Savings Program (as defined in section 

10 1144(c)(7)), under Medicaid, and in the low-income 

11 subsidy program under section 1860D–14 to identify 

12 methods to more efficiently and effectively reach and 

13 enroll dual eligibles. 

14 ‘‘(4) An assessment of communication strate15 gies for dual eligibles to determine whether addi16 tional informational materials or outreach is needed, 

17 including an assessment of the Medicare website, 1– 

18 800–MEDICARE, and the Medicare handbook. 

19 ‘‘(5) Research and evaluation of areas where 

20 service utilization, quality, and access to cost sharing 

21 protection could be improved and an assessment of 

22 factors related to enrollee satisfaction with services 

23 and care delivery. 

24 ‘‘(6) Collection (and making available to the 

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1 gibility, benefit and cost-sharing assistance available 

2 to dual eligibles by State. 

3 ‘‘(7) Monitoring total combined Medicare and 

4 Medicaid program costs in serving dual eligibles and 

5 making recommendations for optimizing total quality 

6 and cost performance across both programs. 

7 ‘‘(8) Coordination of activities relating to Medi8 care Advantage plans under 1859(b)(6)(B)(ii) and 

9 Medicaid. 

10 ‘‘(d) PERIODIC REPORTS.—Not later than 1 year 

11 after the date of the enactment of this section and every 

12 3 years thereafter the Secretary shall submit to Congress 

13 a report on progress in activities conducted under this sec14 tion. 

15 ‘‘(e) DEFINITIONS.—In this section: 

16 ‘‘(1) DUAL ELIGIBLE.—The term ‘dual eligible’ 

17 means an individual who is dually eligible for bene18 fits under title XVIII, and medical assistance under 

19 title XIX, including such individuals who are eligible 

20 for benefits under the Medicare Savings Program 

21 (as defined in section 1144(c)(7)). 

22 ‘‘(2) MEDICARE; MEDICAID.—The terms ‘Medi23 care’ and ‘Medicaid’ mean the programs under titles 

24 XVIII and XIX, respectively.’’. 


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1 SUBDIVISION C—PUBLIC 

2 HEALTH AND WORKFORCE 

3 DEVELOPMENT 

4 SEC. 2001. TABLE OF CONTENTS; REFERENCES. 

5 (a) TABLE OF CONTENTS.—The table of contents of 

6 this subdivision is as follows: 

Sec. 2001. Table of contents; references. 

Sec. 2002. Public Health Investment Fund. 

TITLE I—COMMUNITY HEALTH CENTERS 

Sec. 2101. Increased funding. 

TITLE II—WORKFORCE 

Subtitle A—Primary Care Workforce 

PART 1—NATIONAL HEALTH SERVICE CORPS

Sec. 2201. National Health Service Corps. 

Sec. 2202. Authorizations of appropriations. 

PART 2—PROMOTION OF PRIMARY CARE AND DENTISTRY

Sec. 2211. Frontline health providers. 

Sec. 2212. Primary care student loan funds. 

Sec. 2213. Training in family medicine, general internal medicine, general pediatrics, geriatrics, and physician assistantship. 

Sec. 2214. Training of medical residents in community-based settings. 

Sec. 2215. Training for general, pediatric, and public health dentists and dental 

hygienists. 

Sec. 2216. Authorization of appropriations. 

Subtitle B—Nursing Workforce 

Sec. 2221. Amendments to Public Health Service Act. 

Subtitle C—Public Health Workforce 

Sec. 2231. Public Health Workforce Corps. 

Sec. 2232. Enhancing the public health workforce. 

Sec. 2233. Public health training centers. 

Sec. 2234. Preventive medicine and public health training grant program. 

Sec. 2235. Authorization of appropriations. 

Subtitle D—Adapting Workforce to Evolving Health System Needs 

PART 1—HEALTH PROFESSIONS TRAINING FOR DIVERSITY


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Sec. 2241. Scholarships for disadvantaged students, loan repayments and fellowships regarding faculty positions, and educational assistance 

in the health professions regarding individuals from disadvantaged backgrounds. 

Sec. 2242. Nursing workforce diversity grants. 

Sec. 2243. Coordination of diversity and cultural competency programs. 

PART 2—INTERDISCIPLINARY TRAINING PROGRAMS

Sec. 2251. Cultural and linguistic competency training for health care professionals. 

Sec. 2252. Innovations in interdisciplinary care training. 

PART 3—ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND

ASSESSMENT

Sec. 2261. Health workforce evaluation and assessment. 

PART 4—HEALTH WORKFORCE ASSESSMENT

Sec. 2271. Health workforce assessment. 

PART 5—AUTHORIZATION OF APPROPRIATIONS

Sec. 2281. Authorization of appropriations. 

TITLE III—PREVENTION AND WELLNESS 

Sec. 2301. Prevention and wellness. 

TITLE IV—QUALITY AND SURVEILLANCE 

Sec. 2401. Implementation of best practices in the delivery of health care. 

Sec. 2402. Assistant Secretary for Health Information. 

Sec. 2403. Authorization of appropriations. 

TITLE V—OTHER PROVISIONS 

Subtitle A—Drug Discount for Rural and Other Hospitals 

Sec. 2501. Expanded participation in 340B program. 

Sec. 2502. Extension of discounts to inpatient drugs. 

Sec. 2503. Effective date. 

Subtitle B—School-Based Health Clinics 

Sec. 2511. School-based health clinics. 

Subtitle C—National Medical Device Registry 

Sec. 2521. National medical device registry. 

Subtitle D—Grants for Comprehensive Programs to Provide Education to 

Nurses and Create a Pipeline to Nursing 

Sec. 2531. Establishment of grant program. 

Subtitle E—States Failing To Adhere to Certain Employment Obligations 

Sec. 2541. Limitation on Federal funds. 


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Subtitle F—Standards for Accessibility to Medical Equipment for Individuals 

With Disabilities. 

Sec. 2541. Access for individuals with disabilities. 

Subtitle G—Other Grant Programs 

Sec. 2551. Reducing student-to-school nurse ratios. 

Sec. 2552. Wellness program grants. 

Sec. 2553. Health professions training for diversity programs. 

Subtitle H—Long-term Care and Family Caregiver Support 

Sec. 2561. Long-term care and family caregiver support. 

Subtitle I—Online Resources 

Sec. 2571. Web site on health care labor market and related educational and 

training opportunities. 

Sec. 2572. Online health workforce training programs. 

1 (b) REFERENCES.—Except as otherwise specified, 

2 whenever in this subdivision an amendment is expressed 

3 in terms of an amendment to a section or other provision, 

4 the reference shall be considered to be made to a section 

5 or other provision of the Public Health Service Act (42 

6 U.S.C. 201 et seq.). 

7 SEC. 2002. PUBLIC HEALTH INVESTMENT FUND. 

8 (a) ESTABLISHMENT OF FUNDS.— 

9 (1) IN GENERAL.—There is established a fund 

10 to be known as the ‘‘Public Health Investment 

11 Fund’’ (referred to in this section as the ‘‘Fund’’). 

12 (2) FUNDING.— 

13 (A) There shall be deposited into the 

14 Fund— 

15 (i) for fiscal year 2010, 

16 $4,600,000,000; 


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1 (ii) for fiscal year 2011, 

2 $5,600,000,000; 

3 (iii) for fiscal year 2012, 

4 $6,900,000,000; 

5 (iv) for fiscal year 2013, 

6 $7,800,000,000; 

7 (v) for fiscal year 2014, 

8 $9,000,000,000; 

9 (vi) for fiscal year 2015, 

10 $9,400,000,000; 

11 (vii) for fiscal year 2016, 

12 $10,100,000,000; 

13 (viii) for fiscal year 2017, 

14 $10,800,000,000; 

15 (ix) for fiscal year 2018, 

16 $11,800,000,000; and 

17 (x) for fiscal year 2019, 

18 $12,700,000,000. 

19 (B) Amounts deposited into the Fund shall 

20 be derived from general revenues of the Treas21 ury. 

22 (b) AUTHORIZATION OF APPROPRIATIONS FROM THE

23 FUND.— 

24 (1) NEW FUNDING.— 


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1 (A) IN GENERAL.—Amounts in the Fund 

2 are authorized to be appropriated by the Com3 mittees on Appropriations of the House of Rep4 resentatives and the Senate for carrying out ac5 tivities under designated public health provi6 sions. 

7 (B) DESIGNATED PROVISIONS.—For pur8 poses of this paragraph, the term ‘‘designated 

9 public health provisions’’ means the provisions 

10 for which amounts are authorized to be appro11 priated under section 330(s), 338(c), 338H–1, 

12 799C, 872, or 3111 of the Public Health Serv13 ice Act, as added by this subdivision. 

14 (2) BASELINE FUNDING.— 

15 (A) IN GENERAL.—Amounts in the Fund 

16 are authorized to be appropriated (as described 

17 in paragraph (1)) for a fiscal year only if (ex18 cluding any amounts in or appropriated from 

19 the Fund)— 

20 (i) the amounts specified in subpara21 graph (B) for the fiscal year involved are 

22 equal to or greater than the amounts spec23 ified in subparagraph (B) for fiscal year 

24 2008; and 


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1 (ii) the amounts appropriated, out of 

2 the general fund of the Treasury, to the 

3 Prevention and Wellness Trust under sec4 tion 3111 of the Public Health Service 

5 Act, as added by this subdivision, for the 

6 fiscal year involved are equal to or greater 

7 than the funds— 

8 (I) appropriated under the head9 ing ‘‘Prevention and Wellness Fund’’ 

10 in title VIII of division A of the Amer11 ican Recovery and Reinvestment Act 

12 of 2009 (Public Law 111–5); and 

13 (II) allocated by the second pro14 viso under such heading for evidence15 based clinical and community-based 

16 prevention and wellness strategies. 

17 (B) AMOUNTS SPECIFIED.—The amounts 

18 specified in this subparagraph, with respect to 

19 a fiscal year, are the amounts appropriated for 

20 the following: 

21 (i) Community health centers (includ22 ing funds appropriated under the authority 

23 of section 330 of the Public Health Service 

24 Act (42 U.S.C. 254b)). 


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1 (ii) The National Health Service 

2 Corps Program (including funds appro3 priated under the authority of section 338 

4 of such Act (42 U.S.C. 254k)). 

5 (iii) The National Health Service 

6 Corps Scholarship and Loan Repayment 

7 Programs (including funds appropriated 

8 under the authority of section 338H of 

9 such Act (42 U.S.C. 254q)). 

10 (iv) Primary care loan funds (includ11 ing funds appropriated for schools of medi12 cine or osteopathic medicine under the au13 thority of section 735(f) of such Act (42 

14 U.S.C. 292y(f))). 

15 (v) Primary care education programs 

16 (including funds appropriated under the 

17 authority of sections 736, 740, 741, and 

18 747 of such Act (42 U.S.C. 293, 293d, 

19 and 293k)). 

20 (vi) Sections 761 and 770 of such Act 

21 (42 U.S.C. 294n and 295e). 

22 (vii) Nursing workforce development 

23 (including funds appropriated under the 

24 authority of title VIII of such Act (42 

25 U.S.C. 296 et seq.)). 


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1 (viii) The National Center for Health 

2 Statistics (including funds appropriated 

3 under the authority of sections 304, 306, 

4 307, and 308 of such Act (42 U.S.C. 

5 242b, 242k, 242l, and 242m)). 

6 (ix) The Agency for Healthcare Re7 search and Quality (including funds appro8 priated under the authority of title IX of 

9 such Act (42 U.S.C. 299 et seq.)). 

10 (3) BUDGETARY IMPLICATIONS.—Amounts ap11 propriated under this section, and outlays flowing 

12 from such appropriations, shall not be taken into ac13 count for purposes of any budget enforcement proce14 dures including allocations under section 302(a) and 

15 (b) of the Balanced Budget and Emergency Deficit 

16 Control Act and budget resolutions for fiscal years 

17 during which appropriations are made from the 

18 Fund. 

19 TITLE I—COMMUNITY HEALTH 

20 CENTERS 

21 SEC. 2101. INCREASED FUNDING. 

22 Section 330 of the Public Health Service Act (42 

23 U.S.C. 254b) is amended— 

24 (1) in subsection (r)(1)— 


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1 (A) in subparagraph (D), by striking 

2 ‘‘and’’ at the end; 

3 (B) in subparagraph (E), by striking the 

4 period at the end and inserting ‘‘; and’’; and 

5 (C) by inserting at the end the following: 

6 ‘‘(F) Such sums as may be necessary for 

7 each of fiscal years 2013 and 2019.’’; and 

8 (2) by inserting after subsection (r) the fol9 lowing: 

10 ‘‘(s) ADDITIONAL FUNDING.—For the purpose of 

11 carrying out this section, in addition to any other amounts 

12 authorized to be appropriated for such purpose, there are 

13 authorized to be appropriated, out of any monies in the 

14 Public Health Investment Fund, the following: 

15 ‘‘(1) For fiscal year 2010, $1,000,000,000. 

16 ‘‘(2) For fiscal year 2011, $1,500,000,000. 

17 ‘‘(3) For fiscal year 2012, $2,500,000,000. 

18 ‘‘(4) For fiscal year 2013, $3,000,000,000. 

19 ‘‘(5) For fiscal year 2014, $4,000,000,000. 

20 ‘‘(6) For fiscal year 2015, $4,400,000,000. 

21 ‘‘(7) For fiscal year 2016, $4,800,000,000. 

22 ‘‘(8) For fiscal year 2017, $5,300,000,000. 

23 ‘‘(9) For fiscal year 2018, $5,900,000,000. 

24 ‘‘(10) For fiscal year 2019, $6,400,000,000.’’. 


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1 TITLE II—WORKFORCE 

2 Subtitle A—Primary Care 

3 Workforce 

4 PART 1—NATIONAL HEALTH SERVICE CORPS 

5 SEC. 2201. NATIONAL HEALTH SERVICE CORPS. 

6 (a) FULFILLMENT OF OBLIGATED SERVICE RE7 QUIREMENT THROUGH HALF-TIME SERVICE.— 

8 (1) WAIVERS.—Subsection (i) of section 331 

9 (42 U.S.C. 254d) is amended— 

10 (A) in paragraph (1), by striking ‘‘In car11 rying out subpart III’’ and all that follows 

12 through the period and inserting ‘‘In carrying 

13 out subpart III, the Secretary may, in accord14 ance with this subsection, issue waivers to indi15 viduals who have entered into a contract for ob16 ligated service under the Scholarship Program 

17 or the Loan Repayment Program under which 

18 the individuals are authorized to satisfy the re19 quirement of obligated service through pro20 viding clinical practice that is half-time.’’; 

21 (B) in paragraph (2)— 

22 (i) in subparagraphs (A)(ii) and (B), 

23 by striking ‘‘less than full time’’ each place 

24 it appears and inserting ‘‘half time’’; 


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1 (ii) in subparagraphs (C) and (F), by 

2 striking ‘‘less than full-time service’’ each 

3 place it appears and inserting ‘‘half-time 

4 service’’; and 

5 (iii) by amending subparagraphs (D) 

6 and (E) to read as follows: 

7 ‘‘(D) the entity and the Corps member agree in 

8 writing that the Corps member will perform half9 time clinical practice; 

10 ‘‘(E) the Corps member agrees in writing to 

11 fulfill all of the service obligations under section 

12 338C through half-time clinical practice and ei13 ther— 

14 ‘‘(i) double the period of obligated service; 

15 or 

16 ‘‘(ii) in the case of contracts entered into 

17 under section 338B, accept a minimum service 

18 obligation of 2 years with an award amount 

19 equal to 50 percent of the amount that would 

20 otherwise be payable for full-time service; and’’; 

21 and 

22 (C) in paragraph (3), by striking ‘‘In eval23 uating a demonstration project described in 

24 paragraph (1)’’ and inserting ‘‘In evaluating 

25 waivers issued under paragraph (1)’’. 


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1 (2) DEFINITIONS.—Subsection (j) of section 

2 331 (42 U.S.C. 254d) is amended by adding at the 

3 end the following: 

4 ‘‘(5) The terms ‘full time’ and ‘full-time’ mean 

5 a minimum of 40 hours per week in a clinical prac6 tice, for a minimum of 45 weeks per year. 

7 ‘‘(6) The terms ‘half time’ and ‘half-time’ mean 

8 a minimum of 20 hours per week (not to exceed 39 

9 hours per week) in a clinical practice, for a min10 imum of 45 weeks per year.’’. 

11 (b) REAPPOINTMENT TO NATIONAL ADVISORY COUN12 CIL.—Section 337(b)(1) (42 U.S.C. 254j(b)(1)) is amend13 ed by striking ‘‘Members may not be reappointed to the 

14 Council.’’. 

15 (c) LOAN REPAYMENT AMOUNT.—Section 

16 338B(g)(2)(A) is amended (42 U.S.C. 254l–1(g)(2)(A)) 

17 by striking ‘‘$35,000’’ and inserting ‘‘$50,000, plus, be18 ginning with fiscal year 2012, an amount determined by 

19 the Secretary on an annual basis to reflect inflation,’’. 

20 (d) TREATMENT OF TEACHING AS OBLIGATED SERV21 ICE.—Subsection (a) of section 338C (42 U.S.C. 254m) 

22 is amended by adding at the end the following: ‘‘The Sec23 retary may treat teaching as clinical practice for up to 

24 20 percent of such period of obligated service.’’. 


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1 SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS. 

2 (a) NATIONAL HEALTH SERVICE CORPS PRO3 GRAM.—Section 338 (42 U.S.C. 254k) is amended— 

4 (1) in subsection (a), by striking ‘‘2012’’ and 

5 inserting ‘‘2019’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(c) For the purpose of carrying out this subpart, 

8 in addition to any other amounts authorized to be appro9 priated for such purpose, there are authorized to be appro10 priated, out of any monies in the Public Health Invest11 ment Fund, the following: 

12 ‘‘(1) $63,000,000 for fiscal year 2010. 

13 ‘‘(2) $66,000,000 for fiscal year 2011. 

14 ‘‘(3) $70,000,000 for fiscal year 2012. 

15 ‘‘(4) $73,000,000 for fiscal year 2013. 

16 ‘‘(5) $77,000,000 for fiscal year 2014. 

17 ‘‘(6) $81,000,000 for fiscal year 2015. 

18 ‘‘(7) $85,000,000 for fiscal year 2016. 

19 ‘‘(8) $89,000,000 for fiscal year 2017. 

20 ‘‘(9) $94,000,000 for fiscal year 2018. 

21 ‘‘(10) $98,000,000 for fiscal year 2019.’’. 

22 (b) SCHOLARSHIP AND LOAN REPAYMENT PRO23 GRAMS.—Subpart III of part D of title III of the Public 

24 Health Service Act (42 U.S.C. 254l et seq.) is amended— 

25 (1) in section 338H(a)— 


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1 (A) in paragraph (4), by striking ‘‘and’’ at 

2 the end; 

3 (B) in paragraph (5), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(6) for fiscal years 2013 and 2019, such sums 

7 as may be necessary.’’; and 

8 (2) by inserting after section 338H the fol9 lowing: 

10 ‘‘SEC. 338H–1. ADDITIONAL FUNDING. 

11 ‘‘For the purpose of carrying out this subpart, in ad12 dition to any other amounts authorized to be appropriated 

13 for such purpose, there are authorized to be appropriated, 

14 out of any monies in the Public Health Investment Fund, 

15 the following: 

16 ‘‘(1) $254,000,000 for fiscal year 2010. 

17 ‘‘(2) $266,000,000 for fiscal year 2011. 

18 ‘‘(3) $278,000,000 for fiscal year 2012. 

19 ‘‘(4) $292,000,000 for fiscal year 2013. 

20 ‘‘(5) $306,000,000 for fiscal year 2014. 

21 ‘‘(6) $321,000,000 for fiscal year 2015. 

22 ‘‘(7) $337,000,000 for fiscal year 2016. 

23 ‘‘(8) $354,000,000 for fiscal year 2017. 

24 ‘‘(9) $372,000,000 for fiscal year 2018. 

25 ‘‘(10) $391,000,000 for fiscal year 2019.’’. 


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1 PART 2—PROMOTION OF PRIMARY CARE AND 

2 DENTISTRY 

3 SEC. 2211. FRONTLINE HEALTH PROVIDERS. 

4 Part D of title III (42 U.S.C. 254b et seq.) is amend5 ed by adding at the end the following: 

6 ‘‘Subpart XI—Health Professional Needs Areas 

7 ‘‘SEC. 340H. IN GENERAL. 

8 ‘‘(a) PROGRAM.—The Secretary, acting through the 

9 Administrator of the Health Resources and Services Ad10 ministration, shall establish a program, to be known as 

11 the Frontline Health Providers Loan Repayment Pro12 gram, to address unmet health care needs in health profes13 sional needs areas through loan repayments under section 

14 340I. 

15 ‘‘(b) DESIGNATION OF HEALTH PROFESSIONAL

16 NEEDS AREAS.— 

17 ‘‘(1) IN GENERAL.—In this subpart, the term 

18 ‘health professional needs area’ means an area, pop19 ulation, or facility that is designated by the Sec20 retary in accordance with paragraph (2). 

21 ‘‘(2) DESIGNATION.—To be designated by the 

22 Secretary as a health professional needs area under 

23 this subpart: 

24 ‘‘(A) In the case of an area, the area must 

25 be a rational area for the delivery of health 

26 services. 


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1 ‘‘(B) The area, population, or facility must 

2 have, in one or more health disciplines, special3 ties, or subspecialties for the population served, 

4 as determined by the Secretary— 

5 ‘‘(i) insufficient capacity of health 

6 professionals; or 

7 ‘‘(ii) high needs for health services. 

8 ‘‘(C) With respect to the delivery of pri9 mary health services, the area, population, or 

10 facility must not include a health professional 

11 shortage area (as designated under section 

12 332), except that the area, population, or facil13 ity may include such a health professional 

14 shortage area to which no member of the Na15 tional Health Service Corps is currently as16 signed. 

17 ‘‘(c) ELIGIBILITY.—To be eligible to participate in 

18 the Program, an individual shall— 

19 ‘‘(1) hold a degree in a course of study or pro20 gram (approved by the Secretary) from a school de21 fined in section 799B(1)(A) (other than a school of 

22 public health); 

23 ‘‘(2) hold a degree in a course of study or pro24 gram (approved by the Secretary) from a school or 

25 program defined in subparagraph (C), (D), or 


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1 (E)(4) of section 799B(1), as designated by the Sec2 retary; 

3 ‘‘(3) be enrolled as a full-time student— 

4 ‘‘(A) in a school or program defined in 

5 subparagraph (C), (D), or (E)(4) of section 

6 799B(1), as designated by the Secretary, or a 

7 school described in paragraph (1); and 

8 ‘‘(B) in the final year of a course of study 

9 or program, offered by such school or program 

10 and approved by the Secretary, leading to a de11 gree in a discipline referred to in subparagraph 

12 (A) (other than a graduate degree in public 

13 health), (C), (D), or (E)(4) of section 799B(1); 

14 ‘‘(4) be a practitioner described in section 

15 1842(b)(18)(C) or 1848(k)(3)(B)(iii) or (iv) of the 

16 Social Security Act; or 

17 ‘‘(5) be a practitioner in the field of respiratory 

18 therapy, medical technology, or radiologic tech19 nology. 

20 ‘‘(d) DEFINITION.—In this subpart, the term ‘pri21 mary health services’ has the meaning given to such term 

22 in section 331(a)(3)(D). 

23 ‘‘SEC. 340I. LOAN REPAYMENTS. 

24 ‘‘(a) LOAN REPAYMENTS.—The Secretary, acting 

25 through the Administrator of the Health Resources and 


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1 Services Administration, shall enter into contracts with in2 dividuals under which— 

3 ‘‘(1) the individual agrees— 

4 ‘‘(A) to serve as a full-time primary health 

5 services provider or as a full-time or part-time 

6 provider of other health services for a period of 

7 time equal to 2 years or such longer period as 

8 the individual may agree to; 

9 ‘‘(B) to serve in a health professional 

10 needs area in a health discipline, specialty, or a 

11 subspecialty for which the area, population, or 

12 facility is designated as a health professional 

13 needs area under section 340H; and 

14 ‘‘(C) in the case of an individual described 

15 in subsection 340H(c)(3) who is in the final 

16 year of study and who has accepted employ17 ment as primary health services provider or 

18 provider of other health services in accordance 

19 with subparagraphs (A) and (B), to complete 

20 the education or training and maintain an ac21 ceptable level of academic standing (as deter22 mined by the educational institution offering 

23 the course of study or training); and 

24 ‘‘(2) the Secretary agrees to pay, for each year 

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1 terest of the undergraduate or graduate educational 

2 loans (or both) of the individual that is not more 

3 than 50 percent of the average award made under 

4 the National Health Service Corps Loan Repayment 

5 Program under subpart III in that year. 

6 ‘‘(b) PRACTICE SETTING.—A contract entered into 

7 under this section shall allow the individual receiving the 

8 loan repayment to satisfy the service requirement de9 scribed in subsection (a)(1) through employment in a solo 

10 or group practice, a clinic, an accredited public or private 

11 nonprofit hospital, or any other health care entity, as 

12 deemed appropriate by the Secretary. 

13 ‘‘(c) APPLICATION OF CERTAIN PROVISIONS.—The 

14 provisions of subpart III of part D shall, except as incon15 sistent with this section, apply to the loan repayment pro16 gram under this subpart in the same manner and to the 

17 same extent as such provisions apply to the National 

18 Health Service Corps Loan Repayment Program estab19 lished under section 338B. 

20 ‘‘(d) INSUFFICIENT NUMBER OF APPLICANTS.—If 

21 there are an insufficient number of applicants for loan re22 payments under this section to obligate all appropriated 

23 funds, the Secretary shall transfer the unobligated funds 

24 to the National Health Service Corps for the purpose of— 


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1 ‘‘(1) recruitment of sufficient applicants for the 

2 National Health Service Corps for the following 

3 year; or 

4 ‘‘(2) making additional loan repayments under 

5 section 338B if there is an excess number of quali6 fied applicants for loan repayments under such sec7 tion. 

8 ‘‘SEC. 340J. REPORT. 

9 ‘‘The Secretary shall submit to the Congress an an10 nual report on the program carried out under this subpart. 

11 ‘‘SEC. 340K. ALLOCATION. 

12 ‘‘Of the amount of funds obligated under this subpart 

13 each fiscal year for loan repayments— 

14 ‘‘(1) 90 percent shall be for physicians and 

15 other health professionals providing primary health 

16 services; and 

17 ‘‘(2) 10 percent shall be for health professionals 

18 not described in paragraph (1).’’. 

19 SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS. 

20 (a) LOAN PROVISIONS.—Section 722 (42 U.S.C. 

21 292r) is amended by striking subsection (e) and inserting 

22 the following: 

23 ‘‘(e) RATE OF INTEREST.—Such loans shall bear in24 terest, on the unpaid balance of the loan, computed only 

25 for periods for which the loan is repayable, at the rate 


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1 of 2 percentage points less than the applicable rate of in2 terest described in section 427A(l)(1) of the Higher Edu3 cation Act of 1965 per year.’’. 

4 (b) MEDICAL SCHOOLS AND PRIMARY HEALTH

5 CARE.—Subsection (a) of section 723 (42 U.S.C. 292s) 

6 is amended— 

7 (1) in paragraph (1), by striking subparagraph 

8 (B) and inserting the following: 

9 ‘‘(B) to practice in such care for 10 years 

10 (including residency training in primary health 

11 care) or through the date on which the loan is 

12 repaid in full, whichever occurs first.’’; and 

13 (2) by striking paragraph (3) and inserting the 

14 following: 

15 ‘‘(3) NONCOMPLIANCE BY STUDENT.—If an in16 dividual fails to comply with an agreement entered 

17 into pursuant to paragraph (1), such agreement 

18 shall provide that the total interest to be paid on the 

19 loan, over the course of the loan period, shall equal 

20 the total amount of interest that would have been in21 curred by the individual if, from the outset of the 

22 loan, the loan was repayable at the rate of interest 

23 described in section 427A(l)(1) of the Higher Edu24 cation Act of 1965 per year instead of the rate of 

25 interest described in section 722(e).’’. 


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1 (c) STUDENT LOAN GUIDELINES.— 

2 (1) IN GENERAL.—Section 735 (42 U.S.C. 

3 292y) is amended— 

4 (A) by redesignating subsection (f) as sub5 section (g); and 

6 (B) by inserting after subsection (e) the 

7 following: 

8 ‘‘(f) DETERMINATION OF FINANCIAL NEED.—The 

9 Secretary— 

10 ‘‘(1) may require, or authorize a school or other 

11 entity to require, the submission of financial infor12 mation to determine the financial resources available 

13 to any individual seeking assistance under this sub14 part; and 

15 ‘‘(2) shall take into account the extent to which 

16 such individual is financially independent in deter17 mining whether to require or authorize the submis18 sion of such information regarding such individual’s 

19 family members.’’. 

20 (2) REVISED GUIDELINES.—The Secretary of 

21 Health and Human Services shall— 

22 (A) strike the second sentence of section 

23 57.206(b) of title 42, Code of Federal Regula24 tions; and 


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1 (B) make such other revisions to guidelines 

2 and regulations in effect as of the date of the 

3 enactment of this Act as may be necessary for 

4 consistency with the amendments made by 

5 paragraph (1). 

6 SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL IN7 TERNAL MEDICINE, GENERAL PEDIATRICS, 

8 GERIATRICS, AND PHYSICIAN 

9 ASSISTANTSHIP. 

10 Section 747 (42 U.S.C. 293k) is amended— 

11 (1) by amending the section heading to read as 

12 follows: ‘‘PRIMARY CARE TRAINING AND EN13 HANCEMENT’’; 

14 (2) by redesignating subsection (e) as sub15 section (f); and 

16 (3) by striking subsections (a) through (d) and 

17 inserting the following: 

18 ‘‘(a) PROGRAM.—The Secretary shall establish a pri19 mary care training and capacity building program con20 sisting of awarding grants and contracts under sub21 sections (b) and (c). 

22 ‘‘(b) SUPPORT AND DEVELOPMENT OF PRIMARY

23 CARE TRAINING PROGRAMS.— 


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

2 grants to, or enter into contracts with, eligible enti3 ties— 

4 ‘‘(A) to plan, develop, operate, or partici5 pate in an accredited professional training pro6 gram, including an accredited residency or in7 ternship program, in the field of family medi8 cine, general internal medicine, general pediat9 rics, or geriatrics for medical students, interns, 

10 residents, or practicing physicians; 

11 ‘‘(B) to provide financial assistance in the 

12 form of traineeships and fellowships to medical 

13 students, interns, residents, or practicing physi14 cians, who are participants in any such pro15 gram, and who plan to specialize or work in 

16 family medicine, general internal medicine, gen17 eral pediatrics, or geriatrics; 

18 ‘‘(C) to plan, develop, operate, or partici19 pate in an accredited program for the training 

20 of physicians who plan to teach in family medi21 cine, general internal medicine, general pediat22 rics, or geriatrics training programs including 

23 in community-based settings; 

24 ‘‘(D) to provide financial assistance in the 

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1 ticing physicians who are participants in any 

2 such programs and who plan to teach in a fam3 ily medicine, general internal medicine, general 

4 pediatrics, or geriatrics training program; and 

5 ‘‘(E) to plan, develop, operate, or partici6 pate in an accredited program for physician as7 sistant education, and for the training of indi8 viduals who plan to teach in programs to pro9 vide such training. 

10 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

11 or contract under paragraph (1), an entity shall 

12 be— 

13 ‘‘(A) an accredited school of medicine or 

14 osteopathic medicine, public or nonprofit private 

15 hospital, or physician assistant training pro16 gram; 

17 ‘‘(B) a public or private nonprofit entity; 

18 or 

19 ‘‘(C) a consortium of 2 or more entities de20 scribed in subparagraphs (A) and (B). 

21 ‘‘(c) CAPACITY BUILDING IN PRIMARY CARE.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall make 

23 grants to or enter into contracts with eligible entities 

24 to establish, maintain, or improve— 


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1 ‘‘(A) academic administrative units (in2 cluding departments, divisions, or other appro3 priate units) in the specialties of family medi4 cine, general internal medicine, general pediat5 rics, or geriatrics; or 

6 ‘‘(B) programs that improve clinical teach7 ing in such specialties. 

8 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

9 or contract under paragraph (1), an entity shall be 

10 an accredited school of medicine or osteopathic med11 icine. 

12 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

13 under this section, the Secretary shall give preference to 

14 entities that have a demonstrated record of the following: 

15 ‘‘(1) Training the greatest percentage, or sig16 nificantly improving the percentage, of health care 

17 professionals who provide primary care. 

18 ‘‘(2) Training individuals who are from under19 represented minority groups or disadvantaged back20 grounds. 

21 ‘‘(3) A high rate of placing graduates in prac22 tice settings having the principal focus of serving in 

23 underserved areas or populations experiencing health 

24 disparities (including serving patients eligible for 

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1 curity Act or for child health assistance under title 

2 XXI of such Act or those with special health care 

3 needs). 

4 ‘‘(4) Supporting teaching programs that ad5 dress the health care needs of vulnerable popu6 lations. 

7 ‘‘(e) REPORT.—The Secretary shall submit to the 

8 Congress an annual report on the program carried out 

9 under this section. 

10 ‘‘(f) DEFINITION.—In this section, the term ‘health 

11 disparities’ has the meaning given the term in section 

12 3171.’’. 

13 SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMU14 NITY-BASED SETTINGS. 

15 Title VII (42 U.S.C. 292 et seq.) is amended— 

16 (1) by redesignating section 748 as 749A; and 

17 (2) by inserting after section 747 the following: 

18 ‘‘SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMU19 NITY-BASED SETTINGS. 

20 ‘‘(a) PROGRAM.—The Secretary shall establish a pro21 gram for the training of medical residents in community22 based settings consisting of awarding grants or contracts 

23 under this section. 


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1 ‘‘(b) DEVELOPMENT AND OPERATION OF COMMU2 NITY-BASED PROGRAMS.—The Secretary shall make 

3 grants to, or enter into contracts with, eligible entities— 

4 ‘‘(1) to plan and develop a new primary care 

5 residency training program, which may include— 

6 ‘‘(A) planning and developing curricula; 

7 ‘‘(B) recruiting and training residents and 

8 faculty; and 

9 ‘‘(C) other activities designated to result in 

10 accreditation of such a program; or 

11 ‘‘(2) to operate or participate in an established 

12 primary care residency training program, which may 

13 include— 

14 ‘‘(A) planning and developing curricula; 

15 ‘‘(B) recruitment and training of residents; 

16 and 

17 ‘‘(C) retention of faculty. 

18 ‘‘(c) ELIGIBLE ENTITY.—To be eligible to receive a 

19 grant or contract under subsection (b), an entity shall— 

20 ‘‘(1) be designated as a recipient of payment 

21 for the direct costs of medical education under sec22 tion 1886(k) of the Social Security Act; 

23 ‘‘(2) be designated as an approved teaching 

24 health center under section 1502(d) of the America’s 

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1 tinuing to participate in the demonstration project 

2 under such section; or 

3 ‘‘(3) be an applicant for designation described 

4 in paragraph (1) or (2) and have demonstrated to 

5 the Secretary appropriate involvement of an accred6 ited teaching hospital to carry out the inpatient re7 sponsibilities associated with a primary care resi8 dency training program. 

9 ‘‘(d) PREFERENCES.—In awarding grants and con10 tracts under paragraph (1) or (2) of subsection (b), the 

11 Secretary shall give preference to entities that— 

12 ‘‘(1) support teaching programs that address 

13 the health care needs of vulnerable populations; or 

14 ‘‘(2) are a Federally qualified health center (as 

15 defined in section 1861(aa)(4) of the Social Security 

16 Act) or a rural health clinic (as defined in section 

17 1861(aa)(2) of such Act). 

18 ‘‘(e) ADDITIONAL PREFERENCES FOR ESTABLISHED

19 PROGRAMS.—In awarding grants and contracts under 

20 subsection (b)(2), the Secretary shall give preference to 

21 entities that have a demonstrated record of training— 

22 ‘‘(1) a high or significantly improved percentage 

23 of health care professionals who provide primary 

24 care; 


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1 ‘‘(2) individuals who are from underrepresented 

2 minority groups or disadvantaged backgrounds; or 

3 ‘‘(3) individuals who practice in settings having 

4 the principal focus of serving underserved areas or 

5 populations experiencing health disparities (including 

6 serving patients eligible for medical assistance under 

7 title XIX of the Social Security Act or for child 

8 health assistance under title XXI of such Act or 

9 those with special health care needs). 

10 ‘‘(f) PERIOD OF AWARDS.— 

11 ‘‘(1) IN GENERAL.—The period of a grant or 

12 contract under this section— 

13 ‘‘(A) shall not exceed 2 years for awards 

14 under subsection (b)(1); and 

15 ‘‘(B) shall not exceed 5 years for awards 

16 under subsection (b)(2). 

17 ‘‘(2) SPECIAL RULES.— 

18 ‘‘(A) An award of a grant or contract 

19 under subsection (b)(1) shall not be renewed. 

20 ‘‘(B) The period of a grant or contract 

21 awarded to an entity under subsection (b)(2) 

22 shall not overlap with the period of any grant 

23 or contact awarded to the same entity under 

24 subsection (b)(1). 


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1 ‘‘(g) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the program carried out 

3 under this section. 

4 ‘‘(h) DEFINITIONS.—In this section: 

5 ‘‘(1) PRIMARY CARE RESIDENCY TRAINING PRO6 GRAM.—The term ‘primary care residency training 

7 program’ means an approved medical residency 

8 training program described in section 1886(h)(5)(A) 

9 of the Social Security Act that is— 

10 ‘‘(A) in the case of entities seeking awards 

11 under subsection (b)(1), actively applying to be 

12 accredited by the Accreditation Council for 

13 Graduate Medical Education; or 

14 ‘‘(B) in the case of entities seeking awards 

15 under subsection (b)(2), so accredited. 

16 ‘‘(2) HEALTH DISPARITIES.—The term ‘health 

17 disparities’ has the meaning given the term in sec18 tion 3171.’’. 

19 SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUB20 LIC HEALTH DENTISTS AND DENTAL HYGIEN21 ISTS. 

22 Title VII (42 U.S.C. 292 et seq.) is amended— 

23 (1) in section 791(a)(1), by striking ‘‘747 and 

24 750’’ and inserting ‘‘747, 749, and 750’’; and 


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1 (2) by inserting after section 748, as added, the 

2 following: 

3 ‘‘SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUB4 LIC HEALTH DENTISTS AND DENTAL HYGIEN5 ISTS. 

6 ‘‘(a) PROGRAM.—The Secretary shall establish a den7 tal medicine training program consisting of awarding 

8 grants and contracts under this section. 

9 ‘‘(b) SUPPORT AND DEVELOPMENT OF DENTAL

10 TRAINING PROGRAMS.—The Secretary shall make grants 

11 to, or enter into contracts with, eligible entities— 

12 ‘‘(1) to plan, develop, operate, or participate in 

13 an accredited professional training program for oral 

14 health professionals; 

15 ‘‘(2) to provide financial assistance to oral 

16 health professionals who are in need thereof, who 

17 are participants in any such program, and who plan 

18 to work in general, pediatric, or public heath den19 tistry, or dental hygiene; 

20 ‘‘(3) to plan, develop, operate, or participate in 

21 a program for the training of oral health profes22 sionals who plan to teach in general, pediatric, or 

23 public health dentistry, or dental hygiene; 

24 ‘‘(4) to provide financial assistance in the form 

25 of traineeships and fellowships to oral health profesVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01942 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 sionals who plan to teach in general, pediatric, or 

2 public health dentistry or dental hygiene; 

3 ‘‘(5) to establish, maintain, or improve— 

4 ‘‘(A) academic administrative units (in5 cluding departments, divisions, or other appro6 priate units) in the specialties of general, pedi7 atric, or public health dentistry; or 

8 ‘‘(B) programs that improve clinical teach9 ing in such specialties; 

10 ‘‘(6) to plan, develop, operate, or participate in 

11 predoctoral and postdoctoral training in general, pe12 diatric, or public health dentistry programs, or train13 ing for dental hygienists; 

14 ‘‘(7) to plan, develop, operate, or participate in 

15 a loan repayment program for full-time faculty in a 

16 program of general, pediatric, or public health den17 tistry; and 

18 ‘‘(8) to provide technical assistance to pediatric 

19 dental training programs in developing and imple20 menting instruction regarding the oral health status, 

21 dental care needs, and risk-based clinical disease 

22 management of all pediatric populations with an em23 phasis on underserved children. 

24 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con25 tract under subsection (a), an entity shall be— 


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1 ‘‘(1) an accredited school of dentistry, training 

2 program in dental hygiene, or public or nonprofit 

3 private hospital; 

4 ‘‘(2) a training program in dental hygiene at an 

5 accredited institution of higher education; 

6 ‘‘(3) a public or private nonprofit entity; or 

7 ‘‘(4) a consortium of— 

8 ‘‘(A) 2 or more of the entities described in 

9 paragraphs (1) through (3); and 

10 ‘‘(B) an accredited school of public health. 

11 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

12 under this section, the Secretary shall give preference to 

13 entities that have a demonstrated record of the following: 

14 ‘‘(1) Training the greatest percentage, or sig15 nificantly improving the percentage, of oral health 

16 professionals who practice general, pediatric, or pub17 lic health dentistry. 

18 ‘‘(2) Training individuals who are from under19 represented minority groups or disadvantaged back20 grounds. 

21 ‘‘(3) A high rate of placing graduates in prac22 tice settings having the principal focus of serving in 

23 underserved areas or populations experiencing health 

24 disparities (including serving patients eligible for 

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1 curity Act or for child health assistance under title 

2 XXI of such Act or those with special health care 

3 needs). 

4 ‘‘(4) Supporting teaching programs that ad5 dress the dental needs of vulnerable populations. 

6 ‘‘(5) Providing instruction regarding the oral 

7 health status, dental care needs, and risk-based clin8 ical disease management of all pediatric populations 

9 with an emphasis on underserved children. 

10 ‘‘(e) REPORT.—The Secretary shall submit to the 

11 Congress an annual report on the program carried out 

12 under this section. 

13 ‘‘(f) DEFINITION.—In this section: 

14 ‘‘(1) The term ‘health disparities’ has the 

15 meaning given the term in section 3171. 

16 ‘‘(2) The term ‘oral health professional’ means 

17 an individual training or practicing— 

18 ‘‘(A) in general dentistry, pediatric den19 tistry, public health dentistry, or dental hy20 giene; or 

21 ‘‘(B) another dental medicine specialty, as 

22 deemed appropriate by the Secretary.’’. 


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1 SEC. 2216. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) IN GENERAL.—Part F of title VII (42 U.S.C. 

3 295j et seq.) is amended by adding at the end the fol4 lowing: 

5 ‘‘SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVEST6 MENT FUND. 

7 ‘‘(a) PROMOTION OF PRIMARY CARE AND DEN8 TISTRY.—For the purpose of carrying out subpart XI of 

9 part D of title III and sections 723, 747, 748, and 749, 

10 in addition to any other amounts authorized to be appro11 priated for such purpose, there is authorized to be appro12 priated, out of any monies in the Public Health Invest13 ment Fund, the following: 

14 ‘‘(1) $240,000,000 for fiscal year 2010. 

15 ‘‘(2) $253,000,000 for fiscal year 2011. 

16 ‘‘(3) $265,000,000 for fiscal year 2012. 

17 ‘‘(4) $278,000,000 for fiscal year 2013. 

18 ‘‘(5) $292,000,000 for fiscal year 2014. 

19 ‘‘(6) $307,000,000 for fiscal year 2015. 

20 ‘‘(7) $322,000,000 for fiscal year 2016. 

21 ‘‘(8) $338,000,000 for fiscal year 2017. 

22 ‘‘(9) $355,000,000 for fiscal year 2018. 

23 ‘‘(10) $373,000,000 for fiscal year 2019.’’. 

24 (b) EXISTING AUTHORIZATIONS OF APPROPRIA25 TIONS.— 


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1 (1) SECTION 735.—Paragraph (1) of section 

2 735(g), as so redesignated, is amended by inserting 

3 ‘‘and such sums as may be necessary for subsequent 

4 years through fiscal year 2019’’ before the period at 

5 the end. 

6 (2) SECTION 747.—Subsection (f), as so redes7 ignated, of section 747 (42 U.S.C. 293k) is amended 

8 by striking ‘‘2002’’ and inserting ‘‘2019’’. 

9 Subtitle B—Nursing Workforce 

10 SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT. 

11 (a) DEFINITIONS.—Section 801 (42 U.S.C. 296 et 

12 seq.) is amended— 

13 (1) in paragraph (1), by inserting ‘‘nurse-man14 aged health centers’’ after ‘‘nursing centers,’’; and 

15 (2) by adding at the end the following: 

16 ‘‘(16) NURSE-MANAGED HEALTH CENTER.— 

17 The term ‘nurse-managed health center’ means a 

18 nurse-practice arrangement, managed by advanced 

19 practice nurses, that provides primary care or 

20 wellness services to underserved or vulnerable popu21 lations and is associated with an accredited school of 

22 nursing, Federally qualified health center, or inde23 pendent nonprofit health or social services agency.’’. 


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1 (a) GRANTS FOR HEALTH PROFESSIONS EDU2 CATION.—Title VIII (42 U.S.C. 296 et seq.) is amended 

3 by striking section 807. 

4 (b) ADVANCED EDUCATION NURSING GRANTS.—Sec5 tion 811(f) (42 U.S.C. 296j(f)) is amended— 

6 (1) by striking paragraph (2); 

7 (2) by redesignating paragraph (3) as para8 graph (2); and 

9 (3) in paragraph (2), as so redesignated, by 

10 striking ‘‘that agrees’’ and all that follows through 

11 the end and inserting: ‘‘that agrees to expend the 

12 award— 

13 ‘‘(A) to train advanced education nurses 

14 who will practice in health professional shortage 

15 areas designated under section 332; or 

16 ‘‘(B) to increase diversity among advanced 

17 education nurses.’’. 

18 (c) NURSE EDUCATION, PRACTICE, AND RETENTION

19 GRANTS.—Section 831 (42 U.S.C. 296p) is amended— 

20 (1) in subsection (b), by amending paragraph 

21 (3) to read as follows: 

22 ‘‘(3) providing coordinated care, quality care, 

23 and other skills needed to practice nursing;’’; and 


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1 (2) by striking subsection (e) and redesignating 

2 subsections (f) through (h) as subsections (e) 

3 through (g), respectively. 

4 (d) STUDENT LOANS.—Subsection (a) of section 836 

5 (42 U.S.C. 297b) is amended— 

6 (1) by striking ‘‘$2,500’’ and inserting 

7 ‘‘$3,300’’; 

8 (2) by striking ‘‘$4,000’’ and inserting 

9 ‘‘$5,200’’; 

10 (3) by striking ‘‘$13,000’’ and inserting 

11 ‘‘$17,000’’; and 

12 (4) by adding at the end the following: ‘‘Begin13 ning with fiscal year 2012, the dollar amounts speci14 fied in this subsection shall be adjusted by an 

15 amount determined by the Secretary on an annual 

16 basis to reflect inflation.’’. 

17 (e) LOAN REPAYMENT.—Section 846 (42 U.S.C. 

18 297n) is amended— 

19 (1) in subsection (a), by amending paragraph 

20 (3) to read as follows: 

21 ‘‘(3) who enters into an agreement with the 

22 Secretary to serve for a period of not less than 2 

23 years— 

24 ‘‘(A) as a nurse at a health care facility 

25 with a critical shortage of nurses; or 


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1 ‘‘(B) as a faculty member at an accredited 

2 school of nursing;’’; and 

3 (2) in subsection (g)(1), by striking ‘‘to provide 

4 health services’’ each place it appears and inserting 

5 ‘‘to provide health services or serve as a faculty 

6 member’’. 

7 (f) NURSE FACULTY LOAN PROGRAM.—Paragraph 

8 (2) of section 846A(c) (42 U.S.C. 297n–1(c)) is amended 

9 by striking ‘‘$30,000’’ and all that follows through the 

10 semicolon and inserting ‘‘$35,000, plus, beginning with 

11 fiscal year 2012, an amount determined by the Secretary 

12 on an annual basis to reflect inflation;’’. 

13 (g) PUBLIC SERVICE ANNOUNCEMENTS.—Title VIII 

14 (42 U.S.C. 296 et seq.) is amended by striking part H. 

15 (h) TECHNICAL AND CONFORMING AMENDMENTS.— 

16 Title VIII (42 U.S.C. 296 et seq.) is amended— 

17 (1) by redesignating section 810 (relating to 

18 prohibition against discrimination by schools on the 

19 basis of sex) as section 809 and moving such section 

20 so that it follows section 808; 

21 (2) in sections 835, 836, 838, 840, and 842, by 

22 striking the term ‘‘this subpart’’ each place it ap23 pears and inserting ‘‘this part’’; 

24 (3) in section 836(h), by striking the last sen25 tence; 


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1 (4) in section 836, by redesignating subsection 

2 (l) as subsection (k); 

3 (5) in section 839, by striking ‘‘839’’ and all 

4 that follows through ‘‘(a)’’ and inserting ‘‘839. (a)’’; 

5 (6) in section 835(b), by striking ‘‘841’’ each 

6 place it appears and inserting ‘‘871’’; 

7 (7) by redesignating section 841 as section 871, 

8 moving part F to the end of the title, and redesig9 nating such part as part H; 

10 (8) in part G— 

11 (A) by redesignating section 845 as section 

12 851; and 

13 (B) by redesignating part G as part F; and 

14 (9) in part I— 

15 (A) by redesignating section 855 as section 

16 861; and 

17 (B) by redesignating part I as part G. 

18 (i) FUNDING.— 

19 (1) IN GENERAL.—Part H, as redesignated, of 

20 title VIII is amended by adding at the end the fol21 lowing: 

22 ‘‘SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVEST23 MENT FUND. 

24 ‘‘For the purpose of carrying out this title, in addi25 tion to any other amounts authorized to be appropriated 


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1 for such purpose, there are authorized to be appropriated, 

2 out of any monies in the Public Health Investment Fund, 

3 the following: 

4 ‘‘(1) $115,000,000 for fiscal year 2010. 

5 ‘‘(2) $122,000,000 for fiscal year 2011. 

6 ‘‘(3) $127,000,000 for fiscal year 2012. 

7 ‘‘(4) $134,000,000 for fiscal year 2013. 

8 ‘‘(5) $140,000,000 for fiscal year 2014. 

9 ‘‘(6) $147,000,000 for fiscal year 2015. 

10 ‘‘(7) $154,000,000 for fiscal year 2016. 

11 ‘‘(8) $162,000,000 for fiscal year 2017. 

12 ‘‘(9) $170,000,000 for fiscal year 2018. 

13 ‘‘(10) $179,000,000 for fiscal year 2019.’’. 

14 (2) EXISTING AUTHORIZATIONS OF APPROPRIA15 TIONS.— 

16 (A) SECTIONS 831, 846, 846A, AND 861.— 

17 Sections 831(g) (as so redesignated), 846(i)(1) 

18 (42 U.S.C. 297n(i)(1)), 846A(f) (42 U.S.C. 

19 297n–1(f)), and 861(e) (as so redesignated) are 

20 amended by striking ‘‘2007’’ each place it ap21 pears and inserting ‘‘2019’’. 

22 (B) SECTION 871.—Section 871, as so re23 designated, is amended to read as follows: 


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1 ‘‘SEC. 871. FUNDING. 

2 ‘‘For the purpose of carrying out parts B, C, and D 

3 (subject to section 845(g)), there are authorized to be ap4 propriated such sums as may be necessary for each fiscal 

5 year through fiscal year 2019.’’. 

6 Subtitle C—Public Health 

7 Workforce 

8 SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS. 

9 Part D of title III (42 U.S.C. 254b et seq.), as 

10 amended by section 2211, is amended by adding at the 

11 end the following: 

12 ‘‘Subpart XII—Public Health Workforce 

13 ‘‘SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS. 

14 ‘‘(a) ESTABLISHMENT.—There is established, within 

15 the Service, the Public Health Workforce Corps (in this 

16 subpart referred to as the ‘Corps’), for the purpose of en17 suring an adequate supply of public health professionals 

18 throughout the Nation. The Corps shall consist of— 

19 ‘‘(1) such officers of the Regular and Reserve 

20 Corps of the Service as the Secretary may designate; 

21 and 

22 ‘‘(2) such civilian employees of the United 

23 States as the Secretary may appoint. 

24 ‘‘(b) ADMINISTRATION.—Except as provided in sub25 section (c), the Secretary shall carry out this subpart actVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01953 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ing through the Administrator of the Health Resources 

2 and Services Administration. 

3 ‘‘(c) PLACEMENT AND ASSIGNMENT.—The Secretary, 

4 acting through the Director of the Centers for Disease 

5 Control and Prevention, shall develop a methodology for 

6 placing and assigning Corps participants as public health 

7 professionals. Such methodology may allow for placing and 

8 assigning such participants in State, local, and tribal 

9 health departments and Federally qualified health centers 

10 (as defined in section 1861(aa)(4) of the Social Security 

11 Act). 

12 ‘‘(d) APPLICATION OF CERTAIN PROVISIONS.—The 

13 provisions of subpart II shall, except as inconsistent with 

14 this subpart, apply to the Public Health Workforce Corps 

15 in the same manner and to the same extent as such provi16 sions apply to the National Health Service Corps estab17 lished under section 331. 

18 ‘‘(e) REPORT.—The Secretary shall submit to the 

19 Congress an annual report on the programs carried out 

20 under this subpart. 

21 ‘‘SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP 

22 PROGRAM. 

23 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab24 lish the Public Health Workforce Scholarship Program 


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1 (referred to in this section as the ‘Program’) for the pur2 pose described in section 340L(a). 

3 ‘‘(b) ELIGIBILITY.—To be eligible to participate in 

4 the Program, an individual shall— 

5 ‘‘(1)(A) be accepted for enrollment, or be en6 rolled, as a full-time or part-time student in a course 

7 of study or program (approved by the Secretary) at 

8 an accredited graduate school or program of public 

9 health; or 

10 ‘‘(B) have demonstrated expertise in public 

11 health and be accepted for enrollment, or be en12 rolled, as a full-time or part-time student in a course 

13 of study or program (approved by the Secretary) 

14 at— 

15 ‘‘(i) an accredited graduate school or pro16 gram of nursing; health administration, man17 agement, or policy; preventive medicine; labora18 tory science; veterinary medicine; or dental 

19 medicine; or 

20 ‘‘(ii) another accredited graduate school or 

21 program, as deemed appropriate by Secretary; 

22 ‘‘(2) be eligible for, or hold, an appointment as 

23 a commissioned officer in the Regular or Reserve 

24 Corps of the Service or be eligible for selection for 

25 civilian service in the Corps; and 


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1 ‘‘(3) sign and submit to the Secretary a written 

2 contract (described in subsection (c)) to serve full3 time as a public health professional, upon the com4 pletion of the course of study or program involved, 

5 for the period of obligated service described in sub6 section (c)(2)(E). 

7 ‘‘(c) CONTRACT.—The written contract between the 

8 Secretary and an individual under subsection (b)(3) shall 

9 contain— 

10 ‘‘(1) an agreement on the part of the Secretary 

11 that the Secretary will— 

12 ‘‘(A) provide the individual with a scholar13 ship for a period of years (not to exceed 4 aca14 demic years) during which the individual shall 

15 pursue an approved course of study or program 

16 to prepare the individual to serve in the public 

17 health workforce; and 

18 ‘‘(B) accept (subject to the availability of 

19 appropriated funds) the individual into the 

20 Corps; 

21 ‘‘(2) an agreement on the part of the individual 

22 that the individual will— 

23 ‘‘(A) accept provision of such scholarship 

24 to the individual; 


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1 ‘‘(B) maintain full-time or part-time enroll2 ment in the approved course of study or pro3 gram described in subsection (b)(1) until the in4 dividual completes that course of study or pro5 gram; 

6 ‘‘(C) while enrolled in the approved course 

7 of study or program, maintain an acceptable 

8 level of academic standing (as determined by 

9 the educational institution offering such course 

10 of study or program); 

11 ‘‘(D) if applicable, complete a residency or 

12 internship; and 

13 ‘‘(E) serve full-time as a public health pro14 fessional for a period of time equal to the great15 er of— 

16 ‘‘(i) 1 year for each academic year for 

17 which the individual was provided a schol18 arship under the Program; or 

19 ‘‘(ii) 2 years; and 

20 ‘‘(3) an agreement by both parties as to the na21 ture and extent of the scholarship assistance, which 

22 may include— 

23 ‘‘(A) payment of reasonable educational ex24 penses of the individual, including tuition, fees, 

25 books, equipment, and laboratory expenses; and 


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1 ‘‘(B) payment of a stipend of not more 

2 than $1,269 (plus, beginning with fiscal year 

3 2011, an amount determined by the Secretary 

4 on an annual basis to reflect inflation) per 

5 month for each month of the academic year in6 volved, with the dollar amount of such a stipend 

7 determined by the Secretary taking into consid8 eration whether the individual is enrolled full9 time or part-time. 

10 ‘‘(d) APPLICATION OF CERTAIN PROVISIONS.—The 

11 provisions of subpart III shall, except as inconsistent with 

12 this subpart, apply to the scholarship program under this 

13 section in the same manner and to the same extent as 

14 such provisions apply to the National Health Service 

15 Corps Scholarship Program established under section 

16 338A. 

17 ‘‘SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAY18 MENT PROGRAM. 

19 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab20 lish the Public Health Workforce Loan Repayment Pro21 gram (referred to in this section as the ‘Program’) for the 

22 purpose described in section 340L(a). 

23 ‘‘(b) ELIGIBILITY.—To be eligible to participate in 

24 the Program, an individual shall— 


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1 ‘‘(1)(A) have a graduate degree from an accred2 ited school or program of public health; 

3 ‘‘(B) have demonstrated expertise in public 

4 health and have a graduate degree in a course of 

5 study or program (approved by the Secretary) 

6 from— 

7 ‘‘(i) an accredited school or program of 

8 nursing; health administration, management, or 

9 policy; preventive medicine; laboratory science; 

10 veterinary medicine; or dental medicine; or 

11 ‘‘(ii) another accredited school or program 

12 approved by the Secretary; or 

13 ‘‘(C) be enrolled as a full-time or part-time stu14 dent in the final year of a course of study or pro15 gram (approved by the Secretary) offered by a 

16 school or program described in subparagraph (A) or 

17 (B), leading to a graduate degree; 

18 ‘‘(2) be eligible for, or hold, an appointment as 

19 a commissioned officer in the Regular or Reserve 

20 Corps of the Service or be eligible for selection for 

21 civilian service in the Corps; 

22 ‘‘(3) if applicable, complete a residency or in23 ternship; and 

24 ‘‘(4) sign and submit to the Secretary a written 

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1 time as a public health professional for the period of 

2 obligated service described in subsection (c)(2). 

3 ‘‘(c) CONTRACT.—The written contract between the 

4 Secretary and an individual under subsection (b)(4) shall 

5 contain— 

6 ‘‘(1) an agreement by the Secretary to repay on 

7 behalf of the individual loans incurred by the indi8 vidual in the pursuit of the relevant public health 

9 workforce educational degree in accordance with the 

10 terms of the contract; 

11 ‘‘(2) an agreement by the individual to serve 

12 full-time as a public health professional for a period 

13 of time equal to 2 years or such longer period as the 

14 individual may agree to; and 

15 ‘‘(3) in the case of an individual described in 

16 subsection (b)(1)(C) who is in the final year of study 

17 and who has accepted employment as a public health 

18 professional, in accordance with subsection 340L(c), 

19 an agreement on the part of the individual to com20 plete the education or training, maintain an accept21 able level of academic standing (as determined by 

22 the educational institution offering the course of 

23 study or training), and serve the period of obligated 

24 service described in paragraph (2). 

25 ‘‘(d) PAYMENTS.— 


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1 ‘‘(1) IN GENERAL.—A loan repayment provided 

2 for an individual under a written contract under the 

3 Program shall consist of payment, in accordance 

4 with paragraph (2), on behalf of the individual of 

5 the principal, interest, and related expenses on gov6 ernment and commercial loans received by the indi7 vidual regarding the undergraduate or graduate edu8 cation of the individual (or both), which loans were 

9 made for reasonable educational expenses, including 

10 tuition, fees, books, equipment, and laboratory ex11 penses, incurred by the individual. 

12 ‘‘(2) PAYMENTS FOR YEARS SERVED.— 

13 ‘‘(A) IN GENERAL.—For each year of obli14 gated service that an individual contracts to 

15 serve under subsection (c), the Secretary may 

16 pay up to $35,000 (plus, beginning with fiscal 

17 year 2012, an amount determined by the Sec18 retary on an annual basis to reflect inflation) 

19 on behalf of the individual for loans described 

20 in paragraph (1). 

21 ‘‘(B) REPAYMENT SCHEDULE.—Any ar22 rangement made by the Secretary for the mak23 ing of loan repayments in accordance with this 

24 subsection shall provide that any repayments 

25 for a year of obligated service shall be made no 


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1 later than the end of the fiscal year in which 

2 the individual completes such year of service. 

3 ‘‘(e) APPLICATION OF CERTAIN PROVISIONS.—The 

4 provisions of subpart III shall, except as inconsistent with 

5 this subpart, apply to the loan repayment program under 

6 this section in the same manner and to the same extent 

7 as such provisions apply to the National Health Service 

8 Corps Loan Repayment Program established under sec9 tion 338B.’’. 

10 SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE. 

11 Section 765 (42 U.S.C. 295) is amended to read as 

12 follows: 

13 ‘‘SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE. 

14 ‘‘(a) PROGRAM.—The Secretary, acting through the 

15 Administrator of the Health Resources and Services Ad16 ministration and in consultation with the Director of the 

17 Centers for Disease Control and Prevention, shall estab18 lish a public health workforce training and enhancement 

19 program consisting of awarding grants and contracts 

20 under subsection (b). 

21 ‘‘(b) GRANTS AND CONTRACTS.—The Secretary shall 

22 award grants and contracts to eligible entities— 

23 ‘‘(1) to plan, develop, operate, or participate in, 

24 an accredited professional training program in the 

25 field of public health (including such a program in 


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1 nursing; health administration, management, or pol2 icy; preventive medicine; laboratory science; veteri3 nary medicine; or dental medicine) for members of 

4 the public health workforce including mid-career 

5 professionals; 

6 ‘‘(2) to provide financial assistance in the form 

7 of traineeships and fellowships to students who are 

8 participants in any such program and who plan to 

9 specialize or work in the field of public health; 

10 ‘‘(3) to plan, develop, operate, or participate in 

11 a program for the training of public health profes12 sionals who plan to teach in any program described 

13 in paragraph (1); and 

14 ‘‘(4) to provide financial assistance in the form 

15 of traineeships and fellowships to public health pro16 fessionals who are participants in any program de17 scribed in paragraph (1) and who plan to teach in 

18 the field of public health, including nursing; health 

19 administration, management, or policy; preventive 

20 medicine; laboratory science; veterinary medicine; or 

21 dental medicine. 

22 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con23 tract under subsection (a), an entity shall be— 

24 ‘‘(1) an accredited health professions school, in25 cluding an accredited graduate school or program of 


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1 public health; nursing; health administration, man2 agement, or policy; preventive medicine; laboratory 

3 science; veterinary medicine; or dental medicine; 

4 ‘‘(2) a State, local, or tribal health department; 

5 ‘‘(3) a public or private nonprofit entity; or 

6 ‘‘(4) a consortium of 2 or more entities de7 scribed in paragraphs (1) through (3). 

8 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

9 under this section, the Secretary shall give preference to 

10 entities that have a demonstrated record of the following: 

11 ‘‘(1) Training the greatest percentage, or sig12 nificantly improving the percentage, of public health 

13 professionals who serve in underserved communities. 

14 ‘‘(2) Training individuals who are from under15 represented minority groups or disadvantaged back16 grounds. 

17 ‘‘(3) Training individuals in public health spe18 cialties experiencing a significant shortage of public 

19 health professionals (as determined by the Sec20 retary). 

21 ‘‘(4) Training the greatest percentage, or sig22 nificantly improving the percentage, of public health 

23 professionals serving in the Federal Government or 

24 a State, local, or tribal government. 


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1 ‘‘(e) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the program carried out 

3 under this section.’’. 

4 SEC. 2233. PUBLIC HEALTH TRAINING CENTERS. 

5 Section 766 (42 U.S.C. 295a) is amended— 

6 (1) in subsection (b)(1), by striking ‘‘in further7 ance of the goals established by the Secretary for 

8 the year 2000’’ and inserting ‘‘in furtherance of the 

9 goals established by the Secretary in the national 

10 prevention and wellness strategy under section 

11 3121’’; and 

12 (2) by adding at the end the following: 

13 ‘‘(d) REPORT.—The Secretary shall submit to the 

14 Congress an annual report on the program carried out 

15 under this section.’’. 

16 SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH 

17 TRAINING GRANT PROGRAM. 

18 Section 768 (42 U.S.C. 295c) is amended to read as 

19 follows: 

20 ‘‘SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH 

21 TRAINING GRANT PROGRAM. 

22 ‘‘(a) GRANTS.—The Secretary, acting through the 

23 Administrator of the Health Resources and Services Ad24 ministration and in consultation with the Director of the 

25 Centers for Disease Control and Prevention, shall award 


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1 grants to, or enter into contracts with, eligible entities to 

2 provide training to graduate medical residents in preven3 tive medicine specialties. 

4 ‘‘(b) ELIGIBILITY.—To be eligible for a grant or con5 tract under subsection (a), an entity shall be— 

6 ‘‘(1) an accredited school of public health or 

7 school of medicine or osteopathic medicine; 

8 ‘‘(2) an accredited public or private hospital; 

9 ‘‘(3) a State, local, or tribal health department; 

10 or 

11 ‘‘(4) a consortium of 2 or more entities de12 scribed in paragraphs (1) through (3). 

13 ‘‘(c) USE OF FUNDS.—Amounts received under a 

14 grant or contract under this section shall be used to— 

15 ‘‘(1) plan, develop (including the development of 

16 curricula), operate, or participate in an accredited 

17 residency or internship program in preventive medi18 cine or public health; 

19 ‘‘(2) defray the costs of practicum experiences, 

20 as required in such a program; and 

21 ‘‘(3) establish, maintain, or improve— 

22 ‘‘(A) academic administrative units (in23 cluding departments, divisions, or other appro24 priate units) in preventive medicine and public 

25 health; or 


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1 ‘‘(B) programs that improve clinical teach2 ing in preventive medicine and public health. 

3 ‘‘(d) REPORT.—The Secretary shall submit to the 

4 Congress an annual report on the program carried out 

5 under this section.’’. 

6 SEC. 2235. AUTHORIZATION OF APPROPRIATIONS. 

7 (a) IN GENERAL.—Section 799C, as added by section 

8 2216 of this division, is amended by adding at the end 

9 the following: 

10 ‘‘(b) PUBLIC HEALTH WORKFORCE.—For the pur11 pose of carrying out subpart XII of part D of title III 

12 and sections 765, 766, and 768, in addition to any other 

13 amounts authorized to be appropriated for such purpose, 

14 there are authorized to be appropriated, out of any monies 

15 in the Public Health Investment Fund, the following: 

16 ‘‘(1) $51,000,000 for fiscal year 2010. 

17 ‘‘(2) $54,000,000 for fiscal year 2011. 

18 ‘‘(3) $57,000,000 for fiscal year 2012. 

19 ‘‘(4) $59,000,000 for fiscal year 2013. 

20 ‘‘(5) $62,000,000 for fiscal year 2014. 

21 ‘‘(6) $65,000,000 for fiscal year 2015. 

22 ‘‘(7) $68,000,000 for fiscal year 2016. 

23 ‘‘(8) $72,000,000 for fiscal year 2017. 

24 ‘‘(9) $75,000,000 for fiscal year 2018. 

25 ‘‘(10) $79,000,000 for fiscal year 2019.’’. 


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1 (b) EXISTING AUTHORIZATION OF APPROPRIA2 TIONS.—Subpart (a) of section 770 (42 U.S.C. 295e) is 

3 amended by striking ‘‘2002’’ and inserting ‘‘2019’’. 

4 Subtitle D—Adapting Workforce to 

5 Evolving Health System Needs 

6 PART 1—HEALTH PROFESSIONS TRAINING FOR 

7 DIVERSITY 

8 SEC. 2241. SCHOLARSHIPS FOR DISADVANTAGED STU9 DENTS, LOAN REPAYMENTS AND FELLOW10 SHIPS REGARDING FACULTY POSITIONS, AND 

11 EDUCATIONAL ASSISTANCE IN THE HEALTH 

12 PROFESSIONS REGARDING INDIVIDUALS 

13 FROM DISADVANTAGED BACKGROUNDS. 

14 Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) 

15 is amended by striking ‘‘not more than $20,000’’ and all 

16 that follows through the end of the paragraph and insert17 ing: ‘‘not more than $35,000 (plus, beginning with fiscal 

18 year 2012, an amount determined by the Secretary on an 

19 annual basis to reflect inflation) of the principal and inter20 est of the educational loans of such individuals.’’ 

21 SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS. 

22 Subsection (b) of section 821 (42 U.S.C. 296m) is 

23 amended— 

24 (1) in the heading, by striking ‘‘GUIDANCE’’ 

25 and inserting ‘‘CONSULTATION’’; and 


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1 (2) by striking ‘‘shall take into consideration’’ 

2 and all that follows through ‘‘consult with nursing 

3 associations’’ and inserting ‘‘shall, as appropriate, 

4 consult with nursing associations’’. 

5 SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL 

6 COMPETENCY PROGRAMS. 

7 Title VII (42 U.S.C. 292 et seq.) is amended by in8 serting after section 739 the following: 

9 ‘‘SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL 

10 COMPETENCY PROGRAMS. 

11 ‘‘The Secretary shall, to the extent practicable, co12 ordinate the activities carried out under this part and sec13 tion 821 in order to enhance the effectiveness of such ac14 tivities and avoid duplication of effort.’’. 

15 PART 2—INTERDISCIPLINARY TRAINING 

16 PROGRAMS 

17 SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY 

18 TRAINING FOR HEALTH CARE PROFES19 SIONALS. 

20 Section 741 (42 U.S.C. 293e) is amended— 

21 (1) in the section heading, by striking ‘‘GRANTS

22 FOR HEALTH PROFESSIONS EDUCATION’’ and in23 serting ‘‘CULTURAL AND LINGUISTIC COMPETENCY

24 TRAINING FOR HEALTH CARE PROFESSIONALS’’; 


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1 (2) by redesignating subsection (b) as sub2 section (h); and 

3 (3) by striking subsection (a) and inserting the 

4 following: 

5 ‘‘(a) PROGRAM.—The Secretary shall establish a cul6 tural and linguistic competency training program for 

7 health care professionals, including nurse professionals, 

8 consisting of awarding grants and contracts under sub9 section (b). 

10 ‘‘(b) CULTURAL AND LINGUISTIC COMPETENCY

11 TRAINING.—The Secretary shall award grants and con12 tracts to eligible entities— 

13 ‘‘(1) to test, develop, and evaluate models of 

14 cultural and linguistic competency training (includ15 ing continuing education) for health professionals; 

16 and 

17 ‘‘(2) to implement cultural and linguistic com18 petency training programs for health professionals 

19 developed under paragraph (1) or otherwise. 

20 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con21 tract under subsection (b), an entity shall be— 

22 ‘‘(1) an accredited health professions school or 

23 program; 

24 ‘‘(2) an academic health center; 

25 ‘‘(3) a public or private nonprofit entity; or 


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1 ‘‘(4) a consortium of 2 or more entities de2 scribed in paragraphs (1) through (3). 

3 ‘‘(d) PREFERENCE.—In awarding grants and con4 tracts under this section, the Secretary shall give pref5 erence to entities that have a demonstrated record of the 

6 following: 

7 ‘‘(1) Addressing, or partnering with an entity 

8 with experience addressing, the cultural and lin9 guistic competency needs of the population to be 

10 served through the grant or contract. 

11 ‘‘(2) Addressing health disparities. 

12 ‘‘(3) Placing health professionals in regions ex13 periencing significant changes in the cultural and 

14 linguistic demographics of populations, including 

15 communities along the United States-Mexico border. 

16 ‘‘(4) Carrying out activities described in sub17 section (b) with respect to more than one health pro18 fession discipline, specialty, or subspecialty. 

19 ‘‘(e) CONSULTATION.—The Secretary shall carry out 

20 this section in consultation with the heads of appropriate 

21 health agencies and offices in the Department of Health 

22 and Human Services, including the Office of Minority 

23 Health. 


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1 ‘‘(f) DEFINITION.—In this section, the term ‘health 

2 disparities’ has the meaning given to the term in section 

3 3171. 

4 ‘‘(g) REPORT.—The Secretary shall submit to the 

5 Congress an annual report on the program carried out 

6 under this section.’’. 

7 SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE 

8 TRAINING. 

9 Part D of title VII (42 U.S.C. 294 et seq.) is amend10 ed by adding at the end the following: 

11 ‘‘SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE 

12 TRAINING. 

13 ‘‘(a) PROGRAM.—The Secretary shall establish an in14 novations in interdisciplinary care training program con15 sisting of awarding grants and contracts under subsection 

16 (b). 

17 ‘‘(b) TRAINING PROGRAMS.—The Secretary shall 

18 award grants to, or enter into contracts with, eligible enti19 ties— 

20 ‘‘(1) to test, develop, and evaluate health pro21 fessional training programs (including continuing 

22 education) designed to promote— 

23 ‘‘(A) the delivery of health services through 

24 interdisciplinary and team-based models, which 

25 may include patient-centered medical home 


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1 models, medication therapy management mod2 els, and models integrating physical, mental, or 

3 oral health services; and 

4 ‘‘(B) coordination of the delivery of health 

5 care within and across settings, including health 

6 care institutions, community-based settings, 

7 and the patient’s home; and 

8 ‘‘(2) to implement such training programs de9 veloped under paragraph (1) or otherwise. 

10 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con11 tract under subsection (b), an entity shall be— 

12 ‘‘(1) an accredited health professions school or 

13 program; 

14 ‘‘(2) an academic health center; 

15 ‘‘(3) a public or private nonprofit entity (includ16 ing an area health education center or a geriatric 

17 education center); or 

18 ‘‘(4) a consortium of 2 or more entities de19 scribed in paragraphs (1) through (3). 

20 ‘‘(d) PREFERENCES.—In awarding grants and con21 tracts under this section, the Secretary shall give pref22 erence to entities that have a demonstrated record of the 

23 following: 


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1 ‘‘(1) Training the greatest percentage, or sig2 nificantly increasing the percentage, of health pro3 fessionals who serve in underserved communities. 

4 ‘‘(2) Broad interdisciplinary team-based collabo5 rations. 

6 ‘‘(3) Addressing health disparities. 

7 ‘‘(e) REPORT.—The Secretary shall submit to the 

8 Congress an annual report on the program carried out 

9 under this section. 

10 ‘‘(f) DEFINITIONS.—In this section: 

11 ‘‘(1) The term ‘health disparities’ has the 

12 meaning given the term in section 3171. 

13 ‘‘(2) The term ‘interdisciplinary’ means collabo14 ration across health professions and specialties, 

15 which may include public health, nursing, allied 

16 health, and appropriate medical specialties.’’. 

17 PART 3—ADVISORY COMMITTEE ON HEALTH 

18 WORKFORCE EVALUATION AND ASSESSMENT 

19 SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESS20 MENT. 

21 Subpart 1 of part E of title VII (42 U.S.C. 294n 

22 et seq.) is amended by adding at the end the following: 


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1 ‘‘SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESS2 MENT. 

3 ‘‘(a) ADVISORY COMMITTEE.—The Secretary, acting 

4 through the Assistant Secretary for Health, shall establish 

5 a permanent advisory committee to be known as the Advi6 sory Committee on Health Workforce Evaluation and As7 sessment (referred to in this section as the ‘Advisory Com8 mittee’). 

9 ‘‘(b) RESPONSIBILITIES.—The Advisory Committee 

10 shall— 

11 ‘‘(1) not later than 1 year after the date of the 

12 establishment of the Advisory Committee, submit 

13 recommendations to the Secretary on— 

14 ‘‘(A) classifications of the health workforce 

15 to ensure consistency of data collection on the 

16 health workforce; and 

17 ‘‘(B) based on such classifications, stand18 ardized methodologies and procedures to enu19 merate the health workforce; 

20 ‘‘(2) not later than 2 years after the date of the 

21 establishment of the Advisory Committee, submit 

22 recommendations to the Secretary on— 

23 ‘‘(A) the supply, diversity, and geographic 

24 distribution of the health workforce; 


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1 ‘‘(B) the retention of the health workforce 

2 to ensure quality and adequacy of such work3 force; and 

4 ‘‘(C) policies to carry out the recommenda5 tions made pursuant to subparagraphs (A) and 

6 (B); and 

7 ‘‘(3) not later than 4 years after the date of the 

8 establishment of the Advisory Committee, and every 

9 2 years thereafter, submit updated recommendations 

10 to the Secretary under paragraphs (1) and (2). 

11 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

12 ongoing administrative, research, and technical support 

13 for the operations of the Advisory Committee, including 

14 coordinating and supporting the dissemination of the rec15 ommendations of the Advisory Committee. 

16 ‘‘(d) MEMBERSHIP.— 

17 ‘‘(1) NUMBER; APPOINTMENT.—The Secretary 

18 shall appoint 15 members to serve on the Advisory 

19 Committee. 

20 ‘‘(2) TERMS.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall 

22 appoint members of the Advisory Committee for 

23 a term of 3 years and may reappoint such 

24 members, but the Secretary may not appoint 


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1 any member to serve more than a total of 6 

2 years. 

3 ‘‘(B) STAGGERED TERMS.—Notwith4 standing subparagraph (A), of the members 

5 first appointed to the Advisory Committee 

6 under paragraph (1)— 

7 ‘‘(i) 5 shall be appointed for a term of 

8 1 year; 

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

10 of 2 years; and 

11 ‘‘(iii) 5 shall be appointed for a term 

12 of 3 years. 

13 ‘‘(3) QUALIFICATIONS.—Members of the Advi14 sory Committee shall be appointed from among indi15 viduals who possess expertise in at least one of the 

16 following areas: 

17 ‘‘(A) Conducting and interpreting health 

18 workforce market analysis, including health 

19 care labor workforce analysis. 

20 ‘‘(B) Conducting and interpreting health 

21 finance and economics research. 

22 ‘‘(C) Delivering and administering health 

23 care services. 

24 ‘‘(D) Delivering and administering health 

25 workforce education and training. 


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1 ‘‘(4) REPRESENTATION.—In appointing mem2 bers of the Advisory Committee, the Secretary 

3 shall— 

4 ‘‘(A) include no less than one representa5 tive of each of— 

6 ‘‘(i) health professionals within the 

7 health workforce; 

8 ‘‘(ii) health care patients and con9 sumers; 

10 ‘‘(iii) employers; 

11 ‘‘(iv) labor unions; and 

12 ‘‘(v) third-party health payors; and 

13 ‘‘(B) ensure that— 

14 ‘‘(i) all areas of expertise described in 

15 paragraph (3) are represented; 

16 ‘‘(ii) the members of the Advisory 

17 Committee include members who, collec18 tively, have significant experience working 

19 with— 

20 ‘‘(I) populations in urban and 

21 federally designated rural and non22 metropolitan areas; and 

23 ‘‘(II) populations who are under24 represented in the health professions, 


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1 including underrepresented minority 

2 groups; and 

3 ‘‘(iii) individuals who are directly in4 volved in health professions education or 

5 practice do not constitute a majority of the 

6 members of the Advisory Committee. 

7 ‘‘(5) DISCLOSURE AND CONFLICTS OF INTER8 EST.—Members of the Advisory Committee shall not 

9 be considered employees of the Federal Government 

10 by reason of service on the Advisory Committee, ex11 cept members of the Advisory Committee shall be 

12 considered to be special Government employees with13 in the meaning of section 107 of the Ethics in Gov14 ernment Act of 1978 (5 U.S.C. App.) and section 

15 208 of title 18, United States Code, for the purposes 

16 of disclosure and management of conflicts of interest 

17 under those sections. 

18 ‘‘(6) NO PAY; RECEIPT OF TRAVEL EX19 PENSES.—Members of the Advisory Committee shall 

20 not receive any pay for service on the Committee, 

21 but may receive travel expenses, including a per 

22 diem, in accordance with applicable provisions of 

23 subchapter I of chapter 57 of title 5, United States 

24 Code. 


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1 ‘‘(e) CONSULTATION.—In carrying out this section, 

2 the Secretary shall consult with the Secretary of Edu3 cation and the Secretary of Labor. 

4 ‘‘(f) COLLABORATION.—The Advisory Committee 

5 shall collaborate with the advisory bodies at the Health 

6 Resources and Services Administration, the National Ad7 visory Council (as authorized in section 337), the Advisory 

8 Committee on Training in Primary Care Medicine and 

9 Dentistry (as authorized in section 749A), the Advisory 

10 Committee on Interdisciplinary, Community-Based Link11 ages (as authorized in section 756), the Advisory Council 

12 on Graduate Medical Education (as authorized in section 

13 762), and the National Advisory Council on Nurse Edu14 cation and Practice (as authorized in section 851). 

15 ‘‘(g) FACA.—The Federal Advisory Committee Act 

16 (5 U.S.C. App.) except for section 14 of such Act shall 

17 apply to the Advisory Committee under this section only 

18 to the extent that the provisions of such Act do not conflict 

19 with the requirements of this section. 

20 ‘‘(h) REPORT.—The Secretary shall submit to the 

21 Congress an annual report on the activities of the Advisory 

22 Committee. 

23 ‘‘(i) DEFINITION.—In this section, the term ‘health 

24 workforce’ includes all health care providers with direct 

25 patient care and support responsibilities, including physiVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01980 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cians, nurses, physician assistants, pharmacists, oral 

2 health professionals (as defined in section 749(f)), allied 

3 health professionals, mental and behavioral professionals, 

4 and public health professionals (including veterinarians 

5 engaged in public health practice).’’. 

6 PART 4—HEALTH WORKFORCE ASSESSMENT 

7 SEC. 2271. HEALTH WORKFORCE ASSESSMENT. 

8 (a) IN GENERAL.—Section 761 (42 U.S.C. 294n) is 

9 amended— 

10 (1) by redesignating subsection (c) as sub11 section (e); and 

12 (2) by striking subsections (a) and (b) and in13 serting the following: 

14 ‘‘(a) IN GENERAL.—The Secretary shall, based upon 

15 the classifications and standardized methodologies and 

16 procedures developed by the Advisory Committee on 

17 Health Workforce Evaluation and Assessment under sec18 tion 764(b)— 

19 ‘‘(1) collect data on the health workforce (as 

20 defined in section 764(i)), disaggregated by field, 

21 discipline, and specialty, with respect to— 

22 ‘‘(A) the supply (including retention) of 

23 health professionals relative to the demand for 

24 such professionals; 


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1 ‘‘(B) the diversity of health professionals 

2 (including with respect to race, ethnic back3 ground, and gender); and 

4 ‘‘(C) the geographic distribution of health 

5 professionals; and 

6 ‘‘(2) collect such data on individuals partici7 pating in the programs authorized by subtitles A, B, 

8 and C and part 1 of subtitle D of title II of subdivi9 sion C of the America’s Affordable Health Choices 

10 Act of 2009. 

11 ‘‘(b) GRANTS AND CONTRACTS FOR HEALTH WORK12 FORCE ANALYSIS.— 

13 ‘‘(1) IN GENERAL.—The Secretary may award 

14 grants or contracts to eligible entities to carry out 

15 subsection (a). 

16 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

17 or contract under this subsection, an entity shall 

18 be— 

19 ‘‘(A) an accredited health professions 

20 school or program; 

21 ‘‘(B) an academic health center; 

22 ‘‘(C) a State, local, or tribal government; 

23 ‘‘(D) a public or private entity; or 

24 ‘‘(E) a consortium of 2 or more entities de25 scribed in subparagraphs (A) through (D). 


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1 ‘‘(c) COLLABORATION AND DATA SHARING.—The 

2 Secretary shall collaborate with Federal departments and 

3 agencies, health professions organizations (including 

4 health professions education organizations), and profes5 sional medical societies for the purpose of carrying out 

6 subsection (a). 

7 ‘‘(d) REPORT.—The Secretary shall submit to the 

8 Congress an annual report on the data collected under 

9 subsection (a).’’. 

10 (b) PERIOD BEFORE COMPLETION OF NATIONAL

11 STRATEGY.—Pending completion of the classifications and 

12 standardized methodologies and procedures developed by 

13 the Advisory Committee on Health Workforce Evaluation 

14 and Assessment under section 764(b) of the Public Health 

15 Service Act, as added by section 2261, the Secretary of 

16 Health and Human Services, acting through the Adminis17 trator of the Health Resources and Services Administra18 tion and in consultation with such Advisory Committee, 

19 may make a judgment about the classifications, meth20 odologies, and procedures to be used for collection of data 

21 under section 761(a) of the Public Health Service Act, as 

22 amended by this section. 


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1 PART 5—AUTHORIZATION OF APPROPRIATIONS 

2 SEC. 2281. AUTHORIZATION OF APPROPRIATIONS. 

3 (a) IN GENERAL.—Section 799C, as added by section 

4 2216 of this division, is amended by adding at the end 

5 the following: 

6 ‘‘(c) HEALTH PROFESSIONS TRAINING FOR DIVER7 SITY.—For the purpose of carrying out sections 736, 737, 

8 738, 739, and 739A, in addition to any other amounts 

9 authorized to be appropriated for such purpose, there are 

10 authorized to be appropriated, out of any monies in the 

11 Public Health Investment Fund, the following: 

12 ‘‘(1) $90,000,000 for fiscal year 2010. 

13 ‘‘(2) $97,000,000 for fiscal year 2011. 

14 ‘‘(3) $100,000,000 for fiscal year 2012. 

15 ‘‘(4) $104,000,000 for fiscal year 2013. 

16 ‘‘(5) $110,000,000 for fiscal year 2014. 

17 ‘‘(6) $116,000,000 for fiscal year 2015. 

18 ‘‘(7) $121,000,000 for fiscal year 2016. 

19 ‘‘(8) $127,000,000 for fiscal year 2017. 

20 ‘‘(9) $133,000,000 for fiscal year 2018. 

21 ‘‘(10) $140,000,000 for fiscal year 2019. 

22 ‘‘(d) INTERDISCIPLINARY TRAINING PROGRAMS, AD23 VISORY COMMITTEE ON HEALTH WORKFORCE EVALUA24 TION AND ASSESSMENT, AND HEALTH WORKFORCE AS25 SESSMENT.—For the purpose of carrying out sections 

26 741, 759, 761, and 764, in addition to any other amounts 


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1 authorized to be appropriated for such purpose, there are 

2 authorized to be appropriated, out of any monies in the 

3 Public Health Investment Fund, the following: 

4 ‘‘(1) $91,000,000 for fiscal year 2010. 

5 ‘‘(2) $97,000,000 for fiscal year 2011. 

6 ‘‘(3) $101,000,000 for fiscal year 2012. 

7 ‘‘(4) $105,000,000 for fiscal year 2013. 

8 ‘‘(5) $111,000,000 for fiscal year 2014. 

9 ‘‘(6) $117,000,000 for fiscal year 2015. 

10 ‘‘(7) $122,000,000 for fiscal year 2016. 

11 ‘‘(8) $129,000,000 for fiscal year 2017. 

12 ‘‘(9) $135,000,000 for fiscal year 2018. 

13 ‘‘(10) $141,000,000 for fiscal year 2019.’’. 

14 (b) EXISTING AUTHORIZATIONS OF APPROPRIA15 TIONS.— 

16 (1) SECTION 736.—Paragraph (1) of section 

17 736(h) (42 U.S.C. 293(h)) is amended by striking 

18 ‘‘2002’’ and inserting ‘‘2019’’. 

19 (2) SECTIONS 737, 738, AND 739.—Subsections 

20 (a), (b), and (c) of section 740 are amended by 

21 striking ‘‘2002’’ each place it appears and inserting 

22 ‘‘2019’’. 

23 (3) SECTION 741.—Subsection (h), as so redes24 ignated, of section 741 is amended— 


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1 (A) by striking ‘‘and’’ after ‘‘fiscal year 

2 2003,’’; and 

3 (B) by inserting ‘‘, and such sums as may 

4 be necessary for subsequent fiscal years 

5 through the end of fiscal year 2019’’ before the 

6 period at the end. 

7 (4) SECTION 761.—Subsection (e)(1), as so re8 designated, of section 761 is amended by striking 

9 ‘‘2002’’ and inserting ‘‘2019’’. 

10 TITLE III—PREVENTION AND 

11 WELLNESS 

12 SEC. 2301. PREVENTION AND WELLNESS. 

13 (a) IN GENERAL.—The Public Health Service Act 

14 (42 U.S.C. 201 et seq.) is amended by adding at the end 

15 the following: 

16 ‘‘TITLE XXXI—PREVENTION AND 

17 WELLNESS 

18 ‘‘Subtitle A—Prevention and 

19 Wellness Trust 

20 ‘‘SEC. 3111. PREVENTION AND WELLNESS TRUST. 

21 ‘‘(a) DEPOSITS INTO TRUST.—There is established 

22 a Prevention and Wellness Trust. There are authorized 

23 to be appropriated to the Trust— 


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1 ‘‘(1) amounts described in section 

2 2002(b)(2)(ii) of the America’s Affordable Health 

3 Choices Act of 2009 for each fiscal year; and 

4 ‘‘(2) in addition, out of any monies in the Pub5 lic Health Investment Fund— 

6 ‘‘(A) for fiscal year 2010, $2,400,000,000; 

7 ‘‘(B) for fiscal year 2011, $2,800,000,000; 

8 ‘‘(C) for fiscal year 2012, $3,100,000,000; 

9 ‘‘(D) for fiscal year 2013, $3,400,000,000; 

10 ‘‘(E) for fiscal year 2014, $3,500,000,000; 

11 ‘‘(F) for fiscal year 2015, $3,600,000,000; 

12 ‘‘(G) for fiscal year 2016, $3,700,000,000; 

13 ‘‘(H) for fiscal year 2017, $3,900,000,000; 

14 ‘‘(I) for fiscal year 2018, $4,300,000,000; 

15 and 

16 ‘‘(J) for fiscal year 2019, $4,600,000,000. 

17 ‘‘(b) AVAILABILITY OF FUNDS.—Amounts in the Pre18 vention and Wellness Trust shall be available, as provided 

19 in advance in appropriation Acts, for carrying out this 

20 title. 

21 ‘‘(c) ALLOCATION.—Of the amounts authorized to be 

22 appropriated in subsection (a)(2), there are authorized to 

23 be appropriated— 


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1 ‘‘(1) for carrying out subtitle C (Prevention 

2 Task Forces), $35,000,000 for each of fiscal years 

3 2010 through 2019; 

4 ‘‘(2) for carrying out subtitle D (Prevention 

5 and Wellness Research)— 

6 ‘‘(A) for fiscal year 2010, $100,000,000; 

7 ‘‘(B) for fiscal year 2011, $150,000,000; 

8 ‘‘(C) for fiscal year 2012, $200,000,000; 

9 ‘‘(D) for fiscal year 2013, $250,000,000; 

10 ‘‘(E) for fiscal year 2014, $300,000,000; 

11 ‘‘(F) for fiscal year 2015, $315,000,000; 

12 ‘‘(G) for fiscal year 2016, $331,000,000; 

13 ‘‘(H) for fiscal year 2017, $347,000,000; 

14 ‘‘(I) for fiscal year 2018, $364,000,000; 

15 and 

16 ‘‘(J) for fiscal year 2019, $383,000,000. 

17 ‘‘(3) for carrying out subtitle E (Delivery of 

18 Community Preventive and Wellness Services)— 

19 ‘‘(A) for fiscal year 2010, $1,100,000,000; 

20 ‘‘(B) for fiscal year 2011, $1,300,000,000; 

21 ‘‘(C) for fiscal year 2012, $1,400,000,000; 

22 ‘‘(D) for fiscal year 2013, $1,600,000,000; 

23 ‘‘(E) for fiscal year 2014, $1,700,000,000; 

24 ‘‘(F) for fiscal year 2015, $1,800,000,000; 

25 ‘‘(G) for fiscal year 2016, $1,900,000,000; 


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1 ‘‘(H) for fiscal year 2017, $2,000,000,000; 

2 ‘‘(I) for fiscal year 2018, $2,100,000,000; 

3 and 

4 ‘‘(J) for fiscal year 2019, $2,300,000,000. 

5 ‘‘(4) for carrying out section 3161 (Core Public 

6 Health Infrastructure and Activities for State and 

7 Local Health Departments)— 

8 ‘‘(A) for fiscal year 2010, $800,000,000; 

9 ‘‘(B) for fiscal year 2011, $1,000,000,000; 

10 ‘‘(C) for fiscal year 2012, $1,100,000,000; 

11 ‘‘(D) for fiscal year 2013, $1,200,000,000; 

12 ‘‘(E) for fiscal year 2014, $1,300,000,000; 

13 ‘‘(F) for fiscal year 2015, $1,400,000,000; 

14 ‘‘(G) for fiscal year 2016, $1,500,000,000; 

15 ‘‘(H) for fiscal year 2017, $1,600,000,000; 

16 ‘‘(I) for fiscal year 2018, $1,800,000,000; 

17 and 

18 ‘‘(J) for fiscal year 2019, $1,900,000,000; 

19 and 

20 ‘‘(5) for carrying out section 3162 (Core Public 

21 Health Infrastructure and Activities for CDC), 

22 $400,000,000 for each of fiscal years 2010 through 

23 2019. 


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1 ‘‘Subtitle B—National Prevention 

2 and Wellness Strategy 

3 ‘‘SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRAT4 EGY. 

5 ‘‘(a) IN GENERAL.—The Secretary shall submit to 

6 the Congress within one year after the date of the enact7 ment of this section, and at least every 2 years thereafter, 

8 a national strategy that is designed to improve the Na9 tion’s health through evidence-based clinical and commu10 nity prevention and wellness activities (in this section re11 ferred to as ‘prevention and wellness activities’), including 

12 core public health infrastructure improvement activities. 

13 ‘‘(b) CONTENTS.—The strategy under subsection (a) 

14 shall include each of the following: 

15 ‘‘(1) Identification of specific national goals and 

16 objectives in prevention and wellness activities that 

17 take into account appropriate public health measures 

18 and standards, including departmental measures and 

19 standards (including Healthy People and National 

20 Public Health Performance Standards). 

21 ‘‘(2) Establishment of national priorities for 

22 prevention and wellness, taking into account unmet 

23 prevention and wellness needs. 

24 ‘‘(3) Establishment of national priorities for re25 search on prevention and wellness, taking into acVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01990 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 count unanswered research questions on prevention 

2 and wellness. 

3 ‘‘(4) Identification of health disparities in pre4 vention and wellness. 

5 ‘‘(5) A plan for addressing and implementing 

6 paragraphs (1) through (4). 

7 ‘‘(c) CONSULTATION.—In developing or revising the 

8 strategy under subsection (a), the Secretary shall consult 

9 with the following: 

10 ‘‘(1) The heads of appropriate health agencies 

11 and offices in the Department, including the Office 

12 of the Surgeon General of the Public Health Service, 

13 the Office of Minority Health, and the Office on 

14 Women’s Health. 

15 ‘‘(2) As appropriate, the heads of other Federal 

16 departments and agencies whose programs have a 

17 significant impact upon health (as determined by the 

18 Secretary). 

19 ‘‘(3) As appropriate, nonprofit and for-profit 

20 entities. 

21 ‘‘(4) The Association of State and Territorial 

22 Health Officials and the National Association of 

23 County and City Health Officials. 


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1 ‘‘Subtitle C—Prevention Task 

2 Forces 

3 ‘‘SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERV4 ICES. 

5 ‘‘(a) IN GENERAL.—The Secretary, acting through 

6 the Director of the Agency for Healthcare Research and 

7 Quality, shall establish a permanent task force to be 

8 known as the Task Force on Clinical Preventive Services 

9 (in this section referred to as the ‘Task Force’). 

10 ‘‘(b) RESPONSIBILITIES.—The Task Force shall— 

11 ‘‘(1) identify clinical preventive services for re12 view; 

13 ‘‘(2) review the scientific evidence related to the 

14 benefits, effectiveness, appropriateness, and costs of 

15 clinical preventive services identified under para16 graph (1) for the purpose of developing, updating, 

17 publishing, and disseminating evidence-based rec18 ommendations on the use of such services; 

19 ‘‘(3) as appropriate, take into account health 

20 disparities in developing, updating, publishing, and 

21 disseminating evidence-based recommendations on 

22 the use of such services; 

23 ‘‘(4) identify gaps in clinical preventive services 

24 research and evaluation and recommend priority 

25 areas for such research and evaluation; 


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1 ‘‘(5) as appropriate, consult with the clinical 

2 prevention stakeholders board in accordance with 

3 subsection (f); 

4 ‘‘(6) as appropriate, consult with the Task 

5 Force on Community Preventive Services established 

6 under section 3132; and 

7 ‘‘(7) as appropriate, in carrying out this sec8 tion, consider the national strategy under section 

9 3121. 

10 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

11 ongoing administrative, research, and technical support 

12 for the operations of the Task Force, including coordi13 nating and supporting the dissemination of the rec14 ommendations of the Task Force. 

15 ‘‘(d) MEMBERSHIP.— 

16 ‘‘(1) NUMBER; APPOINTMENT.—The Task 

17 Force shall be composed of 30 members, appointed 

18 by the Secretary. 

19 ‘‘(2) TERMS.— 

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

21 appoint members of the Task Force for a term 

22 of 6 years and may reappoint such members, 

23 but the Secretary may not appoint any member 

24 to serve more than a total of 12 years. 


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1 ‘‘(B) STAGGERED TERMS.—Notwith2 standing subparagraph (A), of the members 

3 first appointed to serve on the Task Force after 

4 the enactment of this title— 

5 ‘‘(i) 10 shall be appointed for a term 

6 of 2 years; 

7 ‘‘(ii) 10 shall be appointed for a term 

8 of 4 years; and 

9 ‘‘(iii) 10 shall be appointed for a term 

10 of 6 years. 

11 ‘‘(3) QUALIFICATIONS.—Members of the Task 

12 Force shall be appointed from among individuals 

13 who possess expertise in at least one of the following 

14 areas: 

15 ‘‘(A) Health promotion and disease preven16 tion. 

17 ‘‘(B) Evaluation of research and system18 atic evidence reviews. 

19 ‘‘(C) Application of systematic evidence re20 views to clinical decisionmaking or health pol21 icy. 

22 ‘‘(D) Clinical primary care in child and ad23 olescent health. 

24 ‘‘(E) Clinical primary care in adult health, 

25 including women’s health. 


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1 ‘‘(F) Clinical primary care in geriatrics. 

2 ‘‘(G) Clinical counseling and behavioral 

3 services for primary care patients. 

4 ‘‘(4) REPRESENTATION.—In appointing mem5 bers of the Task Force, the Secretary shall ensure 

6 that— 

7 ‘‘(A) all areas of expertise described in 

8 paragraph (3) are represented; and 

9 ‘‘(B) the members of the Task Force in10 clude practitioners who, collectively, have sig11 nificant experience treating racially and eth12 nically diverse populations. 

13 ‘‘(e) SUBGROUPS.—As appropriate to maximize effi14 ciency, the Task Force may delegate authority for con15 ducting reviews and making recommendations to sub16 groups consisting of Task Force members, subject to final 

17 approval by the Task Force. 

18 ‘‘(f) CLINICAL PREVENTION STAKEHOLDERS

19 BOARD.— 

20 ‘‘(1) IN GENERAL.—The Task Force shall con21 vene a clinical prevention stakeholders board com22 posed of representatives of appropriate public and 

23 private entities with an interest in clinical preventive 

24 services to advise the Task Force on developing, up25 dating, publishing, and disseminating evidence-based 


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1 recommendations on the use of clinical preventive 

2 services. 

3 ‘‘(2) MEMBERSHIP.—The members of the clin4 ical prevention stakeholders board shall include rep5 resentatives of the following: 

6 ‘‘(A) Health care consumers and patient 

7 groups. 

8 ‘‘(B) Providers of clinical preventive serv9 ices, including community-based providers. 

10 ‘‘(C) Federal departments and agencies, 

11 including— 

12 ‘‘(i) appropriate health agencies and 

13 offices in the Department, including the 

14 Office of the Surgeon General of the Pub15 lic Health Service, the Office of Minority 

16 Health, and the Office on Women’s 

17 Health; and 

18 ‘‘(ii) as appropriate, other Federal de19 partments and agencies whose programs 

20 have a significant impact upon health (as 

21 determined by the Secretary). 

22 ‘‘(D) Private health care payors. 

23 ‘‘(3) RESPONSIBILITIES.—In accordance with 

24 subsection (b)(5), the clinical prevention stake25 holders board shall— 


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1 ‘‘(A) recommend clinical preventive serv2 ices for review by the Task Force; 

3 ‘‘(B) suggest scientific evidence for consid4 eration by the Task Force related to reviews 

5 undertaken by the Task Force; 

6 ‘‘(C) provide feedback regarding draft rec7 ommendations by the Task Force; and 

8 ‘‘(D) assist with efforts regarding dissemi9 nation of recommendations by the Director of 

10 the Agency for Healthcare Research and Qual11 ity. 

12 ‘‘(g) DISCLOSURE AND CONFLICTS OF INTEREST.— 

13 Members of the Task Force or the clinical prevention 

14 stakeholders board shall not be considered employees of 

15 the Federal Government by reason of service on the Task 

16 Force, except members of the Task Force shall be consid17 ered to be special Government employees within the mean18 ing of section 107 of the Ethics in Government Act of 

19 1978 (5 U.S.C. App.) and section 208 of title 18, United 

20 States Code, for the purposes of disclosure and manage21 ment of conflicts of interest under those sections. 

22 ‘‘(h) NO PAY; RECEIPT OF TRAVEL EXPENSES.— 

23 Members of the Task Force or the clinical prevention 

24 stakeholders board shall not receive any pay for service 

25 on the Task Force, but may receive travel expenses, inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01997 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cluding a per diem, in accordance with applicable provi2 sions of subchapter I of chapter 57 of title 5, United 

3 States Code. 

4 ‘‘(i) APPLICATION OF FACA.—The Federal Advisory 

5 Committee Act (5 U.S.C. App.) except for section 14 of 

6 such Act shall apply to the Task Force to the extent that 

7 the provisions of such Act do not conflict with the provi8 sions of this title. 

9 ‘‘(j) REPORT.—The Secretary shall submit to the 

10 Congress an annual report on the Task Force, including 

11 with respect to gaps identified and recommendations made 

12 under subsection (b)(4). 

13 ‘‘SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE 

14 SERVICES. 

15 ‘‘(a) IN GENERAL.—The Secretary, acting through 

16 the Director of the Centers for Disease Control and Pre17 vention, shall establish a permanent task force to be 

18 known as the Task Force on Community Preventive Serv19 ices (in this section referred to as the ‘Task Force’). 

20 ‘‘(b) RESPONSIBILITIES.—The Task Force shall— 

21 ‘‘(1) identify community preventive services for 

22 review; 

23 ‘‘(2) review the scientific evidence related to the 

24 benefits, effectiveness, appropriateness, and costs of 

25 community preventive services identified under paraVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 01998 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 graph (1) for the purpose of developing, updating, 

2 publishing, and disseminating evidence-based rec3 ommendations on the use of such services; 

4 ‘‘(3) as appropriate, take into account health 

5 disparities in developing, updating, publishing, and 

6 disseminating evidence-based recommendations on 

7 the use of such services; 

8 ‘‘(4) identify gaps in community preventive 

9 services research and evaluation and recommend pri10 ority areas for such research and evaluation; 

11 ‘‘(5) as appropriate, consult with the commu12 nity prevention stakeholders board in accordance 

13 with subsection (f); 

14 ‘‘(6) as appropriate, consult with the Task 

15 Force on Clinical Preventive Services established 

16 under section 3131; and 

17 ‘‘(7) as appropriate, in carrying out this sec18 tion, consider the national strategy under section 

19 3121. 

20 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

21 ongoing administrative, research, and technical support 

22 for the operations of the Task Force, including coordi23 nating and supporting the dissemination of the rec24 ommendations of the Task Force. 

25 ‘‘(d) MEMBERSHIP.— 


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1 ‘‘(1) NUMBER; APPOINTMENT.—The Task 

2 Force shall be composed of 30 members, appointed 

3 by the Secretary. 

4 ‘‘(2) TERMS.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 appoint members of the Task Force for a term 

7 of 6 years and may reappoint such members, 

8 but the Secretary may not appoint any member 

9 to serve more than a total of 12 years. 

10 ‘‘(B) STAGGERED TERMS.—Notwith11 standing subparagraph (A), of the members 

12 first appointed to serve on the Task Force after 

13 the enactment of this section— 

14 ‘‘(i) 10 shall be appointed for a term 

15 of 2 years; 

16 ‘‘(ii) 10 shall be appointed for a term 

17 of 4 years; and 

18 ‘‘(iii) 10 shall be appointed for a term 

19 of 6 years. 

20 ‘‘(3) QUALIFICATIONS.—Members of the Task 

21 Force shall be appointed from among individuals 

22 who possess expertise in at least one of the following 

23 areas: 

24 ‘‘(A) Public health. 


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1 ‘‘(B) Evaluation of research and system2 atic evidence reviews. 

3 ‘‘(C) Disciplines relevant to community 

4 preventive services, including health promotion; 

5 disease prevention; chronic disease; worksite 

6 health; qualitative and quantitative analysis; 

7 and health economics, policy, law, and statis8 tics. 

9 ‘‘(4) REPRESENTATION.—In appointing mem10 bers of the Task Force, the Secretary— 

11 ‘‘(A) shall ensure that all areas of exper12 tise described in paragraph (3) are represented; 

13 ‘‘(B) shall ensure that such members in14 clude sufficient representatives of each of— 

15 ‘‘(i) State health officers; 

16 ‘‘(ii) local health officers; 

17 ‘‘(iii) health care practitioners; and 

18 ‘‘(iv) public health practitioners; and 

19 ‘‘(C) shall appoint individuals who, collec20 tively, have significant experience working with 

21 racially and ethnically diverse populations. 

22 ‘‘(e) SUBGROUPS.—As appropriate to maximize effi23 ciency, the Task Force may delegate authority for con24 ducting reviews and making recommendations to subVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02001 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 groups consisting of Task Force members, subject to final 

2 approval by the Task Force. 

3 ‘‘(f) COMMUNITY PREVENTION STAKEHOLDERS

4 BOARD.— 

5 ‘‘(1) IN GENERAL.—The Task Force shall con6 vene a community prevention stakeholders board 

7 composed of representatives of appropriate public 

8 and private entities with an interest in community 

9 preventive services to advise the Task Force on de10 veloping, updating, publishing, and disseminating 

11 evidence-based recommendations on the use of com12 munity preventive services. 

13 ‘‘(2) MEMBERSHIP.—The members of the com14 munity prevention stakeholders board shall include 

15 representatives of the following: 

16 ‘‘(A) Health care consumers and patient 

17 groups. 

18 ‘‘(B) Providers of community preventive 

19 services, including community-based providers. 

20 ‘‘(C) Federal departments and agencies, 

21 including— 

22 ‘‘(i) appropriate health agencies and 

23 offices in the Department, including the 

24 Office of the Surgeon General of the Pub25 lic Health Service, the Office of Minority 


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1 Health, and the Office on Women’s 

2 Health; and 

3 ‘‘(ii) as appropriate, other Federal de4 partments and agencies whose programs 

5 have a significant impact upon health (as 

6 determined by the Secretary). 

7 ‘‘(D) Private health care payors. 

8 ‘‘(3) RESPONSIBILITIES.—In accordance with 

9 subsection (b)(5), the community prevention stake10 holders board shall— 

11 ‘‘(A) recommend community preventive 

12 services for review by the Task Force; 

13 ‘‘(B) suggest scientific evidence for consid14 eration by the Task Force related to reviews 

15 undertaken by the Task Force; 

16 ‘‘(C) provide feedback regarding draft rec17 ommendations by the Task Force; and 

18 ‘‘(D) assist with efforts regarding dissemi19 nation of recommendations by the Director of 

20 the Centers for Disease Control and Prevention. 

21 ‘‘(g) DISCLOSURE AND CONFLICTS OF INTEREST.— 

22 Members of the Task Force or the community prevention 

23 stakeholders board shall not be considered employees of 

24 the Federal Government by reason of service on the Task 

25 Force, except members of the Task Force shall be considVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02003 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ered to be special Government employees within the mean2 ing of section 107 of the Ethics in Government Act of 

3 1978 (5 U.S.C. App.) and section 208 of title 18, United 

4 States Code, for the purposes of disclosure and manage5 ment of conflicts of interest under those sections. 

6 ‘‘(h) NO PAY; RECEIPT OF TRAVEL EXPENSES.— 

7 Members of the Task Force or the community prevention 

8 stakeholders board shall not receive any pay for service 

9 on the Task Force, but may receive travel expenses, in10 cluding a per diem, in accordance with applicable provi11 sions of subchapter I of chapter 57 of title 5, United 

12 States Code. 

13 ‘‘(i) APPLICATION OF FACA.—The Federal Advisory 

14 Committee Act (5 U.S.C. App.) except for section 14 of 

15 such Act shall apply to the Task Force to the extent that 

16 the provisions of such Act do not conflict with the provi17 sions of this title. 

18 ‘‘(j) REPORT.—The Secretary shall submit to the 

19 Congress an annual report on the Task Force, including 

20 with respect to gaps identified and recommendations made 

21 under subsection (b)(4). 


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1 ‘‘Subtitle D—Prevention and 

2 Wellness Research 

3 ‘‘SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIV4 ITY COORDINATION. 

5 ‘‘In conducting or supporting research on prevention 

6 and wellness, the Director of the Centers for Disease Con7 trol and Prevention, the Director of the National Insti8 tutes of Health, and the heads of other agencies within 

9 the Department of Health and Human Services con10 ducting or supporting such research, shall take into con11 sideration the national strategy under section 3121 and 

12 the recommendations of the Task Force on Clinical Pre13 ventive Services under section 3131 and the Task Force 

14 on Community Preventive Services under section 3132. 

15 ‘‘SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RE16 SEARCH GRANTS. 

17 ‘‘(a) IN GENERAL.—The Secretary, acting through 

18 the Director of the Centers for Disease Control and Pre19 vention, shall conduct, or award grants to eligible entities 

20 to conduct, research in priority areas identified by the Sec21 retary in the national strategy under section 3121 or by 

22 the Task Force on Community Preventive Services as re23 quired by section 3132. 

24 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

25 this section, an entity shall be— 


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1 ‘‘(1) a State, local, or tribal department of 

2 health; 

3 ‘‘(2) a public or private nonprofit entity; or 

4 ‘‘(3) a consortium of 2 or more entities de5 scribed in paragraphs (1) and (2). 

6 ‘‘(c) REPORT.—The Secretary shall submit to the 

7 Congress an annual report on the program of research 

8 under this section. 

9 ‘‘Subtitle E—Delivery of Commu10 nity Prevention and Wellness 

11 Services 

12 ‘‘SEC. 3151. COMMUNITY PREVENTION AND WELLNESS 

13 SERVICES GRANTS. 

14 ‘‘(a) IN GENERAL.—The Secretary, acting through 

15 the Director of the Centers for Disease Control and Pre16 vention, shall establish a program for the delivery of com17 munity preventive and wellness services consisting of 

18 awarding grants to eligible entities— 

19 ‘‘(1) to provide evidence-based, community pre20 ventive and wellness services in priority areas identi21 fied by the Secretary in the national strategy under 

22 section 3121; or 

23 ‘‘(2) to plan such services. 

24 ‘‘(b) ELIGIBILITY.— 


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1 ‘‘(1) DEFINITION.—To be eligible for a grant 

2 under this section, an entity shall be— 

3 ‘‘(A) a State, local, or tribal department of 

4 health; 

5 ‘‘(B) a public or private entity; or 

6 ‘‘(C) a consortium of— 

7 ‘‘(i) 2 or more entities described in 

8 subparagraph (A) or (B); and 

9 ‘‘(ii) a community partnership rep10 resenting a Health Empowerment Zone. 

11 ‘‘(2) HEALTH EMPOWERMENT ZONE.—In this 

12 subsection, the term ‘Health Empowerment Zone’ 

13 means an area— 

14 ‘‘(A) in which multiple community preven15 tive and wellness services are implemented in 

16 order to address one or more health disparities, 

17 including those identified by the Secretary in 

18 the national strategy under section 3121; and 

19 ‘‘(B) which is represented by a community 

20 partnership that demonstrates community sup21 port and coordination with State, local, or tribal 

22 health departments and includes— 

23 ‘‘(i) a broad cross section of stake24 holders; 

25 ‘‘(ii) residents of the community; and 


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1 ‘‘(iii) representatives of entities that 

2 have a history of working within and serv3 ing the community. 

4 ‘‘(c) PREFERENCES.—In awarding grants under this 

5 section, the Secretary shall give preference to entities 

6 that— 

7 ‘‘(1) will address one or more goals or objec8 tives identified by the Secretary in the national 

9 strategy under section 3121; 

10 ‘‘(2) will address significant health disparities, 

11 including those identified by the Secretary in the na12 tional strategy under section 3121; 

13 ‘‘(3) will address unmet community prevention 

14 needs and avoids duplication of effort; 

15 ‘‘(4) have been demonstrated to be effective in 

16 communities comparable to the proposed target com17 munity; 

18 ‘‘(5) will contribute to the evidence base for 

19 community preventive and wellness services; 

20 ‘‘(6) demonstrate that the community preven21 tive services to be funded will be sustainable; and 

22 ‘‘(7) demonstrate coordination or collaboration 

23 across governmental and nongovernmental partners. 

24 ‘‘(d) HEALTH DISPARITIES.—Of the funds awarded 

25 under this section for a fiscal year, the Secretary shall 


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1 award not less than 50 percent for planning or imple2 menting community preventive and wellness services 

3 whose primary purpose is to achieve a measurable reduc4 tion in one or more health disparities, including those 

5 identified by the Secretary in the national strategy under 

6 section 3121. 

7 ‘‘(e) EMPHASIS ON RECOMMENDED SERVICES.—For 

8 fiscal year 2013 and subsequent fiscal years, the Secretary 

9 shall award grants under this section only for planning 

10 or implementing services recommended by the Task Force 

11 on Community Preventive Services under section 3122 or 

12 deemed effective based on a review of comparable rigor 

13 (as determined by the Director of the Centers for Disease 

14 Control and Prevention). 

15 ‘‘(f) PROHIBITED USES OF FUNDS.—An entity that 

16 receives a grant under this section may not use funds pro17 vided through the grant— 

18 ‘‘(1) to build or acquire real property or for 

19 construction; or 

20 ‘‘(2) for services or planning to the extent that 

21 payment has been made, or can reasonably be ex22 pected to be made— 

23 ‘‘(A) under any insurance policy; 


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1 ‘‘(B) under any Federal or State health 

2 benefits program (including titles XIX and XXI 

3 of the Social Security Act); or 

4 ‘‘(C) by an entity which provides health 

5 services on a prepaid basis. 

6 ‘‘(g) REPORT.—The Secretary shall submit to the 

7 Congress an annual report on the program of grants 

8 awarded under this section. 

9 ‘‘(h) DEFINITIONS.—In this section, the term ‘evi10 dence-based’ means that methodologically sound research 

11 has demonstrated a beneficial health effect, in the judg12 ment of the Director of the Centers for Disease Control 

13 and Prevention. 

14 ‘‘Subtitle F—Core Public Health 

15 Infrastructure 

16 ‘‘SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR 

17 STATE, LOCAL, AND TRIBAL HEALTH DEPART18 MENTS. 

19 ‘‘(a) PROGRAM.—The Secretary, acting through the 

20 Director of the Centers for Disease Control and Preven21 tion shall establish a core public health infrastructure pro22 gram consisting of awarding grants under subsection (b). 

23 ‘‘(b) GRANTS.— 


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1 ‘‘(1) AWARD.—For the purpose of addressing 

2 core public health infrastructure needs, the Sec3 retary— 

4 ‘‘(A) shall award a grant to each State 

5 health department; and 

6 ‘‘(B) may award grants on a competitive 

7 basis to State, local, or tribal health depart8 ments. 

9 ‘‘(2) ALLOCATION.—Of the total amount of 

10 funds awarded as grants under this subsection for a 

11 fiscal year— 

12 ‘‘(A) not less than 50 percent shall be for 

13 grants to State health departments under para14 graph (1)(A); and 

15 ‘‘(B) not less than 30 percent shall be for 

16 grants to State, local, or tribal health depart17 ments under paragraph (1)(B). 

18 ‘‘(c) USE OF FUNDS.—The Secretary may award a 

19 grant to an entity under subsection (b)(1) only if the enti20 ty agrees to use the grant to address core public health 

21 infrastructure needs, including those identified in the ac22 creditation process under subsection (g). 

23 ‘‘(d) FORMULA GRANTS TO STATE HEALTH DEPART24 MENTS.—In making grants under subsection (b)(1)(A), 


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1 the Secretary shall award funds to each State health de2 partment in accordance with— 

3 ‘‘(1) a formula based on population size; burden 

4 of preventable disease and disability; and core public 

5 health infrastructure gaps, including those identified 

6 in the accreditation process under subsection (g); 

7 and 

8 ‘‘(2) application requirements established by the 

9 Secretary, including a requirement that the State 

10 submit a plan that demonstrates to the satisfaction 

11 of the Secretary that the State’s health department 

12 will— 

13 ‘‘(A) address its highest priority core pub14 lic health infrastructure needs; and 

15 ‘‘(B) as appropriate, allocate funds to local 

16 health departments within the State. 

17 ‘‘(e) COMPETITIVE GRANTS TO STATE, LOCAL, AND

18 TRIBAL HEALTH DEPARTMENTS.—In making grants 

19 under subsection (b)(1)(B), the Secretary shall give pri20 ority to applicants demonstrating core public health infra21 structure needs identified in the accreditation process 

22 under subsection (g). 

23 ‘‘(f) MAINTENANCE OF EFFORT.—The Secretary 

24 may award a grant to an entity under subsection (b) only 


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1 if the entity demonstrates to the satisfaction of the Sec2 retary that— 

3 ‘‘(1) funds received through the grant will be 

4 expended only to supplement, and not supplant, non5 Federal and Federal funds otherwise available to the 

6 entity for the purpose of addressing core public 

7 health infrastructure needs; and 

8 ‘‘(2) with respect to activities for which the 

9 grant is awarded, the entity will maintain expendi10 tures of non-Federal amounts for such activities at 

11 a level not less than the level of such expenditures 

12 maintained by the entity for the fiscal year pre13 ceding the fiscal year for which the entity receives 

14 the grant. 

15 ‘‘(g) ESTABLISHMENT OF A PUBLIC HEALTH AC16 CREDITATION PROGRAM.— 

17 ‘‘(1) IN GENERAL.—The Secretary, acting 

18 through the Director of the Centers for Disease 

19 Control and Prevention, shall— 

20 ‘‘(A) develop, and periodically review and 

21 update, standards for voluntary accreditation of 

22 State, local, or tribal health departments and 

23 public health laboratories for the purpose of ad24 vancing the quality and performance of such de25 partments and laboratories; and 


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1 ‘‘(B) implement a program to accredit 

2 such health departments and laboratories in ac3 cordance with such standards. 

4 ‘‘(2) COOPERATIVE AGREEMENT.—The Sec5 retary may enter into a cooperative agreement with 

6 a private nonprofit entity to carry out paragraph 

7 (1). 

8 ‘‘(h) REPORT.—The Secretary shall submit to the 

9 Congress an annual report on progress being made to ac10 credit entities under subsection (g), including— 

11 ‘‘(1) a strategy, including goals and objectives, 

12 for accrediting entities under subsection (g) and 

13 achieving the purpose described in subsection (g)(1); 

14 and 

15 ‘‘(2) identification of gaps in research related to 

16 core public health infrastructure and recommenda17 tions of priority areas for such research. 

18 ‘‘SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND 

19 ACTIVITIES FOR CDC. 

20 ‘‘(a) IN GENERAL.—The Secretary, acting through 

21 the Director of the Centers for Disease Control and Pre22 vention, shall expand and improve the core public health 

23 infrastructure and activities of the Centers for Disease 

24 Control and Prevention to address unmet and emerging 

25 public health needs. 


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1 ‘‘(b) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the activities funded 

3 through this section. 

4 ‘‘Subtitle G—General Provisions 

5 ‘‘SEC. 3171. DEFINITIONS. 

6 ‘‘In this title: 

7 ‘‘(1) The term ‘core public health infrastruc8 ture’ includes workforce capacity and competency; 

9 laboratory systems; health information, health infor10 mation systems, and health information analysis; 

11 communications; financing; other relevant compo12 nents of organizational capacity; and other related 

13 activities. 

14 ‘‘(2) The terms ‘Department’ and ‘depart15 mental’ refer to the Department of Health and 

16 Human Services. 

17 ‘‘(3) The term ‘health disparities’ includes 

18 health and health care disparities and means popu19 lation-specific differences in the presence of disease, 

20 health outcomes, or access to health care. For pur21 poses of the preceding sentence, a population may be 

22 delineated by race, ethnicity, geographic setting, or 

23 other population or subpopulation determined appro24 priate by the Secretary. 


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1 ‘‘(4) The term ‘tribal’ refers to an Indian tribe, 

2 a Tribal organization, or an Urban Indian organiza3 tion, as such terms are defined in section 4 of the 

4 Indian Health Care Improvement Act.’’. 

5 (b) TRANSITION PROVISIONS APPLICABLE TO TASK

6 FORCES.— 

7 (1) FUNCTIONS, PERSONNEL, ASSETS, LIABIL8 ITIES, AND ADMINISTRATIVE ACTIONS.—All func9 tions, personnel, assets, and liabilities of, and ad10 ministrative actions applicable to, the Preventive 

11 Services Task Force convened under section 915(a) 

12 of the Public Health Service Act and the Task Force 

13 on Community Preventive Services (as such section 

14 and Task Forces were in existence on the day before 

15 the date of the enactment of this Act) shall be trans16 ferred to the Task Force on Clinical Preventive 

17 Services and the Task Force on Community Preven18 tive Services, respectively, established under sections 

19 3121 and 3122 of the Public Health Service Act, as 

20 added by subsection (a). 

21 (2) RECOMMENDATIONS.—All recommendations 

22 of the Preventive Services Task Force and the Task 

23 Force on Community Preventive Services, as in ex24 istence on the day before the date of the enactment 

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1 tions of the Task Force on Clinical Preventive Serv2 ices and the Task Force on Community Preventive 

3 Services, respectively, established under sections 

4 3121 and 3122 of the Public Health Service Act, as 

5 added by subsection (a). 

6 (3) MEMBERS ALREADY SERVING.— 

7 (A) INITIAL MEMBERS.—The Secretary of 

8 Health and Human Services may select those 

9 individuals already serving on the Preventive 

10 Services Task Force and the Task Force on 

11 Community Preventive Services, as in existence 

12 on the day before the date of the enactment of 

13 this Act, to be among the first members ap14 pointed to the Task Force on Clinical Preven15 tive Services and the Task Force on Commu16 nity Preventive Services, respectively, under sec17 tions 3121 and 3122 of the Public Health Serv18 ice Act, as added by subsection (a). 

19 (B) CALCULATION OF TOTAL SERVICE.—In 

20 calculating the total years of service of a mem21 ber of a task force for purposes of section 

22 3131(d)(2)(A) or 3132(d)(2)(A) of the Public 

23 Health Service Act, as added by subsection (a), 

24 the Secretary of Health and Human Services 

25 shall not include any period of service by the 


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1 member on the Preventive Services Task Force 

2 or the Task Force on Community Preventive 

3 Services, respectively, as in existence on the day 

4 before the date of the enactment of this Act. 

5 (c) PERIOD BEFORE COMPLETION OF NATIONAL

6 STRATEGY.—Pending completion of the national strategy 

7 under section 3121 of the Public Health Service Act, as 

8 added by subsection (a), the Secretary of Health and 

9 Human Services, acting through the relevant agency head, 

10 may make a judgment about how the strategy will address 

11 an issue and rely on such judgment in carrying out any 

12 provision of subtitle C, D, E, or F of title XXXI of such 

13 Act, as added by subsection (a), that requires the Sec14 retary— 

15 (1) to take into consideration such strategy; 

16 (2) to conduct or support research or provide 

17 services in priority areas identified in such strategy; 

18 or 

19 (3) to take any other action in reliance on such 

20 strategy. 

21 (d) CONFORMING AMENDMENTS.— 

22 (1) Paragraph (61) of section 3(b) of the In23 dian Health Care Improvement Act (25 U.S.C. 

24 1602) is amended by striking ‘‘United States PreVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02018 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ventive Services Task Force’’ and inserting ‘‘Task 

2 Force on Clinical Preventive Services’’. 

3 (2) Section 126 of the Medicare, Medicaid, and 

4 SCHIP Benefits Improvement and Protection Act of 

5 2000 (Appendix F of Public Law 106–554) is 

6 amended by striking ‘‘United States Preventive 

7 Services Task Force’’ each place it appears and in8 serting ‘‘Task Force on Clinical Preventive Serv9 ices’’. 

10 (3) Paragraph (7) of section 317D of the Pub11 lic Health Service Act (42 U.S.C. 247b–5) is amend12 ed by striking ‘‘United States Preventive Services 

13 Task Force’’ each place it appears and inserting 

14 ‘‘Task Force on Clinical Preventive Services’’. 

15 (4) Section 915 of the Public Health Service 

16 Act (42 U.S.C. 299b–4) is amended by striking sub17 section (a). 

18 (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and 

19 (ddd)(1)(B) of section 1861 of the Social Security 

20 Act (42 U.S.C. 1395x) are amended by striking 

21 ‘‘United States Preventive Services Task Force’’ 

22 each place it appears and inserting ‘‘Task Force on 

23 Clinical Preventive Services’’. 


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1 TITLE IV—QUALITY AND 

2 SURVEILLANCE 

3 SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE 

4 DELIVERY OF HEALTH CARE. 

5 (a) IN GENERAL.—Title IX of the Public Health 

6 Service Act (42 U.S.C. 299 et seq.) is amended— 

7 (1) by redesignating part D as part E; 

8 (2) by redesignating sections 931 through 938 

9 as sections 941 through 948, respectively; 

10 (3) in section 938(1), by striking ‘‘931’’ and in11 serting ‘‘941’’; and 

12 (4) by inserting after part C the following: 

13 ‘‘PART D—IMPLEMENTATION OF BEST 

14 PRACTICES IN THE DELIVERY OF HEALTH CARE 

15 ‘‘SEC. 931. CENTER FOR QUALITY IMPROVEMENT. 

16 ‘‘(a) IN GENERAL.—There is established the Center 

17 for Quality Improvement (referred to in this part as the 

18 ‘Center’), to be headed by the Director. 

19 ‘‘(b) PRIORITIZATION.— 

20 ‘‘(1) IN GENERAL.—The Director shall 

21 prioritize areas for the identification, development, 

22 evaluation, and implementation of best practices (in23 cluding innovative methodologies and strategies) for 

24 quality improvement activities in the delivery of 


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1 health care services (in this section referred to as 

2 ‘best practices’). 

3 ‘‘(2) CONSIDERATIONS.—In prioritizing areas 

4 under paragraph (1), the Director shall consider— 

5 ‘‘(A) the priorities established under sec6 tion 1191 of the Social Security Act; and 

7 ‘‘(B) the key health indicators identified by 

8 the Assistant Secretary for Health Information 

9 under section 1709. 

10 ‘‘(c) OTHER RESPONSIBILITIES.—The Director, act11 ing directly or by awarding a grant or contract to an eligi12 ble entity, shall— 

13 ‘‘(1) identify existing best practices under sub14 section (e); 

15 ‘‘(2) develop new best practices under sub16 section (f); 

17 ‘‘(3) evaluate best practices under subsection 

18 (g); 

19 ‘‘(4) implement best practices under subsection 

20 (h); 

21 ‘‘(5) ensure that best practices are identified, 

22 developed, evaluated, and implemented under this 

23 section consistent with standards adopted by the 

24 Secretary under section 3004 for health information 

25 technology used in the collection and reporting of 


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1 quality information (including for purposes of the 

2 demonstration of meaningful use of certified elec3 tronic health record (EHR) technology by physicians 

4 and hospitals under the Medicare program (under 

5 sections 1848(o)(2) and 1886(n)(3), respectively, of 

6 the Social Security Act)); and 

7 ‘‘(6) provide for dissemination of information 

8 and reporting under subsections (i) and (j). 

9 ‘‘(d) ELIGIBILITY.—To be eligible for a grant or con10 tract under subsection (c), an entity shall— 

11 ‘‘(1) be a nonprofit entity; 

12 ‘‘(2) agree to work with a variety of institu13 tional health care providers, physicians, nurses, and 

14 other health care practitioners; and 

15 ‘‘(3) if the entity is not the organization holding 

16 a contract under section 1153 of the Social Security 

17 Act for the area to be served, agree to cooperate 

18 with and avoid duplication of the activities of such 

19 organization. 

20 ‘‘(e) IDENTIFYING EXISTING BEST PRACTICES.—The 

21 Secretary shall identify best practices that are— 

22 ‘‘(1) currently utilized by health care providers 

23 (including hospitals, physician and other clinician 

24 practices, community cooperatives, and other health 


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1 care entities) that deliver consistently high-quality, 

2 efficient health care services; and 

3 ‘‘(2) easily adapted for use by other health care 

4 providers and for use across a variety of health care 

5 settings. 

6 ‘‘(f) DEVELOPING NEW BEST PRACTICES.—The Sec7 retary shall develop best practices that are— 

8 ‘‘(1) based on a review of existing scientific evi9 dence; 

10 ‘‘(2) sufficiently detailed for implementation 

11 and incorporation into the workflow of health care 

12 providers; and 

13 ‘‘(3) designed to be easily adapted for use by 

14 health care providers across a variety of health care 

15 settings. 

16 ‘‘(g) EVALUATION OF BEST PRACTICES.—The Direc17 tor shall evaluate best practices identified or developed 

18 under this section. Such evaluation— 

19 ‘‘(1) shall include determinations of which best 

20 practices— 

21 ‘‘(A) most reliably and effectively achieve 

22 significant progress in improving the quality of 

23 patient care; and 


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1 ‘‘(B) are easily adapted for use by health 

2 care providers across a variety of health care 

3 settings; 

4 ‘‘(2) shall include regular review, updating, and 

5 improvement of such best practices; and 

6 ‘‘(3) may include in-depth case studies or em7 pirical assessments of health care providers (includ8 ing hospitals, physician and other clinician practices, 

9 community cooperatives, and other health care enti10 ties) and simulations of such best practices for de11 terminations under paragraph (1). 

12 ‘‘(h) IMPLEMENTATION OF BEST PRACTICES.— 

13 ‘‘(1) IN GENERAL.—The Director shall enter 

14 into voluntary arrangements with health care pro15 viders (including hospitals and other health facilities 

16 and health practitioners) in a State or region to im17 plement best practices identified or developed under 

18 this section. Such implementation— 

19 ‘‘(A) may include forming collaborative 

20 multi-institutional teams; and 

21 ‘‘(B) shall include an evaluation of the best 

22 practices being implemented, including the 

23 measurement of patient outcomes before, dur24 ing, and after implementation of such best 

25 practices. 


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1 ‘‘(2) PREFERENCES.—In carrying out this sub2 section, the Director shall give priority to health 

3 care providers implementing best practices that— 

4 ‘‘(A) have the greatest impact on patient 

5 outcomes and satisfaction; 

6 ‘‘(B) are the most easily adapted for use 

7 by health care providers across a variety of 

8 health care settings; 

9 ‘‘(C) promote coordination of health care 

10 practitioners across the continuum of care; and 

11 ‘‘(D) engage patients and their families in 

12 improving patient care and outcomes. 

13 ‘‘(i) PUBLIC DISSEMINATION OF INFORMATION.— 

14 The Director shall provide for the public dissemination of 

15 information with respect to best practices and activities 

16 under this section. Such information shall be made avail17 able in appropriate formats and languages to reflect the 

18 varying needs of consumers and diverse levels of health 

19 literacy. 

20 ‘‘(j) REPORT.— 

21 ‘‘(1) IN GENERAL.—The Director shall submit 

22 an annual report to the Congress and the Secretary 

23 on activities under this section. 

24 ‘‘(2) CONTENT.—Each report under paragraph 

25 (1) shall include— 


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1 ‘‘(A) information on activities conducted 

2 pursuant to grants and contracts awarded; 

3 ‘‘(B) summary data on patient outcomes 

4 before, during, and after implementation of best 

5 practices; and 

6 ‘‘(C) recommendations on the adaptability 

7 of best practices for use by health providers.’’. 

8 (b) INITIAL QUALITY IMPROVEMENT ACTIVITIES AND

9 INITIATIVES TO BE IMPLEMENTED.—Until the Director 

10 of the Agency for Healthcare Research and Quality has 

11 established initial priorities under section 931(b) of the 

12 Public Health Service Act, as added by subsection (a), the 

13 Director shall, for purposes of such section, prioritize the 

14 following: 

15 (1) HEALTH CARE-ASSOCIATED INFECTIONS.— 

16 Reducing health care-associated infections, including 

17 infections in nursing homes and outpatient settings. 

18 (2) SURGERY.—Increasing hospital and out19 patient perioperative patient safety, including reduc20 ing surgical-site infections and surgical errors (such 

21 as wrong-site surgery and retained foreign bodies). 

22 (3) EMERGENCY ROOM.—Improving care in 

23 hospital emergency rooms, including through the use 

24 of principles of efficiency of design and delivery to 

25 improve patient flow. 


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1 (4) OBSTETRICS.—Improving the provision of 

2 obstetrical and neonatal care, including the identi3 fication of interventions that are effective in reduc4 ing the risk of preterm and premature labor and the 

5 implementation of best practices for labor and deliv6 ery care. 

7 SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMA8 TION. 

9 (a) ESTABLISHMENT.—Title XVII (42 U.S.C. 300u 

10 et seq.) is amended— 

11 (1) by redesignating sections 1709 and 1710 as 

12 sections 1710 and 1711, respectively; and 

13 (2) by inserting after section 1708 the fol14 lowing: 

15 ‘‘SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMA16 TION. 

17 ‘‘(a) IN GENERAL.—There is established within the 

18 Department an Assistant Secretary for Health Informa19 tion (in this section referred to as the ‘Assistant Sec20 retary’), to be appointed by the Secretary. 

21 ‘‘(b) RESPONSIBILITIES.—The Assistant Secretary 

22 shall— 

23 ‘‘(1) ensure the collection, collation, reporting, 

24 and publishing of information (including full and 

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1 ing the Nation’s health and the performance of the 

2 Nation’s health care; 

3 ‘‘(2) facilitate and coordinate the collection, col4 lation, reporting, and publishing of information re5 garding the Nation’s health and the performance of 

6 the Nation’s health care (other than information de7 scribed in paragraph (1)); 

8 ‘‘(3)(A) develop standards for the collection of 

9 data regarding the Nation’s health and the perform10 ance of the Nation’s health care; and 

11 ‘‘(B) in carrying out subparagraph (A)— 

12 ‘‘(i) ensure appropriate specificity and 

13 standardization for data collection at the na14 tional, regional, State, and local levels; 

15 ‘‘(ii) include standards, as appropriate, for 

16 the collection of accurate data on health and 

17 health care by race, ethnicity, primary lan18 guage, sex, sexual orientation, gender identity, 

19 disability, socioeconomic status, rural, urban, or 

20 other geographic setting, and any other popu21 lation or subpopulation determined appropriate 

22 by the Secretary; 

23 ‘‘(iii) ensure, with respect to data on race 

24 and ethnicity, consistency with the 1997 Office 

25 of Management and Budget Standards for 


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1 Maintaining, Collecting and Presenting Federal 

2 Data on Race and Ethnicity (or any successor 

3 standards); and 

4 ‘‘(iv) in consultation with the Director of 

5 the Office of Minority Health, and the Director 

6 of the Office of Civil Rights, of the Department, 

7 develop standards for the collection of data on 

8 health and health care with respect to data on 

9 primary language; 

10 ‘‘(4) provide support to Federal departments 

11 and agencies whose programs have a significant im12 pact upon health (as determined by the Secretary) 

13 for the collection and collation of information de14 scribed in paragraphs (1) and (2); 

15 ‘‘(5) ensure the sharing of information de16 scribed in paragraphs (1) and (2) among the agen17 cies of the Department; 

18 ‘‘(6) facilitate the sharing of information de19 scribed in paragraphs (1) and (2) by Federal depart20 ments and agencies whose programs have a signifi21 cant impact upon health (as determined by the Sec22 retary); 

23 ‘‘(7) identify gaps in information described in 

24 paragraphs (1) and (2) and the appropriate agency 

25 or entity to address such gaps; 


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1 ‘‘(8) facilitate and coordinate identification and 

2 monitoring by the agencies of the Department of 

3 health disparities to inform program and policy ef4 forts to reduce such disparities, including facilitating 

5 and funding analyses conducted in cooperation with 

6 the Social Security Administration, the Bureau of 

7 the Census, and other appropriate agencies and enti8 ties; 

9 ‘‘(9) consistent with privacy, proprietary, and 

10 other appropriate safeguards, facilitate public acces11 sibility of datasets (such as de-identified Medicare 

12 datasets or publicly available data on key health in13 dicators) by means of the Internet; and 

14 ‘‘(10) award grants or contracts for the collec15 tion and collation of information described in para16 graphs (1) and (2) (including through statewide sur17 veys that provide standardized information). 

18 ‘‘(c) KEY HEALTH INDICATORS.— 

19 ‘‘(1) IN GENERAL.—In carrying out subsection 

20 (b)(1), the Assistant Secretary shall— 

21 ‘‘(A) identify, and reassess at least once 

22 every 3 years, key health indicators described in 

23 such subsection; 

24 ‘‘(B) publish statistics on such key health 

25 indicators for the public— 


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1 ‘‘(i) not less than annually; and 

2 ‘‘(ii) on a supplemental basis when3 ever warranted by— 

4 ‘‘(I) the rate of change for a key 

5 health indicator; or 

6 ‘‘(II) the need to inform policy 

7 regarding the Nation’s health and the 

8 performance of the Nation’s health 

9 care; and 

10 ‘‘(C) ensure consistency with the national 

11 strategy developed by the Secretary under sec12 tion 3121 and consideration of the indicators 

13 specified in the reports under sections 308, 

14 903(a)(6), and 913(b)(2). 

15 ‘‘(2) RELEASE OF KEY HEALTH INDICATORS.— 

16 The regulations, rules, processes, and procedures of 

17 the Office of Management and Budget governing the 

18 review, release, and dissemination of key health indi19 cators shall be the same as the regulations, rules, 

20 processes, and procedures of the Office of Manage21 ment and Budget governing the review, release, and 

22 dissemination of Principal Federal Economic Indica23 tors (or equivalent statistical data) by the Bureau of 

24 Labor Statistics. 


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1 ‘‘(d) COORDINATION.—In carrying out this section, 

2 the Assistant Secretary shall coordinate with— 

3 ‘‘(1) public and private entities that collect and 

4 disseminate information on health and health care, 

5 including foundations; and 

6 ‘‘(2) the head of the Office of the National Co7 ordinator for Health Information Technology to en8 sure optimal use of health information technology. 

9 ‘‘(e) REQUEST FOR INFORMATION FROM OTHER DE10 PARTMENTS AND AGENCIES.—Consistent with applicable 

11 law, the Assistant Secretary may secure directly from any 

12 Federal department or agency information necessary to 

13 enable the Assistant Secretary to carry out this section. 

14 ‘‘(f) REPORT.— 

15 ‘‘(1) SUBMISSION.—The Assistant Secretary 

16 shall submit to the Secretary and the Congress an 

17 annual report containing— 

18 ‘‘(A) a description of national, regional, or 

19 State changes in health or health care, as re20 flected by the key health indicators identified 

21 under subsection (c)(1); 

22 ‘‘(B) a description of gaps in the collection, 

23 collation, reporting, and publishing of informa24 tion regarding the Nation’s health and the per25 formance of the Nation’s health care; 


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1 ‘‘(C) recommendations for addressing such 

2 gaps and identification of the appropriate agen3 cy within the Department or other entity to ad4 dress such gaps; 

5 ‘‘(D) a description of analyses of health 

6 disparities, including the results of completed 

7 analyses, the status of ongoing longitudinal 

8 studies, and proposed or planned research; and 

9 ‘‘(E) a plan for actions to be taken by the 

10 Assistant Secretary to address gaps described 

11 in subparagraph (B). 

12 ‘‘(2) CONSIDERATION.—In preparing a report 

13 under paragraph (1), the Assistant Secretary shall 

14 take into consideration the findings and conclusions 

15 in the reports under sections 308, 903(a)(6), and 

16 913(b)(2). 

17 ‘‘(g) PROPRIETARY AND PRIVACY PROTECTIONS.— 

18 Nothing in this section shall be construed to affect appli19 cable proprietary or privacy protections. 

20 ‘‘(h) CONSULTATION.—In carrying out this section, 

21 the Assistant Secretary shall consult with— 

22 ‘‘(1) the heads of appropriate health agencies 

23 and offices in the Department, including the Office 

24 of the Surgeon General of the Public Health Service, 


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1 the Office of Minority Health, and the Office on 

2 Women’s Health; and 

3 ‘‘(2) as appropriate, the heads of other Federal 

4 departments and agencies whose programs have a 

5 significant impact upon health (as determined by the 

6 Secretary). 

7 ‘‘(i) DEFINITION.—In this section: 

8 ‘‘(1) The terms ‘agency’ and ‘agencies’ include 

9 an epidemiology center established under section 214 

10 of the Indian Health Care Improvement Act. 

11 ‘‘(2) The term ‘Department’ means the Depart12 ment of Health and Human Services. 

13 ‘‘(3) The term ‘health disparities’ has the 

14 meaning given to such term in section 3171.’’. 

15 (b) OTHER COORDINATION RESPONSIBILITIES.— 

16 Title III (42 U.S.C. 241 et seq.) is amended— 

17 (1) in paragraphs (1) and (2) of section 304(c) 

18 (42 U.S.C. 242b(c)), by inserting ‘‘, acting through 

19 the Assistant Secretary for Health Information,’’ 

20 after ‘‘The Secretary’’ each place it appears; and 

21 (2) in section 306(j) (42 U.S.C. 242k(j)), by in22 serting ‘‘, acting through the Assistant Secretary for 

23 Health Information,’’ after ‘‘of this section, the Sec24 retary’’. 


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1 SEC. 2403. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 799C, as added and amended, is further 

3 amended by adding at the end the following: 

4 ‘‘(e) QUALITY AND SURVEILLANCE.—For the pur5 pose of carrying out part D of title IX and section 1709, 

6 in addition to any other amounts authorized to be appro7 priated for such purpose, there is authorized to be appro8 priated, out of any monies in the Public Health Invest9 ment Fund, $300,000,000 for each of fiscal years 2010 

10 through 2014 and $330,000,000 for each of fiscal years 

11 2015 through 2019.’’. 

12 TITLE V—OTHER PROVISIONS 

13 Subtitle A—Drug Discount for 

14 Rural and Other Hospitals 

15 SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM. 

16 (a) EXPANSION OF COVERED ENTITIES RECEIVING

17 DISCOUNTED PRICES.—Section 340B(a)(4) (42 U.S.C. 

18 256b(a)(4)) is amended by adding at the end the fol19 lowing: 

20 ‘‘(M) A children’s hospital excluded from 

21 the Medicare prospective payment system pur22 suant to section 1886(d)(1)(B)(iii) of the Social 

23 Security Act which would meet the require24 ments of subparagraph (L), including the dis25 proportionate share adjustment percentage re26 quirement under subparagraph (L)(ii), if the 


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1 hospital were a subsection (d) hospital as de2 fined in section 1886(d)(1)(B) of the Social Se3 curity Act. 

4 ‘‘(N) An entity that is a critical access hos5 pital (as determined under section 1820(c)(2) 

6 of the Social Security Act). 

7 ‘‘(O) An entity receiving funds under title 

8 V of the Social Security Act (relating to mater9 nal and child health) for the provision of health 

10 services. 

11 ‘‘(P) An entity receiving funds under sub12 part I of part B of title XIX of the Public 

13 Health Service Act (relating to comprehensive 

14 mental health services) for the provision of com15 munity mental health services. 

16 ‘‘(Q) An entity receiving funds under sub17 part II of such part B (relating to the preven18 tion and treatment of substance abuse) for the 

19 provision of treatment services for substance 

20 abuse. 

21 ‘‘(R) An entity that is a Medicare-depend22 ent, small rural hospital (as defined in section 

23 1886(d)(5)(G)(iv) of the Social Security Act). 


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1 ‘‘(S) An entity that is a sole community 

2 hospital (as defined in section 

3 1886(d)(5)(D)(iii) of the Social Security Act). 

4 ‘‘(T) An entity that is classified as a rural 

5 referral center under section 1886(d)(5)(C) of 

6 the Social Security Act.’’. 

7 (b) PROHIBITION ON GROUP PURCHASING ARRANGE8 MENTS.—Section 340B(a) (42 U.S.C. 256b(a)) is amend9 ed— 

10 (1) in paragraph (4)(L)— 

11 (A) by adding ‘‘and’’ at the end of clause 

12 (i); 

13 (B) by striking ‘‘; and’’ at the end of 

14 clause (ii) and inserting a period; and 

15 (C) by striking clause (iii); 

16 (2) in paragraph (5), by redesignating subpara17 graphs (C) and (D) as subparagraphs (D) and (E), 

18 respectively, and by inserting after subparagraph 

19 (B) the following: 

20 ‘‘(C) PROHIBITING USE OF GROUP PUR21 CHASING ARRANGEMENTS.— 

22 ‘‘(i) A hospital described in subpara23 graph (L), (M), (N), (R), (S), or (T) of 

24 paragraph (4) shall not obtain covered out25 patient drugs through a group purchasing 


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1 organization or other group purchasing ar2 rangement, except as permitted or pro3 vided pursuant to clause (ii). 

4 ‘‘(ii) The Secretary shall establish rea5 sonable exceptions to the requirement of 

6 clause (i)— 

7 ‘‘(I) with respect to a covered 

8 outpatient drug that is unavailable to 

9 be purchased through the program 

10 under this section due to a drug 

11 shortage problem, manufacturer non12 compliance, or any other reason be13 yond the hospital’s control; 

14 ‘‘(II) to facilitate generic substi15 tution when a generic covered out16 patient drug is available at a lower 

17 price; and 

18 ‘‘(III) to reduce in other ways 

19 the administrative burdens of man20 aging both inventories of drugs ob21 tained under this section and not 

22 under this section, if such exception 

23 does not create a duplicate discount 

24 problem in violation of subparagraph 


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1 (A) or a diversion problem in violation 

2 of subparagraph (B).’’. 

3 SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT 

4 DRUGS. 

5 (a) IN GENERAL.—Section 340B (42 U.S.C. 256b) 

6 is amended— 

7 (1) in subsection (b)— 

8 (A) by striking ‘‘In this section, the terms’’ 

9 and inserting the following: ‘‘In this section: 

10 ‘‘(1) IN GENERAL.—The terms’’; and 

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

12 paragraph: 

13 ‘‘(2) COVERED DRUG.—The term ‘covered 

14 drug’— 

15 ‘‘(A) means a covered outpatient drug (as 

16 defined in section 1927(k)(2) of the Social Se17 curity Act); and 

18 ‘‘(B) includes, notwithstanding the section 

19 1927(k)(3)(A) of such Act, a drug used in con20 nection with an inpatient or outpatient service 

21 provided by a hospital described in subpara22 graph (L), (M), (N), (R), (S), or (T) of sub23 section (a)(4) that is enrolled to participate in 

24 the drug discount program under this section.’’; 

25 and 


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1 (2) in paragraphs (5), (7), and (9) of sub2 section (a), by striking ‘‘outpatient’’ each place it 

3 appears. 

4 (b) MEDICAID CREDITS ON INPATIENT DRUGS.— 

5 Subsection (c) of section 340B (42 U.S.C. 256b(c)) is 

6 amended to read as follows: 

7 ‘‘(c) MEDICAID CREDITS ON INPATIENT DRUGS.— 

8 ‘‘(1) IN GENERAL.—For the cost reporting pe9 riod covered by the most recently filed Medicare cost 

10 report under title XVIII of the Social Security Act, 

11 a hospital described in subparagraph (L), (M), (N), 

12 (R), (S), or (T) of subsection (a)(4) and enrolled to 

13 participate in the drug discount program under this 

14 section shall provide to each State under its plan 

15 under title XIX of such Act— 

16 ‘‘(A) a credit on the estimated annual 

17 costs to such hospital of single source and inno18 vator multiple source drugs provided to Med19 icaid beneficiaries for inpatient use; and 

20 ‘‘(B) a credit on the estimated annual 

21 costs to such hospital of noninnovator multiple 

22 source drugs provided to Medicaid beneficiaries 

23 for inpatient use. 

24 ‘‘(2) AMOUNT OF CREDITS.— 


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1 ‘‘(A) SINGLE SOURCE AND INNOVATOR

2 MULTIPLE SOURCE DRUGS.—For purposes of 

3 paragraph (1)(A)— 

4 ‘‘(i) the credit under such paragraph 

5 shall be equal to the product of— 

6 ‘‘(I) the annual value of single 

7 source and innovator multiple source 

8 drugs purchased under this section by 

9 the hospital based on the drugs’ aver10 age manufacturer price; 

11 ‘‘(II) the estimated percentage of 

12 the hospital’s drug purchases attrib13 utable to Medicaid beneficiaries for in14 patient use; and 

15 ‘‘(III) the minimum rebate per16 centage described in section 

17 1927(c)(1)(B) of the Social Security 

18 Act; 

19 ‘‘(ii) the reference in clause (i)(I) to 

20 the annual value of single source and inno21 vator multiple source drugs purchased 

22 under this section by the hospital based on 

23 the drugs’ average manufacturer price 

24 shall be equal to the sum of— 


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1 ‘‘(I) the annual quantity of each 

2 single source and innovator multiple 

3 source drug purchased during the cost 

4 reporting period, multiplied by 

5 ‘‘(II) the average manufacturer 

6 price for that drug; 

7 ‘‘(iii) the reference in clause (i)(II) to 

8 the estimated percentage of the hospital’s 

9 drug purchases attributable to Medicaid 

10 beneficiaries for inpatient use; shall be 

11 equal to— 

12 ‘‘(I) the Medicaid inpatient drug 

13 charges as reported on the hospital’s 

14 most recently filed Medicare cost re15 port, divided by 

16 ‘‘(II) total drug charges reported 

17 on the cost report; and 

18 ‘‘(iv) the terms ‘single source drug’ 

19 and ‘innovator multiple source drug’ have 

20 the meanings given such terms in section 

21 1927(k)(7) of the Social Security Act. 

22 ‘‘(B) NONINNOVATOR MULTIPLE SOURCE

23 DRUGS.—For purposes of paragraph (1)(B)— 

24 ‘‘(i) the credit under such paragraph 

25 shall be equal to the product of— 


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1 ‘‘(I) the annual value of noninno2 vator multiple source drugs purchased 

3 under this section by the hospital 

4 based on the drugs’ average manufac5 turer price; 

6 ‘‘(II) the estimated percentage of 

7 the hospital’s drug purchases attrib8 utable to Medicaid beneficiaries for in9 patient use; and 

10 ‘‘(III) the applicable percentage 

11 as defined in section 1927(c)(3)(B) of 

12 the Social Security Act; 

13 ‘‘(ii) the reference in clause (i)(I) to 

14 the annual value of noninnovator multiple 

15 source drugs purchased under this section 

16 by the hospital based on the drugs’ average 

17 manufacturer price shall be equal to the 

18 sum of— 

19 ‘‘(I) the annual quantity of each 

20 noninnovator multiple source drug 

21 purchased during the cost reporting 

22 period, multiplied by 

23 ‘‘(II) the average manufacturer 

24 price for that drug; 


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1 ‘‘(iii) the reference in clause (i)(II) to 

2 the estimated percentage of the hospital’s 

3 drug purchases attributable to Medicaid 

4 beneficiaries for inpatient use shall be 

5 equal to— 

6 ‘‘(I) the Medicaid inpatient drug 

7 charges as reported on the hospital’s 

8 most recently filed Medicare cost re9 port, divided by 

10 ‘‘(II) total drug charges reported 

11 on the cost report; and 

12 ‘‘(iv) the term ‘noninnovator multiple 

13 source drug’ has the meaning given such 

14 term in section 1927(k)(7) of the Social 

15 Security Act. 

16 ‘‘(3) CALCULATION OF CREDITS.— 

17 ‘‘(A) IN GENERAL.—Each State calculates 

18 credits under paragraph (1) and informs hos19 pitals of amount under section 1927(a)(5)(D) 

20 of the Social Security Act. 

21 ‘‘(B) HOSPITAL PROVISION OF INFORMA22 TION.—Not later than 30 days after the date of 

23 the filing of the hospital’s most recently filed 

24 Medicare cost report, the hospital shall provide 

25 the State with the information described in 


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1 paragraphs (2)(A)(ii) and (2)(B)(ii). With re2 spect to each drug purchased during the cost 

3 reporting period, the hospital shall provide the 

4 dosage form, strength, package size, date of 

5 purchase and the number of units purchased. 

6 ‘‘(4) PAYMENT DEADLINE.—The credits pro7 vided by a hospital under paragraph (1) shall be 

8 paid within 60 days after receiving the information 

9 specified in paragraph (3)(A). 

10 ‘‘(5) OPT OUT.—A hospital shall not be re11 quired to provide the Medicaid credit required under 

12 paragraph (1) if it can demonstrate to the State 

13 that it will lose reimbursement under the State plan 

14 resulting from the extension of discounts to inpa15 tient drugs under subsection (b)(2) and that the loss 

16 of reimbursement will exceed the amount of the 

17 credit otherwise owed by the hospital. 

18 ‘‘(6) OFFSET AGAINST MEDICAL ASSISTANCE.— 

19 Amounts received by a State under this subsection 

20 in any quarter shall be considered to be a reduction 

21 in the amount expended under the State plan in the 

22 quarter for medical assistance for purposes of sec23 tion 1903(a)(1) of the Social Security Act.’’. 

24 (c) CONFORMING AMENDMENTS.—Section 1927 of 

25 the Social Security Act (42 U.S.C. 1396r–8) is amended— 


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1 (1) in subsection (a)(5)(A), by striking ‘‘covered 

2 outpatient drugs’’ and inserting ‘‘covered drugs (as 

3 defined in section 340B(b)(2) of the Public Health 

4 Service Act)’’; 

5 (2) in subsection (a)(5), by striking subpara6 graph (D) and inserting the following: 

7 ‘‘(D) STATE RESPONSIBILITY FOR CALCU8 LATING HOSPITAL CREDITS.—The State shall 

9 calculate the credits owed by the hospital under 

10 paragraph (1) of section 340B(c) of the Public 

11 Health Service Act and provide the hospital 

12 with both the amounts and an explanation of 

13 how it calculated the credits. In performing the 

14 calculations specified in paragraphs (2)(A)(ii) 

15 and (2)(B)(ii) of such section, the State shall 

16 use the average manufacturer price applicable 

17 to the calendar quarter in which the drug was 

18 purchased by the hospital.’’; and 

19 (3) in subsection (k)(1)— 

20 (A) in subparagraph (A), by striking ‘‘sub21 paragraph (B)’’ and inserting ‘‘subparagraphs 

22 (B) and (D)’’; and 

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

24 ‘‘(D) CALCULATION FOR COVERED

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1 fined in section 340B(b)(2) of the Public 

2 Health Service Act), the average manufacturer 

3 price shall be determined in accordance with 

4 subparagraph (A) except that, in the event a 

5 covered drug is not distributed to the retail 

6 pharmacy class of trade, it shall mean the aver7 age price paid to the manufacturer for the drug 

8 in the United States by wholesalers for drugs 

9 distributed to the acute care class of trade, 

10 after deducting customary prompt pay dis11 counts.’’. 

12 SEC. 2503. EFFECTIVE DATE. 

13 (a) IN GENERAL.—The amendments made by this 

14 subtitle shall take effect on July 1, 2010, and shall apply 

15 to drugs dispensed on or after such date. 

16 (b) EFFECTIVENESS.—The amendments made by 

17 this subtitle shall be effective, and shall be taken into ac18 count in determining whether a manufacturer is deemed 

19 to meet the requirements of section 340B(a) of the Public 

20 Health Service Act (42 U.S.C. 256b(a)) and of section 

21 1927(a)(5) of the Social Security Act (42 U.S.C. 1396r– 

22 8(a)(5)), notwithstanding any other provision of law. 


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1 Subtitle B—School-Based Health 

2 Clinics 

3 SEC. 2511. SCHOOL-BASED HEALTH CLINICS. 

4 (a) IN GENERAL.—Part Q of title III (42 U.S.C. 

5 280h et seq.) is amended by adding at the end the fol6 lowing: 

7 ‘‘SEC. 399Z–1. SCHOOL-BASED HEALTH CLINICS. 

8 ‘‘(a) PROGRAM.—The Secretary shall establish a 

9 school-based health clinic program consisting of awarding 

10 grants to eligible entities to support the operation of 

11 school-based health clinics (referred to in this section as 

12 ‘SBHCs’). 

13 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

14 this section, an entity shall— 

15 ‘‘(1) be an SBHC (as defined in subsection 

16 (l)(4)); and 

17 ‘‘(2) submit an application at such time, in 

18 such manner, and containing such information as 

19 the Secretary may require, including at a min20 imum— 

21 ‘‘(A) evidence that the applicant meets all 

22 criteria necessary to be designated as an 

23 SBHC; 

24 ‘‘(B) evidence of local need for the services 

25 to be provided by the SBHC; 


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1 ‘‘(C) an assurance that— 

2 ‘‘(i) SBHC services will be provided in 

3 accordance with Federal, State, and local 

4 laws governing— 

5 ‘‘(I) obtaining parental or guard6 ian consent; and 

7 ‘‘(II) patient privacy and student 

8 records, including section 264 of the 

9 Health Insurance Portability and Ac10 countability Act of 1996 and section 

11 444 of the General Education Provi12 sions Act; 

13 ‘‘(ii) the SBHC has established and 

14 maintains collaborative relationships with 

15 other health care providers in the 

16 catchment area of the SBHC; 

17 ‘‘(iii) the SBHC will provide on-site 

18 access during the academic day when 

19 school is in session and has an established 

20 network of support and access to services 

21 with backup health providers when the 

22 school or SBHC is closed; 

23 ‘‘(iv) the SBHC will be integrated into 

24 the school environment and will coordinate 

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1 sonnel and other community providers co2 located at the school; and 

3 ‘‘(v) the SBHC sponsoring facility as4 sumes all responsibility for the SBHC ad5 ministration, operations, and oversight; 

6 and 

7 ‘‘(D) such other information as the Sec8 retary may require. 

9 ‘‘(c) USE OF FUNDS.—Funds awarded under a grant 

10 under this section may be used for— 

11 ‘‘(1) providing training related to the provision 

12 of comprehensive primary health services and addi13 tional health services; 

14 ‘‘(2) the management and operation of SBHC 

15 programs; and 

16 ‘‘(3) the payment of salaries for health profes17 sionals and other appropriate SBHC personnel. 

18 ‘‘(d) CONSIDERATION OF NEED.—In determining the 

19 amount of a grant under this section, the Secretary shall 

20 take into consideration— 

21 ‘‘(1) the financial need of the SBHC; 

22 ‘‘(2) State, local, or other sources of funding 

23 provided to the SBHC; and 

24 ‘‘(3) other factors as determined appropriate by 

25 the Secretary. 


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1 ‘‘(e) PREFERENCES.—In awarding grants under this 

2 section, the Secretary shall give preference to SBHCs that 

3 have a demonstrated record of service to the following: 

4 ‘‘(1) A high percentage of medically under5 served children and adolescents. 

6 ‘‘(2) Communities or populations in which chil7 dren and adolescents have difficulty accessing health 

8 and mental health services. 

9 ‘‘(3) Communities with high percentages of chil10 dren and adolescents who are uninsured, under11 insured, or eligible for medical assistance under Fed12 eral or State health benefits programs (including ti13 tles XIX and XXI of the Social Security Act). 

14 ‘‘(f) MATCHING REQUIREMENT.—The Secretary may 

15 award a grant to an SBHC only if the SBHC agrees to 

16 provide, from non-Federal sources, an amount equal to 20 

17 percent of the amount of the grant (which may be pro18 vided in cash or in kind) to carry out the activities sup19 ported by the grant. 

20 ‘‘(g) SUPPLEMENT, NOT SUPPLANT.—The Secretary 

21 may award a grant to an SBHC under this section only 

22 if the SBHC demonstrates to the satisfaction of the Sec23 retary that funds received through the grant will be ex24 pended only to supplement, and not supplant, non-Federal 

25 and Federal funds otherwise available to the SBHC for 


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1 operation of the SBHC (including each activity described 

2 in paragraph (1) or (2) of subsection (c)). 

3 ‘‘(h) PAYOR OF LAST RESORT.—The Secretary may 

4 award a grant to an SBHC under this section only if the 

5 SBHC demonstrates to the satisfaction of the Secretary 

6 that funds received through the grant will not be expended 

7 for any activity to the extent that payment has been made, 

8 or can reasonably be expected to be made— 

9 ‘‘(1) under any insurance policy; 

10 ‘‘(2) under any Federal or State health benefits 

11 program (including titles XIX and XXI of the Social 

12 Security Act); or 

13 ‘‘(3) by an entity which provides health services 

14 on a prepaid basis. 

15 ‘‘(i) REGULATIONS REGARDING REIMBURSEMENT

16 FOR HEALTH SERVICES.—The Secretary shall issue regu17 lations regarding the reimbursement for health services 

18 provided by SBHCs to individuals eligible to receive such 

19 services through the program under this section, including 

20 reimbursement under any insurance policy or any Federal 

21 or State health benefits program (including titles XIX and 

22 XXI of the Social Security Act). 

23 ‘‘(j) TECHNICAL ASSISTANCE.—The Secretary shall 

24 provide (either directly or by grant or contract) technical 

25 and other assistance to SBHCs to assist such SBHCs to 


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1 meet the requirements of this section. Such assistance 

2 may include fiscal and program management assistance, 

3 training in fiscal and program management, operational 

4 and administrative support, and the provision of informa5 tion to the SBHCs of the variety of resources available 

6 under this title and how those resources can be best used 

7 to meet the health needs of the communities served by 

8 the SBHCs. 

9 ‘‘(k) EVALUATION; REPORT.—The Secretary shall— 

10 ‘‘(1) develop and implement a plan for evalu11 ating SBHCs and monitoring quality performances 

12 under the awards made under this section; and 

13 ‘‘(2) submit to the Congress on an annual basis 

14 a report on the program under this section. 

15 ‘‘(l) DEFINITIONS.—In this section: 

16 ‘‘(1) COMPREHENSIVE PRIMARY HEALTH SERV17 ICES.—The term ‘comprehensive primary health 

18 services’ means the core services offered by SBHCs, 

19 which shall include the following: 

20 ‘‘(A) PHYSICAL.—Comprehensive health 

21 assessments, diagnosis, and treatment of minor, 

22 acute, and chronic medical conditions and refer23 rals to, and follow-up for, specialty care. 

24 ‘‘(B) MENTAL HEALTH.—Mental health 

25 assessments, crisis intervention, counseling, 


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1 treatment, and referral to a continuum of serv2 ices including emergency psychiatric care, com3 munity support programs, inpatient care, and 

4 outpatient programs. 

5 ‘‘(C) OPTIONAL SERVICES.—Additional 

6 services, which may include oral health, social, 

7 and age-appropriate health education services, 

8 including nutritional counseling. 

9 ‘‘(2) MEDICALLY UNDERSERVED CHILDREN

10 AND ADOLESCENTS.—The term ‘medically under11 served children and adolescents’ means a population 

12 of children and adolescents who are residents of an 

13 area designated by the Secretary as an area with a 

14 shortage of personal health services and health in15 frastructure for such children and adolescents. 

16 ‘‘(3) SCHOOL-BASED HEALTH CLINIC.—The 

17 term ‘school-based health clinic’ means a health clin18 ic that— 

19 ‘‘(A) is located in, or is adjacent to, a 

20 school facility of a local educational agency; 

21 ‘‘(B) is organized through school, commu22 nity, and health provider relationships; 

23 ‘‘(C) is administered by a sponsoring facil24 ity; and 


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1 ‘‘(D) provides, at a minimum, comprehen2 sive primary health services during school hours 

3 to children and adolescents by health profes4 sionals in accordance with State and local laws 

5 and regulations, established standards, and 

6 community practice. 

7 ‘‘(4) SPONSORING FACILITY.—The term ‘spon8 soring facility’ is— 

9 ‘‘(A) a hospital; 

10 ‘‘(B) a public health department; 

11 ‘‘(C) a community health center; 

12 ‘‘(D) a nonprofit health care agency; 

13 ‘‘(E) a local educational agency; or 

14 ‘‘(F) a program administered by the In15 dian Health Service or the Bureau of Indian 

16 Affairs or operated by an Indian tribe or a trib17 al organization under the Indian Self-Deter18 mination and Education Assistance Act, a Na19 tive Hawaiian entity, or an urban Indian pro20 gram under title V of the Indian Health Care 

21 Improvement Act. 

22 ‘‘(m) AUTHORIZATION OF APPROPRIATIONS.—For 

23 purposes of carrying out this section, there are authorized 

24 to be appropriated $50,000,000 for fiscal year 2010 and 


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1 such sums as may be necessary for each of the fiscal years 

2 2011 through 2014.’’. 

3 (b) EFFECTIVE DATE.—The Secretary of Health and 

4 Human Services shall begin awarding grants under section 

5 399Z–1 of the Public Health Service Act, as added by sub6 section (b), not later than July 1, 2010, without regard 

7 to whether or not final regulations have been issued under 

8 section 399Z–1(h) of such Act. 

9 Subtitle C—National Medical 

10 Device Registry 

11 SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY. 

12 (a) REGISTRY.— 

13 (1) IN GENERAL.—Section 519 of the Federal 

14 Food, Drug, and Cosmetic Act (21 U.S.C. 360i) is 

15 amended— 

16 (A) by redesignating subsection (g) as sub17 section (h); and 

18 (B) by inserting after subsection (f) the 

19 following: 

20 ‘‘National Medical Device Registry 

21 ‘‘(g)(1) The Secretary shall establish a national med22 ical device registry (in this subsection referred to as the 

23 ‘registry’) to facilitate analysis of postmarket safety and 

24 outcomes data on each device that— 

25 ‘‘(A) is or has been used in or on a patient; and 


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1 ‘‘(B) is— 

2 ‘‘(i) a class III device; or 

3 ‘‘(ii) a class II device that is implantable, 

4 life-supporting, or life-sustaining. 

5 ‘‘(2) In developing the registry, the Secretary shall, 

6 in consultation with the Commissioner of Food and Drugs, 

7 the Administrator of the Centers for Medicare & Medicaid 

8 Services, the head of the Office of the National Coordi9 nator for Health Information Technology, and the Sec10 retary of Veterans Affairs, determine the best methods 

11 for— 

12 ‘‘(A) including in the registry, in a manner con13 sistent with subsection (f), appropriate information 

14 to identify each device described in paragraph (1) by 

15 type, model, and serial number or other unique iden16 tifier; 

17 ‘‘(B) validating methods for analyzing patient 

18 safety and outcomes data from multiple sources and 

19 for linking such data with the information included 

20 in the registry as described in subparagraph (A), in21 cluding, to the extent feasible, use of— 

22 ‘‘(i) data provided to the Secretary under 

23 other provisions of this chapter; and 

24 ‘‘(ii) information from public and private 

25 sources identified under paragraph (3); 


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1 ‘‘(C) integrating the activities described in this 

2 subsection with— 

3 ‘‘(i) activities under paragraph (3) of sec4 tion 505(k) (relating to active postmarket risk 

5 identification); 

6 ‘‘(ii) activities under paragraph (4) of sec7 tion 505(k) (relating to advanced analysis of 

8 drug safety data); and 

9 ‘‘(iii) other postmarket device surveillance 

10 activities of the Secretary authorized by this 

11 chapter; and 

12 ‘‘(D) providing public access to the data and 

13 analysis collected or developed through the registry 

14 in a manner and form that protects patient privacy 

15 and proprietary information and is comprehensive, 

16 useful, and not misleading to patients, physicians, 

17 and scientists. 

18 ‘‘(3)(A) To facilitate analyses of postmarket safety 

19 and patient outcomes for devices described in paragraph 

20 (1), the Secretary shall, in collaboration with public, aca21 demic, and private entities, develop methods to— 

22 ‘‘(i) obtain access to disparate sources of 

23 patient safety and outcomes data, including— 

24 ‘‘(I) Federal health-related electronic 

25 data (such as data from the Medicare proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02058 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gram under title XVIII of the Social Secu2 rity Act or from the health systems of the 

3 Department of Veterans Affairs); 

4 ‘‘(II) private sector health-related 

5 electronic data (such as pharmaceutical 

6 purchase data and health insurance claims 

7 data); and 

8 ‘‘(III) other data as the Secretary 

9 deems necessary to permit postmarket as10 sessment of device safety and effectiveness; 

11 and 

12 ‘‘(ii) link data obtained under clause (i) 

13 with information in the registry. 

14 ‘‘(B) In this paragraph, the term ‘data’ refers to in15 formation respecting a device described in paragraph (1), 

16 including claims data, patient survey data, standardized 

17 analytic files that allow for the pooling and analysis of 

18 data from disparate data environments, electronic health 

19 records, and any other data deemed appropriate by the 

20 Secretary. 

21 ‘‘(4) Not later than 36 months after the date of the 

22 enactment of this subsection, the Secretary shall promul23 gate regulations for establishment and operation of the 

24 registry under paragraph (1). Such regulations— 


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1 ‘‘(A)(i) in the case of devices that are described 

2 in paragraph (1) and sold on or after the date of the 

3 enactment of this subsection, shall require manufac4 turers of such devices to submit information to the 

5 registry, including, for each such device, the type, 

6 model, and serial number or, if required under sub7 section (f), other unique device identifier; and 

8 ‘‘(ii) in the case of devices that are described in 

9 paragraph (1) and sold before such date, may re10 quire manufacturers of such devices to submit such 

11 information to the registry, if deemed necessary by 

12 the Secretary to protect the public health; 

13 ‘‘(B) shall establish procedures— 

14 ‘‘(i) to permit linkage of information sub15 mitted pursuant to subparagraph (A) with pa16 tient safety and outcomes data obtained under 

17 paragraph (3); and 

18 ‘‘(ii) to permit analyses of linked data; 

19 ‘‘(C) may require device manufacturers to sub20 mit such other information as is necessary to facili21 tate postmarket assessments of device safety and ef22 fectiveness and notification of device risks; 

23 ‘‘(D) shall establish requirements for regular 

24 and timely reports to the Secretary, which shall be 

25 included in the registry, concerning adverse event 


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1 trends, adverse event patterns, incidence and preva2 lence of adverse events, and other information the 

3 Secretary determines appropriate, which may include 

4 data on comparative safety and outcomes trends; 

5 and 

6 ‘‘(E) shall establish procedures to permit public 

7 access to the information in the registry in a manner 

8 and form that protects patient privacy and propri9 etary information and is comprehensive, useful, and 

10 not misleading to patients, physicians, and sci11 entists. 

12 ‘‘(5) To carry out this subsection, there are author13 ized to be appropriated such sums as may be necessary 

14 for fiscal years 2010 and 2011.’’. 

15 (2) EFFECTIVE DATE.—The Secretary of 

16 Health and Human Services shall establish and 

17 begin implementation of the registry under section 

18 519(g) of the Federal Food, Drug, and Cosmetic 

19 Act, as added by paragraph (1), by not later than 

20 the date that is 36 months after the date of the en21 actment of this Act, without regard to whether or 

22 not final regulations to establish and operate the 

23 registry have been promulgated by such date. 

24 (3) CONFORMING AMENDMENT.—Section 

25 303(f)(1)(B)(ii) of the Federal Food, Drug, and 


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1 Cosmetic Act (21 U.S.C. 333(f)(1)(B)(ii)) is amend2 ed by striking ‘‘519(g)’’ and inserting ‘‘519(h)’’. 

3 (b) ELECTRONIC EXCHANGE AND USE IN CERTIFIED

4 ELECTRONIC HEALTH RECORDS OF UNIQUE DEVICE

5 IDENTIFIERS.— 

6 (1) RECOMMENDATIONS.—The HIT Policy 

7 Committee established under section 3002 of the 

8 Public Health Service Act (42 U.S.C. 300jj–12) 

9 shall recommend to the head of the Office of the Na10 tional Coordinator for Health Information Tech11 nology standards, implementation specifications, and 

12 certification criteria for the electronic exchange and 

13 use in certified electronic health records of a unique 

14 device identifier for each device described in section 

15 519(g)(1) of the Federal Food, Drug, and Cosmetic 

16 Act, as added by subsection (a). 

17 (2) STANDARDS, IMPLEMENTATION CRITERIA, 

18 AND CERTIFICATION CRITERIA.—The Secretary of 

19 the Health Human Services, acting through the 

20 head of the Office of the National Coordinator for 

21 Health Information Technology, shall adopt stand22 ards, implementation specifications, and certification 

23 criteria for the electronic exchange and use in cer24 tified electronic health records of a unique device 

25 identifier for each device described in paragraph (1), 


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1 if such an identifier is required by section 519(f) of 

2 the Federal Food, Drug, and Cosmetic Act (21 

3 U.S.C. 360i(f)) for the device. 

4 Subtitle D—Grants for Comprehen5 sive Programs to Provide Edu6 cation to Nurses and Create a 

7 Pipeline to Nursing 

8 SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM. 

9 (a) PURPOSES.—It is the purpose of this section to 

10 authorize grants to— 

11 (1) address the projected shortage of nurses by 

12 funding comprehensive programs to create a career 

13 ladder to nursing (including Certified Nurse Assist14 ants, Licensed Practical Nurses, Licensed Vocational 

15 Nurses, and Registered Nurses) for incumbent ancil16 lary health care workers; 

17 (2) increase the capacity for educating nurses 

18 by increasing both nurse faculty and clinical oppor19 tunities through collaborative programs between 

20 staff nurse organizations, health care providers, and 

21 accredited schools of nursing; and 

22 (3) provide training programs through edu23 cation and training organizations jointly adminis24 tered by health care providers and health care labor 

25 organizations or other organizations representing 


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1 staff nurses and frontline health care workers, work2 ing in collaboration with accredited schools of nurs3 ing and academic institutions. 

4 (b) GRANTS.—Not later than 6 months after the date 

5 of the enactment of this Act, the Secretary of Labor (re6 ferred to in this section as the ‘‘Secretary’’) shall establish 

7 a partnership grant program to award grants to eligible 

8 entities to carry out comprehensive programs to provide 

9 education to nurses and create a pipeline to nursing for 

10 incumbent ancillary health care workers who wish to ad11 vance their careers, and to otherwise carry out the pur12 poses of this section. 

13 (c) ELIGIBILITY.—To be eligible for a grant under 

14 this section, an entity shall be— 

15 (1) a health care entity that is jointly adminis16 tered by a health care employer and a labor union 

17 representing the health care employees of the em18 ployer and that carries out activities using labor 

19 management training funds as provided for under 

20 section 302(c)(6) of the Labor Management Rela21 tions Act, 1947 (29 U.S.C. 186(c)(6)); 

22 (2) an entity that operates a training program 

23 that is jointly administered by— 


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1 (A) one or more health care providers or 

2 facilities, or a trade association of health care 

3 providers; and 

4 (B) one or more organizations which rep5 resent the interests of direct care health care 

6 workers or staff nurses and in which the direct 

7 care health care workers or staff nurses have 

8 direct input as to the leadership of the organi9 zation; 

10 (3) a State training partnership program that 

11 consists of nonprofit organizations that include equal 

12 participation from industry, including public or pri13 vate employers, and labor organizations including 

14 joint labor-management training programs, and 

15 which may include representatives from local govern16 ments, worker investment agency one-stop career 

17 centers, community-based organizations, community 

18 colleges, and accredited schools of nursing; or 

19 (4) a school of nursing (as defined in section 

20 801 of the Public Health Service Act (42 U.S.C. 

21 296)). 

22 (d) ADDITIONAL REQUIREMENTS FOR HEALTH CARE

23 EMPLOYER DESCRIBED IN SUBSECTION (c).—To be eligi24 ble for a grant under this section, a health care employer 

25 described in subsection (c) shall demonstrate that it— 


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1 (1) has an established program within their fa2 cility to encourage the retention of existing nurses; 

3 (2) provides wages and benefits to its nurses 

4 that are competitive for its market or that have been 

5 collectively bargained with a labor organization; and 

6 (3) supports programs funded under this sec7 tion through 1 or more of the following: 

8 (A) The provision of paid leave time and 

9 continued health coverage to incumbent health 

10 care workers to allow their participation in 

11 nursing career ladder programs, including cer12 tified nurse assistants, licensed practical nurses, 

13 licensed vocational nurses, and registered 

14 nurses. 

15 (B) Contributions to a joint labor-manage16 ment training fund which administers the pro17 gram involved. 

18 (C) The provision of paid release time, in19 centive compensation, or continued health cov20 erage to staff nurses who desire to work full- or 

21 part-time in a faculty position. 

22 (D) The provision of paid release time for 

23 staff nurses to enable them to obtain a bachelor 

24 of science in nursing degree, other advanced 


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1 nursing degrees, specialty training, or certifi2 cation program. 

3 (E) The payment of tuition assistance 

4 which is managed by a joint labor-management 

5 training fund or other jointly administered pro6 gram. 

7 (e) OTHER REQUIREMENTS.— 

8 (1) MATCHING REQUIREMENT.— 

9 (A) IN GENERAL.—The Secretary may not 

10 make a grant under this section unless the ap11 plicant involved agrees, with respect to the costs 

12 to be incurred by the applicant in carrying out 

13 the program under the grant, to make available 

14 non-Federal contributions (in cash or in kind 

15 under subparagraph (B)) toward such costs in 

16 an amount equal to not less than $1 for each 

17 $1 of Federal funds provided in the grant. Such 

18 contributions may be made directly or through 

19 donations from public or private entities, or 

20 may be provided through the cash equivalent of 

21 paid release time provided to incumbent worker 

22 students. 

23 (B) DETERMINATION OF AMOUNT OF NON24 FEDERAL CONTRIBUTION.—Non-Federal con25 tributions required in subparagraph (A) may be 


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1 in cash or in kind (including paid release time), 

2 fairly evaluated, including equipment or services 

3 (and excluding indirect or overhead costs). 

4 Amounts provided by the Federal Government, 

5 or services assisted or subsidized to any signifi6 cant extent by the Federal Government, may 

7 not be included in determining the amount of 

8 such non-Federal contributions. 

9 (2) REQUIRED COLLABORATION.—Entities car10 rying out or overseeing programs carried out with 

11 assistance provided under this section shall dem12 onstrate collaboration with accredited schools of 

13 nursing which may include community colleges and 

14 other academic institutions providing associate, 

15 bachelor’s, or advanced nursing degree programs or 

16 specialty training or certification programs. 

17 (f) USE OF FUNDS.—Amounts awarded to an entity 

18 under a grant under this section shall be used for the fol19 lowing: 

20 (1) To carry out programs that provide edu21 cation and training to establish nursing career lad22 ders to educate incumbent health care workers to be23 come nurses (including certified nurse assistants, li24 censed practical nurses, licensed vocational nurses, 


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1 and registered nurses). Such programs shall include 

2 one or more of the following: 

3 (A) Preparing incumbent workers to return 

4 to the classroom through English -as-a-second 

5 language education, GED education, pre-college 

6 counseling, college preparation classes, and sup7 port with entry level college classes that are a 

8 prerequisite to nursing. 

9 (B) Providing tuition assistance with pref10 erence for dedicated cohort classes in commu11 nity colleges, universities, accredited schools of 

12 nursing with supportive services including tu13 toring and counseling. 

14 (C) Providing assistance in preparing for 

15 and meeting all nursing licensure tests and re16 quirements. 

17 (D) Carrying out orientation and 

18 mentorship programs that assist newly grad19 uated nurses in adjusting to working at the 

20 bedside to ensure their retention 

21 postgraduation, and ongoing programs to sup22 port nurse retention. 

23 (E) Providing stipends for release time and 

24 continued health care coverage to enable incumVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02069 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 bent health care workers to participate in these 

2 programs. 

3 (2) To carry out programs that assist nurses in 

4 obtaining advanced degrees and completing specialty 

5 training or certification programs and to establish 

6 incentives for nurses to assume nurse faculty posi7 tions on a part-time or full-time basis. Such pro8 grams shall include one or more of the following: 

9 (A) Increasing the pool of nurses with ad10 vanced degrees who are interested in teaching 

11 by funding programs that enable incumbent 

12 nurses to return to school. 

13 (B) Establishing incentives for advanced 

14 degree bedside nurses who wish to teach in 

15 nursing programs so they can obtain a leave 

16 from their bedside position to assume a full- or 

17 part-time position as adjunct or full-time fac18 ulty without the loss of salary or benefits. 

19 (C) Collaboration with accredited schools 

20 of nursing which may include community col21 leges and other academic institutions providing 

22 associate, bachelor’s, or advanced nursing de23 gree programs, or specialty training or certifi24 cation programs, for nurses to carry out innovaVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02070 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tive nursing programs which meet the needs of 

2 bedside nursing and health care providers. 

3 (g) PREFERENCE.—In awarding grants under this 

4 section the Secretary shall give preference to programs 

5 that— 

6 (1) provide for improving nurse retention; 

7 (2) provide for improving the diversity of the 

8 new nurse graduates to reflect changes in the demo9 graphics of the patient population; 

10 (3) provide for improving the quality of nursing 

11 education to improve patient care and safety; 

12 (4) have demonstrated success in upgrading in13 cumbent health care workers to become nurses or 

14 which have established effective programs or pilots 

15 to increase nurse faculty; or 

16 (5) are modeled after or affiliated with such 

17 programs described in paragraph (4). 

18 (h) EVALUATION.— 

19 (1) PROGRAM EVALUATIONS.—An entity that 

20 receives a grant under this section shall annually 

21 evaluate, and submit to the Secretary a report on, 

22 the activities carried out under the grant and the 

23 outcomes of such activities. Such outcomes may in24 clude— 


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1 (A) an increased number of incumbent 

2 workers entering an accredited school of nurs3 ing and in the pipeline for nursing programs; 

4 (B) an increasing number of graduating 

5 nurses and improved nurse graduation and li6 censure rates; 

7 (C) improved nurse retention; 

8 (D) an increase in the number of staff 

9 nurses at the health care facility involved; 

10 (E) an increase in the number of nurses 

11 with advanced degrees in nursing; 

12 (F) an increase in the number of nurse 

13 faculty; 

14 (G) improved measures of patient quality 

15 (which may include staffing ratios of nurses, 

16 patient satisfaction rates, patient safety meas17 ures); and 

18 (H) an increase in the diversity of new 

19 nurse graduates relative to the patient popu20 lation. 

21 (2) GENERAL REPORT.—Not later than 2 years 

22 after the date of the enactment of this Act, and an23 nually thereafter, the Secretary of Labor shall, using 

24 data and information from the reports received 

25 under paragraph (1), submit to the Congress a reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02072 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 port concerning the overall effectiveness of the grant 

2 program carried out under this section. 

3 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated to carry out this section 

5 such sums as may be necessary. 

6 Subtitle E—States Failing To Ad7 here to Certain Employment Ob8 ligations 

9 SEC. 2541. LIMITATION ON FEDERAL FUNDS. 

10 A State is eligible for Federal funds under the provi11 sions of the Public Health Service Act (42 U.S.C. 201 et 

12 seq.) only if the State— 

13 (1) agrees to be subject in its capacity as an 

14 employer to each obligation under subdivision A of 

15 this division and the amendments made by such sub16 division applicable to persons in their capacity as an 

17 employer; and 

18 (2) assures that all political subdivisions in the 

19 State will do the same. 


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1 Subtitle F—Standards for Accessi2 bility to Medical Equipment for 

3 Individuals With Disabilities. 

4 SEC. 2541. ACCESS FOR INDIVIDUALS WITH DISABILITIES. 

5 Title V of the Rehabilitation Act of 1973 (29 U.S.C. 

6 791 et seq.) is amended by adding at the end of the fol7 lowing: 

8 ‘‘SEC. 510. STANDARDS FOR ACCESSIBILITY OF MEDICAL 

9 DIAGNOSTIC EQUIPMENT. 

10 ‘‘(a) STANDARDS.—Not later than 9 months after the 

11 date of enactment of the America’s Affordable Health 

12 Choices Act of 2009, the Architectural and Transportation 

13 Barriers Compliance Board shall issue guidelines setting 

14 forth the minimum technical criteria for medical diag15 nostic equipment used in (or in conjunction with) physi16 cian’s offices, clinics, emergency rooms, hospitals, and 

17 other medical settings. The guidelines shall ensure that 

18 such equipment is accessible to, and usable by, individuals 

19 with disabilities, including provisions to ensure inde20 pendent entry to, use of, and exit from the equipment by 

21 such individuals to the maximum extent possible. 

22 ‘‘(b) MEDICAL DIAGNOSTIC EQUIPMENT COV23 ERED.—The guidelines issued under subsection (a) for 

24 medical diagnostic equipment shall apply to equipment 

25 that includes examination tables, examination chairs (inVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02074 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cluding chairs used for eye examinations or procedures, 

2 and dental examinations or procedures), weight scales, 

3 mammography equipment, x-ray machines, and other 

4 equipment commonly used for diagnostic or examination 

5 purposes by health professionals. 

6 ‘‘(c) INTERIM STANDARDS.—Until the date on which 

7 final regulations are issued under subsection (d), pur8 chases of examination tables, weight scales, and mammog9 raphy equipment and used in (or in conjunction with) 

10 medical settings described in subsection (a), shall adhere 

11 to the following interim accessibility requirements: 

12 ‘‘(1) Examination tables shall be height-adjust13 able between a range of at least 18 inches to 37 

14 inches. 

15 ‘‘(2) Weight scales shall be capable of weighing 

16 individuals who remain seated in a wheelchair or 

17 other personal mobility aid. 

18 ‘‘(3) Mammography machines and equipment 

19 shall be capable of being used by individuals in a 

20 standing, seated, or recumbent position, including 

21 individuals who remain seated in a wheelchair or 

22 other personal mobility aid. 

23 ‘‘(d) REGULATIONS.—Not later than 6 months after 

24 the date of the issuance of the guidelines under subsection 

25 (a), each appropriate Federal agency authorized to proVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02075 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mulgate regulations under this Act or under the Ameri2 cans with Disabilities Act shall— 

3 ‘‘(1) prescribe regulations in an accessible for4 mat as necessary to carry out the provisions of such 

5 Act and section 504 of this Act that include accessi6 bility standards that are consistent with the guide7 lines issued under subsection (a); and 

8 ‘‘(2) ensure that health care providers and 

9 health care plans covered by the America’s Afford10 able Health Choices Act of 2009 meet the require11 ments of the Americans with Disabilities Act and 

12 section 504, including provisions ensuring that indi13 viduals with disabilities receive equal access to all 

14 aspects of the health care delivery system. 

15 ‘‘(e) REVIEW AND AMEND.—The Architectural and 

16 Transportation Barriers Compliance Board shall periodi17 cally review and, as appropriate, amend the guidelines as 

18 prescribed under subsection (a). Not later than 6 months 

19 after the date of the issuance of such revised guidelines, 

20 revised regulations consistent with such guidelines shall be 

21 promulgated in an accessible format by the appropriate 

22 Federal agencies described in subsection (d).’’. 

23 Subtitle G—Other Grant Programs 

24 SEC. 2551. REDUCING STUDENT-TO-SCHOOL NURSE RATIOS. 

25 (a) DEMONSTRATION GRANTS.— 


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1 (1) IN GENERAL.—The Secretary of Education, 

2 in consultation with the Secretary of Health and 

3 Human Services and the Director of the Centers for 

4 Disease Control and Prevention, may make dem5 onstration grants to eligible local education agencies 

6 for the purpose of reducing the student-to-school 

7 nurse ratio in public elementary and secondary 

8 schools. 

9 (2) SPECIAL CONSIDERATION.—In awarding 

10 grants under this section, the Secretary of Edu11 cation shall give special consideration to applications 

12 submitted by high-need local educational agencies 

13 that demonstrate the greatest need for new or addi14 tional nursing services among children in the public 

15 elementary and secondary schools served by the 

16 agency, in part by providing information on current 

17 ratios of students to school nurses. 

18 (3) MATCHING FUNDS.—The Secretary of Edu19 cation may require recipients of grants under this 

20 subsection to provide matching funds from non-Fed21 eral sources, and shall permit the recipients to 

22 match funds in whole or in part with in-kind con23 tributions. 

24 (b) REPORT.—Not later than 24 months after the 

25 date on which assistance is first made available to local 


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1 educational agencies under this section, the Secretary of 

2 Education shall submit to the Congress a report on the 

3 results of the demonstration grant program carried out 

4 under this section, including an evaluation of the effective5 ness of the program in improving the student-to-school 

6 nurse ratios described in subsection (a) and an evaluation 

7 of the impact of any resulting enhanced health of students 

8 on learning. 

9 (c) DEFINITIONS.—For purposes of this section: 

10 (1) The terms ‘‘elementary school’’, ‘‘local edu11 cational agency’’, and ‘‘secondary school’’ have the 

12 meanings given to those terms in section 9101 of the 

13 Elementary and Secondary Education Act of 1965 

14 (20 U.S.C. 7801). 

15 (2) The term ‘‘eligible local educational agency’’ 

16 means a local educational agency in which the stu17 dent-to-school nurse ratio in the public elementary 

18 and secondary schools served by the agency is 750 

19 or more students to every school nurse. 

20 (3) The term ‘‘high-need local educational agen21 cy’’ means a local educational agency— 

22 (A) that serves not fewer than 10,000 chil23 dren from families with incomes below the pov24 erty line; or 


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1 (B) for which not less than 20 percent of 

2 the children served by the agency are from fam3 ilies with incomes below the poverty line. 

4 (4) The term ‘‘nurse’’ means a licensed nurse, 

5 as defined under State law. 

6 (d) AUTHORIZATION OF APPROPRIATIONS.—To carry 

7 out this section, there are authorized to be appropriated 

8 such sums as may be necessary for each of the fiscal years 

9 2010 through 2014. 

10 SEC. 2552. WELLNESS PROGRAM GRANTS. 

11 (a) ALLOWANCE OF GRANT.— 

12 (1) IN GENERAL.—For purposes of this section, 

13 the Secretary of Labor shall award wellness grants 

14 as determined under this section. Wellness program 

15 grants shall be awarded to qualified employers for 

16 any plan year in an amount equal to 50 percent of 

17 the costs paid or incurred by the employer in con18 nection with a qualified wellness program during the 

19 plan year. For purposes of the preceding sentence, 

20 in the case of any qualified wellness program offered 

21 as part of an employment-based health plan, only 

22 costs attributable to the qualified wellness program 

23 and not to the health plan, or health insurance cov24 erage offered in connection with such a plan, may be 

25 taken into account. 


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1 (2) LIMITATION.—The amount of the grant al2 lowed under paragraph (1) for any plan year shall 

3 not exceed the sum of— 

4 (A) the product of $200 and the number 

5 of employees of the employer not in excess of 

6 200 employees; plus 

7 (B) the product of $100 and the number 

8 of employees of the employer in excess of 200 

9 employees. 

10 The wellness grants awarded to an employer under 

11 this section shall be for up to 3 years and shall not 

12 exceed $50,000. 

13 (b) QUALIFIED WELLNESS PROGRAM.—For purposes 

14 of this section: 

15 (1) QUALIFIED WELLNESS PROGRAM.—The 

16 term ‘‘qualified wellness program’’ means a program 

17 that — 

18 (A) includes any 3 wellness components de19 scribed in subsection (c); and 

20 (B) is be certified by the Secretary of 

21 Labor, in coordination with the Health Choices 

22 Commissioner and the Director of the Center 

23 for Disease Control and Prevention, as a quali24 fied wellness program under this section. 


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1 (2) PROGRAMS MUST BE CONSISTENT WITH RE2 SEARCH AND BEST PRACTICES.— 

3 (A) IN GENERAL.—The Secretary of Labor 

4 shall not certify a program as a qualified 

5 wellness program unless the program— 

6 (i) is newly established or in existence 

7 on the date of enactment of this Act but 

8 not yet meeting the requirements of this 

9 section; 

10 (ii) is consistent with evidenced-based 

11 researched and best practices, as identified 

12 by persons with expertise in employer 

13 health promotion and wellness programs; 

14 (iii) includes multiple, evidenced-based 

15 strategies which are based on the existing 

16 and emerging research and careful sci17 entific reviews, including the Guide to 

18 Community Preventative Services, the 

19 Guide to Clinical Preventative Services, 

20 and the National Registry for Effective 

21 Programs, and 

22 (iv) includes strategies which focus on 

23 prevention and support for employee popu24 lations at risk of poor health outcomes. 


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1 (B) PERIODIC UPDATING AND REVIEW.— 

2 The Secretary of Labor, in consultation with 

3 other appropriate agencies shall establish proce4 dures for periodic review, evaluation, and up5 date of the programs under this subsection. 

6 (3) HEALTH LITERACY/ACCESSIBILITY.—The 

7 Secretary of Labor shall, as part of the certification 

8 process:— 

9 (A) ensure that employers make the pro10 grams culturally competent. physically and pro11 grammatically accessible (including for individ12 uals with disabilities), and appropriate to the 

13 health literacy needs of the employees covered 

14 by the programs; 

15 (B) require a health literacy component to 

16 provide special assistance and materials to em17 ployees with low literacy skills, limited English 

18 and from under-served populations; and 

19 (C) require the Secretary of Labor, in con20 sultation with Secretary of Health and Human 

21 Services, to compile and disseminate to em22 ployer health plans info on model health literacy 

23 curricula, instructional programs, and effective 

24 intervention strategies. 


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1 (c) WELLNESS PROGRAM COMPONENTS.—For pur2 poses of this section, the wellness program components de3 scribed in this subsection are the following: 

4 (1) HEALTH AWARENESS COMPONENT.—A 

5 health awareness component which provides for the 

6 following: 

7 (A) HEALTH EDUCATION.—The dissemina8 tion of health information which addresses the 

9 specific needs and health risks of employees. 

10 (B) HEALTH SCREENINGS.—The oppor11 tunity for periodic screenings for health prob12 lems and referrals for appropriate follow up 

13 measures. 

14 (2) EMPLOYEE ENGAGEMENT COMPONENT.— 

15 An employee engagement component which provides 

16 for the active engagement of employees in worksite 

17 wellness programs through worksite assessments and 

18 program planning, onsite delivery, evaluation, and 

19 improvement efforts. 

20 (3) BEHAVIORAL CHANGE COMPONENT.—A be21 havioral change component which provides for alter22 ing employee lifestyles to encourage healthy living 

23 through counseling, seminars, on-line programs, or 

24 self-help materials which provide technical assistance 


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1 and problem solving skills. such component may in2 clude programs relating to— 

3 (A) tobacco use; 

4 (B) obesity; 

5 (C) stress management; 

6 (D) physical fitness; 

7 (E) nutrition; 

8 (F) substance abuse; 

9 (G) depression; and 

10 (H) mental health promotion (including 

11 anxiety). 

12 (4) SUPPORTIVE ENVIRONMENT COMPONENT.— 

13 A supportive environment component which includes 

14 the following: 

15 (A) ON-SITE POLICIES.—Policies and serv16 ices at the worksite which promote a healthy 

17 lifestyle, including policies relating to— 

18 (i) tobacco use at the worksite; 

19 (ii) the nutrition of food available at 

20 the worksite through cafeterias and vend21 ing options; 

22 (iii) minimizing stress and promoting 

23 positive mental health in the workplace; 

24 and 


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1 (iv) the encouragement of physical ac2 tivity before, during, and after work hours. 

3 (d) PARTICIPATION REQUIREMENT.—No grant shall 

4 be allowed under subsection (a) unless the Secretary of 

5 Labor in consultation with other appropriate agencies, cer6 tifies, as a part of any certification described in subsection 

7 (b), that each wellness program component of the qualified 

8 wellness program— 

9 (1) shall be available to all employees of the 

10 employer; 

11 (2) shall not mandate participation by employ12 ees; and 

13 (3) shall not require participation by individual 

14 employees as a condition to obtain a premium dis15 count, rebate, deductible reduction, or other finan16 cial reward. 

17 (e) PRIVACY PROTECTIONS.—Any employee health 

18 information collected through participation in an employer 

19 wellness program shall be confidential and available only 

20 to appropriately trained health professions as defined by 

21 the Secretary of Labor. Employers or employees of the 

22 employer sponsoring a wellness program shall have no ac23 cess to employee health data. All entities offering em24 ployer-sponsored wellness programs shall be considered 

25 ‘‘business associates’’ pursuant to the American ReinvestVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02085 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ment and Recovery Act and must comply with privacy pro2 tections restricting the release of personal medical infor3 mation. 

4 (f) DEFINITIONS AND SPECIAL RULES.—For pur5 poses of this section: 

6 (1) QUALIFIED EMPLOYER.—The term ‘‘quali7 fied employer’’ means an employer that offers a 

8 qualified health benefits plan to every employee (in9 cluding each employee required to be offered cov10 erage under a qualified health benefits plan under 

11 subtitle B of title III of subdivision A), and meets 

12 the health coverage participation requirements as de13 fined in section 312. 

14 (2) CERTAIN COSTS NOT INCLUDED.—Costs 

15 paid or incurred by an employer for food or health 

16 insurance shall not be taken into account under sub17 section (a). 

18 (g) OUTREACH.— 

19 (1) IN GENERAL.—The Secretary of the Labor, 

20 in conjunction with other appropriate agencies and 

21 members of the business community, shall institute 

22 an outreach program to inform businesses about the 

23 availability of the wellness program grant as well as 

24 to educate businesses on how to develop programs 

25 according to recognized and promising practices and 


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1 on how to measure the success of implemented pro2 grams. 

3 (h) EFFECTIVE DATE.—This section shall take effect 

4 on January 1, 2013. 

5 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated such sums as are nec7 essary to carry out this section. 

8 SEC. 2553. HEALTH PROFESSIONS TRAINING FOR DIVER9 SITY PROGRAMS. 

10 Section 171 of the Workforce Investment Act of 1998 

11 (29 U.S.C. 2916) is amended by adding at the end the 

12 following: 

13 ‘‘(f) HEALTH PROFESSIONS TRAINING FOR DIVER14 SITY PROGRAM.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall make 

16 available 20 grants of no more than $1,000,000 an17 nually to nonprofit organizations for the purposes of 

18 providing workforce development training program 

19 for those who are currently employed in the health 

20 care workforce. 

21 ‘‘(2) ELIGIBILITY.—For the purposes of pro22 viding assistance and services under the program es23 tablished in this subsection, grants are to be award24 ed to Area Health Education Centers or similar non25 profit organizations involved in the development and 


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1 implementation of health care workforce develop2 ment programs and that— 

3 ‘‘(A) have a formal affiliation with a hos4 pital or community health center, and institu5 tion of higher education as defined by section 

6 101 of the Higher Education Act of 1965; 

7 ‘‘(B) have a history of providing program 

8 services to minority populations; and 

9 ‘‘(C) provide workforce development pro10 grams to low-income persons, veterans, or 

11 urban and rural underserved communities.’’. 

12 Subtitle H—Long-term Care and 

13 Family Caregiver Support 

14 SEC. 2561. LONG-TERM CARE AND FAMILY CAREGIVER SUP15 PORT. 

16 (a) AMENDMENTS TO THE OLDER AMERICANS ACT

17 OF 1965.— 

18 (1) PROMOTION OF DIRECT CARE WORK19 FORCE.—Section 202(b)(1) of the Older Americans 

20 Act of 1965 (42 U.S.C. 3012(b)(1)) is amended by 

21 inserting before the semicolon the following: ‘‘, and, 

22 in carrying out the purposes of this paragraph, shall 

23 make recommendations to other Federal entities re24 garding appropriate and effective means of identi25 fying, promoting, and implementing investments in 


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1 the direct care workforce necessary to meet the 

2 growing demand for long-term health services and 

3 supports and assisting States in developing a com4 prehensive state workforce development plans with 

5 respect to such workforce including efforts to sys6 tematically assess, track, and report on workforce 

7 adequacy and capacity’’. 

8 (2) PERSONAL CARE ATTENDANT WORKFORCE

9 ADVISORY PANEL.—Section 202 of such Act (42 

10 U.S.C. 3012) is amended by adding at the end the 

11 following new subsection: 

12 ‘‘(g)(1) The Assistant Secretary shall establish a Per13 sonal Care Attendant Workforce Advisory Panel and pilot 

14 program to improve working conditions and training for 

15 long term care workers, including home health aides, cer16 tified nurse aides, and personal care attendants. 

17 ‘‘(2) The Panel shall include representatives from— 

18 ‘‘(A) relevant health care agencies and facilities 

19 (including personal or home care agencies, home 

20 health care agencies, nursing homes and residential 

21 care facilities); 

22 ‘‘(B) the disability community; 

23 ‘‘(C) the nursing community; 

24 ‘‘(D) direct care workers (which may include 

25 unions and national organizations); 


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1 ‘‘(E) older individuals and family caregivers; 

2 ‘‘(F) State and federal health care entities; and 

3 ‘‘(G) experts in workforce development and 

4 adult learning. 

5 ‘‘(3) Within one year after the establishment of the 

6 Panel, the Panel shall submit a report to the Assistant 

7 Secretary articulating core competencies for eligible per8 sonal or home care aides necessary to successfully provide 

9 long-term services and supports to eligible consumers, as 

10 well as recommended training curricula and resources. 

11 ‘‘(4) Within 180 days after receipt by the Assistant 

12 Secretary of the report under paragraph (3), the Assistant 

13 Secretary shall establish a 3-year demonstration program 

14 in 4 states to pilot and evaluate the effectiveness of the 

15 competencies articulated by the Panel and the training 

16 curricula and training methods recommended by the 

17 Panel. 

18 ‘‘(5) Not later than 1 year after the completion of 

19 the demonstration program under paragraph (4), the As20 sistant Secretary shall submit to each House of the Con21 gress a report containing the results of the evaluations by 

22 the Assistant Secretary pursuant to paragraph (4), to23 gether with such recommendations for legislation or ad24 ministrative action as the Assistant Secretary determines 

25 appropriate.’’. 


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1 (b) AUTHORIZATION OF ADDITIONAL APPROPRIA2 TIONS FOR THE FAMILY CAREGIVER SUPPORT PROGRAM

3 UNDER THE OLDER AMERICANS ACT OF 1965.—Section 

4 303(e)(2) of the Older Americans Act of 1965 (42 U.S.C. 

5 3023(e)(2)) is amended by striking ‘‘$173,000,000’’ and 

6 all that follows through ‘‘2011’’, and inserting ‘‘and 

7 $250,000,000 for each of the fiscal years 2010, 2011, and 

8 2012’’. 

9 (c) AUTHORIZATION OF ADDITIONAL APPROPRIA10 TIONS FOR THE NATIONAL CLEARINGHOUSE FOR LONG11 TERM CARE INFORMATION.—There is authorized to be 

12 appropriated $10,000,000 for each of the fiscal years 

13 2010, 2011, and 2012 for the operation of the National 

14 Clearinghouse for Long-Term Care Information estab15 lished by the Secretary of Health and Human Services 

16 under section 6021(d) of Public Law 109-171. 

17 Subtitle I—Online Resources 

18 SEC. 2571. WEB SITE ON HEALTH CARE LABOR MARKET 

19 AND RELATED EDUCATIONAL AND TRAINING 

20 OPPORTUNITIES. 

21 (a) IN GENERAL.—The Secretary of Labor, in con22 sultation with the National Center for Health Workforce 

23 Analysis, shall establish and maintain a Web site to serve 

24 as a comprehensive source of information, searchable by 


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1 workforce region, on the health care labor market and re2 lated educational and training opportunities. 

3 (b) CONTENTS.—The Web site maintained under this 

4 section shall include the following: 

5 (1) Information on the types of jobs that are 

6 currently or are projected to be in high demand in 

7 the health care field, including— 

8 (A) salary information; and 

9 (B) training requirements, such as require10 ments for educational credentials, licensure, or 

11 certification. 

12 (2) Information on training and educational op13 portunities within each region for the type jobs de14 scribed in paragraph (1), including by— 

15 (A) type of provider or program (such as 

16 public, private nonprofit, or private for-profit); 

17 (B) duration; 

18 (C) cost (such as tuition, fees, books, lab19 oratory expenses, and other mandatory costs); 

20 (D) performance outcomes (such as grad21 uation rates, job placement, average salary, job 

22 retention, and wage progression); 

23 (E) Federal financial aid participation; 

24 (F) average graduate loan debt; 

25 (G) student loan default rates; 


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1 (H) average institutional grant aid pro2 vided; 

3 (I) Federal and State accreditation infor4 mation; and 

5 (J) other information determined by the 

6 Secretary. 

7 (3) A mechanism for searching and comparing 

8 training and educational options for specific health 

9 care occupations to facilitate informed career and 

10 education choices. 

11 (4) Financial aid information, including with 

12 respect to loan forgiveness, loan cancellation, loan 

13 repayment, stipends, scholarships, and grants or 

14 other assistance authorized by this division or other 

15 Federal or State programs. 

16 (c) PUBLIC ACCESSIBILITY.—The Web site main17 tained under this section shall— 

18 (1) be publicly accessible; 

19 (2) be user friendly and convey information in 

20 a manner that is easily understandable; and 

21 (3) be in English and the second most prevalent 

22 language spoken based on the latest Census informa23 tion. 


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1 SEC. 2572. ONLINE HEALTH WORKFORCE TRAINING PRO2 GRAMS. 

3 Section 171 of the Workforce Investment Act of 1998 

4 (29 U.S.C. 2916) (as amended by section 2553) is further 

5 amended by adding at the end the following: 

6 ‘‘(g) ONLINE HEALTH WORKFORCE TRAINING PRO7 GRAM.— 

8 ‘‘(1) GRANT PROGRAM.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall 

10 award National Health Workforce Online 

11 Training Grants on a competitive basis to eligi12 ble entities to enable such entities to carry out 

13 training for individuals to attain or advance in 

14 health care occupations. An entity may leverage 

15 such grant with other Federal, State, local, and 

16 private resources, in order to expand the par17 ticipation of businesses, employees, and individ18 uals in such training programs. 

19 ‘‘(B) ELIGIBILITY.—In order to receive a 

20 grant under the program established under this 

21 paragraph— 

22 ‘‘(i) an entity shall be an educational 

23 institution, community-based organization, 

24 non-profit organization, workforce invest25 ment board, or local or county government; 

26 and 


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1 ‘‘(ii) an entity shall provide online 

2 workforce training for individuals seeking 

3 to attain or advance in health care occupa4 tions, including nursing, nursing assist5 ants, dentistry, pharmacy, health care 

6 management and administration, public 

7 health, health information systems anal8 ysis, medical assistants, and other health 

9 care practitioner and support occupations. 

10 ‘‘(C) PRIORITY.—Priority in awarding 

11 grants under this paragraph shall be given to 

12 entities that— 

13 ‘‘(i) have demonstrated experience in 

14 implementing and operating online worker 

15 skills training and education programs; 

16 ‘‘(ii) have demonstrated experience co17 ordinating activities, where appropriate, 

18 with the workforce investment system; and 

19 ‘‘(iii) conduct training for occupations 

20 with national or local shortages. 

21 ‘‘(D) DATA COLLECTION.—Grantees under 

22 this paragraph shall collect and report informa23 tion on— 

24 ‘‘(i) the number of participants; 


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1 ‘‘(ii) the services received by the par2 ticipants; 

3 ‘‘(iii) program completion rates; 

4 ‘‘(iv) factors determined as signifi5 cantly interfering with program participa6 tion or completion; 

7 ‘‘(v) the rate of job placement; and 

8 ‘‘(vi) other information as determined 

9 as needed by the Secretary. 

10 ‘‘(E) OUTREACH.—Grantees under this 

11 paragraph shall conduct outreach activities to 

12 disseminate information about their program 

13 and results to workforce investment boards, 

14 local governments, educational institutions, and 

15 other workforce training organizations. 

16 ‘‘(F) PERFORMANCE LEVELS.—The Sec17 retary shall establish indicators of performance 

18 that will be used to evaluate the performance of 

19 grantees under this paragraph in carrying out 

20 the activities described in this paragraph. The 

21 Secretary shall negotiate and reach agreement 

22 with each grantee regarding the levels of per23 formance expected to be achieved by the grant24 ee on the indicators of performance. 


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1 ‘‘(G) AUTHORIZATION OF APPROPRIA2 TIONS.—There are authorized to be appro3 priated to the Secretary to carry out this sub4 section $50,000,000 for fiscal years 2011 

5 through 2020. 

6 ‘‘(2) ONLINE HEALTH PROFESSIONS TRAINING

7 PROGRAM CLEARINGHOUSE.— 

8 ‘‘(A) DESCRIPTION OF GRANT.—The Sec9 retary shall award one grant to an eligible post10 secondary educational institution to provide the 

11 services described in this paragraph. 

12 ‘‘(B) ELIGIBILITY.—To be eligible to re13 ceive a grant under this paragraph, a postsec14 ondary educational institution shall— 

15 ‘‘(i) have demonstrated the ability to 

16 disseminate research on best practices for 

17 implementing workforce investment pro18 grams; and 

19 ‘‘(ii) be a national leader in producing 

20 cutting-edge research on technology related 

21 to workforce investment systems under 

22 subtitle B. 

23 ‘‘(C) SERVICES.—The postsecondary edu24 cational institution that receives a grant under 

25 this paragraph shall use such grant— 


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1 ‘‘(i) to provide technical assistance to 

2 entities that receive grants under para3 graph (1); 

4 ‘‘(ii) to collect and nationally dissemi5 nate the data gathered by entities that re6 ceive grants under paragraph (1); and 

7 ‘‘(iii) to disseminate the best practices 

8 identified by the National Health Work9 force Online Training Grant Program to 

10 other workforce training organizations. 

11 ‘‘(D) AUTHORIZATION OF APPROPRIA12 TIONS.—There are authorized to be appro13 priated to the Secretary to carry out this sub14 section $1,000,000 for fiscal years 2011 

15 through 2020.’’. 

16 DIVISION III—HOUSE COM17 MITTEE ON EDUCATION AND 

18 LABOR: INVESTING IN EDU19 CATION 

20 SECTION 1. SHORT TITLE. 

21 This division may be cited as the ‘‘Student Aid and 

22 Fiscal Responsibility Act of 2009’’. 

23 SEC. 2. TABLE OF CONTENTS. 

24 The table of contents is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. References. 


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TITLE I—INVESTING IN STUDENTS AND FAMILIES 

Subtitle A—Increasing College Access and Completion 

Sec. 101. Federal Pell Grants. 

Sec. 102. College Access and Completion Innovation Fund. 

Sec. 103. Investment in historically Black colleges and universities and other 

minority-serving institutions. 

Sec. 104. Investment in cooperative education. 

Sec. 105. Loan forgiveness for servicemembers activated for duty. 

Sec. 106. Veterans Educational Equity Supplemental Grant Program. 

Subtitle B—Student Financial Aid Form Simplification 

Sec. 121. General effective date. 

Sec. 122. Treatment of assets in need analysis. 

Sec. 123. Changes to total income; aid eligibility. 

TITLE II—STUDENT LOAN REFORM 

Subtitle A—Stafford Loan Reform 

Sec. 201. Federal Family Education Loan appropriations. 

Sec. 202. Scope and duration of Federal loan insurance program. 

Sec. 203. Applicable interest rates. 

Sec. 204. Federal payments to reduce student interest costs. 

Sec. 205. Federal PLUS Loans. 

Sec. 206. Federal Consolidation Loan. 

Sec. 207. Unsubsidized Stafford loans for middle-income borrowers. 

Sec. 208. Loan repayment for civil legal assistance attorneys. 

Sec. 209. Special allowances. 

Sec. 210. Revised special allowance calculation. 

Sec. 211. Origination of Direct Loans at institutions located outside the United 

States. 

Sec. 212. Agreements with institutions. 

Sec. 213. Terms and conditions of loans. 

Sec. 214. Contracts. 

Sec. 215. Interest rates. 

Subtitle B—Perkins Loan Reform 

Sec. 221. Federal Direct Perkins Loans terms and conditions. 

Sec. 222. Authorization of appropriations. 

Sec. 223. Allocation of funds. 

Sec. 224. Federal Direct Perkins Loan allocation. 

Sec. 225. Agreements with institutions of higher education. 

Sec. 226. Student loan information by eligible institutions. 

Sec. 227. Terms of loans. 

Sec. 228. Distribution of assets from student loan funds. 

Sec. 229. Implementation of non-title IV revenue requirement. 

Sec. 230. Administrative expenses. 

TITLE III—MODERNIZATION, RENOVATION, AND REPAIR 

Subtitle A—Elementary and Secondary Education 

Sec. 301. Definitions. 


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CHAPTER 1—GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF

PUBLIC SCHOOL FACILITIES

Sec. 311. Purpose. 

Sec. 312. Allocation of funds. 

Sec. 313. Allowable uses of funds. 

Sec. 314. Priority projects. 

CHAPTER 2—SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND

ALABAMA

Sec. 321. Purpose. 

Sec. 322. Allocation to local educational agencies. 

Sec. 323. Allowable uses of funds. 

CHAPTER 3—GENERAL PROVISIONS

Sec. 331. Impermissible uses of funds. 

Sec. 332. Supplement, not supplant. 

Sec. 333. Prohibition regarding State aid. 

Sec. 334. Maintenance of effort. 

Sec. 335. Special rule on contracting. 

Sec. 336. Use of American iron, steel, and manufactured goods. 

Sec. 337. Labor standards. 

Sec. 338. Charter schools. 

Sec. 339. Green schools. 

Sec. 340. Reporting. 

Sec. 341. Special rules. 

Sec. 342. Promotion of employment experiences. 

Sec. 343. Advisory Council on Green, High-Performing Public School Facilities. 

Sec. 344. Education regarding projects. 

Sec. 345. Availability of funds. 

Subtitle B—Higher Education 

Sec. 351. Federal assistance for community college modernization and construction. 

TITLE IV—EARLY LEARNING CHALLENGE FUND 

Sec. 401. Purpose. 

Sec. 402. Programs authorized. 

Sec. 403. Quality pathways grants. 

Sec. 404. Development grants. 

Sec. 405. Research and evaluation. 

Sec. 406. Reporting requirements. 

Sec. 407. Construction. 

Sec. 408. Definitions. 

Sec. 409. Availability of funds. 

TITLE V—AMERICAN GRADUATION INITIATIVE 

Sec. 501. Authorization and appropriation. 

Sec. 502. Definitions; grant priority. 

Sec. 503. Grants to eligible entities for community college reform. 

Sec. 504. Grants to eligible States for community college programs. 

Sec. 505. National activities. 


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1 SEC. 3. REFERENCES. 

2 Except as otherwise expressly provided, whenever in 

3 this division an amendment or repeal is expressed in terms 

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a 

6 section or other provision of the Higher Education Act of 

7 1965 (20 U.S.C. 1001 et seq.). 

8 TITLE I—INVESTING IN 

9 STUDENTS AND FAMILIES 

10 Subtitle A—Increasing College 

11 Access and Completion 

12 SEC. 101. FEDERAL PELL GRANTS. 

13 (a) AMOUNT OF GRANTS.—Section 401(b) (20 

14 U.S.C. 1070a(b)) is amended— 

15 (1) by amending paragraph (2)(A) to read as 

16 follows: 

17 ‘‘(A) The amount of the Federal Pell 

18 Grant for a student eligible under this part 

19 shall be— 

20 ‘‘(i) the maximum Federal Pell Grant, 

21 as specified in the last enacted appropria22 tion Act applicable to that award year, 

23 plus 

24 ‘‘(ii) the amount of the increase cal25 culated under paragraph (8)(B) for that 

26 year, less 


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1 ‘‘(iii) an amount equal to the amount 

2 determined to be the expected family con3 tribution with respect to that student for 

4 that year.’’; and 

5 (2) by amending paragraph (8), as amended by 

6 the Higher Education Opportunity Act (Public Law 

7 110–315), to read as follows: 

8 ‘‘(8) ADDITIONAL FUNDS.— 

9 ‘‘(A) IN GENERAL.—There are authorized 

10 to be appropriated, and there are appropriated, 

11 to carry out subparagraph (B) of this para12 graph (in addition to any other amounts appro13 priated to carry out this section and out of any 

14 money in the Treasury not otherwise appro15 priated) the following amounts— 

16 ‘‘(i) $2,030,000,000 for fiscal year 

17 2008; 

18 ‘‘(ii) $2,733,000,000 for fiscal year 

19 2009; and 

20 ‘‘(iii) such sums as may be necessary 

21 for fiscal year 2010 and each subsequent 

22 fiscal year to provide the amount of in23 crease of the maximum Federal Pell Grant 

24 required by clauses (ii) and (iii) of sub25 paragraph (B). 


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1 ‘‘(B) INCREASE IN FEDERAL PELL

2 GRANTS.—The amounts made available pursu3 ant to subparagraph (A) shall be used to in4 crease the amount of the maximum Federal 

5 Pell Grant for which a student shall be eligible 

6 during an award year, as specified in the last 

7 enacted appropriation Act applicable to that 

8 award year, by— 

9 ‘‘(i) $490 for each of the award years 

10 2008–2009 and 2009–2010; 

11 ‘‘(ii) $690 for the award year 2010– 

12 2011; and 

13 ‘‘(iii) the amount determined under 

14 subparagraph (C) for each succeeding 

15 award year. 

16 ‘‘(C) INFLATION-ADJUSTED AMOUNTS.— 

17 ‘‘(i) AWARD YEAR 2011–2012.—For 

18 award year 2011–2012, the amount deter19 mined under this subparagraph for pur20 poses of subparagraph (B)(iii) shall be 

21 equal to— 

22 ‘‘(I) $5,550 or the total max23 imum Federal Pell Grant for the pre24 ceding award year (as determined 

25 under clause (iv)(II)), whichever is 


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1 greater, increased by a percentage 

2 equal to the annual adjustment per3 centage for award year 2011–2012; 

4 reduced by 

5 ‘‘(II) $4,860 or the maximum 

6 Federal Pell Grant for which a stu7 dent was eligible for the preceding 

8 award year, as specified in the last en9 acted appropriation Act applicable to 

10 that year, whichever is greater; and 

11 ‘‘(III) rounded to the nearest $5. 

12 ‘‘(ii) SUBSEQUENT AWARD YEARS.— 

13 For award year 2012–2013 and each of 

14 the subsequent award years, the amount 

15 determined under this subparagraph for 

16 purposes of subparagraph (B)(iii) shall be 

17 equal to— 

18 ‘‘(I) the total maximum Federal 

19 Pell Grant for the preceding award 

20 year (as determined under clause 

21 (iv)(II)), increased by a percentage 

22 equal to the annual adjustment per23 centage for the award year for which 

24 the amount under this subparagraph 

25 is being determined; reduced by 


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1 ‘‘(II) $4,860 or the maximum 

2 Federal Pell Grant for which a stu3 dent was eligible for the preceding 

4 award year, as specified in the last en5 acted appropriation Act applicable to 

6 that year, whichever is greater; and 

7 ‘‘(III) rounded to the nearest $5. 

8 ‘‘(iii) LIMITATION ON DECREASES.— 

9 Notwithstanding clauses (i) and (ii), if the 

10 amount determined under clause (i) or (ii) 

11 for an award year is less than the amount 

12 determined under this paragraph for the 

13 preceding award year, the amount deter14 mined under such clause for such award 

15 year shall be the amount determined under 

16 this paragraph for the preceding award 

17 year. 

18 ‘‘(iv) DEFINITIONS.—For purposes of 

19 this subparagraph— 

20 ‘‘(I) the term ‘annual adjustment 

21 percentage’ as it applies to an award 

22 year is equal to the sum of— 

23 ‘‘(aa) the estimated percent24 age change in the Consumer 

25 Price Index (as determined by 


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1 the Secretary, using the defini2 tion in section 478(f)) for the 

3 most recent calendar year ending 

4 prior to the beginning of that 

5 award year; and 

6 ‘‘(bb) one percentage point; 

7 and 

8 ‘‘(II) the term ‘total maximum 

9 Federal Pell Grant’ as it applies to a 

10 preceding award year is equal to the 

11 sum of— 

12 ‘‘(aa) the maximum Federal 

13 Pell Grant for which a student is 

14 eligible during an award year, as 

15 specified in the last enacted ap16 propriation Act applicable to that 

17 preceding award year; and 

18 ‘‘(bb) the amount of the in19 crease in the maximum Federal 

20 Pell Grant required by this para21 graph for that preceding award 

22 year. 

23 ‘‘(D) PROGRAM REQUIREMENTS AND OP24 ERATIONS OTHERWISE UNAFFECTED.—Except 

25 as provided in subparagraphs (B) and (C), 


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1 nothing in this paragraph shall be construed to 

2 alter the requirements and operations of the 

3 Federal Pell Grant Program as authorized 

4 under this section, or to authorize the imposi5 tion of additional requirements or operations 

6 for the determination and allocation of Federal 

7 Pell Grants under this section. 

8 ‘‘(E) AVAILABILITY OF FUNDS.—The 

9 amounts made available by subparagraph (A) 

10 for any fiscal year shall be available beginning 

11 on October 1 of that fiscal year, and shall re12 main available through September 30 of the 

13 succeeding fiscal year.’’. 

14 (b) CONFORMING AMENDMENTS.—Title IV (20 

15 U.S.C. 1070 et seq.) is further amended— 

16 (1) in section 401(b)(6), as amended by the 

17 Higher Education Opportunity Act (Public Law 

18 110–315), by striking ‘‘the grant level specified in 

19 the appropriate Appropriation Act for this subpart 

20 for such year’’ and inserting ‘‘the Federal Pell Grant 

21 amount, determined under paragraph (2)(A), for 

22 which a student is eligible during such award year’’; 

23 (2) in section 402D(d)(1), by striking ‘‘exceed 

24 the maximum appropriated Pell Grant’’ and insert25 ing ‘‘exceed the Federal Pell Grant amount, deterVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02107 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 mined under section 401(b)(2)(A), for which a stu2 dent is eligible’’; 

3 (3) in section 435(a)(5)(A)(i)(I), by striking 

4 ‘‘one-half the maximum Federal Pell Grant award 

5 for which a student would be eligible’’ and inserting 

6 ‘‘one-half the Federal Pell Grant amount, deter7 mined under section 401(b)(2)(A), for which a stu8 dent would be eligible’’; 

9 (4) in section 483(e)(3)(ii), by striking ‘‘based 

10 on the maximum Federal Pell Grant award at the 

11 time of application’’ and inserting ‘‘based on the 

12 Federal Pell Grant amount, determined under sec13 tion 401(b)(2)(A), for which a student is eligible at 

14 the time of application’’; 

15 (5) in section 485E(b)(1)(A), by striking ‘‘of 

16 such students’ potential eligibility for a maximum 

17 Federal Pell Grant under subpart 1 of part A’’ and 

18 inserting ‘‘of such students’ potential eligibility for 

19 the Federal Pell Grant amount, determined under 

20 section 401(b)(2)(A), for which the student would be 

21 eligible’’; and 

22 (6) in section 894(f)(2)(C)(ii)(I), by striking 

23 ‘‘the maximum Federal Pell Grant for each award 

24 year’’ and inserting ‘‘the Federal Pell Grant 

25 amount, determined under section 401(b)(2)(A), for 


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1 which a student may be eligible for each award 

2 year’’. 

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

4 subsections (a) and (b) of this section shall take effect on 

5 July 1, 2010. 

6 SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVA7 TION FUND. 

8 (a) HEADER.—Part E of title VII (20 U.S.C. 1141 

9 et seq.) is amended by striking the header of such part 

10 and inserting the following: 

11 ‘‘PART E—COLLEGE ACCESS AND COMPLETION 

12 INNOVATION FUND’’. 

13 (b) PURPOSE.—Part E of title VII (20 U.S.C. 1141 

14 et seq.) is further amended by inserting before section 781 

15 the following: 

16 ‘‘SEC. 780. PURPOSES. 

17 ‘‘The purposes of this part are— 

18 ‘‘(1) to promote innovation in postsecondary 

19 education practices and policies by institutions of 

20 higher education, States, and nonprofit organiza21 tions to improve student success, completion, and 

22 post-completion employment, particularly for stu23 dents from groups that are underrepresented in 

24 postsecondary education; and 


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1 ‘‘(2) to assist States in developing longitudinal 

2 data systems, common metrics, and reporting sys3 tems to enhance the quality and availability of infor4 mation about student success, completion, and post5 completion employment.’’. 

6 (c) AUTHORIZATION AND APPROPRIATION.—Section 

7 781(a) (20 U.S.C. 1141(a)) is amended to read as follows: 

8 ‘‘(a) AUTHORIZATION AND APPROPRIATION.— 

9 ‘‘(1) IN GENERAL.—There are authorized to be 

10 appropriated, and there are appropriated, to carry 

11 out this part (in addition to any other amounts ap12 propriated to carry out this part and out of any 

13 money in the Treasury not otherwise appropriated), 

14 $600,000,000 for each of the fiscal years 2010 

15 through 2014. 

16 ‘‘(2) ALLOCATIONS.—Of the amount appro17 priated for any fiscal year under paragraph (1)— 

18 ‘‘(A) 25 percent shall be made available to 

19 carry out section 781; 

20 ‘‘(B) 50 percent shall be made available to 

21 carry out section 782; 

22 ‘‘(C) 23 percent shall be made available to 

23 carry out section 783; and 

24 ‘‘(D) 2 percent shall be made available to 

25 carry out section 784.’’. 


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1 (d) STATE GRANTS AND GRANTS TO ELIGIBLE ENTI2 TIES.—Part E of title VII (20 U.S.C. 1141 et seq.) is 

3 further amended by adding at the end the following: 

4 ‘‘SEC. 782. STATE INNOVATION COMPLETION GRANTS. 

5 ‘‘(a) PROGRAM AUTHORIZATION.—From the amount 

6 appropriated under section 781(a)(2)(B) to carry out this 

7 section, the Secretary shall award grants to States on a 

8 competitive basis to promote student persistence in, and 

9 completion of, postsecondary education. 

10 ‘‘(b) FEDERAL SHARE; NON-FEDERAL SHARE.— 

11 ‘‘(1) FEDERAL SHARE.—The amount of the 

12 Federal share under this section for a fiscal year 

shall be equal to 2 13 ⁄3 of the costs of the activities and 

14 services described in subsection (d)(1) that are car15 ried out under the grant. 

16 ‘‘(2) NON-FEDERAL SHARE.—The amount of 

17 the non-Federal share under this section shall be 

equal to 1 18 ⁄3 of the costs of the activities and services 

19 described in subsection (d)(1). The non-Federal 

20 share may be in cash or in kind, and may be pro21 vided from State resources, contributions from pri22 vate organizations, or both. 

23 ‘‘(3) SUPPLEMENT, NOT SUPPLANT.—The Fed24 eral and non-Federal shares required by this para25 graph shall be used to supplement, and not supVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02111 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 plant, State and private resources that would other2 wise be expended to carry out activities and services 

3 to promote student persistence in and completion of 

4 postsecondary education. 

5 ‘‘(c) APPLICATION AND SELECTION.— 

6 ‘‘(1) APPLICATION REQUIREMENTS.—For each 

7 fiscal year for which a State desires to receive a 

8 grant under this section, the State agency with ju9 risdiction over higher education, or another agency 

10 designated by the Governor or chief executive of the 

11 State to administer the grant program under this 

12 section, shall submit an application to the Secretary 

13 at such time, in such manner, and containing such 

14 information as the Secretary may require. Such ap15 plication shall include— 

16 ‘‘(A) a description of the State’s capacity 

17 to administer the grant under this section; 

18 ‘‘(B) a description of the State’s plans for 

19 using the grant funds for activities described in 

20 subsection (d)(1), including plans for how the 

21 State will make special efforts to provide bene22 fits to students in the State who are from 

23 groups that are underrepresented in postsec24 ondary education; 


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1 ‘‘(C) a description of how the State will 

2 provide for the non-Federal share from State 

3 resources, private contributions, or both; 

4 ‘‘(D) a description of— 

5 ‘‘(i) the administrative system that 

6 the State has in place to administer the ac7 tivities and services described in subsection 

8 (d)(1); or 

9 ‘‘(ii) the plan to develop such adminis10 trative system; 

11 ‘‘(E) a description of the data system the 

12 State has or will have in place to measure the 

13 performance and progress toward the State’s 

14 goals included in the Access and Completion 

15 Plan submitted, or that will be submitted, 

16 under paragraph (2)(A); and 

17 ‘‘(F) the assurances under paragraph (2). 

18 ‘‘(2) STATE ASSURANCES.—The assurances re19 quired in paragraph (1)(F) shall include an assur20 ance of each of the following: 

21 ‘‘(A) That the State will submit, not later 

22 than July 1, 2011, an Access and Completion 

23 Plan to increase the State’s rate of persistence 

24 in and completion of postsecondary education. 

25 Such plan shall include— 


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1 ‘‘(i) the State’s annual and long-term 

2 quantifiable goals with respect to— 

3 ‘‘(I) the rates of postsecondary 

4 enrollment, persistence, and comple5 tion, disaggregated by income, race, 

6 ethnicity, sex, disability, and age of 

7 students; 

8 ‘‘(II) closing gaps in enrollment, 

9 persistence, and completion rates for 

10 students from groups that are under11 represented in postsecondary edu12 cation; 

13 ‘‘(III) targeting education and 

14 training programs to address labor 

15 market needs in the State, as such 

16 needs are determined by the State, or 

17 the State in coordination with the 

18 State public employment service, the 

19 State workforce investment board, or 

20 industry or sector partnerships in the 

21 State; and 

22 ‘‘(IV) improving coordination be23 tween two-year and four-year institu24 tions of higher education in the State, 

25 including supporting comprehensive 


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1 articulation agreements between such 

2 institutions; and 

3 ‘‘(ii) the State’s plan to develop an 

4 interoperable statewide longitudinal data 

5 system that— 

6 ‘‘(I) can be linked to other data 

7 systems, as applicable, including ele8 mentary and secondary education and 

9 workforce data systems; 

10 ‘‘(II) will collect, maintain, 

11 disaggregate (by institution, income, 

12 race, ethnicity, sex, disability, and age 

13 of students), and analyze postsec14 ondary education and workforce infor15 mation, including— 

16 ‘‘(aa) postsecondary edu17 cation enrollment, persistence, 

18 and completion information; 

19 ‘‘(bb) post-completion em20 ployment outcomes of students 

21 who enrolled in postsecondary 

22 programs and training programs 

23 offered by eligible training pro24 viders under the Workforce InVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02115 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 vestment Act of 1998 (29 U.S.C. 

2 2801 et seq.); 

3 ‘‘(cc) postsecondary edu4 cation and employment outcomes 

5 of students who move out of the 

6 State; and 

7 ‘‘(dd) postsecondary instruc8 tional workforce information; and 

9 ‘‘(III) makes the information de10 scribed in subclause (I) available to 

11 the general public in a manner that is 

12 transparent and user-friendly. 

13 ‘‘(B) That the State has a comprehensive 

14 planning or policy formulation process with re15 spect to increasing postsecondary enrollment, 

16 persistence, and completion that— 

17 ‘‘(i) encourages coordination between 

18 the State administration of grants under 

19 this section and similar State programs; 

20 ‘‘(ii) encourages State policies that 

21 are designed to improve rates of enroll22 ment and persistence in, and completion 

23 of, postsecondary education for all cat24 egories of institutions of higher education 

25 described in section 132(d) in the State; 


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1 ‘‘(iii) considers the postsecondary edu2 cation needs of students from groups that 

3 are underrepresented in postsecondary 

4 education; 

5 ‘‘(iv) considers the resources of public 

6 and private institutions of higher edu7 cation, organizations, and agencies within 

8 the State that are capable of providing ac9 cess to postsecondary education opportuni10 ties within the State; and 

11 ‘‘(v) provides for direct, equitable, and 

12 active participation in the comprehensive 

13 planning or policy formulation process or 

14 processes, through membership on State 

15 planning commissions, State advisory 

16 councils, or other State entities established 

17 by the State and consistent with State law, 

18 by representatives of— 

19 ‘‘(I) institutions of higher edu20 cation, including at least one member 

21 from a junior or community college 

22 (as defined in section 312(f)); 

23 ‘‘(II) students; 

24 ‘‘(III) other providers of postsec25 ondary education services (including 


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1 organizations providing access to such 

2 services); 

3 ‘‘(IV) the general public in the 

4 State; and 

5 ‘‘(V) postsecondary education 

6 faculty members, including at least 

7 one faculty member whose primary re8 sponsibilities are teaching and schol9 arship. 

10 ‘‘(C) That the State will incorporate poli11 cies and practices that, through the activities 

12 funded under this section, are determined to be 

13 effective in improving rates of postsecondary 

14 education enrollment, persistence, and comple15 tion into the future postsecondary education 

16 policies and practices of the State to ensure 

17 that the benefits achieved through the activities 

18 funded under this section continue beyond the 

19 period of the grant. 

20 ‘‘(D) That the State will participate in the 

21 evaluation required under section 784. 

22 ‘‘(3) SUBGRANTS TO NONPROFIT ORGANIZA23 TIONS.—A State receiving a payment under this sec24 tion may elect to make a subgrant to one or more 

25 nonprofit organizations in the State, including agenVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02118 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cies with agreements with the Secretary under sub2 sections (b) and (c) of section 428 on the date of the 

3 enactment of the Student Aid and Fiscal Responsi4 bility Act of 2009, or a partnership of such organi5 zations, to carry out activities and services described 

6 in subsection (d)(1), if the nonprofit organization or 

7 partnership— 

8 ‘‘(A) was in existence on the day before the 

9 date of the enactment of the Student Aid and 

10 Fiscal Responsibility Act of 2009; and 

11 ‘‘(B) as of such day, was participating in 

12 activities and services related to promoting per13 sistence in, and completion of, postsecondary 

14 education, such as the activities and services de15 scribed in subsection (d)(1). 

16 ‘‘(4) PRIORITY.—In awarding grants under this 

17 section, the Secretary shall give priority to States 

18 that enter into a partnership with one of the fol19 lowing entities to carry out the activities and serv20 ices described in subsection (d)(1): 

21 ‘‘(A) A philanthropic organization, as such 

22 term is defined in section 781(i)(1). 

23 ‘‘(B) An agency with an agreement with 

24 the Secretary under subsections (b) and (c) of 

25 section 428 on the date of the enactment of 


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1 Student Aid and Fiscal Responsibility Act of 

2 2009. 

3 ‘‘(d) USES OF FUNDS.— 

4 ‘‘(1) AUTHORIZED USES.—A State receiving a 

5 grant under this section shall use the grant funds 

6 to— 

7 ‘‘(A) provide programs in such State that 

8 increase persistence in, and completion of, post9 secondary education, which may include— 

10 ‘‘(i) assisting institutions of higher 

11 education in providing financial literacy, 

12 education, and counseling to enrolled stu13 dents; 

14 ‘‘(ii) assisting students enrolled in an 

15 institution of higher education to reduce 

16 the amount of loan debt incurred by such 

17 students; 

18 ‘‘(iii) providing grants to students de19 scribed in section 415A(a)(1), in accord20 ance with the terms of that section; and 

21 ‘‘(iv) carrying out the activities de22 scribed in section 415E(a); and 

23 ‘‘(B) support the development and imple24 mentation of a statewide longitudinal data sys25 tem, as described in subsection (c)(2)(A)(ii). 


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1 ‘‘(2) PROHIBITED USES.—Funds made avail2 able under this section shall not be used to promote 

3 any lender’s loans. 

4 ‘‘(3) RESTRICTIONS ON USE OF FUNDS.—A 

5 State— 

‘‘(A) shall use not less than 1 6 ⁄3 of the sum 

7 of the Federal and non-Federal share used for 

8 paragraph (1)(A) on activities that benefit stu9 dents enrolled in junior or community colleges 

10 (as defined in section 312(f)), two-year public 

11 institutions, or two-year programs of instruc12 tion at four-year public institutions; 

13 ‘‘(B) may use not more than 10 percent of 

14 the sum of the Federal and non-Federal share 

15 under this section for activities described in 

16 paragraph (1)(B); and 

17 ‘‘(C) may use not more than 6 percent of 

18 the sum of the Federal and non-Federal share 

19 under this section for administrative purposes 

20 relating to the grant under this section. 

21 ‘‘(e) ANNUAL REPORT.—Each State receiving a 

22 grant under this section shall submit to the Secretary an 

23 annual report on— 

24 ‘‘(1) the activities and services described in sub25 section (d)(1) that are carried out with such grant; 


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1 ‘‘(2) the effectiveness of such activities and 

2 services in increasing postsecondary persistence and 

3 completion, as determined by measurable progress in 

4 achieving the State’s goals for persistence and com5 pletion described in the Access and Completion Plan 

6 submitted by the State under subsection (c)(2)(A), 

7 if such plan has been submitted; and 

8 ‘‘(3) any other information or assessments the 

9 Secretary may require. 

10 ‘‘(f) DEFINITIONS.—In this section: 

11 ‘‘(1) INDUSTRY OR SECTOR PARTNERSHIP.— 

12 The term ‘industry or sector partnership’ means a 

13 workforce collaborative that organizes key stake14 holders in a targeted industry cluster into a working 

15 group that focuses on the human capital needs of a 

16 targeted industry cluster and that includes, at the 

17 appropriate stage of development of the partner18 ship— 

19 ‘‘(A) representatives of multiple firms or 

20 employers (including workers) in a targeted in21 dustry cluster, including small- and medium22 sized employers when practicable; 

23 ‘‘(B) 1 or more representatives of State 

24 labor organizations, central labor coalitions, or 

25 other labor organizations; 


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1 ‘‘(C) 1 or more representatives of local 

2 workforce investment boards; 

3 ‘‘(D) 1 or more representatives of postsec4 ondary educational institutions or other train5 ing providers; and 

6 ‘‘(E) 1 or more representatives of State 

7 workforce agencies or other entities providing 

8 employment services. 

9 ‘‘(2) STATE PUBLIC EMPLOYMENT SERVICE.— 

10 The term ‘State public employment service’ has the 

11 meaning given such term in section 502(a)(9) of the 

12 Student Aid and Fiscal Responsibility Act of 2009. 

13 ‘‘(3) STATE WORKFORCE INVESTMENT BOARD; 

14 LOCAL WORKFORCE INVESTMENT BOARD.—The 

15 terms ‘State workforce investment board’ and ‘local 

16 workforce investment board’ have the meanings 

17 given such terms in section 502(a)(10) of the Stu18 dent Aid and Fiscal Responsibility Act of 2009. 

19 ‘‘SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLE20 TION NATIONAL ACTIVITIES. 

21 ‘‘(a) PROGRAMS AUTHORIZED.—From the amount 

22 appropriated under section 781(a)(2)(C) to carry out this 

23 section, the Secretary shall award grants, on a competitive 

24 basis, to eligible entities in accordance with this section 

25 to conduct innovative programs that advance knowledge 


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1 about, and adoption of, policies and practices that increase 

2 the number of individuals with postsecondary degrees or 

3 certificates. 

4 ‘‘(b) ELIGIBLE ENTITIES.—The Secretary is author5 ized to award grants under subsection (a) to— 

6 ‘‘(1) institutions of higher education; 

7 ‘‘(2) States; 

8 ‘‘(3) nonprofit organizations with demonstrated 

9 experience in the operation of programs to increase 

10 postsecondary completion; 

11 ‘‘(4) philanthropic organizations (as such term 

12 is defined in section 781(i)(1)); 

13 ‘‘(5) entities receiving a grant under chapter 1 

14 of subpart 2 of part A of title IV; and 

15 ‘‘(6) consortia of any of the entities described 

16 in paragraphs (1) through (5). 

17 ‘‘(c) INNOVATION GRANTS.— 

18 ‘‘(1) MINIMUM AWARD.—A grant awarded 

19 under subsection (a) shall be not less than 

20 $1,000,000. 

21 ‘‘(2) GRANTS USES.—The Secretary’s authority 

22 to award grants under subsection (a) includes— 

23 ‘‘(A) the authority to award to an eligible 

24 entity a grant in an amount equal to all or part 

25 of the amount of funds received by such entity 


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1 from philanthropic organizations (as such term 

2 is defined in section 781(i)(1)) to conduct inno3 vative programs that advance knowledge about, 

4 and adoption of, policies and practices that in5 crease the number of individuals with postsec6 ondary degrees or certificates; and 

7 ‘‘(B) the authority to award an eligible en8 tity a grant to develop 2-year programs that 

9 provide supplemental grant or loan benefits to 

10 students that— 

11 ‘‘(i) are designed to improve student 

12 outcomes, including degree completion, 

13 graduation without student loan debt, and 

14 post-completion employment; 

15 ‘‘(ii) are in addition to the student fi16 nancial aid available under title IV of this 

17 Act; and 

18 ‘‘(iii) do not result in the reduction of 

19 the amount of that aid or any other stu20 dent financial aid for which a student is 

21 otherwise eligible under Federal law. 

22 ‘‘(3) APPLICATION.—To be eligible to receive a 

23 grant under subsection (a), an eligible entity shall 

24 submit an application at such time, in such manner, 


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1 and containing such information as the Secretary 

2 shall require. 

3 ‘‘(4) PRIORITIES.—In awarding grants under 

4 subsection (a), the Secretary shall give priority to 

5 applications that— 

6 ‘‘(A) are from an eligible entity with dem7 onstrated experience in serving students from 

8 groups that are underrepresented in postsec9 ondary education, including institutions of high10 er education that are eligible for assistance 

11 under title III or V, or are from a consortium 

12 that includes an eligible entity with such experi13 ence; 

14 ‘‘(B) are from an eligible entity that is a 

15 public institution of higher education that does 

16 not predominantly provide an educational pro17 gram for which it awards a bachelor’s degree 

18 (or an equivalent degree), or from a consortium 

19 that includes at least one such institution; 

20 ‘‘(C) include activities to increase degree or 

21 certificate completion in the fields of science, 

22 technology, engineering, and mathematics, in23 cluding preparation for, or entry into, 

24 postbaccaluareate study, especially for women 


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1 and other groups of students who are underrep2 resented in such fields; 

3 ‘‘(D) are from an eligible entity that is a 

4 philanthropic organization with the primary 

5 purpose of providing scholarships and support 

6 services to students from groups that are 

7 underrepresented in postsecondary education, or 

8 are from a consortium that includes such an or9 ganization; or 

10 ‘‘(E) are from an eligible entity that en11 courages partnerships between institutions of 

12 higher education with high degree-completion 

13 rates and institutions of higher education with 

14 low degree-completion rates from the same cat15 egory of institutions described in section 132(d) 

16 to facilitate the sharing of information relating 

17 to, and the implementation of, best practices for 

18 increasing postsecondary completion. 

19 ‘‘(5) TECHNICAL ASSISTANCE.—The Secretary 

20 may reserve up to $5,000,000 per year to award 

21 grants and contracts to provide technical assistance 

22 to eligible entities receiving a grant under subsection 

23 (a), including technical assistance on the evaluation 

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1 lishing networks of eligible entities receiving grants 

2 under such subsection. 

3 ‘‘(d) REPORTS.— 

4 ‘‘(1) ANNUAL REPORTS BY ENTITIES.—Each el5 igible entity receiving a grant under subsection (a) 

6 shall submit to the Secretary an annual report on— 

7 ‘‘(A) the effectiveness of the program car8 ried out with such grant in increasing postsec9 ondary completion, as determined by measur10 able progress in achieving the goals of the pro11 gram, as described in the application for such 

12 grant; and 

13 ‘‘(B) any other information or assessments 

14 the Secretary may require. 

15 ‘‘(2) ANNUAL REPORT TO CONGRESS.—The 

16 Secretary shall submit to the authorizing committees 

17 an annual report on grants awarded under sub18 section (a), including— 

19 ‘‘(A) the amount awarded to each eligible 

20 entity receiving a grant under such subsection; 

21 and 

22 ‘‘(B) a description of the activities con23 ducted by each such eligible entity. 


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1 ‘‘SEC. 784. EVALUATION. 

2 ‘‘From the amount appropriated under section 

3 781(a)(2)(D), the Director of the Institute of Education 

4 Sciences shall evaluate the programs funded under this 

5 part. Not later than January 30, 2016, the Director shall 

6 issue a final report on such evaluation to the authorizing 

7 committees and the Secretary, and shall make such report 

8 available to the public. 

9 ‘‘SEC. 785. VETERANS RESOURCE OFFICER GRANTS. 

10 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall 

11 award grants, on a competitive basis, to eligible institu12 tions of higher education to hire a Veterans Resource Offi13 cer to increase the college completion rates for veterans 

14 enrolled at such institutions. 

15 ‘‘(b) DEFINITIONS.—In this section: 

16 ‘‘(1) ELIGIBLE INSTITUTION OF HIGHER EDU17 CATION.—The term ‘eligible institution of higher 

18 education’ means an institution of higher education 

19 that has an enrollment of at least 100 full-time 

20 equivalent students who are veterans. 

21 ‘‘(2) FULL-TIME EQUIVALENT STUDENTS.—The 

22 term ‘full-time equivalent students’ has the meaning 

23 given such term in section 312(e). 

24 ‘‘(3) VETERAN.—The term ‘veteran’ has the 

25 meaning give such term in section 480(c). 


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

2 under this section, an eligible institution of higher edu3 cation shall submit an application at such time, in such 

4 manner, and containing such information as the Secretary 

5 shall require. 

6 ‘‘(d) USES OF FUNDS.— 

7 ‘‘(1) IN GENERAL.—An eligible institution of 

8 higher education receiving a grant under this section 

9 shall use such grant to hire 1 or 2 Veterans Re10 source Officers (in the case of an institution that 

11 has an enrollment of at least 200 full-time equiva12 lent students who are veterans) to serve in the office 

13 of campus programs, or a similar office, at such in14 stitution and carry out the activities described in 

15 paragraph (2). 

16 ‘‘(2) ACTIVITIES.—A Veterans Resource Officer 

17 shall carry out activities at an eligible institution of 

18 higher education to help increase the completion 

19 rates for veterans enrolled at such institution, which 

20 shall include the following activities: 

21 ‘‘(A) Serving as a link between student 

22 veterans and the staff of the institution. 

23 ‘‘(B) Serving as a link between student 

24 veterans and local facilities of the Department 

25 of Veterans Affairs. 


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1 ‘‘(C) Organizing and advising student vet2 erans organization. 

3 ‘‘(D) Organizing veterans oriented group 

4 functions and events. 

5 ‘‘(E) Maintaining newsletters and 

6 listserves to distribute news and information to 

7 all student veterans. 

8 ‘‘(F) Organizing new student veterans 

9 campus orientation. 

10 ‘‘(G) Ensuring that the Department of 

11 Veterans Affairs certifying official at such insti12 tution is properly trained. 

13 ‘‘(3) PRIORITY.—To the extent practicable, 

14 each institution described in paragraph (1) shall give 

15 priority to hiring a veteran to serve as a Veterans 

16 Resource Officer. 

17 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section 

19 such sums as may be necessary for fiscal year 2010 and 

20 each succeeding fiscal year.’’. 

21 SEC. 103. INVESTMENT IN HISTORICALLY BLACK COL22 LEGES AND UNIVERSITIES AND OTHER MI23 NORITY-SERVING INSTITUTIONS. 

24 Section 371 (20 U.S.C. 1067q) is amended— 

25 (1) in subsection (a)— 


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1 (A) in paragraph (2), by striking ‘‘section 

2 502’’ and inserting ‘‘section 502(a)’’; 

3 (B) in paragraph (3), by striking ‘‘section 

4 316’’ and inserting ‘‘section 316(b)’’; 

5 (C) in paragraph (5), by striking ‘‘in sub6 section (c)’’ and inserting ‘‘in section 318(b)’’; 

7 (D) in paragraph (6), by striking ‘‘in sub8 section (c)’’ and inserting ‘‘in section 320(b)’’; 

9 and 

10 (E) in paragraph (7), by striking ‘‘in sub11 section (c)’’ and inserting ‘‘in section 319(b)’’; 

12 (2) in subsection (b)— 

13 (A) in paragraph (1)(A), by striking 

14 ‘‘$255,000,000’’ and all that follows and insert15 ing ‘‘$255,000,000 for each of the fiscal years 

16 2008 through 2019.’’; and 

17 (B) by amending paragraph (2)(B) to read 

18 as follows: 

19 ‘‘(B) STEM AND ARTICULATION PRO20 GRAMS.—From the amount made available for 

21 allocation under this subparagraph by subpara22 graph (A)(i) for any fiscal year— 

23 ‘‘(i) 90 percent shall be available for 

24 Hispanic-serving institutions for activities 

25 described in sections 503 and 513, with a 


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1 priority given to applications that pro2 pose— 

3 ‘‘(I) to increase the number of 

4 Hispanic and other low-income stu5 dents attaining degrees in the fields of 

6 science, technology, engineering, or 

7 mathematics; and 

8 ‘‘(II) to develop model transfer 

9 and articulation agreements between 

10 2-year Hispanic-serving institutions 

11 and 4-year institutions in such fields; 

12 and 

13 ‘‘(ii) 10 percent shall be available for 

14 grants under section 355.’’; 

15 (C) in paragraph (2)(C)(ii), by striking 

16 ‘‘and shall be available for a competitive’’ and 

17 all that follows and inserting ‘‘and shall be 

18 made available as grants under section 318 and 

19 allotted among such institutions under section 

20 318(e), treating such amount, plus the amount 

21 appropriated for such fiscal year in a regular or 

22 supplemental appropriation Act to carry out 

23 section 318, as the amount appropriated to 

24 carry out section 318 for purposes of allotments 

25 under section 318(e)’’; and 


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1 (D) in paragraph (2)(D)— 

2 (i) in clause (iii), by striking ‘‘for ac3 tivities described in section 311(c)’’ and in4 serting ‘‘and shall be made available as 

5 grants under section 320, treating such 

6 $5,000,000 as part of the amount appro7 priated for such fiscal year in a regular or 

8 supplemental appropriation Act to carry 

9 out such section and using such 

10 $5,000,000 for purposes described in sub11 section (c) of such section’’; and 

12 (ii) in clause (iv), by striking ‘‘de13 scribed in subsection (a)(7)—’’ and all that 

14 follows and inserting ‘‘and shall be made 

15 available as grants under section 319, 

16 treating such $5,000,000 as part of the 

17 amount appropriated for such fiscal year 

18 in a regular or supplemental appropriation 

19 Act to carry out such section and using 

20 such $5,000,000 for purposes described in 

21 subsection (c) of such section’’; and 

22 (3) by striking subsection (c). 

23 SEC. 104. INVESTMENT IN COOPERATIVE EDUCATION. 

24 There are authorized to be appropriated, and there 

25 are appropriated, to carry out part N of title VIII of the 


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1 Higher Education Act of 1965 (20 U.S.C. 1161n) (in ad2 dition to any other amounts appropriated to carry out 

3 such part and out of any money in the Treasury not other4 wise appropriated), $10,000,000 for fiscal year 2010. 

5 SEC. 105. LOAN FORGIVENESS FOR SERVICEMEMBERS AC6 TIVATED FOR DUTY. 

7 (a) IN GENERAL.—Section 484B(b)(2) (20 U.S.C. 

8 1091b(b)(2)) is amended by adding at the end the fol9 lowing: 

10 ‘‘(F) TUITION RELIEF FOR STUDENTS

11 CALLED TO MILITARY SERVICE.— 

12 ‘‘(i) WAIVER OF REPAYMENT BY STU13 DENTS CALLED TO MILITARY SERVICE.—In 

14 addition to the waivers authorized by sub15 paragraphs (D) and (E), the Secretary 

16 shall waive the amounts that students are 

17 required to return under this section if the 

18 withdrawals on which the returns are 

19 based are withdrawals necessitated by rea20 son of service in the uniformed services. 

21 ‘‘(ii) LOAN FORGIVENESS AUTHOR22 IZED.—Whenever a student’s withdrawal 

23 from an institution of higher education is 

24 necessitated by reason of service in the 

25 uniformed services, the Secretary shall, 


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1 with respect to the payment period or pe2 riod of enrollment for which such student 

3 did not receive academic credit as a result 

4 of such withdrawal, carry out a program— 

5 ‘‘(I) through the holder of the 

6 loan, to assume the obligation to 

7 repay— 

8 ‘‘(aa) the outstanding prin9 cipal and accrued interest on any 

10 loan assistance awarded to the 

11 student under part B (including 

12 to a parent on behalf of the stu13 dent under section 428B) for 

14 such payment period or period of 

15 enrollment; minus 

16 ‘‘(bb) any amount of such 

17 loan assistance returned by the 

18 institution in accordance with 

19 paragraph (1) of this subsection 

20 for such payment period or pe21 riod of enrollment; and 

22 ‘‘(II) to cancel— 

23 ‘‘(aa) the outstanding prin24 cipal and accrued interest on the 

25 loan assistance awarded to the 


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1 student under part D or E (in2 cluding a Federal Direct PLUS 

3 loan awarded to a parent on be4 half of the student) for such pay5 ment period or period of enroll6 ment; minus 

7 ‘‘(bb) any amount of such 

8 loan assistance returned by the 

9 institution in accordance with 

10 paragraph (1) of this subsection 

11 for such payment period or pe12 riod of enrollment. 

13 ‘‘(iii) REIMBURSEMENT FOR CAN14 CELLATION OF PERKINS LOANS.—The Sec15 retary shall pay to each institution for 

16 each fiscal year an amount equal to the ag17 gregate of the amounts of Federal Perkins 

18 loans in such institutions’s student loan 

19 fund which are cancelled pursuant to 

20 clause (iii)(II) for such fiscal year, minus 

21 an amount equal to the aggregate of the 

22 amounts of any such loans so canceled 

23 which were made from Federal capital con24 tributions to its student loan fund provided 

25 by the Secretary under section 468. None 


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1 of the funds appropriated pursuant to sec2 tion 461(b) shall be available for payments 

3 pursuant to this paragraph. To the extent 

4 feasible, the Secretary shall pay the 

5 amounts for which any institution qualifies 

6 under this paragraph not later than 3 

7 months after the institution files an insti8 tutional application for campus-based 

9 funds. 

10 ‘‘(iv) LOAN ELIGIBILITY AND LIMITS

11 FOR STUDENTS.—Any amounts that are 

12 returned by an institution in accordance 

13 with paragraph (1), or forgiven or waived 

14 by the Secretary under this subparagraph, 

15 with respect to a payment period or period 

16 of enrollment for which a student did not 

17 receive academic credit as a result of with18 drawal necessitated by reason of service in 

19 the uniformed services, shall not be in20 cluded in the calculation of the student’s 

21 annual or aggregate loan limits for assist22 ance under this title, or otherwise affect 

23 the student’s eligibility for grants or loans 

24 under this title. 


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1 ‘‘(v) DEFINITION.—In this subpara2 graph, the term ‘service in the uniformed 

3 services’ has the meaning given such term 

4 in section 484C(a).’’. 

5 (b) EFFECTIVE DATE.— 

6 (1) IN GENERAL.—The amendments made by 

7 this section shall take effect for periods of service in 

8 the uniformed services beginning after the date of 

9 the enactment of this Act. 

10 (2) DEFINITION.—In this paragraph, the term 

11 ‘‘period of service in the uniformed services’’ means 

12 the period beginning 30 days prior to the date a stu13 dent is required to report to service in the uniformed 

14 services (as defined in section 484C(a) of the Higher 

15 Education Act of 1965 (20 U.S.C. 1091c(a)) and 

16 ending when such student returns from such service. 

17 SEC. 106. VETERANS EDUCATIONAL EQUITY SUPPLE18 MENTAL GRANT PROGRAM. 

19 (a) VETERANS EDUCATIONAL EQUITY SUPPLE20 MENTAL GRANT PROGRAM.—Subpart 1 of part A of title 

21 IV (20 U.S.C. 1070a et seq.) is amended by adding at 

22 the end the following: 


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1 ‘‘SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLE2 MENTAL GRANT PROGRAM. 

3 ‘‘(a) VETERANS EDUCATIONAL EQUITY SUPPLE4 MENTAL GRANTS AUTHORIZED.—The Secretary shall 

5 award a grant to each eligible student, in an amount de6 termined in accordance with subsection (c), to assist such 

7 student with paying the cost of tuition incurred by the 

8 student for a program of education at an institution of 

9 higher education. 

10 ‘‘(b) DEFINITIONS.—In this section— 

11 ‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 

12 student’ means a student who— 

13 ‘‘(A) is a covered individual, as such term 

14 is defined in section 3311(b) of title 38, United 

15 States Code; 

16 ‘‘(B) is enrolled at an institution of higher 

17 education that— 

18 ‘‘(i) is not a public institution of high19 er education; and 

20 ‘‘(ii) is located in a State with a zero, 

21 or very low, maximum tuition charge per 

22 credit hour compared to the maximum tui23 tion charge per credit hour in all other 

24 States, as determined by the Secretary of 

25 Veterans Affairs (based on the determina26 tions of maximum tuition charged per 


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1 credit hour in each State for the purposes 

2 of chapter 33 of title 38, United States 

3 Code); and 

4 ‘‘(C) is eligible for educational assistance 

5 for an academic year, and will receive an 

6 amount of such assistance for such year for fees 

7 charged the individual that is less than the 

8 maximum amount of such assistance available 

9 for fees charged for such year in such State. 

10 ‘‘(2) EDUCATIONAL ASSISTANCE.—The term 

11 ‘educational assistance’ means the amount of edu12 cational assistance from the Secretary of Veterans 

13 Affairs an eligible student receives or will receive 

14 under section 3313(c)(1)(A) of title 38, United 

15 States Code, or a similar amount of such assistance 

16 under paragraphs (2) through (7) of such section 

17 3313(c). 

18 ‘‘(c) GRANT AMOUNT.—A grant to an eligible student 

19 under this section be equal to an amount that is— 

20 ‘‘(1) the maximum amount of educational as21 sistance for fees charged that the eligible student 

22 would receive, in accordance with section 3313(c) of 

23 title 38, United States Code, if such student at24 tended the public institution of higher education in 

25 the State in which the eligible student is enrolled 


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1 that has the highest fees charged to an individual 

2 for a year in such State (as determined by the Sec3 retary of Veterans Affairs for the purposes of chap4 ter 33 of such title 38), less 

5 ‘‘(2) the educational assistance the eligible stu6 dent will receive, in accordance with such section, for 

7 fees charged to the student for such year at the in8 stitution of higher education at which the student is 

9 enrolled. 

10 ‘‘(d) USES OF FUNDS.—An eligible student who re11 ceives a grant under this section shall use such grant to 

12 pay tuition incurred by the student for a program of edu13 cation at an institution of higher education. 

14 ‘‘(e) NOTIFICATION.—The Secretary, in coordination 

15 with Secretary of Veterans Affairs, shall establish a sys16 tem of notification to ensure the timely delivery to each 

17 eligible student of— 

18 ‘‘(1) educational assistance received by the stu19 dent; and 

20 ‘‘(2) grants awarded to the student under this 

21 section. 

22 ‘‘(f) AUTHORIZATION AND APPROPRIATION.—There 

23 are authorized to be appropriated, and there are appro24 priated, such sums as may be necessary to carry out this 

25 section (in addition to any other amounts appropriated to 


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1 carry out this section and out of any money in the Treas2 ury not otherwise appropriated).’’. 

3 (b) CONFORMING AMENDMENT.—The header for 

4 subpart 1 of part A of title IV (20 U.S.C. 1070a et seq.) 

5 is amended by inserting ‘‘; Veterans Educational 

6 Equity Supplemental Grants’’ after ‘‘Pell 

7 Grants’’. 

8 Subtitle B—Student Financial Aid 

9 Form Simplification 

10 SEC. 121. GENERAL EFFECTIVE DATE. 

11 Except as otherwise provided in this subtitle, amend12 ments made by this subtitle shall be effective with respect 

13 to determinations of need for assistance under title IV of 

14 the Higher Education Act of 1965 (20 U.S.C. 1070 et 

15 seq.) for award years beginning on or after July 1, 2011. 

16 SEC. 122. TREATMENT OF ASSETS IN NEED ANALYSIS. 

17 (a) AMOUNT OF NEED.—Section 471 (20 U.S.C. 

18 1087kk) is amended— 

19 (1) by striking ‘‘Except’’ and inserting the fol20 lowing: 

21 ‘‘(a) IN GENERAL.—Except’’; 

22 (2) by inserting ‘‘and subject to subsection (b)’’ 

23 after ‘‘therein’’; and 

24 (3) by adding at the end the following: 


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1 ‘‘(b) ASSET CAP FOR NEED-BASED AID.—Notwith2 standing any other provision of this title, a student shall 

3 not be eligible to receive a Federal Pell Grant, a Federal 

4 Direct Stafford Loan, or work assistance under this title 

5 if— 

6 ‘‘(1) in the case of a dependent student, the 

7 combined net assets of the student and the student’s 

8 parents are equal to an amount greater than 

9 $150,000 (or a successor amount prescribed by the 

10 Secretary under section 478(c)); or 

11 ‘‘(2) in the case of an independent student, the 

12 net assets of the student (and the student’s spouse, 

13 if applicable) are equal to an amount greater than 

14 $150,000 (or a successor amount prescribed by the 

15 Secretary under section 478(c)).’’. 

16 (b) DATA ELEMENTS.—Section 474(b) (20 U.S.C. 

17 1087nn(b)) is amended— 

18 (1) by striking paragraph (4); and 

19 (2) by redesignating paragraphs (5), (6), and 

20 (7) as paragraphs (4), (5), and (6), respectively. 

21 (c) DEPENDENT STUDENTS.—Section 475 (20 

22 U.S.C. 1087oo) is amended— 

23 (1) in subsection (a)— 

24 (A) in paragraph (1)— 

25 (i) by striking ‘‘adjusted’’; and 


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1 (ii) by inserting ‘‘and’’ after the semi2 colon; 

3 (B) in paragraph (2), by striking ‘‘; and’’ 

4 and inserting a period; and 

5 (C) by striking paragraph (3); 

6 (2) in subsection (b)— 

7 (A) in the header, by striking ‘‘AD8 JUSTED’’; 

9 (B) in the matter preceding paragraph (1), 

10 by striking ‘‘adjusted’’; 

11 (C) by striking paragraph (1); 

12 (D) by redesignating paragraphs (2) and 

13 (3) as paragraphs (1) and (2), respectively; 

14 (E) in paragraph (1) (as redesignated by 

15 subparagraph (D) of this paragraph), by strik16 ing ‘‘adjusted’’; and 

17 (F) in paragraph (2) (as redesignated by 

18 subparagraph (D) of this paragraph), by strik19 ing ‘‘paragraph (2)’’ and inserting ‘‘paragraph 

20 (1)’’; 

21 (3) by repealing subsection (d); 

22 (4) in subsection (e)— 

23 (A) by striking ‘‘The adjusted available’’ 

24 and inserting ‘‘The available’’; 


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1 (B) by striking ‘‘to as ‘AAI’)’’ and insert2 ing ‘‘to as ‘AI’)’’; 

3 (C) by striking ‘‘From Adjusted Available 

4 Income (AAI)’’ and inserting ‘‘From Available 

5 Income (AI)’’; and 

6 (D) in the table— 

7 (i) by striking ‘‘If AAI’’ and inserting 

8 ‘‘If AI’’; and 

9 (ii) by striking ‘‘of AAI’’ each place it 

10 appears and inserting ‘‘of AI’’; 

11 (5) in subsection (f)— 

12 (A) by striking ‘‘and assets’’ each place it 

13 appears; 

14 (B) in paragraph (2)(B), by striking ‘‘or 

15 assets’’; and 

16 (C) in paragraph (3)— 

17 (i) by striking ‘‘are taken into’’ and 

18 inserting ‘‘is taken into’’; and 

19 (ii) by striking ‘‘adjusted’’; 

20 (6) in subsection (g)(6), by striking ‘‘exceeds 

21 the sum of’’ and all that follows and inserting ‘‘ex22 ceeds the parents’ total income (as defined in section 

23 480)’’; 

24 (7) by repealing subsection (h); and 


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1 (8) in subsection (i), by striking ‘‘adjusted’’ 

2 each place it appears. 

3 (d) FAMILY CONTRIBUTION FOR INDEPENDENT STU4 DENTS WITHOUT DEPENDENTS OTHER THAN A

5 SPOUSE.—Section 476 (20 U.S.C. 1087pp) is amended— 

6 (1) in subsection (a)— 

7 (A) by striking paragraph (1); 

8 (B) by redesignating paragraphs (2) and 

9 (3) as paragraphs (1) and (2), respectively; 

10 (C) in paragraph (1) (as redesignated by 

11 subparagraph (B)), by striking ‘‘the sum result12 ing under paragraph (1)’’ and inserting ‘‘the 

13 family’s contribution from available income (de14 termined in accordance with subsection (b))’’; 

15 and 

16 (D) in paragraph (2)(A) (as redesignated 

17 by subparagraph (B)), by striking ‘‘paragraph 

18 (2)’’ and inserting ‘‘paragraph (1)’’; 

19 (2) by repealing subsection (c); and 

20 (3) in subsection (d)— 

21 (A) by striking ‘‘and assets’’; and 

22 (B) by striking ‘‘or assets’’. 

23 (e) FAMILY CONTRIBUTION FOR INDEPENDENT STU24 DENTS WITH DEPENDENTS OTHER THAN A SPOUSE.— 

25 Section 477 (20 U.S.C. 1087qq) is amended— 


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1 (1) in subsection (a)— 

2 (A) by striking paragraph (1); 

3 (B) by redesignating paragraphs (2), (3), 

4 and (4) as paragraphs (1), (2), and (3), respec5 tively; 

6 (C) in paragraph (1) (as redesignated by 

7 subparagraph (B)), by striking ‘‘such adjusted 

8 available income’’ and inserting ‘‘the family’s 

9 available income (determined in accordance with 

10 subsection (b))’’; 

11 (D) in paragraph (2) (as redesignated by 

12 subparagraph (B)), by striking ‘‘paragraph (2)’’ 

13 and inserting ‘‘paragraph (1)’’; and 

14 (E) in paragraph (3)(A) (as redesignated 

15 by subparagraph (B)), by striking ‘‘paragraph 

16 (3)’’ and inserting ‘‘paragraph (2)’’; 

17 (2) by repealing subsection (c); and 

18 (3) in subsection (d)— 

19 (A) by striking ‘‘The adjusted available’’ 

20 and inserting ‘‘The available’’; 

21 (B) by striking ‘‘to as ‘AAI’)’’ and insert22 ing ‘‘to as ‘AI’)’’; 

23 (C) by striking ‘‘From Adjusted Available 

24 Income (AAI)’’ and inserting ‘‘From Available 

25 Income (AI)’’; and 


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1 (D) in the table— 

2 (i) by striking ‘‘If AAI’’ and inserting 

3 ‘‘If AI’’; and 

4 (ii) by striking ‘‘of AAI’’ each place it 

5 appears and inserting ‘‘of AI’’; and 

6 (E) in subsection (e)— 

7 (i) by striking ‘‘and assets’’; and 

8 (ii) by striking ‘‘or assets’’. 

9 (f) REGULATIONS; UPDATED TABLES.—Section 478 

10 (20 U.S.C. 1087rr) is amended— 

11 (1) in subsection (a), by inserting ‘‘or amounts, 

12 as the case may be,’’ after ‘‘tables’’ each place the 

13 term appears; 

14 (2) by amending subsection (c) to read as fol15 lows: 

16 ‘‘(c) ASSET CAP FOR NEED-BASED AID.—For each 

17 award year after award year 2011–2012, the Secretary 

18 shall publish in the Federal Register a revised net asset 

19 cap for the purposes of section 471(b). Such revised cap 

20 shall be determined by increasing the dollar amount in 

21 such section by a percentage equal to the estimated per22 centage change in the Consumer Price Index (as deter23 mined by the Secretary) between December 2010 and the 

24 December preceding the beginning of such award year, 

25 and rounding the result to the nearest $5.’’; 


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1 (3) by repealing subsection (d); and 

2 (4) in subsection (e), by striking ‘‘adjusted’’ 

3 both places it appears. 

4 SEC. 123. CHANGES TO TOTAL INCOME; AID ELIGIBILITY. 

5 (a) DEFINITION OF UNTAXED INCOME AND BENE6 FITS.—Section 480(b)(1) (20 U.S.C. 1087vv(b)(1)), as 

7 amended by the Higher Education Opportunity Act (Pub8 lic Law 110–315), is amended— 

9 (1) by striking subparagraphs (A), (B), (C), 

10 (E), (F), and (I); 

11 (2) by redesignating subparagraphs (D), (G), 

12 and (H) as subparagraphs (A), (B), and (C), respec13 tively; 

14 (3) in subparagraph (B) (as redesignated by 

15 paragraph (2)), by inserting ‘‘and’’ after the semi16 colon; and 

17 (4) in subparagraph (C) (as redesignated by 

18 paragraph (2)), by striking ‘‘; and’’ and inserting a 

19 period. 

20 (b) DEFINITION OF ASSETS.—Section 480(f)(2) (20 

21 U.S.C. 1087vv(f)(2)) is amended— 

22 (1) by striking ‘‘or’’ at the end of subparagraph 

23 (B); 

24 (2) by striking the period at the end of sub25 paragraph (C) and inserting ‘‘; or’’; and 


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1 (3) by adding at the end the following: 

2 ‘‘(D) an employee pension benefit plan (as 

3 defined in section 3(2) of the Employee Retire4 ment Income Security Act of 1974 (29 U.S.C. 

5 1002(2))).’’. 

6 (c) FINANCIAL ADMINISTRATOR DISCRETION.—Sec7 tion 479A(b) (20 U.S.C. 1087tt) is amended in the sub8 section heading, by striking ‘‘TO ASSETS’’. 

9 (d) SUSPENSION OF ELIGIBILITY FOR DRUG-RE10 LATED OFFENSES.—Section 484(r)(1) (20 U.S.C. 

11 1091(r)(1)) is amended to read as follows: 

12 ‘‘(1) IN GENERAL.—A student who is convicted 

13 of any offense under any Federal or State law in14 volving the sale of a controlled substance for conduct 

15 that occurred during a period of enrollment for 

16 which the student was receiving any grant, loan, or 

17 work assistance under this title shall not be eligible 

18 to receive any grant, loan, or work assistance under 

19 this title from the date of that conviction for the pe20 riod of time specified in the following subpara21 graphs: 

22 ‘‘(A) For a first offense, the period of in23 eligibility shall be 2 years. 

24 ‘‘(B) For a second offense, the period of 

25 ineligibility shall be indefinite.’’. 


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1 TITLE II—STUDENT LOAN 

2 REFORM 

3 Subtitle A—Stafford Loan Reform 

4 SEC. 201. FEDERAL FAMILY EDUCATION LOAN APPROPRIA5 TIONS. 

6 Section 421 (20 U.S.C. 1071) is amended— 

7 (1) in subsection (b), in the matter following 

8 paragraph (6), by inserting ‘‘, except that no sums 

9 may be expended after June 30, 2010, with respect 

10 to loans under this part for which the first disburse11 ment would be made after such date’’ after ‘‘ex12 pended’’; and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(d) TERMINATION OF AUTHORITY TO MAKE OR IN16 SURE NEW LOANS.—Notwithstanding paragraphs (1) 

17 through (6) of subsection (b) or any other provision of 

18 law— 

19 ‘‘(1) no new loans (including consolidation 

20 loans) may be made or insured under this part after 

21 June 30, 2010; and 

22 ‘‘(2) no funds are authorized to be appro23 priated, or may be expended, under this Act or any 

24 other Act to make or insure loans under this part 


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1 (including consolidation loans) for which the first 

2 disbursement would be made after June 30, 2010, 

3 except as expressly authorized by an Act of Congress en4 acted after the date of enactment of Student Aid and Fis5 cal Responsibility Act of 2009.’’. 

6 SEC. 202. SCOPE AND DURATION OF FEDERAL LOAN INSUR7 ANCE PROGRAM. 

8 Section 424(a) (20 U.S.C. 1074(a)) is amended by 

9 striking ‘‘September 30, 1976,’’ and all that follows and 

10 inserting ‘‘September 30, 1976, for each of the succeeding 

11 fiscal years ending prior to October 1, 2009, and for the 

12 period from October 1, 2009, to June 30, 2010, for loans 

13 first disbursed on or before June 30, 2010.’’. 

14 SEC. 203. APPLICABLE INTEREST RATES. 

15 Section 427A(l) (20 U.S.C. 1077a(l)) is amended— 

16 (1) in paragraph (1), by inserting ‘‘and before 

17 July 1, 2010,’’ after ‘‘July 1, 2006,’’; 

18 (2) in paragraph (2), by inserting ‘‘and before 

19 July 1, 2010,’’ after ‘‘July 1, 2006,’’; 

20 (3) in paragraph (3), by inserting ‘‘and that 

21 was disbursed before July 1, 2010,’’ after ‘‘July 1, 

22 2006,’’; and 

23 (4) in paragraph (4)— 


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1 (A) in the matter preceding subparagraph 

2 (A), by striking ‘‘July 1, 2012’’ and inserting 

3 ‘‘July 1, 2010’’; and 

4 (B) by repealing subparagraphs (D) and 

5 (E). 

6 SEC. 204. FEDERAL PAYMENTS TO REDUCE STUDENT IN7 TEREST COSTS. 

8 (a) HIGHER EDUCATION ACT OF 1965.—Section 428 

9 (20 U.S.C. 1078) is amended— 

10 (1) in subsection (a)— 

11 (A) in paragraph (1), in the matter pre12 ceding subparagraph (A), by inserting ‘‘for 

13 which the first disbursement is made before 

14 July 1, 2010, and’’ after ‘‘eligible institution’’; 

15 and 

16 (B) in paragraph (5), by striking ‘‘Sep17 tember 30, 2014,’’ and all that follows through 

18 the period and inserting ‘‘June 30, 2010.’’; 

19 (2) in subsection (b)(1)— 

20 (A) in subparagraph (G)(ii), by inserting 

21 ‘‘and before July 1, 2010,’’ after ‘‘July 1, 

22 2006,’’; and 

23 (B) in subparagraph (H)(ii), by inserting 

24 ‘‘and that are first disbursed before July 1, 

25 2010,’’ after ‘‘July 1, 2006,’’; 


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1 (3) in subsection (f)(1)(A)(ii)— 

2 (A) by striking ‘‘during fiscal years begin3 ning’’; and 

4 (B) by inserting ‘‘and first disbursed be5 fore July 1, 2010,’’ after ‘‘October 1, 2003,’’; 

6 and 

7 (4) in subsection (j)(1), by inserting ‘‘, before 

8 July 1, 2010,’’ after ‘‘section 435(d)(1)(D) of this 

9 Act shall’’. 

10 (b) COLLEGE COST REDUCTION AND ACCESS ACT.— 

11 Section 303 of the College Cost Reduction and Access Act 

12 (Public Law 110–84) is repealed. 

13 SEC. 205. FEDERAL PLUS LOANS. 

14 Section 428B(a)(1) (20 U.S.C. 1078–2(a)(1)) is 

15 amended by striking ‘‘A graduate’’ and inserting ‘‘Prior 

16 to July 1, 2010, a graduate’’. 

17 SEC. 206. FEDERAL CONSOLIDATION LOAN. 

18 (a) AMENDMENTS.—Section 428C (20 U.S.C. 1078– 

19 3) is amended— 

20 (1) in subsection (a)— 

21 (A) by amending paragraph (3)(B)(i)(V) to 

22 read as follows: 

23 ‘‘(V) an individual who has a consoli24 dation loan under this section and does not 

25 have a consolidation loan under section 


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1 455(g) may obtain a subsequent consolida2 tion loan under section 455(g).’’; and 

3 (B) in paragraph (4)(A), by inserting ‘‘, 

4 and first disbursed before July 1, 2010’’ after 

5 ‘‘under this part’’; 

6 (2) in subsection (b)— 

7 (A) in paragraph (1)(E), by inserting be8 fore the semicolon ‘‘, and before July 1, 2010’’; 

9 and 

10 (B) in paragraph (5), by striking ‘‘In the 

11 event that’’ and inserting ‘‘If, before July 1, 

12 2010,’’; 

13 (3) in subsection (c)(1)— 

14 (A) in subparagraph (A)(ii), by inserting 

15 ‘‘and that is disbursed before July 1, 2010,’’ 

16 after ‘‘2006,’’; and 

17 (B) in subparagraph (C), by inserting 

18 ‘‘and first disbursed before July 1, 2010,’’ after 

19 ‘‘1994,’’; and 

20 (4) in subsection (e), by striking ‘‘September 

21 30, 2014.’’ and inserting ‘‘June 30, 2010. No loan 

22 may be made under this section for which the first 

23 disbursement would be on or after July 1, 2010.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a)(1)(A) shall be effective at the close of June 

3 30, 2010. 

4 SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE5 INCOME BORROWERS. 

6 Section 428H (20 U.S.C. 1078–8) is amended— 

7 (1) in subsection (a), by inserting ‘‘that are 

8 first disbursed before July 1, 2010,’’ after ‘‘under 

9 this part’’; 

10 (2) in subsection (b)— 

11 (A) by striking ‘‘Any student’’ and insert12 ing ‘‘Prior to July 1, 2010, any student’’; and 

13 (B) by inserting ‘‘for which the first dis14 bursement is made before such date’’ after ‘‘un15 subsidized Federal Stafford Loan’’; and 

16 (3) in subsection (h), by inserting ‘‘and that are 

17 first disbursed before July 1, 2010,’’ after ‘‘July 1, 

18 2006,’’. 

19 SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE 

20 ATTORNEYS. 

21 Section 428L(b)(2)(A) (20 U.S.C. 1078– 

22 12(b)(2)(A)) is amended— 

23 (1) by amending clause (i) to read as follows: 

24 ‘‘(i) subject to clause (ii)— 


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1 ‘‘(I) a loan made, insured, or 

2 guaranteed under this part, and that 

3 is first disbursed before July 1, 2010; 

4 or 

5 ‘‘(II) a loan made under part D 

6 or part E; and’’; and 

7 (2) in clause (ii)— 

8 (A) by striking ‘‘428C or 455(g)’’ and in9 serting ‘‘428C, that is disbursed before July 1, 

10 2010, or section 455(g)’’; and 

11 (B) in subclause (II), by inserting ‘‘for 

12 which the first disbursement is made before 

13 July 1, 2010,’’ after ‘‘or 428H’’. 

14 SEC. 209. SPECIAL ALLOWANCES. 

15 Section 438 (20 U.S.C. 1087–1) is amended— 

16 (1) in subsection (b)(2)(I)— 

17 (A) in the header, by inserting ‘‘, AND BE18 FORE JULY 1, 2010’’ after ‘‘2000’’; 

19 (B) in clause (i), by inserting ‘‘and before 

20 July 1, 2010,’’ after ‘‘2000,’’; 

21 (C) in clause (ii)(II), by inserting ‘‘and be22 fore July 1, 2010,’’ after ‘‘2006,’’; 

23 (D) in clause (iii), by inserting ‘‘and before 

24 July 1, 2010,’’ after ‘‘2000,’’; 


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1 (E) in clause (iv), by inserting ‘‘and that 

2 is disbursed before July 1, 2010,’’ after 

3 ‘‘2000,’’; 

4 (F) in clause (v)(I), by inserting ‘‘and be5 fore July 1, 2010,’’ after ‘‘2006,’’; and 

6 (G) in clause (vi)— 

7 (i) in the header, by inserting ‘‘, AND

8 BEFORE JULY 1, 2010’’ after ‘‘2007’’; and 

9 (ii) in the matter preceding subclause 

10 (I), by inserting ‘‘and before July 1, 

11 2010,’’ after ‘‘2007,’’; 

12 (2) in subsection (c)— 

13 (A) in paragraph (2)(B)— 

14 (i) in clause (iii), by inserting ‘‘and’’ 

15 after the semicolon; 

16 (ii) in clause (iv), by striking ‘‘; and’’ 

17 and inserting a period; and 

18 (iii) by striking clause (v); and 

19 (B) in paragraph (6), by inserting ‘‘and 

20 first disbursed before July 1, 2010,’’ after 

21 ‘‘1992,’’; and 

22 (3) in subsection (d)(2)(B), by inserting ‘‘, and 

23 before July 1, 2010’’ after ‘‘2007’’. 


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1 SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION. 

2 (a) REVISED CALCULATION RULE.—Section 

3 438(b)(2)(I) of the Higher Education Act of 1965 (20 

4 U.S.C. 1087–1(b)(2)(I)) is amended by adding at the end 

5 the following new clause: 

6 ‘‘(vii) REVISED CALCULATION RULE

7 TO REFLECT FINANCIAL MARKET CONDI8 TIONS.— 

9 ‘‘(I) CALCULATION BASED ON

10 LIBOR.—For the calendar quarter be11 ginning on October 1, 2009, and each 

12 subsequent calendar quarter, in com13 puting the special allowance paid pur14 suant to this subsection with respect 

15 to loans described in subclause (II), 

16 clause (i)(I) of this subparagraph 

17 shall be applied by substituting ‘of the 

18 1-month London Inter Bank Offered 

19 Rate (LIBOR) for United States dol20 lars in effect for each of the days in 

21 such quarter as compiled and released 

22 by the British Bankers Association’ 

23 for ‘of the quotes of the 3-month com24 mercial paper (financial) rates in ef25 fect for each of the days in such quar26 ter as reported by the Federal Reserve 


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1 in Publication H–15 (or its successor) 

2 for such 3-month period’. 

3 ‘‘(II) LOANS ELIGIBLE FOR

4 LIBOR-BASED CALCULATION.—The 

5 special allowance paid pursuant to 

6 this subsection shall be calculated as 

7 described in subclause (I) with respect 

8 to special allowance payments for the 

9 3-month period ending December 31, 

10 2009, and each succeeding 3-month 

11 period, on loans for which the first 

12 disbursement is made— 

13 ‘‘(aa) on or after the date of 

14 enactment of the Student Aid 

15 and Fiscal Responsibility Act of 

16 2009, and before July 1, 2010; 

17 and 

18 ‘‘(bb) on or after January 1, 

19 2000, and before the date of en20 actment of the Student Aid and 

21 Fiscal Responsibility Act of 

22 2009, if, not later than the last 

23 day of the second full fiscal quar24 ter after the date of enactment of 

25 such Act, the holder of the loan 


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1 affirmatively and permanently 

2 waives all contractual, statutory 

3 or other legal rights to a special 

4 allowance paid pursuant to this 

5 subsection that is calculated 

6 using the formula in effect at the 

7 time the loans were first dis8 bursed. 

9 ‘‘(III) TERMS OF WAIVER.—A 

10 waiver pursuant to subclause (II)(bb) 

11 shall— 

12 ‘‘(aa) be applicable to all 

13 loans described in such subclause 

14 that are held under any lender 

15 identification number associated 

16 with the holder (pursuant to sec17 tion 487B); and 

18 ‘‘(bb) apply with respect to 

19 all future calculations of the spe20 cial allowance on loans described 

21 in such subclause that are held 

22 on the date of such waiver or 

23 that are acquired by the holder 

24 after such date. 


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1 ‘‘(IV) PARTICIPANT’S YIELD.— 

2 For the calendar quarter beginning on 

3 October 1, 2009, and each subsequent 

4 calendar quarter, the Secretary’s par5 ticipant yield in any loan for which 

6 the first disbursement is made on or 

7 after January 1, 2000, and before Oc8 tober 1, 2009, and that is held by a 

9 lender that has sold any participation 

10 interest in such loan to the Secretary 

11 shall be determined by using the 

12 LIBOR-based rate described in sub13 clause (I) as the substitute rate (for 

14 the commercial paper rate) referred to 

15 in the participation agreement be16 tween the Secretary and such lend17 er.’’; 

18 (b) CONFORMING AMENDMENT.—Section 

19 438(b)(2)(I) (20 U.S.C. 1087–1(b)(2)(I)) is further 

20 amended— 

21 (1) in clause (i)(II), by striking ‘‘such average 

22 bond equivalent rate’’ and inserting ‘‘the rate deter23 mined under subclause (I)’’; and 

24 (2) in clause (v)(III) by striking ‘‘(iv), and (vi)’’ 

25 and inserting ‘‘(iv), (vi), and (vii)’’. 


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1 SEC. 211. ORIGINATION OF DIRECT LOANS AT INSTITU2 TIONS LOCATED OUTSIDE THE UNITED 

3 STATES. 

4 (a) LOANS FOR STUDENTS ATTENDING INSTITU5 TIONS LOCATED OUTSIDE THE UNITED STATES.—Sec6 tion 452 (20 U.S.C. 1087b) is amended by adding at the 

7 end the following: 

8 ‘‘(d) INSTITUTIONS LOCATED OUTSIDE THE UNITED

9 STATES.—Loan funds for students (and parents of stu10 dents) attending institutions located outside the United 

11 States shall be disbursed through a financial institution 

12 located in the United States and designated by the Sec13 retary to serve as the agent of such institutions with re14 spect to the receipt of the disbursements of such loan 

15 funds and the transfer of such funds to such institutions. 

16 To be eligible to receive funds under this part, an other17 wise eligible institution located outside the United States 

18 shall make arrangements, subject to regulations by the 

19 Secretary, with the agent designated by the Secretary 

20 under this subsection to receive funds under this part.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) AMENDMENTS.—Section 102 (20 U.S.C. 

23 1002), as amended by section 102 of the Higher 

24 Education Opportunity Act (Public Law 110–315) 

25 and section 101 of Public Law 111–39, is amend26 ed— 


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1 (A) by striking ‘‘part B’’ each place it ap2 pears and inserting ‘‘part D’’; 

3 (B) in subsection (a)(1)(C), by inserting ‘‘, 

4 consistent with the requirements of section 

5 452(d)’’ before the period at the end; and 

6 (C) in subsection (a)(2)(A)— 

7 (i) in the matter preceding clause (i), 

8 by striking ‘‘made, insured, or guaranteed’’ 

9 and inserting ‘‘made’’; and 

10 (ii) in clause (iii)— 

11 (I) in subclause (III), by striking 

12 ‘‘only Federal Stafford’’ and all that 

13 follows through ‘‘section 428B’’ and 

14 inserting ‘‘only Federal Direct Staf15 ford Loans under section 

16 455(a)(2)(A), Federal Direct Unsub17 sidized Stafford Loans under section 

18 455(a)(2)(D), or Federal Direct 

19 PLUS Loans under section 

20 455(a)(2)(B)’’; and 

21 (II) in subclause (V), by striking 

22 ‘‘a Federal Stafford’’ and all that fol23 lows through ‘‘section 428B’’ and in24 serting ‘‘a Federal Direct Stafford 

25 Loan under section 455(a)(2)(A), a 


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1 Federal Direct Unsubsidized Stafford 

2 Loan under section 455(a)(2)(D), or a 

3 Federal Direct PLUS Loan under 

4 section 455(a)(2)(B)’’. 

5 (2) EFFECTIVE DATE.—The amendments made 

6 by subparagraph (C) of paragraph (1) shall be effec7 tive on July 1, 2010, as if enacted as part of section 

8 102(a)(1) of the Higher Education Opportunity Act 

9 (Public Law 110–315). 

10 SEC. 212. AGREEMENTS WITH INSTITUTIONS. 

11 Section 454 (20 U.S.C. 1087d) is amended— 

12 (1) in subsection (a), by striking paragraph (4) 

13 and redesignating the succeeding paragraphs accord14 ingly; and 

15 (2) in subsection (b)(2), by striking ‘‘(5), (6), 

16 and (7)’’ and inserting ‘‘(5), and (6)’’. 

17 SEC. 213. TERMS AND CONDITIONS OF LOANS. 

18 (a) AMENDMENTS.—Section 455 (20 U.S.C. 1087e) 

19 is amended— 

20 (1) in subsection (a)(1), by inserting ‘‘, and 

21 first disbursed on June 30, 2010,’’ before ‘‘under 

22 sections 428’’; and 

23 (2) in subsection (g)— 


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1 (A) by inserting ‘‘, including any loan 

2 made under part B and first disbursed before 

3 July 1, 2010’’ after ‘‘section 428C(a)(4)’’; and 

4 (B) by striking the third sentence. 

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

6 subsection (a)(1) shall apply with respect to loans first dis7 bursed under part D of title IV of the Higher Education 

8 Act of 1965 (20 U.S.C. 1087a et seq.) on or after July 

9 1, 2010. 

10 SEC. 214. CONTRACTS. 

11 Section 456 (20 U.S.C. 1087f) is amended— 

12 (1) in subsection (a)— 

13 (A) in paragraph (1)— 

14 (i) in the header, by striking ‘‘IN

15 GENERAL’’ and inserting ‘‘AWARDING OF

16 CONTRACTS’’; 

17 (ii) by striking ‘‘The Secretary’’ and 

18 inserting the following: 

19 ‘‘(A) IN GENERAL.—The Secretary’’; and 

20 (iii) by adding at the end the fol21 lowing: 

22 ‘‘(B) AWARDING CONTRACTS FOR SERV23 ICING LOANS.—The Secretary shall, if prac24 ticable, award multiple contracts, through a 

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1 ing eligible not-for-profit servicers, to service 

2 loans originated under this part. The competi3 tive bidding process shall take into account 

4 price, servicing capacity, and capability, and 

5 may take into account the capacity and capa6 bility to provide default aversion activities and 

7 outreach services. 

8 ‘‘(C) JOB RETENTION INCENTIVE PAY9 MENT.—(i) In a contract with an entity under 

10 subparagraph (B) for the servicing of loans, the 

11 Secretary shall provide a job retention incentive 

12 payment, in an amount and manner determined 

13 by the Secretary, if such entity agrees to give 

14 priority for hiring for positions created as a re15 sult of such a contract to those geographical lo16 cations at which the entity performed student 

17 loan origination or servicing activities under the 

18 Federal Family Education Loan Program as of 

19 the date of enactment of the Student Aid and 

20 Fiscal Responsibility Act of 2009. 

21 ‘‘(ii) In determining the allocation of loans 

22 to be serviced by an entity awarded such a con23 tract, the Secretary shall consider the retention 

24 of highly qualified employees of such entity a 

25 positive factor in determining such allocation.’’; 


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1 (B) in paragraph (2)— 

2 (i) in the first sentence, by inserting 

3 ‘‘, including eligible not-for-profit 

4 servicers,’’ after ‘‘The entities’’; 

5 (ii) by amending the third sentence to 

6 read as follows: ‘‘The entities with which 

7 the Secretary may enter into such con8 tracts shall include, where practicable, 

9 agencies with agreements with the Sec10 retary under sections 428(b) and (c) on 

11 the date of the enactment of the Student 

12 Aid and Fiscal Responsibility Act of 2009, 

13 and eligible not-for-profit servicers, if such 

14 agencies or servicers meet the qualifica15 tions as determined by the Secretary under 

16 this subsection and if those agencies or 

17 servicers have such experience and dem18 onstrated effectiveness.’’; and 

19 (iii) by striking the last sentence and 

20 inserting the following: ‘‘In awarding con21 tracts to such State agencies, and such eli22 gible not-for-profit servicers, the Secretary 

23 shall, to the extent practicable and con24 sistent with the purposes of this part, give 

25 special consideration to State agencies and 


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1 such servicers with a history of high qual2 ity performance and demonstrated integ3 rity in conducting operations with institu4 tions of higher education and the Sec5 retary.’’; 

6 (C) by redesignating paragraph (3) as 

7 paragraph (4), and by inserting in such para8 graph ‘‘, or of any eligible not-for-profit servicer 

9 to enter into an agreement for the purposes of 

10 this section as a member of a consortium of 

11 such entities’’ before the period at the end; and 

12 (D) by inserting after paragraph (2) the 

13 following new paragraph: 

14 ‘‘(3) SERVICING BY ELIGIBLE NOT-FOR-PROFIT

15 SERVICERS.— 

16 ‘‘(A) IN GENERAL.—Notwithstanding any 

17 other provision of this section, in each State 

18 where one or more eligible not-for-profit 

19 servicer has its principal place of business, the 

20 Secretary shall contract with each such servicer 

21 to service loans originated under this part on 

22 behalf of borrowers attending institutions lo23 cated within such State, provided that the 

24 servicer demonstrates that it meets the stand25 ards for servicing Federal assets and providing 


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1 quality service and agrees to service the loans 

2 at a competitive market rate, as determined by 

3 the Secretary. In determining such a competi4 tive market rate, the Secretary may take into 

5 account the volume of loans serviced by the 

6 servicer. Contracts awarded under this para7 graph shall be subject to the same requirements 

8 for quality, performance, and accountability as 

9 contracts awarded under paragraph (2) for 

10 similar activities. 

11 ‘‘(B) ALLOCATIONS.—(i) ONE

12 SERVICER.—In the case of a State with only 

13 one eligible not-for-profit servicer with a con14 tract described in subparagraph (A), the Sec15 retary shall, at a minimum, allocate to such 

16 servicer, on an annual basis and subject to such 

17 contract, the servicing rights for the lesser of— 

18 ‘‘(I) the loans of 100,000 borrowers 

19 (including borrowers who borrowed loans 

20 in a prior year that were serviced by the 

21 servicer) attending institutions located 

22 within the State; or 

23 ‘‘(II) the loans of all the borrowers at24 tending institutions located within the 

25 State. 


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1 ‘‘(ii) MULTIPLE SERVICERS.—In the case 

2 of a State with more than one eligible not-for3 profit servicer with a contract described in sub4 paragraph (A), the Secretary shall, at a min5 imum, allocate to each such servicer, on an an6 nual basis and subject to such contract, the 

7 servicing rights for the lesser of— 

8 ‘‘(I) the loans of 100,000 borrowers 

9 (including borrowers who borrowed loans 

10 in a prior year that were serviced by the 

11 servicer) attending institutions located 

12 within the State; or 

13 ‘‘(II) an equal share of the loans of all 

14 borrowers attending institutions located 

15 within the State, except the Secretary shall 

16 adjust such shares as necessary to ensure 

17 that the loans of any single borrower re18 main with a single servicer. 

19 ‘‘(iii) ADDITIONAL ALLOCATION.—The Sec20 retary may allocate additional servicing rights 

21 to an eligible not-for-profit servicer based on 

22 the performance of such servicer, as determined 

23 by the Secretary, including performance in the 

24 areas of customer service and default aversion. 


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1 ‘‘(C) MULTIPLE LOANS.—Notwithstanding 

2 the allocations required by subparagraph (B), 

3 the Secretary may transfer loans among 

4 servicers who are awarded contracts to service 

5 loans pursuant to this section to ensure that 

6 the loans of any single borrower remain with a 

7 single servicer.’’; and 

8 (2) by adding at the end the following: 

9 ‘‘(c) REPORT TO CONGRESS.—Not later than 3 years 

10 after the date of the enactment of the Student Aid and 

11 Fiscal Responsibility Act of 2009, the Secretary shall pre12 pare and submit to the authorizing committees, a report 

13 evaluating the performance of all eligible not-for-profit 

14 servicers awarded a contract under this section to service 

15 loans originated under this part. Such report shall give 

16 consideration to— 

17 ‘‘(1) customer satisfaction of borrowers and in18 stitutions with respect to the loan servicing provided 

19 by the servicers; 

20 ‘‘(2) compliance with applicable regulations by 

21 the servicers; and 

22 ‘‘(3) the effectiveness of default aversion activi23 ties, and outreach services (if any), provided by the 

24 servicers. 

25 ‘‘(d) DEFINITIONS.—In this section: 


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1 ‘‘(1) DEFAULT AVERSION ACTIVITIES.—The 

2 term ‘default aversion activities’ means activities 

3 that are directly related to providing collection as4 sistance to the Secretary on a delinquent loan, prior 

5 to the loan being legally in a default status, includ6 ing due diligence activities required pursuant to reg7 ulations. 

8 ‘‘(2) ELIGIBLE NOT-FOR-PROFIT SERVICER.— 

9 ‘‘(A) IN GENERAL.—The term ‘eligible not10 for-profit servicer’ means an entity that, on the 

11 date of enactment of the Student Aid and Fis12 cal Responsibility Act of 2009— 

13 ‘‘(i) meets the definition of an eligible 

14 not-for-profit holder under section 435(p), 

15 except that such term does not include eli16 gible lenders described in paragraph 

17 (1)(D) of such section; 

18 ‘‘(ii) notwithstanding clause (i), is the 

19 sole beneficial owner of a loan for which 

20 the special allowance rate is calculated 

21 under section 438(b)(2)(I)(vi)(II) because 

22 the loan is held by an eligible lender trust23 ee that is an eligible not-for-profit holder 

24 as defined under section 435(p)(1)(D); or 


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1 ‘‘(iii) is an affiliated entity of an eligi2 ble not-for-profit servicer described in 

3 clause (i) or (ii) that— 

4 ‘‘(I) directly employs, or will di5 rectly employ (on or before the date 

6 the entity begins servicing loans under 

7 a contract awarded by the Secretary 

8 pursuant to subsection (a)(3)(A)), the 

9 majority of individuals who perform 

10 student loan servicing functions; and 

11 ‘‘(II) on such date of enactment, 

12 was performing, or had entered into a 

13 contract with a third party servicer 

14 (as such term is defined in section 

15 481(c)) who was performing, student 

16 loan servicing functions for loans 

17 made under part B of this title. 

18 ‘‘(B) AFFILIATED ENTITY.—For the pur19 poses of subparagraph (A), the term ‘affiliated 

20 entity’ means an entity contracted to perform 

21 services for an eligible not-for-profit servicer 

22 that— 

23 ‘‘(i) is a nonprofit entity or is wholly 

24 owned by a nonprofit entity; and 


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1 ‘‘(ii) is not owned or controlled, in 

2 whole or in part, by— 

3 ‘‘(I) a for-profit entity; or 

4 ‘‘(II) an entity having its prin5 cipal place of business in another 

6 State. 

7 ‘‘(3) OUTREACH SERVICES.—The term ‘out8 reach services’ means programs offered to students 

9 and families, including programs delivered in coordi10 nation with institutions of higher education that— 

11 ‘‘(A) encourage— 

12 ‘‘(i) students to attend and complete a 

13 degree or certification program at an insti14 tution of higher education; and 

15 ‘‘(ii) students and families to obtain 

16 financial aid, but minimize the borrowing 

17 of education loans; and 

18 ‘‘(B) deliver financial literacy and coun19 seling tools.’’. 

20 SEC. 215. INTEREST RATES. 

21 Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amend22 ed by adding at the end the following new subparagraph: 

23 ‘‘(E) REDUCED RATES FOR UNDER24 GRADUATE FDSL ON AND AFTER JULY 1, 

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1 graphs of this subsection and subparagraph (A) 

2 of this paragraph, for Federal Direct Stafford 

3 Loans made to undergraduate students for 

4 which the first disbursement is made on or 

5 after July 1, 2012, the applicable rate of inter6 est shall, during any 12-month period beginning 

7 on July 1 and ending on June 30, be deter8 mined on the preceding June 1 and be equal 

9 to— 

10 ‘‘(i) the bond equivalent rate of 91- 

11 day Treasury bills auctioned at the final 

12 auction held prior to such June 1; plus 

13 ‘‘(ii) 2.5 percent, 

14 except that such rate shall not exceed 6.8 per15 cent.’’. 

16 Subtitle B—Perkins Loan Reform 

17 SEC. 221. FEDERAL DIRECT PERKINS LOANS TERMS AND 

18 CONDITIONS. 

19 Part D of title IV (20 U.S.C. 1087a et seq.) is 

20 amended by inserting after section 455 the following new 

21 section: 

22 ‘‘SEC. 455A. FEDERAL DIRECT PERKINS LOANS. 

23 ‘‘(a) DESIGNATION OF LOANS.—Loans made to bor24 rowers under this section shall be known as ‘Federal Di25 rect Perkins Loans’. 


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1 ‘‘(b) IN GENERAL.—It is the purpose of this section 

2 to authorize loans to be awarded by institutions of higher 

3 education through agreements established under section 

4 463(f). Unless otherwise specified in this section, all terms 

5 and conditions and other requirements applicable to Fed6 eral Direct Unsubsidized Stafford loans established under 

7 section 455(a)(2)(D) shall apply to loans made pursuant 

8 to this section. 

9 ‘‘(c) ELIGIBLE BORROWERS.—Any student meeting 

10 the requirements for student eligibility under section 

11 464(b) (including graduate and professional students as 

12 defined in regulations promulgated by the Secretary) shall 

13 be eligible to borrow a Federal Direct Perkins Loan, pro14 vided the student attends an eligible institution with an 

15 agreement with the Secretary under section 463(f), and 

16 the institution uses its authority under that agreement to 

17 award the student a loan. 

18 ‘‘(d) LOAN LIMITS.—The annual and aggregate lim19 its for loans under this section shall be the same as those 

20 established under section 464, and aggregate limits shall 

21 include loans made by institutions under agreements 

22 under section 463(a). 

23 ‘‘(e) APPLICABLE RATES OF INTEREST.—Loans 

24 made pursuant to this section shall bear interest, on the 


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1 unpaid balance of the loan, at the rate of 5 percent per 

2 year.’’. 

3 SEC. 222. AUTHORIZATION OF APPROPRIATIONS. 

4 Section 461 (20 U.S.C. 1087aa) is amended— 

5 (1) in subsection (a), by inserting ‘‘, before July 

6 1, 2010,’’ after ‘‘The Secretary shall’’; 

7 (2) in subsection (b)— 

8 (A) in paragraph (1)— 

9 (i) by striking ‘‘(1) For the purpose’’ 

10 and inserting ‘‘For the purpose’’; and 

11 (ii) by striking ‘‘and for each of the 

12 five succeeding fiscal years’’; and 

13 (B) by striking paragraph (2); and 

14 (3) by striking subsection (c). 

15 SEC. 223. ALLOCATION OF FUNDS. 

16 Section 462 (20 U.S.C. 1087bb) is amended— 

17 (1) in subsection (a)(1), by striking ‘‘From’’ 

18 and inserting ‘‘For any fiscal year before fiscal year 

19 2010, from’’; and 

20 (2) in subsection (i)(1), by striking ‘‘for any fis21 cal year,’’ and inserting ‘‘for any fiscal year before 

22 fiscal year 2010,’’. 

23 SEC. 224. FEDERAL DIRECT PERKINS LOAN ALLOCATION. 

24 Part E of title IV is further amended by inserting 

25 after section 462 (20 U.S.C. 1087bb) the following: 


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1 ‘‘SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION. 

2 ‘‘(a) PURPOSES.—The purposes of this section are— 

3 ‘‘(1) to allocate, among eligible and partici4 pating institutions (as such terms are defined in this 

5 section), the authority to make Federal Direct Per6 kins Loans under section 455A with a portion of the 

7 annual loan authority described in subsection (b); 

8 and 

9 ‘‘(2) to make funds available, in accordance 

10 with section 452, to each participating institution 

11 from a portion of the annual loan authority de12 scribed in subsection (b), in an amount not to exceed 

13 the sum of an institution’s allocation of funds under 

14 subparagraphs (A), (B), and (C) of subsection (b)(1) 

15 to enable each such institution to make Federal Di16 rect Perkins Loans to eligible students at the insti17 tution. 

18 ‘‘(b) AVAILABLE DIRECT PERKINS ANNUAL LOAN

19 AUTHORITY.— 

20 ‘‘(1) AVAILABILITY AND ALLOCATIONS.—There 

21 are hereby made available, from funds made avail22 able for loans made under part D, not to exceed 

23 $6,000,000,000 of annual loan authority for award 

24 year 2010–2011 and each succeeding award year, to 

25 be allocated as follows: 


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1 ‘‘(A) The Secretary shall allocate not more 

than 1 2 ⁄2 of such funds for each award year by 

3 allocating to each participating institution an 

4 amount equal to the adjusted self-help need 

5 amount of the institution, as determined in ac6 cordance with subsection (c) for such award 

7 year. 

8 ‘‘(B) The Secretary shall allocate not more 

than 1 9 ⁄4 of such funds for each award year by 

10 allocating to each participating institution an 

11 amount equal to the low tuition incentive 

12 amount of the institution, as determined in ac13 cordance with subsection (d). 

14 ‘‘(C) The Secretary shall allocate not more 

than 1 15 ⁄4 of such funds for each award year by 

16 allocating to each participating institution an 

17 amount which bears the same ratio to the funds 

18 allocated under this subparagraph as the ratio 

19 determined in accordance with subsection (e) 

20 for the calculation of the Federal Pell Grant 

21 and degree recipient amount of the institution. 

22 ‘‘(2) NO FUNDS TO NON-PARTICIPATING INSTI23 TUTIONS.—The Secretary shall not make funds 

24 available under this subsection to any eligible insti25 tution that is not a participating institution. The adVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02181 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 justed self-help need amount (determined in accord2 ance with subsection (c)) of an eligible institution 

3 that is not a participating institution shall not be 

4 made available to any other institution. 

5 ‘‘(c) ADJUSTED SELF-HELP NEED AMOUNT.—For 

6 the purposes of subsection (b)(1)(A), the Secretary shall 

7 calculate the adjusted self-help need amount of each eligi8 ble institution for an award year as follows: 

9 ‘‘(1) USE OF BASE SELF-HELP NEED

10 AMOUNTS.— 

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

12 paragraphs (2), (3), and (4), the adjusted self13 help need amount of each eligible institution 

14 shall be the institution’s base self-help need 

15 amount, which is the sum of— 

16 ‘‘(i) the self-help need of the institu17 tion’s eligible undergraduate students for 

18 such award year; and 

19 ‘‘(ii) the self-help need of the institu20 tion’s eligible graduate and professional 

21 students for such award year. 

22 ‘‘(B) UNDERGRADUATE STUDENT SELF23 HELP NEED.—To determine the self-help need 

24 of an institution’s eligible undergraduate stu25 dents, the Secretary shall determine the sum of 


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1 each eligible undergraduate student’s average 

2 cost of attendance for the second preceding 

3 award year less each such student’s expected 

4 family contribution (computed in accordance 

5 with part F) for the second preceding award 

6 year, except that, for each such eligible under7 graduate student, the amount computed by 

8 such subtraction shall not be less than zero or 

9 more than the lesser of— 

10 ‘‘(i) 25 percent of the average cost of 

11 attendance with respect to such eligible 

12 student; or 

13 ‘‘(ii) $5,500. 

14 ‘‘(C) GRADUATE AND PROFESSIONAL STU15 DENT SELF-HELP NEED.—To determine the 

16 self-help need of an institution’s eligible grad17 uate and professional students, the Secretary 

18 shall determine the sum of each eligible grad19 uate and professional student’s average cost of 

20 attendance for the second preceding award year 

21 less each such student’s expected family con22 tribution (computed in accordance with part F) 

23 for such second preceding award year, except 

24 that, for each such eligible graduate and profes25 sional student, the amount computed by such 


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1 subtraction shall not be less than zero or more 

2 than $8,000. 

3 ‘‘(2) RATABLE REDUCTION ADJUSTMENTS.—If 

4 the sum of the base self-help need amounts of all eli5 gible institutions for an award year as determined 

under paragraph (1) exceeds 1 6 ⁄2 of the annual loan 

7 authority under subsection (b) for such award year, 

8 the Secretary shall ratably reduce the base self-help 

9 need amounts of all eligible institutions until the 

10 sum of such amounts is equal to the amount that is 

1 11 ⁄2 of the annual loan authority under subsection 

12 (b). 

13 ‘‘(3) REQUIRED MINIMUM AMOUNT.—Notwith14 standing paragraph (2), the adjusted self-help need 

15 amount of each eligible institution shall not be less 

16 than the average of the institution’s total principal 

17 amount of loans made under this part for each of 

18 the 5 most recent award years. 

19 ‘‘(4) ADDITIONAL ADJUSTMENTS.—If the Sec20 retary determines that a ratable reduction under 

21 paragraph (2) results in the adjusted self-help need 

22 amount of any eligible institution being reduced 

23 below the minimum amount required under para24 graph (3), the Secretary shall— 


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1 ‘‘(A) for each institution for which the 

2 minimum amount under paragraph (3) is not 

3 satisfied, increase the adjusted self-help need 

4 amount to the amount of the required minimum 

5 under such subparagraph; and 

6 ‘‘(B) ratably reduce the adjusted self-help 

7 need amounts of all eligible institutions not de8 scribed in subparagraph (A) until the sum of 

9 the adjusted self-help need amounts of all eligi10 ble institutions is equal to the amount that is 

1 11 ⁄2 of the annual loan authority under sub12 section (b). 

13 ‘‘(d) LOW TUITION INCENTIVE AMOUNT.— 

14 ‘‘(1) IN GENERAL.—For purposes of subsection 

15 (b)(1)(B), the Secretary shall determine the low tui16 tion incentive amount for each participating institu17 tion for each award year, by calculating for each 

18 such institution the sum of— 

19 ‘‘(A) the total amount, if any (but not less 

20 than zero), by which— 

21 ‘‘(i) the average tuition and required 

22 fees for the institution’s sector for the sec23 ond preceding award year; exceeds 

24 ‘‘(ii) the tuition and required fees for 

25 the second preceding award year for each 


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1 undergraduate and graduate student at2 tending the institution who had financial 

3 need (as determined under part F); plus 

4 ‘‘(B) the total amount, if any (but not less 

5 than zero), by which— 

6 ‘‘(i) the total amount for the second 

7 preceding award year of non-Federal grant 

8 aid provided to meet the financial need of 

9 all undergraduate students attending the 

10 institution (as determined without regard 

11 to financial aid not received under this 

12 title); exceeds 

13 ‘‘(ii) the total amount for the second 

14 preceding award year, if any, by which— 

15 ‘‘(I) the tuition and required fees 

16 of each such student with such finan17 cial need; exceeds 

18 ‘‘(II) the average tuition and re19 quired fees for the institution’s sector. 

20 ‘‘(2) RATABLE REDUCTION.—If the sum of the 

21 low tuition incentive amounts of all participating in22 stitutions for an award year as determined under 

paragraph (1) exceeds 1 23 ⁄4 of the annual loan author24 ity under subsection (b) for such award year, the 

25 Secretary shall ratably reduce the low tuition incenVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02186 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tive amounts of all participating institutions until 

2 the sum of such amounts is equal to the amount 

that is 1 3 ⁄4 of the annual loan authority under sub4 section (b). 

5 ‘‘(e) FEDERAL PELL GRANT AND DEGREE RECIPI6 ENT AMOUNT.—For purposes of subsection (b)(1)(C), the 

7 Secretary shall determine the Federal Pell Grant and de8 gree recipient amount for each participating institution for 

9 each award year, by calculating for each such institution 

10 the ratio of— 

11 ‘‘(1) the number of students who, during the 

12 most recent year for which data are available, ob13 tained an associate’s degree or other postsecondary 

14 degree from such participating institution and, prior 

15 to obtaining such degree, received a Federal Pell 

16 Grant for attendance at any institution of higher 

17 education; to 

18 ‘‘(2) the sum of the number of students who, 

19 during the most recent year for which data are 

20 available, obtained an associate’s degree or other 

21 postsecondary degree from each participating insti22 tution and, prior to obtaining such degree, received 

23 a Federal Pell Grant for attendance at any institu24 tion of higher education. 

25 ‘‘(f) DEFINITIONS.—As used in this section: 


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1 ‘‘(1) ANNUAL LOAN AUTHORITY.—The term 

2 ‘annual loan authority’ means the total original prin3 cipal amount of loans that may be allocated and 

4 made available for an award year to make Federal 

5 Direct Perkins Loans under section 455A. 

6 ‘‘(2) AVERAGE COST OF ATTENDANCE.— 

7 ‘‘(A) IN GENERAL.—The term ‘average 

8 cost of attendance’ means the average of the at9 tendance costs for undergraduate students and 

10 for graduate and professional students, respec11 tively, for the second preceding award year 

12 which shall include— 

13 ‘‘(i) tuition and required fees deter14 mined in accordance with subparagraph 

15 (B); 

16 ‘‘(ii) standard living expenses deter17 mined in accordance with subparagraph 

18 (C); and 

19 ‘‘(iii) books and supplies determined 

20 in accordance with subparagraph (D). 

21 ‘‘(B) TUITION AND REQUIRED FEES.—The 

22 average undergraduate and graduate and pro23 fessional tuition and required fees described in 

24 subparagraph (A)(i) shall be computed on the 


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1 basis of information reported by the institution 

2 to the Secretary, which shall include— 

3 ‘‘(i) total revenue received by the in4 stitution from undergraduate and graduate 

5 and professional students, respectively, for 

6 tuition and required fees for the second 

7 preceding award year; and 

8 ‘‘(ii) the institution’s full-time equiva9 lent enrollment of undergraduate and 

10 graduate and professional students, respec11 tively, for such second preceding award 

12 year. 

13 ‘‘(C) STANDARD LIVING EXPENSES.—The 

14 standard living expense described in subpara15 graph (A)(ii) is equal to the allowance, deter16 mined by an institution, for room and board 

17 costs incurred by a student, as computed in ac18 cordance with part F for the second preceding 

19 award year. 

20 ‘‘(D) BOOKS AND SUPPLIES.—The allow21 ance for books and supplies described in sub22 paragraph (A)(iii) is equal to the allowance, de23 termined by an institution, for books, supplies, 

24 transportation, and miscellaneous personal ex25 penses, including a reasonable allowance for the 


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1 documented rental or purchase of a personal 

2 computer, as computed in accordance with part 

3 F for the second preceding award year. 

4 ‘‘(3) AVERAGE TUITION AND REQUIRED FEES

5 FOR THE INSTITUTION’S SECTOR.—The term ‘aver6 age tuition and required fees for the institution’s 

7 sector’ shall be determined by the Secretary for each 

8 of the categories described in section 132(d). 

9 ‘‘(4) ELIGIBLE INSTITUTION.—The term ‘eligi10 ble institution’ means an institution of higher edu11 cation that participates in the Federal Direct Staf12 ford Loan Program. 

13 ‘‘(5) PARTICIPATING INSTITUTION.—The term 

14 ‘participating institution’ means an institution of 

15 higher education that has an agreement under sec16 tion 463(f). 

17 ‘‘(6) SECTOR.—The term ‘sector’ means each of 

18 the categories described in section 132(d).’’. 

19 SEC. 225. AGREEMENTS WITH INSTITUTIONS OF HIGHER 

20 EDUCATION. 

21 (a) AMENDMENTS.—Section 463 (20 U.S.C. 1087cc) 

22 is amended— 

23 (1) in subsection (a)— 


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1 (A) in the heading, by inserting ‘‘FOR

2 LOANS MADE BEFORE JULY 1, 2010’’ after 

3 ‘‘AGREEMENTS’’; 

4 (B) in paragraph (3)(A), by inserting ‘‘be5 fore July 1, 2010’’ after ‘‘students’’; 

6 (C) in paragraph (4), by striking ‘‘there7 on—’’ and all that follows and inserting ‘‘there8 on, if the institution has failed to maintain an 

9 acceptable collection record with respect to such 

10 loan, as determined by the Secretary in accord11 ance with criteria established by regulation, the 

12 Secretary may require the institution to assign 

13 such note or agreement to the Secretary, with14 out recompense;’’; and 

15 (D) in paragraph (5), by striking ‘‘and the 

16 Secretary shall apportion’’ and all that follows 

17 through ‘‘in accordance with section 462’’ and 

18 inserting ‘‘and the Secretary shall return a por19 tion of funds from loan repayments to the insti20 tution as specified in section 466(b)’’; 

21 (2) by amending subsection (b) to read as fol22 lows: 

23 ‘‘(b) ADMINISTRATIVE EXPENSES.—An institution 

24 that has entered into an agreement under subsection (a) 

25 shall be entitled, for each fiscal year during which it servVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02191 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ices student loans from a student loan fund established 

2 under such agreement, to a payment in lieu of reimburse3 ment for its expenses in servicing student loans made be4 fore July 1, 2010. Such payment shall be equal to 0.50 

5 percent of the outstanding principal and interest balance 

6 of such loans being serviced by the institution as of Sep7 tember 30 of each fiscal year.’’; and 

8 (3) by adding at the end the following: 

9 ‘‘(f) CONTENTS OF AGREEMENTS FOR LOANS MADE

10 ON OR AFTER JULY 1, 2010.—An agreement with any 

11 institution of higher education that elects to participate 

12 in the Federal Direct Perkins Loan program under section 

13 455A shall provide— 

14 ‘‘(1) for the establishment and maintenance of 

15 a Direct Perkins Loan program at the institution 

16 under which the institution shall use loan authority 

17 allocated under section 462A to make loans to eligi18 ble students attending the institution; 

19 ‘‘(2) that the institution, unless otherwise speci20 fied in this subsection, shall operate the program 

21 consistent with the requirements of agreements es22 tablished under section 454; 

23 ‘‘(3) that the institution will pay matching 

24 funds, quarterly, in an amount agreed to by the in25 stitution and the Secretary, to an escrow account 


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1 approved by the Secretary, for the purpose of pro2 viding loan benefits to borrowers; 

3 ‘‘(4) that if the institution fails to meet the re4 quirements of paragraph (3), the Secretary shall 

5 suspend or terminate the institution’s eligibility to 

6 make Federal Direct Perkins Loans under section 

7 455A until such time as the Secretary determines, 

8 in accordance with section 498, that the institution 

9 has met the requirements of such paragraph; and 

10 ‘‘(5) that if the institution ceases to be an eligi11 ble institution within the meaning of section 435(a) 

12 by reason of having a cohort default rate that ex13 ceeds the threshold percentage specified paragraph 

14 (2) of such section, the Secretary shall suspend or 

15 terminate the institution’s eligibility to make Fed16 eral Direct Perkins Loans under section 455A un17 less and until the institution would qualify for a re18 sumption of eligible institution status under such 

19 section.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 paragraph (2) of subsection (a) shall take effect on Octo22 ber 1, 2010. 

23 SEC. 226. STUDENT LOAN INFORMATION BY ELIGIBLE IN24 STITUTIONS. 

25 Section 463A (20 U.S.C. 1087cc–1) is amended— 


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1 (1) in subsection (a), by striking ‘‘Each institu2 tion’’ and inserting ‘‘For loans made before July 1, 

3 2010, each institution’’; and 

4 (2) in subsection (b), by striking ‘‘Each institu5 tion’’ and inserting ‘‘For loans made before July 1, 

6 2010, each institution’’. 

7 SEC. 227. TERMS OF LOANS. 

8 (a) Section 464 (20 U.S.C. 1087dd) is amended— 

9 (1) in subsection (a)(1), by striking ‘‘section 

10 463’’ and inserting ‘‘section 463(a)’’; 

11 (2) in subsection (b)(1), by inserting ‘‘made be12 fore July 1, 2010,’’ after ‘‘A loan’’; 

13 (3) in subsection (c)— 

14 (A) in paragraph (1), by inserting ‘‘made 

15 before July 1, 2010,’’ after ‘‘a loan’’; 

16 (B) in paragraph (2)— 

17 (i) in subparagraph (A), by inserting 

18 ‘‘made before July 1, 2010,’’ after ‘‘any 

19 loan’’; and 

20 (ii) in subparagraph (B), by inserting 

21 ‘‘made before July 1, 2010,’’ after ‘‘any 

22 loan’’; 

23 (C) in paragraph (3)(B), by inserting ‘‘for 

24 a loan made before July 1, 2010,’’ after ‘‘dur25 ing the repayment period’’; 


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1 (D) in paragraph (4), by inserting ‘‘before 

2 July 1, 2010,’’ after ‘‘for a loan made’’; 

3 (E) in paragraph (5), by striking ‘‘The in4 stitution’’ and inserting ‘‘For loans made before 

5 July 1, 2010, the institution’’; and 

6 (F) in paragraph (6), by inserting ‘‘made 

7 before July 1, 2010,’’ after ‘‘of loans’’; 

8 (4) in subsection (d), by inserting ‘‘made before 

9 July 1, 2010,’’ before ‘‘from the student loan fund’’; 

10 (5) in subsection (e), by inserting ‘‘with respect 

11 to loans made before July 1, 2010, and’’ before ‘‘as 

12 documented in accordance with paragraph (2),’’; 

13 (6) by repealing subsection (f); 

14 (7) in subsection (g)(1), by inserting ‘‘and be15 fore July 1, 2010,’’ after ‘‘January 1, 1986,’’; 

16 (8) in subsection (h)— 

17 (A) in paragraph (1)(A) by inserting ‘‘be18 fore July 1, 2010,’’ after ‘‘made under this 

19 part’’; and 

20 (B) in paragraph (2), by inserting ‘‘before 

21 July 1, 2010,’’ after ‘‘under this part’’; and 

22 (9) in subsection (j)(1), by inserting ‘‘before 

23 July 1, 2010,’’ after ‘‘under this part’’. 


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1 SEC. 228. DISTRIBUTION OF ASSETS FROM STUDENT LOAN 

2 FUNDS. 

3 (a) Section 465 (20 U.S.C. 1087ee) is amended— 

4 (1) in subsection (a), by inserting ‘‘and before 

5 July 1, 2010,’’ after ‘‘June 30, 1972,’’; and 

6 (2) by amending subsection (b) to read as fol7 lows: 

8 ‘‘(b) REIMBURSEMENT FOR CANCELLATIONS.— 

9 ‘‘(1) ASSIGNED LOANS.—In the case of loans 

10 made under this part before July 1, 2010, and that 

11 are assigned to the Secretary, the Secretary shall, 

12 from amounts repaid each quarter on assigned Per13 kins Loans made before July 1, 2010, pay to each 

14 institution for each quarter an amount equal to— 

15 ‘‘(A) the aggregate of the amounts of loans 

16 from its student loan fund that are canceled 

17 pursuant to this section for such quarter, minus 

18 ‘‘(B) an amount equal to the aggregate of 

19 the amounts of any such loans so canceled that 

20 were made from Federal capital contributions 

21 to its student loan fund. 

22 ‘‘(2) RETAINED LOANS.—In the case of loans 

23 made under this part before July 1, 2010, and that 

24 are retained by the institution for servicing, the in25 stitution shall deduct from loan repayments owed to 


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1 the Secretary under section 466, an amount equal 

2 to— 

3 ‘‘(A) the aggregate of the amounts of loans 

4 from its student loan fund that are canceled 

5 pursuant to this section for such quarter, minus 

6 ‘‘(B) an amount equal to the aggregate of 

7 the amounts of any such loans so canceled that 

8 were made from Federal capital contributions 

9 to its student loan fund.’’. 

10 (b) Section 466 (20 U.S.C. 1087ff) is amended to 

11 read as follows: 

12 ‘‘SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN 

13 FUNDS. 

14 ‘‘(a) CAPITAL DISTRIBUTION.—Beginning July 1, 

15 2010, there shall be a capital distribution of the balance 

16 of the student loan fund established under this part by 

17 each institution of higher education as follows: 

18 ‘‘(1) For the quarter beginning July 1, 2010, 

19 the Secretary shall first be paid, no later than Sep20 tember 30, 2010, an amount that bears the same 

21 ratio to the cash balance in such fund at the close 

22 of June 30, 2010, as the total amount of the Fed23 eral capital contributions to such fund by the Sec24 retary under this part bears to— 


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1 ‘‘(A) the sum of such Federal contribu2 tions and the institution’s capital contributions 

3 to such fund, less 

4 ‘‘(B) an amount equal to— 

5 ‘‘(i) the institution’s outstanding ad6 ministrative costs as calculated under sec7 tion 463(b), 

8 ‘‘(ii) outstanding charges assessed 

9 under section 464(c)(1)(H), and 

10 ‘‘(iii) outstanding loan cancellation 

11 costs incurred under section 465. 

12 ‘‘(2) At the end of each quarter subsequent to 

13 the quarter ending September 30, 2010, the Sec14 retary shall first be paid an amount that bears the 

15 same ratio to the cash balance in such fund at the 

16 close of the preceding quarter, as the total amount 

17 of the Federal capital contributions to such fund by 

18 the Secretary under this part bears to— 

19 ‘‘(A) the sum of such Federal contribu20 tions and the institution’s capital contributions 

21 to such fund, less 

22 ‘‘(B) an amount equal to— 

23 ‘‘(i) the institution’s administrative 

24 costs incurred for that quarter as cal25 culated under section 463(b), 


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1 ‘‘(ii) charges assessed for that quarter 

2 under section 464(c)(1)(H), and 

3 ‘‘(iii) loan cancellation costs incurred 

4 for that quarter under section 465. 

5 ‘‘(3)(A) The Secretary shall calculate the 

6 amounts due to the Secretary under paragraph (1) 

7 (adjusted in accordance with subparagraph (B), as 

8 appropriate) and paragraph (2) and shall promptly 

9 inform the institution of such calculated amounts. 

10 ‘‘(B) In the event that, prior to the date of en11 actment of the Student Aid and Fiscal Responsi12 bility Act of 2009, an institution made a short-term, 

13 interest-free loan to the institution’s student loan 

14 fund established under this part in anticipation of 

15 collections or receipt of Federal capital contribu16 tions, and the institution demonstrates to the Sec17 retary, on or before June 30, 2010, that such loan 

18 will still be outstanding after June 30, 2010, the 

19 Secretary shall subtract the amount of such out20 standing loan from the cash balance of the institu21 tion’s student loan fund that is used to calculate the 

22 amount due to the Secretary under paragraph (1). 

23 An adjustment of an amount due to the Secretary 

24 under this subparagraph shall be made by the Sec25 retary on a case-by-case basis. 


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1 ‘‘(4) Any remaining balance at the end of a 

2 quarter after a payment under paragraph (1) or (2) 

3 shall be retained by the institution for use at its dis4 cretion. Any balance so retained shall be withdrawn 

5 from the student loan fund and shall not be counted 

6 in calculating amounts owed to the Secretary for 

7 subsequent quarters. 

8 ‘‘(5) Each institution shall make the quarterly 

9 payments to the Secretary described in paragraph 

10 (2) until all outstanding Federal Perkins Loans at 

11 that institution have been assigned to the Secretary 

12 and there are no funds remaining in the institution’s 

13 student loan fund. 

14 ‘‘(6) In the event that the institution’s adminis15 trative costs, charges, and cancellation costs de16 scribed in paragraph (2) for a quarter exceed the 

17 amount owed to the Secretary under paragraphs (1) 

18 and (2) for that quarter, no payment shall be due 

19 to the Secretary from the institution for that quarter 

20 and the Secretary shall pay the institution, from 

21 funds realized from the collection of assigned Fed22 eral Perkins Loans made before July 1, 2010, an 

23 amount that, when combined with the amount re24 tained by the institution under paragraphs (1) and 


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1 (2), equals the full amount of such administrative 

2 costs, charges, and cancellation costs. 

3 ‘‘(b) ASSIGNMENT OF OUTSTANDING LOANS.—Be4 ginning July 1, 2010, an institution of higher education 

5 may assign all outstanding loans made under this part be6 fore July 1, 2010, to the Secretary, consistent with the 

7 requirements of section 463(a)(5). In collecting loans so 

8 assigned, the Secretary shall pay an institution an amount 

9 that constitutes the same fraction of such collections as 

10 the fraction of the cash balance that the institution retains 

11 under subsection (a)(2), but determining such fraction 

12 without regard to subparagraph (B)(i) of such sub13 section.’’. 

14 SEC. 229. IMPLEMENTATION OF NON-TITLE IV REVENUE 

15 REQUIREMENT. 

16 (a) AMENDMENTS.—Section 487(d) (20 U.S.C. 

17 1094(d)) is amended— 

18 (1) in paragraph (1)(E), by striking ‘‘July 1, 

19 2011’’ and inserting ‘‘July 1, 2012’’; 

20 (2) in paragraph (1)(F)— 

21 (A) by redesignating clauses (iii), (iv), and 

22 (v) as clauses (iv), (v), and (vi), respectively; 

23 and 

24 (B) by inserting after clause (ii) the fol25 lowing new clause: 


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1 ‘‘(iii) for the period beginning July 1, 

2 2010, and ending July 1, 2012, the 

3 amount of funds the institution received 

4 from loans disbursed under section 

5 455A;’’;. 

6 (3) in paragraph (2)(A), by striking ‘‘two con7 secutive’’ and inserting ‘‘three consecutive’’; and 

8 (4) in paragraph (2)(B)— 

9 (A) by striking ‘‘any institutional fiscal 

10 year’’ and inserting ‘‘two consecutive institu11 tional fiscal years’’; 

12 (B) by striking ‘‘the two institutional fiscal 

13 years after the institutional fiscal year’’ and in14 serting ‘‘the institutional fiscal year after the 

15 second consecutive institutional fiscal year’’; 

16 and 

17 (C) by striking ‘‘two consecutive’’ in clause 

18 (ii) of such paragraph and inserting ‘‘three con19 secutive’’. 

20 (b) TEMPORARY EFFECT.—The amendments made 

21 by paragraphs (3) and (4) of subsection (a)— 

22 (1) shall take effect on the date of enactment 

23 of this Act; and 

24 (2) shall cease to be effective on July 1, 2012. 


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1 SEC. 230. ADMINISTRATIVE EXPENSES. 

2 Section 489(a) (20 U.S.C. 1096(a)) is amended— 

3 (1) in the second sentence, by striking ‘‘or 

4 under part E of this title’’; and 

5 (2) in the third sentence— 

6 (A) by inserting ‘‘and’’ after ‘‘subpart 3 of 

7 part A,’’; and 

8 (B) by striking ‘‘compensation of stu9 dents,’’ and all that follows through the period 

10 and inserting ‘‘compensation of students.’’. 

11 TITLE III—MODERNIZATION, 

12 RENOVATION, AND REPAIR 

13 Subtitle A—Elementary and 

14 Secondary Education 

15 SEC. 301. DEFINITIONS. 

16 In this subtitle: 

17 (1) The term ‘‘Bureau-funded school’’ has the 

18 meaning given such term in section 1141 of the 

19 Education Amendments of 1978 (25 U.S.C. 2021). 

20 (2) The term ‘‘charter school’’ has the meaning 

21 given such term in section 5210 of the Elementary 

22 and Secondary Education Act of 1965 (20 U.S.C. 

23 7221i). 

24 (3) The term ‘‘CHPS Criteria’’ means the 

25 green building rating program developed by the Col26 laborative for High Performance Schools. 


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1 (4) The term ‘‘Energy Star’’ means the Energy 

2 Star program of the United States Department of 

3 Energy and the United States Environmental Pro4 tection Agency. 

5 (5) The term ‘‘Green Globes’’ means the Green 

6 Building Initiative environmental design and rating 

7 system referred to as Green Globes. 

8 (6) The term ‘‘LEED Green Building Rating 

9 System’’ means the United States Green Building 

10 Council Leadership in Energy and Environmental 

11 Design green building rating standard referred to as 

12 LEED Green Building Rating System. 

13 (7) The term ‘‘local educational agency’’— 

14 (A) has the meaning given such term in 

15 section 9101 of the Elementary and Secondary 

16 Education Act of 1965 (20 U.S.C. 7801); 

17 (B) includes any public charter school that 

18 constitutes a local educational agency under 

19 State law; and 

20 (C) includes the Recovery School District 

21 of Louisiana. 

22 (8) The term ‘‘outlying area’’— 

23 (A) means the United States Virgin Is24 lands, Guam, American Samoa, and the ComVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02204 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 monwealth of the Northern Mariana Islands; 

2 and 

3 (B) includes the Republic of Palau. 

4 (9) The term ‘‘public school facilities’’ means 

5 existing public elementary or secondary school facili6 ties, including public charter school facilities and 

7 other existing facilities planned for adaptive reuse as 

8 public charter school facilities. 

9 (10) The term ‘‘Secretary’’ means the Secretary 

10 of Education. 

11 (11) The term ‘‘State’’ means each of the 50 

12 States, the District of Columbia, and the Common13 wealth of Puerto Rico. 

14 CHAPTER 1—GRANTS FOR MODERNIZA15 TION, RENOVATION, OR REPAIR OF 

16 PUBLIC SCHOOL FACILITIES 

17 SEC. 311. PURPOSE. 

18 Grants under this chapter shall be for the purpose 

19 of modernizing, renovating, or repairing public school fa20 cilities (including early learning facilities, as appropriate), 

21 based on the need of the facilities for such improvements, 

22 to ensure that public school facilities are safe, healthy, 

23 high-performing, and technologically up-to-date. 

24 SEC. 312. ALLOCATION OF FUNDS. 

25 (a) RESERVATION.— 


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1 (1) IN GENERAL.—From the amount appro2 priated to carry out this chapter for each fiscal year 

3 pursuant to section 345(a), the Secretary shall re4 serve 2 percent of such amount, consistent with the 

5 purpose described in section 311— 

6 (A) to provide assistance to the outlying 

7 areas; and 

8 (B) for payments to the Secretary of the 

9 Interior to provide assistance to Bureau-funded 

10 schools. 

11 (2) USE OF RESERVED FUNDS.—In each fiscal 

12 year, the amount reserved under paragraph (1) shall 

13 be divided between the uses described in subpara14 graphs (A) and (B) of such paragraph in the same 

15 proportion as the amount reserved under section 

16 1121(a) of the Elementary and Secondary Edu17 cation Act of 1965 (20 U.S.C. 6331(a)) is divided 

18 between the uses described in paragraphs (1) and 

19 (2) of such section 1121(a) in such fiscal year. 

20 (3) DISTRESSED AREAS AND NATURAL DISAS21 TERS.—From the amount appropriated to carry out 

22 this chapter for each fiscal year pursuant to section 

23 345(a), the Secretary shall reserve 5 percent of such 

24 amount for grants to— 


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1 (A) local educational agencies serving geo2 graphic areas with significant economic distress, 

3 to be used consistent with the purpose de4 scribed in section 311 and the allowable uses of 

5 funds described in section 313; and 

6 (B) local educational agencies serving geo7 graphic areas recovering from a natural dis8 aster, to be used consistent with the purpose 

9 described in section 321 and the allowable uses 

10 of funds described in section 323. 

11 (b) ALLOCATION TO STATES.— 

12 (1) STATE-BY-STATE ALLOCATION.—Of the 

13 amount appropriated to carry out this chapter for 

14 each fiscal year pursuant to section 345(a), and not 

15 reserved under subsection (a), each State shall be al16 located an amount in proportion to the amount re17 ceived by all local educational agencies in the State 

18 under part A of title I of the Elementary and Sec19 ondary Education Act of 1965 (20 U.S.C. 6311 et 

20 seq.) for the previous fiscal year relative to the total 

21 amount received by all local educational agencies in 

22 every State under such part for such fiscal year. 

23 (2) STATE ADMINISTRATION.—A State may re24 serve up to 1 percent of its allocation under paraVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02207 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 graph (1) to carry out its responsibilities under this 

2 chapter, which include— 

3 (A) providing technical assistance to local 

4 educational agencies; 

5 (B) developing an online, publicly search6 able database that includes an inventory of pub7 lic school facilities in the State, including for 

8 each such facility, its design, condition, mod9 ernization, renovation and repair needs, utiliza10 tion, energy use, and carbon footprint; and 

11 (C) creating voluntary guidelines for high12 performing school buildings, including guide13 lines concerning the following: 

14 (i) Site location, storm water manage15 ment, outdoor surfaces, outdoor lighting, 

16 and transportation, including public transit 

17 and pedestrian and bicycle accessability. 

18 (ii) Outdoor water systems, land19 scaping to minimize water use, including 

20 elimination of irrigation systems for land21 scaping, and indoor water use reduction. 

22 (iii) Energy efficiency (including min23 imum and superior standards, such as for 

24 heating, ventilation, and air conditioning 


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1 systems), use of alternative energy sources, 

2 commissioning, and training. 

3 (iv) Use of durable, sustainable mate4 rials and waste reduction. 

5 (v) Indoor environmental quality, such 

6 as day lighting in classrooms, lighting 

7 quality, indoor air quality (including with 

8 reference to reducing the incidence and ef9 fects of asthma and other respiratory ill10 nesses), acoustics, and thermal comfort. 

11 (vi) Operations and management, 

12 such as use of energy-efficient equipment, 

13 indoor environmental management plan, 

14 maintenance plan, and pest management. 

15 (3) GRANTS TO LOCAL EDUCATIONAL AGEN16 CIES.—From the amount allocated to a State under 

17 paragraph (1), each eligible local educational agency 

18 in the State shall receive an amount in proportion 

19 to the amount received by such local educational 

20 agency under part A of title I of the Elementary and 

21 Secondary Education Act of 1965 (20 U.S.C. 6311 

22 et seq.) for the previous fiscal year relative to the 

23 total amount received by all local educational agen24 cies in the State under such part for such fiscal 

25 year, except that no local educational agency that reVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02209 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ceived funds under such part for such fiscal year 

2 shall receive a grant of less than $5,000 in any fiscal 

3 year under this chapter. 

4 (4) SPECIAL RULE.—Section 1122(c)(3) of the 

5 Elementary and Secondary Education Act of 1965 

6 (20 U.S.C. 6332(c)(3)) shall not apply to paragraph 

7 (1) or (3). 

8 (c) SPECIAL RULES.— 

9 (1) DISTRIBUTIONS BY SECRETARY.—The Sec10 retary shall make and distribute the reservations 

11 and allocations described in subsections (a) and (b) 

12 not later than 120 days after an appropriation of 

13 funds for this chapter is made. 

14 (2) DISTRIBUTIONS BY STATES.—A State shall 

15 make and distribute the allocations described in sub16 section (b)(3) within 90 days of receiving such funds 

17 from the Secretary. 

18 SEC. 313. ALLOWABLE USES OF FUNDS. 

19 A local educational agency receiving a grant under 

20 this chapter shall use the grant for modernization, renova21 tion, or repair of public school facilities (including early 

22 learning facilities, as appropriate), including— 

23 (1) repair, replacement, or installation of roofs, 

24 including extensive, intensive or semi-intensive green 

25 roofs, electrical wiring, water supply and plumbing 


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1 systems, sewage systems, storm water runoff sys2 tems, lighting systems, building envelope, windows, 

3 ceilings, flooring, or doors, including security doors; 

4 (2) repair, replacement, or installation of heat5 ing, ventilation, or air conditioning systems, includ6 ing insulation, and conducting indoor air quality as7 sessments; 

8 (3) compliance with fire, health, seismic, and 

9 safety codes, including professional installation of 

10 fire and life safety alarms, and modernizations, ren11 ovations, and repairs that ensure that schools are 

12 prepared for emergencies, such as improving build13 ing infrastructure to accommodate security measures 

14 and installing or upgrading technology to ensure 

15 that schools are able to respond to emergencies such 

16 as acts of terrorism, campus violence, and natural 

17 disasters; 

18 (4) retrofitting necessary to increase the energy 

19 efficiency and water efficiency of public school facili20 ties; 

21 (5) modifications necessary to make facilities 

22 accessible in compliance with the Americans with 

23 Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) 

24 and section 504 of the Rehabilitation Act of 1973 

25 (29 U.S.C. 794); 


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1 (6) abatement, removal, or interim controls of 

2 asbestos, polychlorinated biphenyls, mold, mildew, 

3 lead-based hazards, including lead-based paint haz4 ards, or a proven carcinogen; 

5 (7) measures designed to reduce or eliminate 

6 human exposure to classroom noise and environ7 mental noise pollution; 

8 (8) modernization, renovation, or repair nec9 essary to reduce the consumption of coal, electricity, 

10 land, natural gas, oil, or water; 

11 (9) installation or upgrading of educational 

12 technology infrastructure; 

13 (10) modernization, renovation, or repair of 

14 science and engineering laboratories, libraries, and 

15 career and technical education facilities, and im16 provements to building infrastructure to accommo17 date bicycle and pedestrian access; 

18 (11) installation or upgrading of renewable en19 ergy generation and heating systems, including 

20 solar, photovoltaic, wind, biomass (including wood 

21 pellet and woody biomass), waste-to-energy, and 

22 solar-thermal and geothermal systems, and for en23 ergy audits; 


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1 (12) measures designed to reduce or eliminate 

2 human exposure to airborne particles such as dust, 

3 sand, and pollens; 

4 (13) creating greenhouses, gardens (including 

5 trees), and other facilities for environmental, sci6 entific, or other educational purposes, or to produce 

7 energy savings; 

8 (14) modernizing, renovating, or repairing 

9 physical education facilities for students, including 

10 upgrading or installing recreational structures made 

11 from post-consumer recovered materials in accord12 ance with the comprehensive procurement guidelines 

13 prepared by the Administrator of the Environmental 

14 Protection Agency under section 6002(e) of the 

15 Solid Waste Disposal Act (42 U.S.C. 6962(e)); 

16 (15) other modernization, renovation, or repair 

17 of public school facilities to— 

18 (A) improve teachers’ ability to teach and 

19 students’ ability to learn; 

20 (B) ensure the health and safety of stu21 dents and staff; 

22 (C) make them more energy efficient; or 

23 (D) reduce class size; and 


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1 (16) required environmental remediation related 

2 to modernization, renovation, or repair described in 

3 paragraphs (1) through (15). 

4 SEC. 314. PRIORITY PROJECTS. 

5 In selecting a project under section 313, a local edu6 cational agency may give priority to projects involving the 

7 abatement, removal, or interim controls of asbestos, poly8 chlorinated biphenyls, mold, mildew, lead-based hazards, 

9 including lead-based paint hazards, or a proven car10 cinogen. 

11 CHAPTER 2—SUPPLEMENTAL GRANTS 

12 FOR LOUISIANA, MISSISSIPPI, AND 

13 ALABAMA 

14 SEC. 321. PURPOSE. 

15 Grants under this chapter shall be for the purpose 

16 of modernizing, renovating, repairing, or constructing 

17 public school facilities, including, where applicable, early 

18 learning facilities, based on the need for such improve19 ments or construction, to ensure that public school facili20 ties are safe, healthy, high-performing, and technologically 

21 up-to-date. 

22 SEC. 322. ALLOCATION TO LOCAL EDUCATIONAL AGEN23 CIES. 

24 (a) IN GENERAL.—Of the amount appropriated to 

25 carry out this chapter for each fiscal year pursuant to secVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02214 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion 345(b), the Secretary shall allocate to local edu2 cational agencies in Louisiana, Mississippi, and Alabama 

3 an amount equal to the infrastructure damage inflicted on 

4 public school facilities in each such district by Hurricane 

5 Katrina or Hurricane Rita in 2005 relative to the total 

6 of such infrastructure damage so inflicted in all such dis7 tricts, combined. 

8 (b) DISTRIBUTION BY SECRETARY.—The Secretary 

9 shall determine and distribute the allocations described in 

10 subsection (a) not later than 120 days after an appropria11 tion of funds for this chapter is made. 

12 SEC. 323. ALLOWABLE USES OF FUNDS. 

13 A local educational agency receiving a grant under 

14 this chapter shall use the grant for one or more of the 

15 activities described in section 313, except that an agency 

16 receiving a grant under this chapter also may use the 

17 grant for the construction of new public school facilities. 

18 CHAPTER 3—GENERAL PROVISIONS 

19 SEC. 331. IMPERMISSIBLE USES OF FUNDS. 

20 No funds received under this subtitle may be used 

21 for— 

22 (1) payment of maintenance costs, including 

23 routine repairs classified as current expenditures 

24 under State or local law; 


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1 (2) stadiums or other facilities primarily used 

2 for athletic contests or exhibitions or other events 

3 for which admission is charged to the general public; 

4 (3) improvement or construction of facilities the 

5 purpose of which is not the education of children, in6 cluding central office administration or operations or 

7 logistical support facilities; or 

8 (4) purchasing carbon offsets. 

9 SEC. 332. SUPPLEMENT, NOT SUPPLANT. 

10 A local educational agency receiving a grant under 

11 this subtitle shall use such Federal funds only to supple12 ment and not supplant the amount of funds that would, 

13 in the absence of such Federal funds, be available for mod14 ernization, renovation, repair, and construction of public 

15 school facilities. 

16 SEC. 333. PROHIBITION REGARDING STATE AID. 

17 A State shall not take into consideration payments 

18 under this subtitle in determining the eligibility of any 

19 local educational agency in that State for State aid, or 

20 the amount of State aid, with respect to free public edu21 cation of children. 

22 SEC. 334. MAINTENANCE OF EFFORT. 

23 (a) IN GENERAL.—A local educational agency may 

24 receive a grant under this subtitle for any fiscal year only 

25 if either the combined fiscal effort per student or the agVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02216 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gregate expenditures of the agency and the State involved 

2 with respect to the provision of free public education by 

3 the agency for the preceding fiscal year was not less than 

4 90 percent of the combined fiscal effort or aggregate ex5 penditures for the second preceding fiscal year. 

6 (b) REDUCTION IN CASE OF FAILURE TO MEET

7 MAINTENANCE OF EFFORT REQUIREMENT.— 

8 (1) IN GENERAL.—The State educational agen9 cy shall reduce the amount of a local educational 

10 agency’s grant in any fiscal year in the exact propor11 tion by which a local educational agency fails to 

12 meet the requirement of subsection (a) by falling 

13 below 90 percent of both the combined fiscal effort 

14 per student and aggregate expenditures (using the 

15 measure most favorable to the local agency). 

16 (2) SPECIAL RULE.—No such lesser amount 

17 shall be used for computing the effort required 

18 under subsection (a) for subsequent years. 

19 (c) WAIVER.—The Secretary shall waive the require20 ments of this section if the Secretary determines that a 

21 waiver would be equitable due to— 

22 (1) exceptional or uncontrollable circumstances, 

23 such as a natural disaster; or 

24 (2) a precipitous decline in the financial re25 sources of the local educational agency. 


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1 SEC. 335. SPECIAL RULE ON CONTRACTING. 

2 Each local educational agency receiving a grant under 

3 this subtitle shall ensure that, if the agency carries out 

4 modernization, renovation, repair, or construction through 

5 a contract, the process for any such contract ensures the 

6 maximum number of qualified bidders, including local, 

7 small, minority, and women- and veteran-owned busi8 nesses, through full and open competition. 

9 SEC. 336. USE OF AMERICAN IRON, STEEL, AND MANUFAC10 TURED GOODS. 

11 (a) IN GENERAL.—None of the funds appropriated 

12 or otherwise made available by this subtitle may be used 

13 for a project for the modernization, renovation, repair, or 

14 construction of a public school facility unless all of the 

15 iron, steel, and manufactured goods used in the project 

16 are produced in the United States. 

17 (b) EXCEPTIONS.—Subsection (a) shall not apply in 

18 any case or category of cases in which the Secretary finds 

19 that— 

20 (1) applying subsection (a) would be incon21 sistent with the public interest; 

22 (2) iron, steel, and the relevant manufactured 

23 goods are not produced in the United States in suffi24 cient and reasonably available quantities and of a 

25 satisfactory quality; or 


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1 (3) inclusion of iron, steel, and manufactured 

2 goods produced in the United States will increase 

3 the cost of the overall project by more than 25 per4 cent. 

5 (c) PUBLICATION OF JUSTIFICATION.—If the Sec6 retary determines that it is necessary to waive the applica7 tion of subsection (a) based on a finding under subsection 

8 (b), the Secretary shall publish in the Federal Register 

9 a detailed written justification of the determination. 

10 (d) CONSTRUCTION.—This section shall be applied in 

11 a manner consistent with United States obligations under 

12 international agreements. 

13 SEC. 337. LABOR STANDARDS. 

14 The grant programs under this subtitle are applicable 

15 programs (as that term is defined in section 400 of the 

16 General Education Provisions Act (20 U.S.C. 1221)) sub17 ject to section 439 of such Act (20 U.S.C. 1232b). 

18 SEC. 338. CHARTER SCHOOLS. 

19 (a) IN GENERAL.—A local educational agency receiv20 ing an allocation under this subtitle shall reserve an 

21 amount of that allocation for charter schools within its ju22 risdiction for modernization, renovation, repair, and con23 struction of charter school facilities. 

24 (b) DETERMINATION OF RESERVED AMOUNT.—The 

25 amount to be reserved by a local educational agency under 


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1 subsection (a) shall be determined based on the combined 

2 percentage of students counted under section 1113(a)(5) 

3 of the Elementary and Secondary Education Act of 1965 

4 (20 U.S.C. 6313(a)(5)) in the schools of the agency who— 

5 (1) are enrolled in charter schools; and 

6 (2) the local educational agency, in consultation 

7 with the authorized public chartering agency, ex8 pects to be enrolled, during the year with respect to 

9 which the reservation is made, in charter schools 

10 that are scheduled to commence operation during 

11 such year. 

12 (c) SCHOOL SHARE.—Individual charter schools shall 

13 receive a share of the amount reserved under subsection 

14 (a) based on the need of each school for modernization, 

15 renovation, repair, or construction, as determined by the 

16 local educational agency in consultation with charter 

17 school administrators. 

18 (d) EXCESS FUNDS.—After the consultation de19 scribed in subsection (c), if the local educational agency 

20 determines that the amount of funds reserved under sub21 section (a) exceeds the modernization, renovation, repair, 

22 and construction needs of charter schools within the local 

23 educational agency’s jurisdiction, the agency may use the 

24 excess funds for other public school facility modernization, 

25 renovation, repair, or construction consistent with this 


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1 subtitle and is not required to carry over such funds to 

2 the following fiscal year for use for charter schools. 

3 SEC. 339. GREEN SCHOOLS. 

4 (a) IN GENERAL.—Of the funds appropriated for a 

5 given fiscal year and made available to a local educational 

6 agency to carry out this subtitle, the local educational 

7 agency shall use not less than the applicable percentage 

8 (described in subsection (b)) of such funds for public 

9 school modernization, renovation, repair, or construction 

10 that are certified, verified, or consistent with any applica11 ble provisions of— 

12 (1) the LEED Green Building Rating System; 

13 (2) Energy Star; 

14 (3) the CHPS Criteria; 

15 (4) Green Globes; or 

16 (5) an equivalent program adopted by the 

17 State, or another jurisdiction with authority over the 

18 local educational agency, that includes a verifiable 

19 method to demonstrate compliance with such pro20 gram. 

21 (b) APPLICABLE PERCENTAGES.—The applicable 

22 percentage described in subsection (a) is— 

23 (1) for funds appropriated in fiscal year 2010, 

24 50 percent; and 


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1 (2) for funds appropriated in fiscal year 2011, 

2 75 percent. 

3 (c) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed to prohibit a local educational 

5 agency from using sustainable, domestic hardwood lumber 

6 as ascertained through the forest inventory and analysis 

7 program of the Forest Service of the Department of Agri8 culture under the Forest and Rangeland Renewable Re9 sources Research Act of 1978 (16 U.S.C. 1641 et seq.) 

10 for public school modernization, renovation, repairs, or 

11 construction. 

12 (d) TECHNICAL ASSISTANCE.—The Secretary, in 

13 consultation with the Secretary of Energy and the Admin14 istrator of the Environmental Protection Agency, shall 

15 provide outreach and technical assistance to States and 

16 local educational agencies concerning the best practices in 

17 school modernization, renovation, repair, and construc18 tion, including those related to student academic achieve19 ment, student and staff health, energy efficiency, and envi20 ronmental protection. 

21 SEC. 340. REPORTING. 

22 (a) REPORTS BY LOCAL EDUCATIONAL AGENCIES.— 

23 Local educational agencies receiving a grant under this 

24 subtitle shall annually compile a report describing the 

25 projects for which such funds were used, including— 


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1 (1) the number and identity of public schools in 

2 the agency, including the number of charter schools, 

3 and for each school, the total number of students, 

4 and the number of students counted under section 

5 1113(a)(5) of the Elementary and Secondary Edu6 cation Act of 1965 (20 U.S.C. 6313(a)(5)); 

7 (2) the total amount of funds received by the 

8 local educational agency under this subtitle, and for 

9 each public school in the agency, including each 

10 charter school, the amount of such funds expended, 

11 and the types of modernization, renovation, repair, 

12 or construction projects for which such funds were 

13 used; 

14 (3) the number of students impacted by such 

15 projects, including the number of students so im16 pacted who are counted under section 1113(a)(5) of 

17 the Elementary and Secondary Education Act of 

18 1965 (20 U.S.C. 6313(a)(5)); 

19 (4) the number of public schools in the agency 

20 with a metro-centric locale code of 41, 42, or 43 as 

21 determined by the National Center for Education 

22 Statistics and the percentage of funds received by 

23 the agency under chapter 1 or chapter 2 of this sub24 title that were used for projects at such schools; 


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1 (5) the number of public schools in the agency 

2 that are eligible for schoolwide programs under sec3 tion 1114 of the Elementary and Secondary Edu4 cation Act of 1965 (20 U.S.C. 6314) and the per5 centage of funds received by the agency under chap6 ter 1 or chapter 2 of this subtitle that were used for 

7 projects at such schools; 

8 (6) for each project— 

9 (A) the cost; 

10 (B) the standard described in section 

11 339(a) with which the use of the funds com12 plied or, if the use of funds did not comply with 

13 a standard described in section 339(a), the rea14 son such funds were not able to be used in com15 pliance with such standards and the agency’s 

16 efforts to use such funds in an environmentally 

17 sound manner; and 

18 (C) any demonstrable or expected benefits 

19 as a result of the project (such as energy sav20 ings, improved indoor environmental quality, 

21 student and staff health, including the reduc22 tion of the incidence and effects of asthma and 

23 other respiratory illnesses, and improved cli24 mate for teaching and learning); and 


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1 (7) the total number and amount of contracts 

2 awarded, and the number and amount of contracts 

3 awarded to local, small, minority, women, and vet4 eran-owned businesses. 

5 (b) AVAILABILITY OF REPORTS.—A local educational 

6 agency shall— 

7 (1) submit the report described in subsection 

8 (a) to the State educational agency, which shall com9 pile such information and report it annually to the 

10 Secretary; and 

11 (2) make the report described in subsection (a) 

12 publicly available, including on the agency’s website. 

13 (c) REPORTS BY SECRETARY.—Not later than March 

14 31 of each fiscal year, the Secretary shall submit to the 

15 Committee on Education and Labor of the House of Rep16 resentatives and the Committee on Health, Education, 

17 Labor and Pensions of the Senate, and make available on 

18 the Department of Education’s website, a report on grants 

19 made under this subtitle, including the information from 

20 the reports described in subsection (b)(1). 

21 SEC. 341. SPECIAL RULES. 

22 Notwithstanding any other provision of this subtitle, 

23 none of the funds authorized by this subtitle may be— 


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1 (1) used to employ workers in violation of sec2 tion 274A of the Immigration and Nationality Act 

3 (8 U.S.C. 1324a); or 

4 (2) distributed to a local educational agency 

5 that does not have a policy that requires a criminal 

6 background check on all employees of the agency. 

7 SEC. 342. PROMOTION OF EMPLOYMENT EXPERIENCES. 

8 The Secretary of Education, in consultation with the 

9 Secretary of Labor, shall work with recipients of funds 

10 under this subtitle to promote appropriate opportunities 

11 to gain employment experience working on modernization, 

12 renovation, repair, and construction projects funded under 

13 this subtitle for— 

14 (1) participants in a YouthBuild program (as 

15 defined in section 173A of the Workforce Investment 

16 Act of 1998 (29 U.S.C. 2918a)); 

17 (2) individuals enrolled in the Job Corps pro18 gram carried out under subtitle C of title I of the 

19 Workforce Investment Act of 1998 (29 U.S.C. 2881 

20 et seq.); 

21 (3) individuals enrolled in a junior or commu22 nity college (as defined in section 312(f) of the 

23 Higher Education Act of 1965 (20 U.S.C. 1088(f))) 

24 certificate or degree program relating to projects de25 scribed in section 339(a); and 


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1 (4) participants in preapprenticeship programs 

2 that have direct linkages with apprenticeship pro3 grams that are registered with the Department of 

4 Labor or a State Apprenticeship Agency under the 

5 National Apprenticeship Act of 1937 (29 U.S.C. 50 

6 et seq.). 

7 SEC. 343. ADVISORY COUNCIL ON GREEN, HIGH-PER8 FORMING PUBLIC SCHOOL FACILITIES. 

9 (a) ESTABLISHMENT OF ADVISORY COUNCIL.—The 

10 Secretary shall establish an advisory council to be known 

11 as the ‘‘Advisory Council on Green, High-Performing Pub12 lic School Facilities’’ (in this section referred to as the 

13 ‘‘Advisory Council’’) which shall be composed of— 

14 (1) appropriate officials from the Department 

15 of Education; 

16 (2) representatives of the academic, architec17 tural, business, education, engineering, environ18 mental, labor, and scientific communities; and 

19 (3) such other representatives as the Secretary 

20 deems appropriate. 

21 (b) DUTIES OF ADVISORY COUNCIL.— 

22 (1) ADVISORY DUTIES.—The Advisory Council 

23 shall advise the Secretary on the impact of green, 

24 high-performing schools, on— 

25 (A) teaching and learning; 


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1 (B) health; 

2 (C) energy costs; 

3 (D) environmental impact; and 

4 (E) other areas that the Secretary and the 

5 Advisory Council deem appropriate. 

6 (2) OTHER DUTIES.—The Advisory Council 

7 shall assist the Secretary in— 

8 (A) making recommendations on Federal 

9 policies to increase the number of green, high10 performing schools; 

11 (B) identifying Federal policies that are 

12 barriers to helping States and local educational 

13 agencies make green, high-performing schools; 

14 (C) providing technical assistance and out15 reach to States and local educational agencies 

16 under section 339(d); and 

17 (D) providing the Secretary such other as18 sistance as the Secretary deems appropriate. 

19 (c) CONSULTATION.—In carrying out its duties under 

20 subsection (b), the Advisory Council shall consult with the 

21 Chair of the Council on Environmental Quality and the 

22 heads of appropriate Federal agencies, including the Sec23 retary of Commerce, the Secretary of Energy, the Sec24 retary of Health and Human Services, the Secretary of 

25 Labor, the Administrator of the Environmental Protection 


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1 Agency, and the Administrator of the General Services 

2 Administration (through the Office of Federal High-Per3 formance Green Buildings). 

4 SEC. 344. EDUCATION REGARDING PROJECTS. 

5 A local educational agency receiving funds under this 

6 subtitle may encourage schools at which projects are un7 dertaken with such funds to educate students about the 

8 project, including, as appropriate, the functioning of the 

9 project and its environmental, energy, sustainability, and 

10 other benefits. 

11 SEC. 345. AVAILABILITY OF FUNDS. 

12 (a) CHAPTER 1.—There are authorized to be appro13 priated, and there are appropriated, to carry out chapter 

14 1 of this subtitle (in addition to any other amounts appro15 priated to carry out such chapter and out of any money 

16 in the Treasury not otherwise appropriated), 

17 $2,020,000,000 for each of fiscal years 2010 and 2011. 

18 (b) CHAPTER 2.—There are authorized to be appro19 priated, and there are appropriated, to carry out chapter 

20 2 of this subtitle (in addition to any other amounts appro21 priated to carry out such chapter and out of any money 

22 in the Treasury not otherwise appropriated), $30,000,000 

23 for each of fiscal years 2010 and 2011. 

24 (c) PROHIBITION ON EARMARKS.—None of the funds 

25 appropriated under this section may be used for a ConVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02229 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 gressional earmark as defined in clause 9(d) of rule XXI 

2 of the Rules of the House of Representatives. 

3 Subtitle B—Higher Education 

4 SEC. 351. FEDERAL ASSISTANCE FOR COMMUNITY COL5 LEGE MODERNIZATION AND CONSTRUCTION. 

6 (a) IN GENERAL.— 

7 (1) GRANT PROGRAM.—From the amounts 

8 made available under subsection (i), the Secretary 

9 shall award grants to States for the purposes of con10 structing new community college facilities and mod11 ernizing, renovating, and repairing existing commu12 nity college facilities. Grants awarded under this sec13 tion shall be used by a State for one or more of the 

14 following: 

15 (A) To reduce financing costs of loans for 

16 new construction, modernization, renovation, or 

17 repair projects at community colleges (such as 

18 paying interest or points on such loans). 

19 (B) To provide matching funds for a com20 munity college capital campaign to attract pri21 vate donations of funds for new construction, 

22 modernization, renovation, or repair projects at 

23 the community college. 

24 (C) To capitalize a revolving loan fund to 

25 finance new construction, modernization, renVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02230 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ovation, and repair projects at community col2 leges. 

3 (2) ALLOCATION.— 

4 (A) DETERMINATION OF AVAILABLE

5 AMOUNT.—The Secretary shall determine the 

6 amount available for allocation to each State by 

7 determining the amount equal to the total num8 ber of students in the State who are enrolled in 

9 community colleges and who are pursuing a de10 gree or certificate that is not a bachelor’s, mas11 ter’s, professional, or other advanced degree, 

12 relative to the total number of such students in 

13 all States, combined. 

14 (B) ALLOCATION.—The Secretary shall al15 locate to each State selected by the Secretary to 

16 receive a grant under this section an amount 

17 equal to the amount determined to be available 

18 for allocation to such State under subparagraph 

19 (A), less any portion of that amount that is 

20 subject to a limitation under paragraph (3). 

21 (C) REALLOCATION.—Amounts not allo22 cated under this section to a State because— 

23 (i) the State did not submit an appli24 cation under subsection (b); 


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1 (ii) the State submitted an application 

2 that the Secretary determined did not meet 

3 the requirements of such subsection; or 

4 (iii) the State is subject to a limita5 tion under paragraph (3) that prevents the 

6 State from using a portion of the alloca7 tion, 

8 shall be proportionately reallocated under this 

9 paragraph to the States that are not described 

10 in clause (i), (ii), or (iii) of this subparagraph. 

11 (3) GRANT AMOUNT LIMITATIONS.—A grant 

12 awarded to a State under this section— 

13 (A) to reduce financing costs of loans for 

14 new construction, modernization, renovation, or 

15 repair projects at community colleges under 

16 paragraph (1)(A) shall be for an amount that 

17 is not more than 25 percent of the total prin18 cipal amount of the loans for which financing 

19 costs are being reduced; and 

20 (B) to provide matching funds for a com21 munity college capital campaign under para22 graph (1)(B) shall be for an amount that is not 

23 more than 25 percent of the total amount of 

24 the private donations of funds raised through 

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1 paign, as such duration is determined by the 

2 State in the application submitted under sub3 section (b). 

4 (4) SUPPLEMENT, NOT SUPPLANT.—Funds 

5 made available under this section shall be used to 

6 supplement, and not supplant, other Federal, State, 

7 and local funds that would otherwise be expended to 

8 construct new community college facilities or mod9 ernize, renovate, or repair existing community col10 lege facilities. 

11 (b) APPLICATION.—A State that desires to receive a 

12 grant under this section shall submit an application to the 

13 Secretary at such time, in such manner, and containing 

14 such information and assurances as the Secretary may re15 quire. Such application shall include a certification by the 

16 State that the funds provided under this section for the 

17 construction of new community college facilities and the 

18 modernization, renovation, and repair of existing commu19 nity college facilities will improve instruction at such col20 leges and will improve the ability of such colleges to edu21 cate and train students to meet the workforce needs of 

22 employers in the State. 

23 (c) USE OF FUNDS BY COMMUNITY COLLEGES.— 

24 (1) PERMISSIBLE USES OF FUNDS.—Funds 

25 made available to community colleges through a loan 


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1 described in subsection (a)(1)(A), a capital campaign 

2 described in subsection (a)(1)(B), or a loan from a 

3 revolving loan fund described in subsection (a)(1)(C) 

4 shall be used only for the construction, moderniza5 tion, renovation, or repair of community college fa6 cilities that are primarily used for instruction, re7 search, or student housing, which may include any 

8 of the following: 

9 (A) Repair, replacement, or installation of 

10 roofs, including extensive, intensive, or semi-in11 tensive green roofs, electrical wiring, water sup12 ply and plumbing systems, sewage systems, 

13 storm water runoff systems, lighting systems, 

14 building envelope, windows, ceilings, flooring, or 

15 doors, including security doors. 

16 (B) Repair, replacement, or installation of 

17 heating, ventilation, or air conditioning systems, 

18 including insulation, and conducting indoor air 

19 quality assessments. 

20 (C) Compliance with fire, health, seismic, 

21 and safety codes, including professional installa22 tion of fire and life safety alarms, and mod23 ernizations, renovations, and repairs that en24 sure that the community college’s facilities are 

25 prepared for emergencies, such as improving 


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1 building infrastructure to accommodate security 

2 measures and installing or upgrading tech3 nology to ensure that the community college is 

4 able to respond to emergencies such as acts of 

5 terrorism, campus violence, and natural disas6 ters. 

7 (D) Retrofitting necessary to increase the 

8 energy efficiency of the community college’s fa9 cilities. 

10 (E) Modifications necessary to make facili11 ties accessible in compliance with the Americans 

12 with Disabilities Act of 1990 (42 U.S.C. 12101 

13 et seq.) and section 504 of the Rehabilitation 

14 Act of 1973 (29 U.S.C. 794). 

15 (F) Abatement, removal, or interim con16 trols of asbestos, polychlorinated biphenyls, 

17 mold, mildew, or lead-based hazards, including 

18 lead-based paint hazards from the community 

19 college’s facilities. 

20 (G) Modernization, renovation, or repair 

21 necessary to reduce the consumption of coal, 

22 electricity, land, natural gas, oil, or water. 

23 (H) Modernization, renovation, and repair 

24 relating to improving science and engineering 

25 laboratories, libraries, or instructional facilities. 


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1 (I) Installation or upgrading of educational 

2 technology infrastructure. 

3 (J) Installation or upgrading of renewable 

4 energy generation and heating systems, includ5 ing solar, photovoltaic, wind, biomass (including 

6 wood pellet and woody biomass), waste-to-en7 ergy, solar-thermal and geothermal systems, 

8 and energy audits. 

9 (K) Other modernization, renovation, or 

10 repair projects that are primarily for instruc11 tion, research, or student housing. 

12 (L) Required environmental remediation 

13 related to modernization, renovation, or repair 

14 described in subparagraphs (A) through (K). 

15 (2) GREEN SCHOOL REQUIREMENT.—A commu16 nity college receiving assistance through a loan de17 scribed in subsection (a)(1)(A), a capital campaign 

18 described in subsection (a)(1)(B), or a loan from a 

19 revolving loan fund described in subsection (a)(1)(C) 

20 shall use not less than 50 percent of such assistance 

21 to carry out projects for construction, moderniza22 tion, renovation, or repair that are certified, verified, 

23 or consistent with the applicable provisions of— 

24 (A) the LEED Green Building Rating Sys25 tem; 


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1 (B) Energy Star; 

2 (C) the CHPS Criteria, as applicable; 

3 (D) Green Globes; or 

4 (E) an equivalent program adopted by the 

5 State or the State higher education agency that 

6 includes a verifiable method to demonstrate 

7 compliance with such program. 

8 (3) PROHIBITED USES OF FUNDS.— 

9 (A) IN GENERAL.—No funds awarded 

10 under this section may be used for— 

11 (i) payment of maintenance costs; 

12 (ii) construction, modernization, ren13 ovation, or repair of stadiums or other fa14 cilities primarily used for athletic contests 

15 or exhibitions or other events for which ad16 mission is charged to the general public; or 

17 (iii) construction, modernization, ren18 ovation, or repair of facilities— 

19 (I) used for sectarian instruction, 

20 religious worship, or a school or de21 partment of divinity; or 

22 (II) in which a substantial por23 tion of the functions of the facilities 

24 are subsumed in a religious mission. 


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1 (B) FOUR-YEAR INSTITUTIONS.—No funds 

2 awarded to a four-year public institution of 

3 higher education under this section may be 

4 used for any facility, service, or program of the 

5 institution that is not available to students who 

6 are pursuing a degree or certificate that is not 

7 a bachelor’s, master’s, professional, or other ad8 vanced degree. 

9 (d) APPLICATION OF GEPA.—The grant program 

10 authorized in this section is an applicable program (as 

11 that term is defined in section 400 of the General Edu12 cation Provisions Act (20 U.S.C. 1221)) subject to section 

13 439 of such Act (20 U.S.C. 1232b). The Secretary shall, 

14 notwithstanding section 437 of such Act (20 U.S.C. 1232) 

15 and section 553 of title 5, United States Code, establish 

16 such program rules as may be necessary to implement 

17 such grant program by notice in the Federal Register. 

18 (e) CONCURRENT FUNDING.—Funds made available 

19 under this section shall not be used to assist any commu20 nity college that receives funding for the construction, 

21 modernization, renovation, and repair of facilities under 

22 any other program under this division, the Higher Edu23 cation Act of 1965, or the American Recovery and Rein24 vestment Act of 2009. 


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1 (f) REPORTS BY THE STATES.—Each State that re2 ceives a grant under this section shall, not later than Sep3 tember 30, 2012, and annually thereafter for each fiscal 

4 year in which the State expends funds received under this 

5 section, submit to the Secretary a report that includes— 

6 (1) a description the projects for which the 

7 grant funding was, or will be, used; 

8 (2) a list of the community colleges that have 

9 received, or will receive, assistance from the grant 

10 through a loan described in subsection (a)(1)(A), a 

11 capital campaign described in subsection (a)(1)(B), 

12 or a loan from a revolving loan fund described in 

13 subsection (a)(1)(C); and 

14 (3) a description of the amount and nature of 

15 the assistance provided to each such college. 

16 (g) REPORT BY THE SECRETARY.—The Secretary 

17 shall submit to the authorizing committees (as defined in 

18 section 103 of the Higher Education Act of 1965) an an19 nual report on the grants made under this section, includ20 ing the information described in subsection (f). 

21 (h) DEFINITIONS.— 

22 (1) COMMUNITY COLLEGE.—As used in this 

23 section, the term ‘‘community college’’ means— 


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1 (A) a junior or community college, as such 

2 term is defined in section 312(f) of the Higher 

3 Education Act of 1965 (20 U.S.C. 1085(f)); or 

4 (B) a four-year public institution of higher 

5 education (as defined in section 101 of the 

6 Higher Education Act of 1965) that awards a 

7 significant number of degrees and certificates 

8 that are not— 

9 (i) bachelor’s degrees (or an equiva10 lent); or 

11 (ii) master’s, professional, or other 

12 advanced degrees. 

13 (2) CHPS CRITERIA.—The term ‘‘CHPS Cri14 teria’’ means the green building rating program de15 veloped by the Collaborative for High Performance 

16 Schools. 

17 (3) ENERGY STAR.—The term ‘‘Energy Star’’ 

18 means the Energy Star program of the United 

19 States Department of Energy and the United States 

20 Environmental Protection Agency. 

21 (4) GREEN GLOBES.—The term ‘‘Green 

22 Globes’’ means the Green Building Initiative envi23 ronmental design and rating system referred to as 

24 Green Globes. 


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1 (5) LEED GREEN BUILDING RATING SYSTEM.— 

2 The term ‘‘LEED Green Building Rating System’’ 

3 means the United States Green Building Council 

4 Leadership in Energy and Environmental Design 

5 green building rating standard referred to as the 

6 LEED Green Building Rating System. 

7 (6) SECRETARY.—The term ‘‘Secretary’’ means 

8 the Secretary of Education. 

9 (7) STATE.—The term ‘‘State’’ has the mean10 ing given such term in section 103 of the Higher 

11 Education Act of 1965 (20 U.S.C. 1003). 

12 (i) AVAILABILITY OF FUNDS.—There are authorized 

13 to be appropriated, and there are appropriated, to carry 

14 out this section (in addition to any other amounts appro15 priated to carry out this section and out of any money 

16 in the Treasury not otherwise appropriated), 

17 $2,500,000,000 for fiscal year 2011, which shall remain 

18 available until expended. 

19 TITLE IV—EARLY LEARNING 

20 CHALLENGE FUND 

21 SEC. 401. PURPOSE. 

22 The purpose of this title is to provide grants on a 

23 competitive basis to States for the following: 

24 (1) To promote standards reform of State early 

25 learning programs serving children from birth 


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1 through age 5 in order to support the healthy devel2 opment and improve the school readiness outcomes 

3 of young children. 

4 (2) To establish a high standard of quality in 

5 early learning programs that integrates appropriate 

6 early learning and development standards across 

7 early learning settings. 

8 (3) To fund and implement quality initiatives 

9 that improve the skills and effectiveness of early 

10 learning providers, and improve the quality of exist11 ing early learning programs, in order to increase the 

12 number of disadvantaged children who participate in 

13 comprehensive and high-quality early learning pro14 grams. 

15 (4) To ensure that a greater number of dis16 advantaged children enter kindergarten with the cog17 nitive, social, emotional, and physical skills and abili18 ties needed to be successful in school. 

19 (5) To increase parents’ abilities to access com20 prehensive and high quality early learning programs 

21 across settings for their children. 

22 SEC. 402. PROGRAMS AUTHORIZED. 

23 (a) QUALITY PATHWAYS GRANTS.—The Secretary 

24 shall use funds made available to carry out this title for 


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1 a fiscal year to award grants on a competitive basis to 

2 States in accordance with section 403. 

3 (b) DEVELOPMENT GRANTS.—The Secretary shall 

4 use funds made available to carry out this title for a fiscal 

5 year to award grants in accordance with section 404 on 

6 a competitive basis to States that demonstrate a commit7 ment to establishing a system of early learning that will 

8 include the components described in section 403(c)(3) but 

9 are not— 

10 (1) eligible to be awarded a grant under sub11 section (a); or 

12 (2) are not awarded such a grant after applica13 tion. 

14 (c) RESERVATIONS OF FEDERAL FUNDS.— 

15 (1) RESEARCH, EVALUATION, AND ADMINISTRA16 TION.—From the amount made available to carry 

17 out this title for a fiscal year, the Secretary— 

18 (A) shall reserve up to 2 percent jointly to 

19 administer this title with the Secretary of 

20 Health and Human Services; and 

21 (B) shall reserve up to 3 percent to carry 

22 out activities under section 405. 

23 (2) TRIBAL SCHOOL READINESS PLANNING

24 DEMONSTRATION.—After making the reservations 

25 under paragraph (1), the Secretary shall reserve 


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1 0.25 percent for a competitive grant program for In2 dian tribes to develop and implement school readi3 ness plans that— 

4 (A) are coordinated with local educational 

5 agencies serving children who are members of 

6 the tribe; and 

7 (B) include American Indian and Alaska 

8 Native Head Start and Early Head Start pro9 grams, tribal child care programs, Indian 

10 Health Service programs, and other tribal pro11 grams serving children. 

12 (3) QUALITY PATHWAYS GRANTS.— 

13 (A) IN GENERAL.—From the amount made 

14 available to carry out this title for a fiscal year 

15 and not reserved under paragraph (1) or (2), 

16 the Secretary shall reserve a percent (which 

17 shall be not greater than 65 percent for fiscal 

18 years 2010 through 2012 and not greater than 

19 85 percent for fiscal year 2013 and each suc20 ceeding fiscal year) determined under subpara21 graph (B) to carry out subsection (a). 

22 (B) DETERMINATION OF AMOUNT.—In de23 termining the amount to reserve under subpara24 graph (A), the Secretary, consistent with secVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02244 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 tion 403(e), shall take into account the fol2 lowing: 

3 (i) The total number of States deter4 mined by the Secretary to qualify for re5 ceipt of a grant under this title for the 

6 year. 

7 (ii) The number of children under age 

8 5 from low-income families in each State 

9 with an approved application under section 

10 403 for the year. 

11 (C) REALLOCATION.—For fiscal year 2013 

12 and subsequent fiscal years, the Secretary may 

13 reallocate funds allocated for development 

14 grants under subsection (b) for the purpose of 

15 providing additional grants under subsection 

16 (a), if the Secretary determines that there is an 

17 insufficient number of applications that meet 

18 the requirements for a grant under subsection 

19 (b). 

20 (d) STATE APPLICATIONS.—In applying for a grant 

21 under this title, a State— 

22 (1) shall designate a State-level entity for ad23 ministration of the grant; 

24 (2) shall coordinate proposed activities with the 

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1 cation and Care (established pursuant to section 

2 642B(b)(1)(A) of the Head Start Act (42 U.S.C. 

3 9837b(b)(1)(A))) and shall incorporate plans and 

4 recommendations from such Council in the applica5 tion, where applicable; and 

6 (3) otherwise shall submit the application to the 

7 Secretary at such time, in such manner, and con8 taining such information as the Secretary may rea9 sonably require. 

10 (e) PRIORITY IN AWARDING GRANTS.—In awarding 

11 grants under this title, the Secretary shall give priority 

12 to States— 

13 (1) whose applications contain assurances that 

14 the State will use, in part, funds reserved under sec15 tion 658G of the Child Care and Development Block 

16 Grant Act of 1990 (42 U.S.C. 9858e) for activities 

17 described in section 403(f); 

18 (2) that will commit to dedicating a significant 

19 increase, in comparison to recent fiscal years, in 

20 State expenditures on early learning programs and 

21 services; and 

22 (3) that demonstrate efforts to build public-pri23 vate partnerships designed to accomplish the pur24 poses of this title. 

25 (f) MAINTENANCE OF EFFORT.— 


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1 (1) IN GENERAL.—With respect to each period 

2 for which a State is awarded a grant under this 

3 title, the aggregate expenditures by the State and its 

4 political subdivisions on early learning programs and 

5 services shall be not less than the level of the ex6 penditures for such programs and services by the 

7 State and its political subdivisions for fiscal year 

8 2006. 

9 (2) STATE EXPENDITURES.—For purposes of 

10 paragraph (1), expenditures by the State on early 

11 learning programs and services shall include, at a 

12 minimum, the following: 

13 (A) State matching and maintenance of ef14 fort funds for the Child Care and Development 

15 Block Grant Act of 1990 (42 U.S.C. 9858 et 

16 seq.). 

17 (B) State matching funds for the State 

18 Advisory Council on Early Childhood Education 

19 and Care (established pursuant to section 

20 642B(b)(1)(A) of the Head Start Act (42 

21 U.S.C. 9837b(b)(1)(A))). 

22 (C) State expenditures on public pre-kin23 dergarten, Head Start (including Early Head 

24 Start), and other State early learning programs 

25 and services dedicated to children (including 


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1 State expenditures under part C of the Individ2 uals with Disabilities Education Act (20 U.S.C. 

3 1431 et seq.)). 

4 (g) PROHIBITIONS ON USE OF FUNDS.—Funds 

5 under this title may not be used for any of the following: 

6 (1) Assessments that provide rewards or sanc7 tions for individual children or teachers. 

8 (2) A single assessment used as the primary or 

9 sole method for assessing program effectiveness. 

10 (3) Evaluating children other than for— 

11 (A) improving instruction or classroom en12 vironment; 

13 (B) targeting professional development; 

14 (C) determining the need for health, men15 tal health, disability, or family support services; 

16 (D) informing the quality improvement 

17 process at the State level; 

18 (E) program evaluation for the purposes of 

19 program improvement and parent information; 

20 or 

21 (F) research conducted as part of the na22 tional evaluation required by section 405(2). 

23 (h) FEDERAL ADMINISTRATION.— 

24 (1) IN GENERAL.—With respect to this title, 

25 the Secretary shall bear responsibility for obligating 


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1 and disbursing funds and ensuring compliance with 

2 applicable laws and administrative requirements, 

3 subject to paragraph (2). 

4 (2) INTERAGENCY AGREEMENT.—The Secretary 

5 of Education and the Secretary of Health and 

6 Human Services shall jointly administer this title on 

7 such terms as such secretaries shall set forth in an 

8 interagency agreement. 

9 SEC. 403. QUALITY PATHWAYS GRANTS. 

10 (a) GRANT PERIOD.—Grants under section 402(a)— 

11 (1) may be awarded for a period not to exceed 

12 5 years; and 

13 (2) may be renewed, subject to approval by the 

14 Secretary, and based on the State’s progress in— 

15 (A) increasing the percentage of disadvan16 taged children in each age group (infants, tod17 dlers, and preschoolers) who participate in high18 quality early learning programs; 

19 (B) increasing the number of high-quality 

20 early learning programs in low-income commu21 nities; 

22 (C) implementing an early learning system 

23 that includes the components described in sub24 section (c)(3); and 


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1 (D) incorporating the findings and rec2 ommendations reported by the commission es3 tablished under section 405(1) into the State 

4 system of early learning. 

5 (b) MATCHING REQUIREMENT.— 

6 (1) IN GENERAL.—Subject to subsection (g), to 

7 be eligible to receive a grant under section 402(a), 

8 a State shall contribute to the activities assisted 

9 under the grant non-Federal matching funds in an 

10 amount equal to not less than the applicable percent 

11 of the amount of the grant. 

12 (2) APPLICABLE PERCENT.—For purposes of 

13 paragraph (1), the applicable percent means— 

14 (A) 10 percent in the first fiscal year of 

15 the grant; 

16 (B) 10 percent in the second fiscal year of 

17 the grant; 

18 (C) 15 percent in the third fiscal year of 

19 the grant; and 

20 (D) 20 percent in the fourth fiscal year of 

21 the grant and subsequent fiscal years. 

22 (3) NON-FEDERAL FUNDS.—A State may use 

23 the following to satisfy the requirement of paragraph 

24 (1): 

25 (A) Cash. 


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1 (B) In-kind contributions for the acquisi2 tion, construction, or improvement of early 

3 learning program facilities serving disadvan4 taged children. 

5 (C) Technical assistance related to sub6 paragraph (B). 

7 (4) PRIVATE CONTRIBUTIONS.—Private con8 tributions made as part of public-private partner9 ships to increase the number of low-income children 

10 in high-quality early learning programs in a State 

11 may be used by the State to satisfy the requirement 

12 of paragraph (1). 

13 (5) FINANCIAL HARDSHIP WAIVER.—The Sec14 retary may waive or reduce the non-Federal share of 

15 a State that has submitted an application for a 

16 grant under section 402(a) if the State demonstrates 

17 a need for such waiver or reduction due to extreme 

18 financial hardship, as defined by the Secretary by 

19 regulation. 

20 (c) STATE APPLICATIONS.—In order to be considered 

21 for a grant under section 402(a), a State’s application 

22 under section 402(d) shall include the following: 

23 (1) A description of how the State will use the 

24 grant to implement quality initiatives to improve 

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1 dren from birth to age 5 to lead to a greater per2 centage of such children participating in higher 

3 quality early learning programs. 

4 (2) A description of the goals and benchmarks 

5 the State will establish to lead to a greater percent6 age of disadvantaged children participating in higher 

7 quality early learning programs to improve school 

8 readiness outcomes, including an established baseline 

9 of the number of disadvantaged children in high10 quality early learning programs. 

11 (3) A description of how the State will imple12 ment a governance structure and a system of early 

13 learning programs and services that includes the fol14 lowing components: 

15 (A) Not later than 12 months after receiv16 ing notice of an award of the grant, complete 

17 State early learning and development standards 

18 that include social and emotional, cognitive, and 

19 physical development domains, and approaches 

20 to learning that are developmentally appro21 priate (including culturally and linguistically 

22 appropriate) for all children. 

23 (B) A process to ensure that State early 

24 learning and development standards are inte25 grated into the instructional and programmatic 


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1 practices of early learning programs and serv2 ices, including services provided to children 

3 under section 619 and part C of the Individuals 

4 with Disabilities Education Act (20 U.S.C. 

5 1419, 1431 et seq.). 

6 (C) A program rating system that builds 

7 on licensing requirements, as appropriate, and 

8 other State regulatory standards and that— 

9 (i) is designed to improve quality and 

10 effectiveness across different types of early 

11 learning settings; 

12 (ii) integrates evidence-based program 

13 quality standards that reflect standard lev14 els of quality and has progressively higher 

15 levels of program quality; 

16 (iii) integrates the State’s early learn17 ing and development standards for the 

18 purpose of improving instructional and 

19 programmatic practices; 

20 (iv) addresses quality and effective in21 clusion of children with disabilities or de22 velopmental delays across different types of 

23 early learning settings; 

24 (v) addresses staff qualifications and 

25 professional development; 


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1 (vi) provides financial incentives and 

2 other supports to help programs meet and 

3 sustain higher levels of quality; 

4 (vii) includes mechanisms for evalu5 ating how programs are meeting those 

6 standards and progressively higher levels 

7 of quality; and 

8 (viii) includes a mechanism for public 

9 awareness and understanding of the pro10 gram rating system, including rating levels 

11 of individual programs. 

12 (D) A system of program review and moni13 toring that is designed to rate providers using 

14 the system described in subparagraph (C) and 

15 to assess and improve programmatic practices, 

16 instructional practices, and classroom environ17 ment. 

18 (E) A process to support early learning 

19 programs integrating instructional and pro20 grammatic practices that— 

21 (i) include developmentally appro22 priate (including culturally and linguis23 tically appropriate), ongoing, classroom24 based instructional assessments for each 

25 domain of child development and learning 


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1 (including social and emotional, cognitive, 

2 and physical development domains and ap3 proaches to learning) to guide and improve 

4 instructional practice, professional develop5 ment of staff, and services; and 

6 (ii) are aligned with the curricula used 

7 in the early learning program and with the 

8 State early learning and development 

9 standards or the Head Start Child Out10 comes Framework (as described in the 

11 Head Start Act), as applicable. 

12 (F) Minimum preservice early childhood 

13 development and education training require14 ments for providers in early learning programs. 

15 (G) A comprehensive plan for supporting 

16 the professional preparation and the ongoing 

17 professional development of an effective, well18 compensated early learning workforce, which 

19 plan includes training and education that is 

20 sustained, intensive, and classroom-focused and 

21 leads toward a credential or degree and is tied 

22 to improved compensation. 

23 (H) An outreach strategy to promote un24 derstanding by parents and families of— 


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1 (i) how to support their child’s early 

2 development and learning; 

3 (ii) the State’s program rating sys4 tem, as described in subparagraph (C); 

5 and 

6 (iii) the rating of the program in 

7 which their child is enrolled. 

8 (I) A coordinated system to facilitate 

9 screening, referral, and provision of services re10 lated to health, mental health, disability, and 

11 family support for children participating in 

12 early learning programs. 

13 (J) A process for evaluating school readi14 ness in children that reflects all of the major 

15 domains of development, and that is used to 

16 guide practice and improve early learning pro17 grams. 

18 (K) A coordinated data infrastructure that 

19 facilitates— 

20 (i) uniform data collection about the 

21 quality of early learning programs, essen22 tial information about the children and 

23 families that participate in such programs, 

24 and the qualifications and compensation of 


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1 the early learning workforce in such pro2 grams; and 

3 (ii) alignment and interoperability be4 tween the data system for early learning 

5 programs for children and data systems for 

6 elementary and secondary education. 

7 (4) A description of how the funds provided 

8 under the grant will be targeted to prioritize increas9 ing the number and percentage of low-income chil10 dren in high-quality early learning programs, includ11 ing children— 

12 (A) in each age group (infants, toddlers, 

13 and preschoolers); 

14 (B) with developmental delays and disabil15 ities; 

16 (C) with limited English proficiency; and 

17 (D) living in rural areas. 

18 (5) An assurance that the grant will be used to 

19 improve the quality of early learning programs 

20 across a range of types of settings and providers of 

21 such programs. 

22 (6) A description of the steps the State will 

23 take to make progress toward including all center24 based child care programs, family child care pro25 grams, State-funded prekindergarten, Head Start 


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1 programs, and other early learning programs, such 

2 as those funded under title I of the Elementary and 

3 Secondary Education Act of 1965 (20 U.S.C. 6301 

4 et seq.) or receiving funds under section 619 or part 

5 C of the Individuals with Disabilities Education Act 

6 (20 U.S.C. 1419, 1431 et seq.) in the State program 

7 rating system described in paragraph (3)(C). 

8 (7) An assurance that the State, not later than 

9 18 months after receiving notice of an award of the 

10 grant, will conduct an analysis of the alignment of 

11 the State’s early learning and development stand12 ards with— 

13 (A) appropriate academic content stand14 ards for grades kindergarten through 3; and 

15 (B) elements of program quality standards 

16 for early learning programs. 

17 (8) An assurance that the grant will be used 

18 only to supplement, and not to supplant, Federal, 

19 State, and local funds otherwise available to support 

20 existing early learning programs and services. 

21 (9) A description of any disparity by age group 

22 (infants, toddlers, and preschoolers) of available 

23 high-quality early learning programs in low-income 

24 communities and the steps the State will take to de25 crease such disparity, if applicable. 


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1 (10) A description of how the State early learn2 ing and development standards will address the 

3 needs of children with limited English proficiency, 

4 including by incorporating benchmarks related to 

5 English language development. 

6 (11) A description of how the State’s profes7 sional development plan will prepare the early learn8 ing workforce to support the early learning needs of 

9 children with limited English proficiency. 

10 (12) A description of how the State will im11 prove interagency collaboration and coordinate the 

12 purposes of this title with the activities funded 

13 under— 

14 (A) section 658G of the Child Care and 

15 Development Block Grant Act of 1990 (42 

16 U.S.C. 9858e); 

17 (B) section 619 and part C of the Individ18 uals with Disabilities Education Act (20 U.S.C. 

19 1419, 1431 et seq.); 

20 (C) title I of the Elementary and Sec21 ondary Education Act of 1965 (20 U.S.C. 6301 

22 et seq.); 

23 (D) State-funded pre-kindergarten pro24 grams (where applicable); 

25 (E) Head Start programs; and 


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1 (F) other early childhood programs and 

2 services. 

3 (13) A description of how the State’s early 

4 learning policies, including child care policies, facili5 tate access to high-quality early learning programs 

6 for children from low-income families. 

7 (14) An assurance that the State will continue 

8 to participate in part C of the Individuals with Dis9 abilities Education Act (20 U.S.C. 1431 et seq.) for 

10 the duration of the grant. 

11 (d) CRITERIA USED IN AWARDING GRANTS.—In 

12 awarding grants under section 402(a), the Secretary shall 

13 evaluate the applications, and award grants under such 

14 section on a competitive basis, based on— 

15 (1) the quality of the application submitted pur16 suant to section 402(d); 

17 (2) the priority factors described in section 

18 402(e); 

19 (3) evidence of significant progress in estab20 lishing a system of early learning for children that 

21 includes the components described in subsection 

22 (c)(3); and 

23 (4) the State’s capacity to fully complete imple24 mentation of such a system. 


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1 (e) CRITERION USED IN DETERMINING AMOUNT OF

2 AWARD.—In determining the amount to award a State 

3 under section 402(a), the Secretary shall take into ac4 count— 

5 (1) the proportion of children under age 5 from 

6 low-income families in the State relative to such pro7 portion in other States; and 

8 (2) the State plan and capacity to implement 

9 the criteria described in paragraphs (3) and (4) of 

10 subsection (d). 

11 (f) STATE USES OF FUNDS.— 

12 (1) IN GENERAL.—A State receiving a grant 

13 under section 402(a) shall use the grant as follows: 

14 (A) Not less than 65 percent of the grant 

15 amount shall be used for two or more of the fol16 lowing activities to improve the quality of early 

17 learning programs serving disadvantaged chil18 dren: 

19 (i) Initiatives that improve the creden20 tials of early learning providers and are 

21 tied to increased compensation. 

22 (ii) Initiatives that help early learning 

23 programs meet and sustain higher pro24 gram quality standards, such as— 


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1 (I) improving the ratio of early 

2 learning provider to children in early 

3 learning settings; 

4 (II) reducing group size; 

5 (III) improving the qualifications 

6 of early learning providers; and 

7 (IV) supporting effective edu8 cation and training for early learning 

9 providers. 

10 (iii) Implementing classroom observa11 tion assessments and data-driven decisions 

12 (which may include implementation of a 

13 research-based prevention and intervention 

14 framework designed to build social com15 petence and prevent challenging behaviors) 

16 tied to activities that improve instructional 

17 practices, programmatic practices, or class18 room environment and promote school 

19 readiness. 

20 (iv) Providing financial incentives to 

21 early learning programs— 

22 (I) for undertaking quality im23 provements that promote healthy de24 velopment and school readiness; and 


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1 (II) maintaining quality improve2 ments that promote healthy develop3 ment and school readiness. 

4 (v) Integrating State early learning 

5 and development standards into instruc6 tional and programmatic practices in early 

7 learning programs. 

8 (vi) Providing high-quality, sustained, 

9 intensive, and classroom-focused profes10 sional development that improves the 

11 knowledge and skills of early learning pro12 viders, including professional development 

13 related to meeting the needs of diverse 

14 populations. 

15 (vii) Building the capacity of early 

16 learning programs and communities to pro17 mote the understanding of parents and 

18 families of the State’s early learning sys19 tem and the rating of the program in 

20 which their child is enrolled and to encour21 age the active involvement and engagement 

22 of parents and families in the learning and 

23 development of their children. 

24 (viii) Building the capacity of early 

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1 cilitate screening, referral, and provision of 

2 services related to health, mental health, 

3 disability, and family support for children 

4 participating in early learning programs. 

5 (ix) Other innovative activities, pro6 posed by the State and approved in ad7 vance by the Secretary that are— 

8 (I) based on successful practices; 

9 (II) designed to improve the 

10 quality of early learning programs and 

11 services; and 

12 (III) advance the system compo13 nents described in subsection (c)(3). 

14 (B) The remainder of the grant amount 

15 may be used for one or more of the following: 

16 (i) Implementation or enhancement of 

17 the State’s data system described in sub18 section (c)(3)(K), including interoperability 

19 across agencies serving children, and 

20 unique child and program identifiers. 

21 (ii) Enhancement of the State’s over22 sight system for early learning programs, 

23 including the implementation of a program 

24 rating system. 


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1 (iii) The development and implemen2 tation of measures of school readiness of 

3 children that reflect all of the major do4 mains of child development and that in5 form the quality improvement process. 

6 (2) PRIORITY.—A State receiving a grant under 

7 section 402(a) shall use the grant so as to prioritize 

8 improving the quality of early learning programs 

9 serving children from low-income families. 

10 (g) SPECIAL RULE.— 

11 (1) IN GENERAL.—Beginning with the second 

12 fiscal year of a grant under section 402(a), a State 

13 with respect to which the Secretary certifies that the 

14 State has made sufficient progress in implementing 

15 the requirements of the grant may apply to the Sec16 retary to reserve up to 25 percent of the amount of 

17 the grant to expand access for children from low-in18 come families to the highest quality early learning 

19 programs that offer full-day services, except that the 

20 State must agree to contribute for such purpose 

21 non-Federal matching funds in an amount equal to 

22 not less than 20 percent of the amount reserved 

23 under this subsection. One-half of such non-Federal 

24 matching funds may be provided by a private entity. 


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1 (2) NON-FEDERAL FUNDS.—A State may use 

2 the following to satisfy the matching requirement of 

3 paragraph (1): 

4 (A) Cash. 

5 (B) In-kind contributions for the acquisi6 tion, construction, or improvement of early 

7 learning program facilities serving disadvan8 taged children. 

9 (C) Technical assistance related to sub10 paragraph (B). 

11 (3) FINANCIAL HARDSHIP WAIVER.—The Sec12 retary may waive or reduce the non-Federal share of 

13 a State under paragraph (1) if the State dem14 onstrates a need for such waiver or reduction due to 

15 extreme financial hardship, as defined by the Sec16 retary by regulation. 

17 (h) IMPROVEMENT PLAN.—If the Secretary deter18 mines that a State receiving a grant under section 402(a) 

19 is encountering barriers to reaching goals described in 

20 subsection (c)(2), the State shall develop a plan for im21 provement in consultation with, and subject to approval 

22 by, the Secretary. 


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1 SEC. 404. DEVELOPMENT GRANTS. 

2 (a) GRANT PERIOD.—Grants under section 402(b) 

3 may be awarded for a period not to exceed 3 years, and 

4 may not be renewed. 

5 (b) STATE USES OF FUNDS.— 

6 (1) IN GENERAL.—A State receiving a grant 

7 under section 402(b) shall use the grant to under8 take activities to develop the early learning system 

9 components described in section 403(c)(3) and that 

10 will allow a State to become eligible and competitive 

11 for a grant described in section 402(a). 

12 (2) PRIORITY.—A State receiving a grant under 

13 section 402(b) shall use the grant so as to prioritize 

14 improving the quality of early learning programs 

15 serving low-income children. 

16 (c) MATCHING REQUIREMENT.— 

17 (1) IN GENERAL.—To be eligible to receive a 

18 grant under section 402(b), a State shall contribute 

19 to the activities assisted under the grant non-Fed20 eral matching funds in an amount equal to not less 

21 than the applicable percent of the amount of the 

22 grant. 

23 (2) APPLICABLE PERCENT.—For purposes of 

24 paragraph (1), the applicable percent means— 

25 (A) 20 percent in the first fiscal year of 

26 the grant; 


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1 (B) 25 percent in the second fiscal year of 

2 the grant; and 

3 (C) 30 percent in the third fiscal year of 

4 the grant. 

5 (3) NON-FEDERAL FUNDS.—A State may use 

6 the following to satisfy the requirement of paragraph 

7 (1): 

8 (A) Cash. 

9 (B) In-kind contributions for the acquisi10 tion, construction, or improvement of early 

11 learning program facilities serving disadvan12 taged children. 

13 (C) Technical assistance related to sub14 paragraph (B). 

15 (4) PRIVATE CONTRIBUTIONS.—Private con16 tributions made as part of public-private partner17 ships to increase the number of low-income children 

18 in high-quality early learning programs in a State 

19 may be used by the State to satisfy the requirement 

20 of paragraph (1). 

21 (5) FINANCIAL HARDSHIP WAIVER.—The Sec22 retary may waive or reduce the non-Federal share of 

23 a State that has submitted an application for a 

24 grant under section 402(b) if the State demonstrates 

25 a need for such waiver or reduction due to extreme 


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1 financial hardship, as defined by the Secretary by 

2 regulation. 

3 SEC. 405. RESEARCH AND EVALUATION. 

4 From funds reserved under section 402(c)(1), the 

5 Secretary of Education and the Secretary of Health and 

6 Human Services, acting jointly, shall carry out the fol7 lowing activities: 

8 (1) Establishing a national commission whose 

9 duties shall include— 

10 (A) reviewing the status of State and Fed11 eral early learning program quality standards 

12 and early learning and development standards; 

13 (B) recommending benchmarks for pro14 gram quality standards and early learning and 

15 development standards, including taking into 

16 consideration the school readiness needs of chil17 dren with limited English proficiency; and 

18 (C) reporting to the Secretaries of Edu19 cation and Health and Human Services not 

20 later than 2 years after the date of the enact21 ment of this Act on the commission’s findings 

22 and recommendations. 

23 (2) Conducting a national evaluation of the 

24 grants made under this title through the Institute of 

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1 priate research divisions within the Department of 

2 Health and Human Services. 

3 (3) Supporting a research collaborative among 

4 the Institute of Education Sciences, the National In5 stitute of Child Health and Human Development, 

6 the Office of Planning, Research, and Evaluation 

7 within the Administration for Children and Families 

8 in the Department of Health and Human Services, 

9 and, as appropriate, other Federal entities to sup10 port research on early learning that can inform im11 proved State and other standards and licensing re12 quirements and improved child outcomes, which col13 laborative shall— 

14 (A) biennially prepare and publish for pub15 lic comment a detailed research plan; 

16 (B) support early learning research activi17 ties that could include determining— 

18 (i) the characteristics of early learning 

19 programs that produce positive develop20 mental outcomes for children; 

21 (ii) the effects of program quality 

22 standards on child outcomes; 

23 (iii) the relationships between specific 

24 interventions and types of child and family 

25 outcomes; 


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1 (iv) the effectiveness of early learning 

2 provider training in raising program qual3 ity and improving child outcomes; 

4 (v) the effectiveness of professional 

5 development strategies in raising program 

6 quality and improving child outcomes; and 

7 (vi) how to improve the school readi8 ness outcomes of children with limited 

9 English proficiency, special needs, and 

10 homeless children, including evaluation of 

11 professional development programs for 

12 working with such children; and 

13 (C) disseminate relevant research findings 

14 and best practices. 

15 (4) Evaluating barriers to improving the quality 

16 of early learning programs serving low-income chil17 dren, including evaluating barriers to successful 

18 interagency collaboration and coordination, by con19 ducting a review of the statewide strategic reports 

20 developed by the State Advisory Councils on Early 

21 Care and Education and other relevant reports, re22 porting the findings of such review to Congress, and 

23 disseminating relevant research findings and best 

24 practices. 


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1 SEC. 406. REPORTING REQUIREMENTS. 

2 (a) REPORTS TO CONGRESS.—For each year in which 

3 funding is provided under this title, the Secretary shall 

4 submit an annual report to the Committee on Education 

5 and Labor of the House of Representatives and the Com6 mittee on Health, Education, Labor and Pensions of the 

7 Senate on the activities carried out under this title, includ8 ing, at a minimum, information on the following: 

9 (1) The activities undertaken by States to in10 crease the availability of high-quality early learning 

11 programs. 

12 (2) The number of children in high-quality 

13 early learning programs, and the change from the 

14 prior year, disaggregated by State, age, and race. 

15 (3) The number of early learning providers en16 rolled, with assistance from funds under this title, in 

17 a program to obtain a credential or degree in early 

18 childhood education and the settings in which such 

19 providers work. 

20 (4) A summary of State progress in imple21 menting a system of early learning with the compo22 nents described in section 403(c)(3). 

23 (5) A summary of the research activities being 

24 conducted under section 405 and the findings of 

25 such research. 


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1 (b) REPORTS TO SECRETARY.—Each State that re2 ceives a grant under this title shall submit to the Secretary 

3 an annual report that includes, at a minimum, information 

4 on the activities carried out by the State under this title, 

5 including the following: 

6 (1) The progress on fully implementing and in7 tegrating into a system of early learning each of the 

8 components described in section 403(c)(3). 

9 (2) The State’s progress in meeting its goals 

10 for increasing the number of disadvantaged children 

11 participating in high-quality early learning pro12 grams, disaggregated by child age. 

13 (3) The number and percentage of disadvan14 taged children participating in early learning pro15 grams at each level of quality, disaggregated by 

16 race, family income, child age, disability, and limited 

17 English proficiency status. 

18 (4) The number of providers participating in 

19 the State quality rating system, disaggregated by 

20 setting, rating, and the number of high-quality pro21 viders available in low-income communities. 

22 (5) Information on how the funds provided 

23 under this title were used to increase the availability 

24 of high-quality early learning programs for each age 


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1 group, disaggregated by race and limited English 

2 proficient status, to the maximum extent practicable. 

3 (6) Information on professional development 

4 and training expenditures, including— 

5 (A) the number of early learning providers 

6 engaged in such activities; and 

7 (B) the number of early learning providers 

8 enrolled in programs to obtain a credential or 

9 degree in early childhood education, 

10 disaggregated by the type of credential and de11 gree. 

12 (7) The change in the number and percentage 

13 of early learning providers with appropriate creden14 tials or degrees in early childhood education, includ15 ing the change in compensation given to such pro16 viders, in comparison to the prior fiscal year, 

17 disaggregated by early learning setting and the type 

18 of credential or degree. 

19 (8) In the case of a State receiving a grant 

20 under section 402(a), the percentage of children re21 ceiving assistance under the Child Care and Devel22 opment Block Grant Act of 1990 (42 U.S.C. 9858 

23 et seq.) who participate in the highest quality early 

24 learning programs, disaggregated by program set25 ting and child age. 


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1 (9) Barriers to expanding access to high-quality 

2 early learning programs for disadvantaged children. 

3 SEC. 407. CONSTRUCTION. 

4 Nothing in this title— 

5 (1) shall be construed to require a child to par6 ticipate in an early learning program; or 

7 (2) shall be used to deny entry to kindergarten 

8 for any individual if the individual is legally eligible, 

9 as defined by State or local law. 

10 SEC. 408. DEFINITIONS. 

11 For purposes of this title: 

12 (1) CHILD.—The term ‘‘child’’ refers to an in13 dividual from birth through the day the individual 

14 enters kindergarten. 

15 (2) DISADVANTAGED.—The term ‘‘disadvan16 taged’’, when used with respect to a child, means a 

17 child whose family income is described in section 

18 658P(4)(B) of the Child Care and Development 

19 Block Grant Act of 1990 (42 U.S.C. 9858n(4)(B)). 

20 (3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

21 has the meaning given such term in section 637 of 

22 the Head Start Act (42 U.S.C. 9832). 

23 (4) LIMITED ENGLISH PROFICIENT.—The term 

24 ‘‘limited English proficient’’ has the meaning given 


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1 such term in section 637 of the Head Start Act (42 

2 U.S.C. 9832). 

3 (5) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of Education. 

5 (6) STATE.—The term ‘‘State’’ has the mean6 ing given such term in section 9101 of the Elemen7 tary and Secondary Education Act of 1965 (20 

8 U.S.C. 7801). 

9 SEC. 409. AVAILABILITY OF FUNDS. 

10 There are authorized to be appropriated, and there 

11 are appropriated, to carry out this title (in addition to any 

12 other amounts appropriated to carry out this title and out 

13 of any money in the Treasury not otherwise appropriated) 

14 $1,000,000,000 for each of fiscal years 2010 through 

15 2017. 

16 TITLE V—AMERICAN 

17 GRADUATION INITIATIVE 

18 SEC. 501. AUTHORIZATION AND APPROPRIATION. 

19 (a) AUTHORIZATION AND APPROPRIATION.—There 

20 are authorized to be appropriated, and there are appro21 priated, to carry out this title (in addition to any other 

22 amounts appropriated to carry out this title and out of 

23 any money in the Treasury not otherwise appropriated), 

24 $730,000,000 for each of the fiscal years 2010 through 


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1 2013, and $680,000,000 for each of the fiscal years 2014 

2 through 2019. 

3 (b) ALLOCATIONS.—Of the amount appropriated 

4 under subsection (a)— 

5 (1) $630,000,000 shall be made available for 

6 each of the fiscal years 2010 through 2013 to carry 

7 out section 503; 

8 (2) $630,000,000 shall be made available for 

9 each of the fiscal years 2014 through 2019 to carry 

10 out section 504; 

11 (3) $50,000,000 shall be made available for 

12 each of the fiscal years 2010 through 2019 to carry 

13 out subsection (a) of section 505; and 

14 (4) $50,000,000 shall be made available for 

15 each of the fiscal years 2010 through 2013 to carry 

16 out subsections (b) and (c) of section 505. 

17 (c) RESPONSIBILITY.— 

18 (1) IN GENERAL.—With respect to sections 503 

19 and 504, the Secretary of Education shall bear the 

20 responsibility for obligating and disbursing funds 

21 under such sections and ensuring compliance with 

22 applicable law and administrative requirements, sub23 ject to paragraph (2). 

24 (2) INTERAGENCY AGREEMENT.—The Secretary 

25 of Education and the Secretary of Labor shall jointVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02277 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 ly administer sections 503 and 504 on such terms 

2 as such Secretaries shall set forth in an interagency 

3 agreement. 

4 SEC. 502. DEFINITIONS; GRANT PRIORITY. 

5 (a) DEFINITIONS.—In this title: 

6 (1) AREA CAREER AND TECHNICAL EDUCATION

7 SCHOOL.—The term ‘‘area career and technical edu8 cation school’’ has the meaning given such term in 

9 section 3 of the Carl D. Perkins Career and Tech10 nical Education Act of 2006 (20 U.S.C. 2302). 

11 (2) COMMUNITY COLLEGE.—The term ‘‘commu12 nity college’’ means a public institution of higher 

13 education at which the highest degree that is pre14 dominantly awarded to students is an associate’s de15 gree. 

16 (3) ELIGIBLE ENTITY.—The term ‘‘eligible enti17 ty’’ means— 

18 (A) a community college or community col19 lege district; 

20 (B) an area career and technical education 

21 school; 

22 (C) a public four-year institution of higher 

23 education that— 

24 (i) offers two-year degrees; 


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1 (ii) will use funds provided under this 

2 section for activities at the certificate and 

3 associate degree levels; and 

4 (iii) is not reasonably close, as deter5 mined by the Secretary, to a community 

6 college; 

7 (D) a public four-year institution of higher 

8 education that is in partnership with an eligible 

9 entity described in subparagraph (A), (B), or 

10 (C); 

11 (E) a State that— 

12 (i) is in compliance with section 137 

13 of the Higher Education Act of 1965 (20 

14 U.S.C. 1015f); 

15 (ii) has an articulation agreement 

16 pursuant to section 486A of such Act (20 

17 U.S.C. 1093a); and 

18 (iii) is in partnership with an eligible 

19 entity described in subparagraph (A), (B), 

20 (C), or (D); or 

21 (F) a consortium of at least 2 entities de22 scribed in subparagraphs (A) through (E). 

23 (4) INDUSTRY OR SECTOR PARTNERSHIP.—The 

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1 ing given such term in section 782(f) of the Higher 

2 Education Act of 1965. 

3 (5) INSTITUTION OF HIGHER EDUCATION.—The 

4 term ‘‘institution of higher education’’ has the 

5 meaning given such term in section 101 of the High6 er Education Act of 1965 (20 U.S.C. 1001). 

7 (6) PHILANTHROPIC ORGANIZATION.—The term 

8 ‘‘philanthropic organization’’ has the meaning given 

9 such term in section 781(i) of the Higher Education 

10 Act of 1965 (20 U.S.C. 1141(i)). 

11 (7) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Education. 

13 (8) STATE.—The term ‘‘State’’ has the mean14 ing given such term in section 103 of the Higher 

15 Education Act of 1965 (20 U.S.C. 1003). 

16 (9) STATE PUBLIC EMPLOYMENT SERVICE.— 

17 The term ‘‘State public employment service’’ refers 

18 to a State public employment service established 

19 under the Wagner-Peyser Act (29 U.S.C. 49 et 

20 seq.). 

21 (10) STATE WORKFORCE INVESTMENT BOARD; 

22 LOCAL WORKFORCE INVESTMENT BOARD.—The 

23 terms ‘‘State workforce investment board’’ and 

24 ‘‘local workforce investment board’’ refer to a State 

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1 tion 111 of the Workforce Investment Act (29 

2 U.S.C. 2821) and a local workforce investment 

3 board established under section 117 of such Act (29 

4 U.S.C. 2832), respectively. 

5 (11) SUPPORTIVE SERVICES.—The term ‘‘sup6 portive services’’ has the meaning given such term in 

7 section 101(46) of the Workforce Investment Act of 

8 1998 (29 U.S.C. 2801(46)). 

9 (b) GRANT PRIORITY.—In addition to any grant pri10 orities established under any other provision of this title, 

11 the Secretary, in awarding grants under this title, shall 

12 give priority to applications focused on serving low-income, 

13 nontraditional students who do not have a bachelor’s de14 gree, and who have one or more of the following character15 istics: 

16 (1) Are the first generation in their family to 

17 attend college. 

18 (2) Have delayed enrollment in college. 

19 (3) Have dependents. 

20 (4) Are independent students. 

21 (5) Work at least 25 hours per week. 

22 (6) Are out-of-school youth without a high 

23 school diploma. 


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1 SEC. 503. GRANTS TO ELIGIBLE ENTITIES FOR COMMUNITY 

2 COLLEGE REFORM. 

3 (a) PROGRAM AUTHORIZATION.— 

4 (1) GRANTS AUTHORIZED.— 

5 (A) IN GENERAL.—Subject to paragraph 

6 (2), from the amount appropriated to carry out 

7 this section, the Secretary, in coordination with 

8 the Secretary of Labor, shall award grants to 

9 eligible entities, on a competitive basis, to es10 tablish and support programs described in sub11 paragraph (B) at eligible entities described in 

12 subparagraphs (A) through (D) of section 

13 502(a)(3). 

14 (B) PROGRAMS.—The programs to be es15 tablished and supported with grants under sub16 paragraph (A) (and carried out through activi17 ties described in subsection (f)) shall be pro18 grams— 

19 (i) that are— 

20 (I) innovative programs; or 

21 (II) programs of demonstrated 

22 effectiveness, based on the evaluations 

23 of similar programs funded by the De24 partment of Education or the Depart25 ment of Labor, or other research of 

26 similar programs; and 


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1 (ii) that lead to the completion of a 

2 postsecondary degree, certificate, or indus3 try-recognized credential leading to a 

4 skilled occupation in a high-demand indus5 try. 

6 (2) LIMITATION.—For each fiscal year for 

7 which funds are appropriated to carry out this sec8 tion, the aggregate amount of the grants awarded to 

9 eligible entities that are States, or consortia that in10 clude a State, shall be not more than 50 percent of 

11 the total amount appropriated under section 

12 501(b)(1) for such fiscal year. 

13 (3) PROHIBITION.—The Secretary shall not 

14 award a grant to an eligible entity for the same ac15 tivities that are being supported by other Federal 

16 funds. 

17 (b) GRANT DURATION AND AMOUNT.— 

18 (1) DURATION.—A grant under this section 

19 shall be awarded to an eligible entity for a 4-year pe20 riod, except that if the Secretary determines that the 

21 eligible entity has not made demonstrable progress 

22 in achieving the benchmarks developed pursuant to 

23 subsection (g) by the end of the third year of such 

24 grant period, no further grant funds shall be made 


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1 available to the entity after the date of such deter2 mination. 

3 (2) AMOUNT.—The minimum amount of a total 

4 grant award under this section over the 4-year pe5 riod of the award shall be $750,000. 

6 (c) PRIORITY.—In awarding grants under this sec7 tion, the Secretary shall give priority to eligible entities 

8 that— 

9 (1) enter into partnerships with— 

10 (A) philanthropic or research organizations 

11 with expertise in meeting the goals of this sec12 tion; 

13 (B) businesses or industry or sector part14 nerships that— 

15 (i) design and implement programs 

16 described in subsection (a)(1)(B); 

17 (ii) pay a portion of the costs of such 

18 programs; and 

19 (iii) agree to collaborate with one or 

20 more eligible entities to hire individuals 

21 who have completed a particular postsec22 ondary degree, certificate, or credential 

23 program; or 

24 (C) labor organizations that provide tech25 nical expertise for occupationally specific eduVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02284 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 cation necessary for an industry-recognized cre2 dential leading to a skilled occupation in a high3 demand industry; or 

4 (2) are institutions of higher education eligible 

5 for assistance under title III or V of the Higher 

6 Education Act of 1965, or consortia that include 

7 such an institution. 

8 (d) FEDERAL AND NON-FEDERAL SHARE; SUPPLE9 MENT, NOT SUPPLANT.— 

10 (1) FEDERAL SHARE.—The amount of the Fed11 eral share under this section for a fiscal year shall 

be not greater than 1 12 ⁄2 of the costs of the programs, 

13 services, and policies described in subsection (f) that 

14 are carried out under the grant. 

15 (2) NON-FEDERAL SHARE.— 

16 (A) IN GENERAL.—The amount of the 

17 non-Federal share under this section for a fiscal 

year shall be not less than 1 18 ⁄2 of the costs of the 

19 programs, services, and policies described in 

20 subsection (f) that are carried out under the 

21 grant. The non-Federal share may be in cash or 

22 in kind, and may be provided from State re23 sources, local resources, contributions from pri24 vate organizations, or a combination thereof. 


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1 (B) FINANCIAL HARDSHIP WAIVER.—The 

2 Secretary may waive or reduce the non-Federal 

3 share of an eligible entity that has submitted an 

4 application under this section if the entity dem5 onstrates a need for such waiver or reduction 

6 due to extreme financial hardship, as defined by 

7 the Secretary by regulation. 

8 (3) SUPPLEMENT, NOT SUPPLANT.—The Fed9 eral and non-Federal shares required by this section 

10 shall be used to supplement, and not supplant, State 

11 and private resources that would otherwise be ex12 pended to establish and support programs described 

13 in subsection (a)(1)(B) at eligible entities. 

14 (e) APPLICATION.—An eligible entity seeking to re15 ceive a grant under this section shall submit to the Sec16 retary an application at such time, in such manner, and 

17 containing such information as the Secretary may require. 

18 Such application shall describe the programs under sub19 section (a)(1)(B) that the eligible entity will carry out 

20 using the grant funds, (including the programs, services, 

21 and policies under subsection (f)), including— 

22 (1) the goals of such programs, services, and 

23 policies; 

24 (2) how the eligible entity will allocate grant 

25 funds for such programs, services, and policies; 


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1 (3) how such programs, services, and policies, 

2 and the resources of the eligible entity, will enable 

3 the eligible entity to meet the benchmarks developed 

4 pursuant to subsection (g), and how the eligible enti5 ty will track and report the entity’s progress in 

6 reaching such benchmarks; 

7 (4) how the eligible entity will use such pro8 grams, services, and policies to establish quantifiable 

9 targets for improving graduation rates and employ10 ment-related outcomes; 

11 (5) how the eligible entity will serve high-need 

12 populations through such programs, services, and 

13 policies; 

14 (6) how the eligible entity will partner with in15 dustry or sector partnerships in the State, the State 

16 public employment service, and State or local work17 force investment boards in carrying out such pro18 grams, services, and policies; 

19 (7) an assurance that the eligible entity will 

20 share information with the Learning and Earning 

21 Research Center established under section 505(b), 

22 once such Center is established; 

23 (8) an assurance that the eligible entity will 

24 participate in the evaluation of such programs, serv25 ices, and policies under subsection (i); and 


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1 (9) the potential for such programs, services, 

2 and policies to be replicated at other institutions of 

3 higher education. 

4 (f) USES OF FUNDS.—An eligible entity receiving a 

5 grant under this section shall use the grant funds to carry 

6 out the programs described in subsection (a)(1)(B), which 

7 shall include at least 2 of the following activities: 

8 (1) Developing and implementing policies and 

9 programs to expand opportunities for students at eli10 gible entities described in subparagraphs (A) 

11 through (D) of section 502(a)(3) to earn bachelor’s 

12 degrees by— 

13 (A) facilitating the transfer of academic 

14 credits between institutions of higher education, 

15 including the transfer of academic credits for 

16 courses in the same field of study; and 

17 (B) expanding articulation agreements and 

18 guaranteed transfer agreements between such 

19 institutions, including through common course 

20 numbering and general core curriculum. 

21 (2) Expanding, enhancing, or creating academic 

22 programs or training programs, which shall be car23 ried out with industry or sector partnerships or in 

24 partnership with employers and may include other 

25 relevant partners, that provide relevant job-skill 


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1 training (including apprenticeships and worksite 

2 learning and training opportunities) for skilled occu3 pations in high-demand industries. 

4 (3) Providing student support services, includ5 ing— 

6 (A) intensive career and academic advising; 

7 (B) labor market information and job 

8 counseling; and 

9 (C) transitional job support, supportive 

10 services, or assistance in connecting students 

11 with community resources. 

12 (4) Creating workforce programs that provide a 

13 sequence of education and occupational training that 

14 leads to industry-recognized credentials, including 

15 programs that— 

16 (A) blend basic skills and occupational 

17 training that lead to industry-recognized cre18 dentials; 

19 (B) integrate developmental education cur20 ricula and instruction with for-credit 

21 coursework toward degree or certificate path22 ways; or 

23 (C) advance individuals on a career path 

24 toward high-wage occupations in high-demand 

25 industries. 


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1 (5) Building or enhancing linkages, including 

2 the development of dual enrollment programs and 

3 early college high schools, between— 

4 (A) secondary education or adult education 

5 programs (including programs established 

6 under the Carl D. Perkins Career and Tech7 nical Education Act of 2006 and title II of the 

8 Workforce Investment Act of 1998 (29 U.S.C. 

9 9201 et seq.)); and 

10 (B) eligible entities described in subpara11 graphs (A) through (D) of section 502(a)(3). 

12 (6) Implementing other innovative programs, 

13 services, and policies designed to— 

14 (A) increase postsecondary degree, certifi15 cate, and industry-recognized credential comple16 tion rates, particularly with respect to groups 

17 underrepresented in higher education, at eligible 

18 entities described in subparagraphs (A) through 

19 (D) of section 502(a)(3); and 

20 (B) increase the provision of training for 

21 students to enter skilled occupations in high-de22 mand industries. 

23 (7) Improving the timeliness of the process for 

24 creating degree, certificate, and industry-recognized 

25 credential programs at eligible entities described in 


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1 subparagraphs (A) through (D) of section 502(a)(3) 

2 that— 

3 (A) reflect and respond to regional labor 

4 market developments and trends; 

5 (B) effectively address the workforce needs 

6 of employers in the State; and 

7 (C) are designed in consultation with such 

8 employers. 

9 (g) BENCHMARKS.— 

10 (1) IN GENERAL.—Each eligible entity receiving 

11 a grant under this section shall develop quantifiable 

12 benchmarks on the following indicators (where appli13 cable), to be approved by the Secretary: 

14 (A) Closing gaps in enrollment and com15 pletion rates for— 

16 (i) groups underrepresented in higher 

17 education; and 

18 (ii) groups of students enrolled at the 

19 eligible entity (or at an institution of high20 er education under the jurisdiction of the 

21 eligible entity, in the case of an entity that 

22 is not an institution) who have the lowest 

23 enrollment and completion rates. 

24 (B) Addressing local and regional work25 force needs. 


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1 (C) Establishing articulation agreements 

2 between two-year and four-year public institu3 tions of higher education within a State. 

4 (D) Improving comprehensive employment 

5 and educational outcomes for postsecondary 

6 education and training programs, including— 

7 (i) student persistence from one aca8 demic year to the following academic year; 

9 (ii) the number of credits students 

10 earn toward a certificate or an associate’s 

11 degree; 

12 (iii) the number of students in devel13 opmental education courses who subse14 quently enroll in credit bearing coursework; 

15 (iv) transfer of general education 

16 credits between institutions of higher edu17 cation, as applicable; 

18 (v) completion of industry-recognized 

19 credentials or associate’s degrees to work 

20 in skilled occupations in high-demand in21 dustries; 

22 (vi) transfers to four-year institutions 

23 of higher education; and 

24 (vii) job placement related to skills 

25 training or associate’s degree completion. 


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1 (2) REPORT.—The eligible entity receiving such 

2 a grant shall annually measure and report to the 

3 Secretary the progress of the entity in achieving the 

4 benchmarks developed pursuant to paragraph (1). 

5 (h) PROVISION OF TRANSFER OF CREDIT INFORMA6 TION IN COMMUNITY COLLEGE COURSE SCHEDULES.— 

7 To the maximum extent practicable, each community col8 lege receiving a grant under this section shall include in 

9 each electronic and printed publication of the college’s 

10 course schedule, in a manner of the college’s choosing, for 

11 each course listed in the college’s course schedule, whether 

12 such course is transferable for credit toward the comple13 tion of a 4-year baccalaureate degree at a public institu14 tion of higher education in the State in which the college 

15 is located. 

16 (i) EVALUATION.—The Secretary shall allocate not 

17 more than two percent of the funds appropriated under 

18 section 501(b)(1) to the Institute of Education Sciences 

19 to conduct evaluations, ending not later than January 30, 

20 2014, that— 

21 (1) assess the effectiveness of the grant pro22 grams carried out by each eligible entity receiving 

23 such a grant in— 


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1 (A) improving postsecondary education 

2 completion rates (disaggregated by age, race, 

3 ethnicity, sex, income, and disability); 

4 (B) improving employment-related out5 comes for students served by such programs; 

6 (C) serving high-need populations; and 

7 (D) building or enhancing working part8 nerships with the State public employment serv9 ice or State or local workforce investment 

10 boards; and 

11 (2) include any other information or assess12 ments the Secretary may require. 

13 (j) REPORT.—The Secretary shall submit to the 

14 Committee on Health, Education, Labor, and Pensions of 

15 the Senate and the Committee on Education and Labor 

16 of the House of Representatives an annual report on 

17 grants awarded under this section, including— 

18 (1) the amount awarded to each eligible entity 

19 under this section; 

20 (2) a description of the activities conducted by 

21 each eligible entity receiving a grant under this sec22 tion; and 

23 (3) a summary of the results of the evaluations 

24 submitted to the Secretary under subsection (i) and 


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1 the progress each eligible entity made toward achiev2 ing the benchmarks developed under subsection (g). 

3 SEC. 504. GRANTS TO ELIGIBLE STATES FOR COMMUNITY 

4 COLLEGE PROGRAMS. 

5 (a) PROGRAM AUTHORIZATION.—From the amount 

6 appropriated to carry out this section, the Secretary, in 

7 coordination with the Secretary of Labor, shall award 

8 grants to eligible States, on a competitive basis, to imple9 ment the systematic reform of community colleges located 

10 in the State by carrying out programs, services, and poli11 cies that demonstrated effectiveness under the evaluation 

12 described in section 503(i). 

13 (b) ELIGIBLE STATE.—In this section, the term ‘‘eli14 gible State’’ means a State that demonstrates to the Sec15 retary in the application submitted pursuant to subsection 

16 (e) that the State— 

17 (1) has a plan under section 782 of the Higher 

18 Education Act of 1965 to increase the State’s rate 

19 of persistence in and completion of postsecondary 

20 education that takes into consideration and involves 

21 community colleges located in such State; 

22 (2) has a statewide longitudinal data system 

23 that includes data with respect to community col24 leges; 


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1 (3) has an articulation agreement pursuant to 

2 section 486A of the Higher Education Act of 1965 

3 (20 U.S.C. 1093a); 

4 (4) is in compliance with section 137 of such 

5 Act (20 U.S.C. 1015f); and 

6 (5) meets any other requirements the Secretary 

7 may require. 

8 (c) GRANT DURATION; RENEWAL.—A grant awarded 

9 under this section shall be awarded to an eligible State 

10 for a 6-year period, except that if the Secretary determines 

11 that the eligible State has not made demonstrable progress 

12 in achieving the benchmarks developed pursuant to sub13 section (g) by the end of the third year of the grant period, 

14 no further grant funds shall be made available to the enti15 ty after the date of such determination. 

16 (d) FEDERAL AND NON-FEDERAL SHARE; SUPPLE17 MENT, NOT SUPPLANT.— 

18 (1) FEDERAL SHARE.—The amount of the Fed19 eral share under this section for a fiscal year shall 

be not greater than 1 20 ⁄2 of the costs of the reform de21 scribed in subsection (f) that is carried out with the 

22 grant. 

23 (2) NON-FEDERAL SHARE.— 

24 (A) IN GENERAL.—The amount of the 

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cal year shall be not less than 1 1 ⁄2 of the costs 

2 of the reform described in subsection (f) that is 

3 carried out with the grant. The non-Federal 

4 share may be in cash or in kind, and may be 

5 provided from State resources, local resources, 

6 contributions from private organizations, or a 

7 combination thereof. 

8 (B) FINANCIAL HARDSHIP WAIVER.—The 

9 Secretary may waive or reduce the non-Federal 

10 share of an eligible State that has submitted an 

11 application under this section if the State dem12 onstrates a need for such waiver or reduction 

13 due to extreme financial hardship, as defined by 

14 the Secretary by regulation. 

15 (3) SUPPLEMENT, NOT SUPPLANT.—The Fed16 eral and non-Federal share required by this section 

17 shall be used to supplement, and not supplant, State 

18 and private resources that would otherwise be ex19 pended to carry out the systematic reform of com20 munity colleges in a State. 

21 (e) APPLICATION.—An eligible State desiring to re22 ceive a grant under this section shall submit to the Sec23 retary an application at such time, in such manner, and 

24 containing such information as the Secretary may require. 

25 Such application shall describe the programs, service, and 


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1 policies to be used by the State to achieve the systematic 

2 reform described in subsection (f), including— 

3 (1) the goals of such programs, services, and 

4 policies; 

5 (2) how the State will allocate grant funds to 

6 carry out such programs, services, and policies, in7 cluding identifying any State or private entity that 

8 will administer such programs, services, and policies; 

9 (3) how such programs, services, and policies 

10 will enable the State to— 

11 (A) meet the benchmarks developed pursu12 ant to subsection (g), and how the State will 

13 track and report the State’s progress in reach14 ing such benchmarks; and 

15 (B) benefit students attending all commu16 nity colleges within the State; 

17 (4) how the State will use such programs, serv18 ices, and policies to establish quantifiable targets for 

19 improving graduation rates and employment-related 

20 outcomes; 

21 (5) how the State will serve high-need popu22 lations through such programs, services, and poli23 cies; 

24 (6) how the State will partner with the State 

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1 force investment boards in carrying out such pro2 grams, services, and policies; 

3 (7) how the State will evaluate such programs, 

4 services, and policies, which may include participa5 tion in national evaluations; and 

6 (8) how the State will involve community col7 leges and community college faculty in the planning, 

8 implementation, and evaluation of such programs, 

9 services, and policies. 

10 (f) USES OF FUNDS.—An eligible State receiving a 

11 grant under this section shall use the grant funds to im12 plement the systematic reform of community colleges lo13 cated in the State by carrying out programs, services, and 

14 policies that the Secretary has determined to have dem15 onstrated effectiveness based on the results of the evalua16 tion described in section 503(i). States shall allocate not 

17 less than 90 percent of such grant funds to community 

18 colleges within the State. 

19 (g) BENCHMARKS.— 

20 (1) IN GENERAL.—Each eligible State receiving 

21 a grant under this section shall, in consultation with 

22 the Secretary, develop quantifiable benchmarks on 

23 the indicators identified in section 503(f)(1). 

24 (2) PROGRESS.—An eligible State receiving 

25 such a grant shall annually measure and report to 


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1 the Secretary progress in achieving the benchmarks 

2 developed pursuant to paragraph (1). 

3 (h) REPORT.— 

4 (1) REPORTS TO THE SECRETARY.—Each eligi5 ble State receiving a grant under this section shall 

6 annually submit to the Secretary and the Secretary 

7 of Labor a report on such grant, including— 

8 (A) a description of the systematic reform 

9 carried out by the State using such grant; and 

10 (B) the outcome of such reform, including 

11 the State’s progress in achieving the bench12 marks developed under subsection (g). 

13 (2) REPORTS TO CONGRESS.—Not later than 6 

14 months after the end of the grant period, the Sec15 retary shall submit to the Committee on Health, 

16 Education, Labor, and Pensions of the Senate and 

17 the Committee on Education and Labor of the 

18 House of Representatives a summary of the reports 

19 submitted under paragraph (1) with respect to such 

20 grant period. 

21 (i) SENSE OF CONGRESS.—It is the sense of Con22 gress that— 

23 (1) community colleges play an important role 

24 in preparing and training students seeking to enter 

25 the workforce; 


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1 (2) it is vital that all States have access to the 

2 resources and assistance needed to compete for 

3 grants authorized under this section; and 

4 (3) in executing the grant program authorized 

5 under this section, the Secretary will make available 

6 any and all assistance, guidance, and support to 

7 States seeking to compete for grants authorized 

8 under this section and will work to ensure that such 

9 grants are distributed in a fair and equitable man10 ner. 

11 SEC. 505. NATIONAL ACTIVITIES. 

12 (a) OPEN ONLINE EDUCATION.—From the amount 

13 appropriated to carry out this section, the Secretary is au14 thorized to make competitive grants to, or enter into con15 tracts with, institutions of higher education, philanthropic 

16 organizations, and other appropriate entities to develop, 

17 evaluate, and disseminate freely-available high-quality on18 line training, high school courses, and postsecondary edu19 cation courses. Entities receiving funds under this sub20 section shall ensure that electronic and information tech21 nology activities meet the access standards established 

22 under section 508 of the Rehabilitation Act of 1973 (29 

23 U.S.C. 794d). 

24 (b) LEARNING AND EARNING RESEARCH CENTER.— 


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1 (1) IN GENERAL.—From the amount appro2 priated to carry out this section, the Director of the 

3 Institute of Education Sciences is authorized to 

4 award a grant to, or enter into a contract with, an 

5 organization with demonstrated expertise in the re6 search and evaluation of community colleges to es7 tablish and operate the Learning and Earning Re8 search Center (in this section referred to as the 

9 ‘‘Center’’). 

10 (2) GRANT TERM.—The grant or contract 

11 awarded under this section shall be awarded for a 

12 period of not more than 4 years. 

13 (3) BOARD.—The Center shall have an inde14 pendent advisory board of 9 individuals who— 

15 (A) are appointed by the Secretary, based 

16 on recommendations from the organization re17 ceiving the grant or contract under this section; 

18 and 

19 (B) who have demonstrated expertise in— 

20 (i) data collection; 

21 (ii) data analysis; and 

22 (iii) econometrics, postsecondary edu23 cation, and workforce development re24 search. 

25 (4) CENTER ACTIVITIES.—The Center shall— 


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1 (A) develop— 

2 (i) peer-reviewed metrics to help con3 sumers make sound education and training 

4 choices, and to help students, workers, 

5 schools, businesses, researchers, and pol6 icymakers assess the effectiveness of com7 munity colleges, and courses of study at 

8 such colleges, in meeting education and 

9 employment objectives and serving groups 

10 that are underrepresented in postsecondary 

11 education; 

12 (ii) common metrics and data ele13 ments to measure the education and em14 ployment outcomes of students attending 

15 community colleges; 

16 (B) coordinate with the Institute of Edu17 cation Sciences and States receiving a grant 

18 under subsection (c) to develop— 

19 (i) standardized data elements, defini20 tions, and data-sharing protocols to make 

21 it possible for data systems related to post22 secondary education to be linked and inter23 operable, and for best practices to be 

24 shared among States; 


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1 (ii) standards and processes for facili2 tating sharing of data in a manner that 

3 safeguards student privacy; and 

4 (C) develop and make widely available ma5 terials analyzing best practices and research on 

6 successful postsecondary education and training 

7 efforts; 

8 (D) make the data and metrics developed 

9 pursuant to subparagraph (A) available to the 

10 public in a transparent, user-friendly format 

11 that is accessible to individuals with disabilities; 

12 and 

13 (E) consult with representatives from 

14 States with respect to the activities of the Cen15 ter. 

16 (c) STATE SYSTEMS.— 

17 (1) IN GENERAL.—From the amount appro18 priated to carry out this section, the Secretary is au19 thorized to award grants to States or consortia of 

20 States to establish cooperative agreements to de21 velop, implement, and expand interoperable state22 wide longitudinal data systems that— 

23 (A) collect, maintain, disaggregate (by in24 stitution, income, race, ethnicity, sex, disability, 

25 and age), and analyze student data from comVerDate Nov 24 2008 23:53 Mar 17, 2010 Jkt 089200 PO 00000 Frm 02304 Fmt 6652 Sfmt 6201 E:\BILLS\H4872.RH H4872

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1 munity colleges, including data on the programs 

2 of study and education and employment out3 comes for particular students, tracked over 

4 time; and 

5 (B) can be linked to other data systems, as 

6 applicable, including elementary and secondary 

7 education and workforce data systems. 

8 (2) SUPPLEMENT, NOT SUPPLANT.—Funds ap9 propriated to carry out this subsection shall be used 

10 to supplement, and not supplant, other Federal and 

11 State resources that would otherwise be expended to 

12 carry out statewide longitudinal data systems, in13 cluding funding appropriated for State Longitudinal 

14 Data Systems in the American Recovery and Rein15 vestment Act of 2009 (Public Law 111–5; 123 Stat. 

16 115). 

17 (3) PRIVACY AND ACCESS TO DATA.— 

18 (A) IN GENERAL.—Each State or consortia 

19 that receives a grant under this subsection or 

20 any other provision of this division shall imple21 ment measures to— 

22 (i) ensure that the statewide longitu23 dinal data system under this subsection 

24 and any other data system the State or 

25 consortia is operating for the purposes of 


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1 this division meet the requirements of sec2 tion 444 of the General Education Provi3 sions Act (20 U.S.C. 1232g) (commonly 

4 known as the ‘‘Family Educational Rights 

5 and Privacy Act of 1974’’); 

6 (ii) limit the use of information in any 

7 such data system by governmental agencies 

8 in the State, including State agencies, 

9 State educational authorities, local edu10 cational agencies, community colleges, and 

11 institutions of higher education, to edu12 cation and workforce related activities 

13 under this division or education and work14 force related activities otherwise permitted 

15 by Federal or State law; 

16 (iii) prohibit the disclosure of person17 ally identifiable information except as per18 mitted under section 444 of the General 

19 Education Provisions Act and any addi20 tional limitations set forth in State law; 

21 (iv) keep an accurate accounting of 

22 the date, nature, and purpose of each dis23 closure of personally identifiable informa24 tion in any such data system, a description 

25 of the information disclosed, and the name 


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1 and address of the person, agency, institu2 tion, or entity to whom the disclosure is 

3 made, which accounting shall be made 

4 available on request to parents of any stu5 dent whose information has been disclosed; 

6 (v) notwithstanding section 444 of the 

7 General Education Provisions Act, require 

8 any non-governmental party obtaining per9 sonally identifiable information to sign a 

10 data use agreement prior to disclosure 

11 that— 

12 (I) prohibits the party from fur13 ther disclosing the information; 

14 (II) prohibits the party from 

15 using the information for any purpose 

16 other than the purpose specified in 

17 the agreement; and 

18 (III) requires the party to de19 stroy the information when the pur20 pose for which the disclosure was 

21 made is accomplished; 

22 (vi) maintain adequate security meas23 ures to ensure the confidentiality and in24 tegrity of any such data system, such as 


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1 protecting a student record from identifica2 tion by a unique identifier; 

3 (vii) where rights are provided to par4 ents under this clause, provide those rights 

5 to the student instead of the parent if the 

6 student has reached the age of 18 or is en7 rolled in a postsecondary educational insti8 tution; and 

9 (viii) ensure adequate enforcement of 

10 the requirements of this paragraph. 

11 (B) USE OF UNIQUE IDENTIFIERS.—It 

12 shall be unlawful for any Federal, State, or 

13 local governmental agency to— 

14 (i) use the unique identifiers employed 

15 in such data systems for any purpose other 

16 than as authorized by Federal or State 

17 law; or 

18 (ii) deny any individual any right, 

19 benefit, or privilege provided by law be20 cause of such individual’s refusal to dis21 close the individual’s unique identifier. 

22 (d) REPORT.—The Secretary shall submit to the 

23 Committee on Health, Education, Labor, and Pensions of 

24 the Senate and the Committee on Education and Labor 

25 of the House of Representatives an annual report on the 


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1 amounts awarded to entities receiving grants or contracts 

2 under this section, and the activities carried out by such 

3 entities under such grants and contracts. 


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Union Calendar No. 256 

111TH CONGRESS 

2D SESSION H. R. 4872 

A BILL 

To provide for reconciliation pursuant to section 

for fiscal year 2010. 202 of the concurrent resolution on the budget 

MARCH 17, 2010 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 


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